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Corruption

Uphill struggle against misuse of public funds

Billions of euros of tax payers’ money are wasted every year, the German Taxpayers’ Union claims. The Union takes on politicians and bureaucrats, and would like the waste of public funds to be made a criminal offense.

Andrea Defeld's desk is overflowing with documents. Files and papers are strewn across the floor. Each one documents the waste of taxes – from roads no one needs to huge building projects or mismanaged subsidies. There's even a file for gold-plated manhole covers for street sewers.

In 2012, Andrea Defeld, a researcher at the German Taxpayers' Union (BDSt), documented dozens of cases in which public funds were clearly being wasted. She has gathered examples from all across North Rhine-Westphalia, Germany's largest federal state.

The examples are shocking. In the city of Dortmund, the cost of building an arts centre tripled. “When they applied for planning permission, they simply ignored important operating costs,” Defeld told Deutsche Welle.

Somewhat dubious projects

Andrea Defeld with folder 
Photo: Wolfgang Dick, DW

Defeld has been fighting for years against the mismanagement of public funds

She's stunned by a metal fence the city of Hagen built to protect a school wall from graffitists. “The problem is that you can easily reach through the fence. You can even get around it in places.” The fence cost tax payers some 15,000 euros.

The city of Aachen built a huge industrial estate not far from the Dutch border. But ten years after its construction only around six percent of it is being used. All the expensive experts' reports got their predictions wrong. An outdoor theatre, also in Aachen, has only staged three productions this year, according to the BDSt. That may be because it doens't have a roof.

Andrea Defeld concedes that in the majority of cases those responsible for the projects do actually mean well. But she believes that if politicians want to bestow a museum, a swimming pool or yet another parking lot upon their constituents, they shouldn't lose sight of reason.  

Prior to taking a decision, a certain amount of creative accounting takes place, she says. “I'm surprised that no one says anything.” Many local politicians often lament that had they known projects would be so expensive, they would never have voted for them.

In fact, decision-makers in communities face tough choices. They have to award the contract to the cheapest provider. But those responsible for projects should realise, Defeld says, that the cheapest providers often can't keep their commitments. “This is often ignored,” she says.

Empty stage in a park in Aaachen 
Bild: Bund der Steuerzahler

Hardly used: a theatre stage in a park in Aachen

Co-financing can lead to mismanagement

Other mismanagement is down to joint-financing. When the federal government, the state or even the European Union in Brussels co-finance a project, cities often come up with projects they would never have built without the additional funding. “Often municipalities are saddled with secondary costs,” Defeld says. 

Even after 12 years of documenting cases of mismanagement, she is still surprised by the recklessness of politicians and bureaucrats when it comes to spending public funds.

Naturally, few cities and institutions want their bad decisions to be made public. So it's mostly concerned citizens who call Andrea Defeld to report cases. “But occasionally furious mayors call with information,” she says. In any case, the suspected cases then have to be verified.

“That's not always easy,” Defeld remarks. She writes to municipalities and asks for clarification. Often her questions simply remain unanswered, but sometimes things are deliberately covered up. “Information is often incomplete,” she says. Follow-up questions mean the process drags on.

Hard to access information

Many council meetings aren't held publicly. “And then there are no minutes that would help the investigations.” Even audits by the German Federal Court of Auditors aren't made publicly available. 

Folders 
Foto: Soeren Stache dpa

Facts have to be painstakingly collated

“We don't have the powers of a body of public prosecutors or a court of auditors,” Andrea Defeld says, “but we are persistent.”

It's true that the Union can't force municipalities to provide information, or even seize documents. But since it was founded in 1949 the Taxpayers' Union has established itself as an institution that many politicians take seriously.

Defeld says that the Union has managed to prevent many projects, including unnecessary roundabouts and expensive advertisements.

But despite these successes the Taxpayers' Union does have its critics. The oft-cited figure of some 30 billion euros of wasted tax payers' money is a mere estimate, according to the Federal Court of Auditors. Official estimates put the figure at two billion euros. 

Waste of public funds should be punishable

Andrea Defeld counters that it's not so much about the exact figures, but rather the way in which taxpayers' money is being handled. “It's an absolute scandal that tax fraud is punished, but the waste of public funds isn't.”

While embezzlement is in fact a criminal offense, critics point to the fact that it has to be proven and that, for the law to hold, politicians have to have been knowingly siphoning funds into their own pockets. That, however, is seldom the case.

It's more likely that politicians simply don't give much thought to a project's long-term consequences, preferring to focus on short-term electoral successes. Given that in 2013 there will be both general elections and three federal elections, voters are likely to be tempted by more campaign give-aways – even if they come at a high price. And the folders will continue to pile up on Andrea Defeld's desk.

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