The Teflon candidate – POLITICO

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HAMBURG, Germany — As a young law student, German chancellor hopeful Olaf Scholz learned the Roman maxim that ignorance offers no protection in court.

That may be why he pursued a career in politics.

Of the many puzzling questions surrounding Scholz’s surprise rise from also-ran to favorite to succeed Angela Merkel as chancellor of Germany, there’s this: Why don’t voters care that the Social Democratic finance minister’s fingerprints are all over some of the biggest scandals in recent German history?

In the last years alone, it has emerged that Scholz’s ministry not only overlooked the country’s biggest fraud in decades at the payments firm Wirecard, but also that his underlings unleashed prosecutors on the Financial Times journalists trying to expose the scandal.

Just this week, Scholz was summoned before a parliamentary committee to respond to accusations that a unit of his ministry responsible for investigating money laundering obstructed justice by not passing along evidence of wrongdoing to prosecutors.

The parliamentary hearing was triggered by an unprecedented raid on Scholz’s ministry by police this month.

Employing what has become a well-rehearsed tactic in such cases, Scholz denied that there was any wrongdoing and stressed that he wasn’t directly engaged with the matters at hand.  

In many countries, such a dramatic turn of events just days before a key national election would throw the campaign into disarray and put the front-runner on the back foot.

The German public’s reaction to the Scholz affair? A yawn. With less than a week until election day, Scholz’s Social Democrats remain first in all the polls.

Small, sly and always wins

Conventional wisdom holds that the scandals in question are simply too complicated for the common man to grasp.

“If you can’t explain it in one sentence, it’s not a scandal,” said Jan Fleischhauer, a conservative German columnist. (Tell that to Hillary Clinton.)

Others argue that the opacity of the investigations makes Scholz’s role in the various affairs difficult for anyone to discern.

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“There is some question about whether Scholz was really responsible and if it’s fair to blame him,” said Isabelle Borucki, a political scientist at the University of Siegen.

A simpler explanation might be that Germans simply like Scholz.

Short, wiry and nearly bald, Scholz looks more like an accountant than a political star.

Yet in Germany, a country where even the TV news presenters look (and sound) like librarians, Scholz’s low-key persona evokes trust. Whether discussing Germany’s latest tax estimate or evidence that his ministry was asleep at the switch while Wirecard executives defrauded investors of billions, Scholz speaks in the same soft Hamburg lilt, reassuring listeners that all is well.

When he finishes, a broad smile typically grips his face. To Scholz’s political rivals, it looks more like a self-satisfied smirk.

“You don’t need to sit there with that Smurfy grin,” Bavarian premier Markus Söder told Scholz during heated late-night negotiations in March over pandemic aid. Scholz, who was born the same year as the cartoon characters, said he welcomed the comparison: “They are small, sly and always win.”

By force if necessary

Born in Osnabrück in Lower Saxony, Scholz, whose father worked as a manager for textile companies, grew up in a simple red-brick house in a middle-class neighborhood in Hamburg. He joined the SPD’s youth organization in high school and remained active in the party after moving to Hamburg-Altona, a workers’ district known at the time as a hotbed for leftist agitators. Scholz identified with Marxism at the time and like many of his generation railed against the “imperialism” of the U.S.

He soon moderated, however. He completed his studies and pursued a career as a labor lawyer, while also remaining active in the party.

He joined the Bundestag, the German parliament, in 1998 and two years later was elected the head of the SPD in Hamburg, a traditional party stronghold.

Soon thereafter, Scholz became Hamburg’s senator for interior, a key post overseeing the police.

It was then that Scholz had his first brush with controversy. Worried that a law-and-order, right-wing party led by a former judge was gaining traction ahead of a local election, Scholz veered to the right. His target: the immigrant drug dealers plying their trade on city corners.

A common tactic used by the dealers to avoid arrest was to swallow the drug packets in their possession if the police showed up. Scholz agreed to allow officers to give suspects vomit-inducing drugs, known as emetics, to secure the evidence, by force if necessary.

Not only did the SPD still lose the election, and Scholz his post, but his authorization of emetics came back to haunt him two months later when a suspected Nigerian drug dealer died in custody after being forced to take an emetic. Scholz expressed regret about the incident but defended the practice, which was kept in Hamburg until the European Court of Human Rights ruled in 2006 that it was illegal.

‘He’s a fighter’

After the Social Democrats lost the Hamburg election, Scholz moved in 2002 to Berlin to become the party’s general secretary, a crucial post that effectively made him the SPD’s chief operating officer.

It was a delicate time. Under then-Chancellor Gerhard Schröder, the SPD was trying to push through a controversial set of labor and welfare reforms known as the Agenda 2010. Scholz’s job was to sell the benefit cuts to a skeptical party base and the broader public.

It didn’t go well. After Schröder was forced to resign as party chairman in 2004 over the reforms (he remained chancellor for another year), Scholz also stepped down.

His support in the Hamburg SPD had also evaporated. Allies told him that if he stood for reelection as party chair that year, he would lose. He listened. 

And then he regrouped.

Behçet Algan, a hairdresser and SPD member | Hans von der Burchard/POLITICO

“He’s a fighter. He never lost his courage and confidence,” said Behçet Algan, a hairdresser and SPD member from Altona who has known Scholz for nearly 40 years as both a client and party colleague. “He always planned ahead and looked up” for the next career opportunity, Algan said.

Following a short stint as labor minister at the end of Merkel’s first coalition with the SPD, Scholz found himself once again out of work after Germany’s 2009 election, when his party was left in opposition. 

So he went home to mount another comeback.

A few weeks after losing his job as minister, Scholz celebrated his reelection as chair of the regional SPD branch that had banished him years earlier. He managed to unite the party behind him with a no-nonsense centrist approach. Two years later, he led the SPD to victory in Hamburg and became mayor.

“He delivered what he promised voters,” Milan Pein, the budgetary spokesperson of the SPD in Hamburg, said of the following seven years of Scholz’s leadership in the city. He cited his efforts to rein in the rise of housing rents, create 10,000 new apartments every year and to abolish study and childcare fees. 

Chaos and destruction

Hamburg, Germany’s second-largest city, flourished during Scholz’s tenure.

Yet there were also problems, big ones.

During the G20 summit in 2017, vandals rampaged through the city, destroying storefronts, setting cars on fire and leaving a trail of chaos and destruction in their wake. The summit, which was supposed to showcase Hamburg as a modern, global city, was a fiasco.

Scholz stood accused of not preparing the city for the onslaught of violent protesters.  He responded, as ever, in measured tones, apportioning some the blame via surrogates on others. He eventually apologized to the citizens of Hamburg for the security breakdown. His standing once again recovered. 

“A lot of things bounce off him,” said Farid Müller, the budgetary spokesperson of Hamburg’s Greens.   

Scholz has also come under scrutiny for a connection to a massive tax evasion scheme, known as “CumEx,” that defrauded the German government of more than €30 billion.

One of the banks involved in the affair, Hamburg’s M.M. Warburg & Co. could have been ordered by Hamburg tax authorities to repay €47 million in what officials said were ill-gotten gains in connection with the fraud.

The tax office let the statute of limitations on the payment demand expire, however. Scholz said he didn’t intervene as mayor on the bank’s behalf. But he did meet on three separate occasions in private with one of the owners of the bank. What did they discuss? Scholz says he can’t remember. 

He denied any wrongdoing, and the bank repaid the money this year.

‘We won’t find anything’

Opposition parties in Hamburg have launched investigations into both the G20 events and the CumEx affair. They haven’t found clear evidence against Scholz so far.

David Stoop, a far-left lawmaker on a Hamburg committee investigating the CumEx scandal, said that Scholz was adept at deflecting attacks on his record.

“Whenever there’s criticism, he is very adept at drawing attention away from the critical issues” by stressing at length initiatives he has taken to iron out deficiencies or successes he’s achieved in other areas, Stoop said.

Scholz will have to appear again in front of the investigative committee early next year — potentially as chancellor. But Stoop and his colleagues are already resigned to the fact that it won’t change anything.

“There are very many discrepancies, but we don’t have the one point where we can say that Scholz is directly responsible,” Stoop said. “We probably won’t find it either.”

Not if Scholz can help it anyway. Sly as he may be, he knows all too well the political risks that would arise if these matters ever ended up in the courts.

That’s not Roman wisdom, but old Hamburg seafarer speak: “In court and on the high seas, you’re in God’s hands.” 





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