No-show of Berenberg CEO Hans-Walter Peters at PANA hearing

Title photo: © Bankenverband

Find all background material for this hearing on the event page.

Today, Thursday 9 February, the European Parliament’s Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion (PANA) held its second round of hearings on the role of intermediaries in the offshore world.

The first panel of the day mostly focused on the business affairs of the Hamburg based private bank Berenberg. The bank, which has specialised in private banking for high wealth individuals, drew unwanted attention to its dealings in spring last year, when the German newsportal NDR published a series of articles on the banks involvement with the Panama Papers.

With the help of the data leak, the German ICIJ journalists could unveil that Berenberg had had extensive ties with the offshore world for years. Among their clients one can find some of the who is who of organised crime. Gabriel Fallon, the alleged right hand of the Valle del Norte cocaine cartel, for example, held accounts with the bank. Also offshore companies belonging to the Vanagels Connection, a vast and well-known money laundering network from the Baltics, had accounts with Berenberg.

Benedikt Strunz, one of the journalists who has written on Berenberg, told the Committee today that Berenberg had an excellent relationship with Mossack Fonseca, the infamous law firm at the centre of the Panama Papers. Co-founder Ramón Fonseca himself had several private accounts with Berenberg while a Director of Berenberg Switzerland used one of Mossack Fonseca’s shell companies. One of Ramón Fonseca’s sons even completed a short-term internship at the bank.

Hans-Walter Peters, managing partner at Berenberg, refused to appear in front of the Inquiry Committee today, referring to on-going investigations by the BaFin, the German bank regulator. “For me, Mr Peters no-show can only be interpreted as a guilty plea as Peters has also been invited to come before the Parliament in his role as acting President of the Association of German Banks”, commented GUE/NGL MEP Fabio De Masi before the hearing. “The big German banks need to think twice about whether someone who may have a case to defend before a judge and one who shirks his public duties should be their choice as president of the guild”, said De Masi.

Instead of Peters, the Association of German Banks sent their General Manager Michael Kemmer. From 2006-2009 Kemmer was part of the management board of the German bank Bayern LB. From 2005-2013, one of its subsidiaries, the Banque LB Lux, based in Luxembourg, was itself quite active in creating and administering shell companies. Several MEPs pressed Mr Kemmer on his past with Bayern LB, but he just claimed to haven’t been aware of any of the bank’s offshore activities.

Watch GUE/NGL MEP Fabio De Masi question Michael Kemmer, General Manager of the Association of German Banks, on his past as a board member of Bayern LB, yet another bank with ties to the offshore world.

One of the highlights of the hearing was certainly the appearance of Katrin Keikert. Ms Keikert is one of two former Berenberg Compliance Officers that were fired by the bank after having warned the management of the riskiness of some of its clients. According to Ms Keikert, Berenberg’s partners at first welcomed their risk report. Once, however, the two women discovered that also one of the partner’s themselves was involved in a money laundering case, the tables turned and the two employees lost their jobs. Colleagues were forbidden to talk to them and the bank prohibited them to pass on their findings to regulators as the bank would sue them otherwise. This happened in 2013 and still today, the other compliance officer has to defend herself in front of a labour court for having done her job.

Berenberg claims that it has since cleaned up its client register. The auditing firm Deloitte, which looked into the allegations raised by the compliance officers, certified the bank no wrongdoings. The quality of the result of the audit, however, was not only questioned by Ms Keikert, but also by other Berenberg employees. In 2014, for example, the bank was accused of having laundered drug money for Hezbollah.

To re-watch the hearing, click here.