Criminal prosecutors review Deutsche Bahn fraud allegations | #phishing | #scams


Public prosecutors in Stuttgart are assessing fraud allegations raised by two whistleblowers at Deutsche Bahn.

The Financial Times on Thursday reported that the state-owned German railway operator had received repeated warnings that cost inflation at the construction of Stuttgart’s new railway station was caused by glaring mismanagement and suspected corruption.

Prosecutors told the FT they had been unaware of the allegations and were now reviewing them. If prosecutors conclude that there is reasonable suspicion of potential criminal conduct, they can launch a criminal investigation under German law.

The station overhaul, dubbed Stuttgart 21, is Germany’s biggest infrastructure project; its costs have ballooned from €2.5bn to €8.2bn.

One of the whistleblowers — an experienced expert in cost allocation — estimated the financial damage to the company from the observed misconduct stood at €600m. This employee, who still works at Deutsche Bahn, also claimed that financing partners were deliberately misled by the company.

Winfried Hermann, the Green transport minister for the state of Baden-Württemberg, criticised Deutsche Bahn for failing to inform the state government about the allegations or internal investigation. “The state is providing significant funding and is entitled to receive comprehensive information,” he said, adding that his ministry will formally ask the railway operator for an explanation.

Deutsche Bahn on Thursday promised “maximum transparency” and told the FT that it would disclose the results of its internal probe to “authorised parties”. The €40bn company stressed that it investigated “all available allegations regarding the issue thoroughly based on its internal standards and the law” and that no violation of law was found.

One of the whistleblowers was fired in December 2016 by Deutsche Bahn over alleged work-related misconduct while the investigation into the allegations was still ongoing. The company said the dismissal was entirely unrelated to the whistleblower complaint — a view that was upheld in court.

The second whistleblower abruptly broke off contact with compliance staff, fearing retaliation and believing there was no appetite to investigate the allegations thoroughly, according to people familiar with the matter.

Transparency International, an anti-corruption lobby group in which Deutsche Bahn is a member, said it had requested a “prompt and comprehensive” statement.

“We expect from our corporate members that whistleblower information is investigated diligently,” said Transparency International, adding that it also expected that employees who flag potential misconduct should be protected from retaliation.

Fabio De Masi, a former MP who now is a private investigator into white-collar crime, said the Stuttgart 21 revelations were “another embarrassment” for corporate Germany and urged the country’s parliament to summon transport minister Andreas Scheuer as well as Deutsche Bahn executive Ronald Pofalla over the issue. “I do hope that criminal prosecutors will deal with the issue,” he said.

Dieter Reicherter, a retired presiding criminal judge and former state prosecutor who is active among the Stuttgart 21 protest groups, said the allegations were “grave” and need to be diligently investigated.

The federal transport ministry, which oversees Deutsche Bahn, did not respond to an FT request for comment.

Additional reporting by Guy Chazan in Berlin



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