A top contender for Angela Merkel’s office as chancellor will on Monday face an investigation into an anti-money laundering agency overseen by his ministry.
The appearance of Finance Minister, Olaf Scholz, the frontrunner in the race to succeed Merkel, before the German parliament’s finance committee comes less than a week before Germans go to the polls in national elections on September 26.
MPs from opposition parties will have the opportunity to ask Scholz questions via video link after the finance and justice ministries were raided by prosecutors on September 9 as part of a probe into the Cologne-based Financial Intelligence Unit.
The body, part of Germany’s customs authority tasked with tackling money laundering, is suspected of failing to report potential wrongdoing to the relevant authorities.
Merkel’s conservative bloc has seen a steady decline in opinion polls under unpopular candidate Armin Laschet, allowing Scholz’s centre-left Social Democratic Party to grab a late polling lead.
“Nerves at the SPD are shredded” at the prospect that the scandal could have an impact on the party’s poll ratings, according to German weekly Der Spiegel.
But prosecutors are also under scrutiny over the timing of their raids.
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The under-pressure conservatives have seized the opportunity to attack Scholz for his involvement in the controversy.
In a televised election debate last Sunday, Laschet said the result of the finance minister’s actions was that “supervision had failed” and accused Scholz of trying to brush the issue under the carpet.
In response, Scholz distanced himself from the unit, saying the raids “had nothing to do with the ministries”, and accused Laschet of asking “dishonest” questions.
Scholz has previously been criticised for the failure of his ministry to heed early warning signs from the payments company Wirecard, which collapsed last year after acknowledging a 1.9-billion-euro ($2.2-billion) hole in its accounts.
The finance minister appeared in front of a parliamentary inquiry into Wirecard earlier this year, where he denied responsibility for the collapse of the company.
On the campaign trail, Scholz has defended his response to Wirecard, saying that he has led an effort to strengthen Germany’s financial watchdog in the aftermath.
“We did what we had to do,” Scholz said when confronted with accusations in a televised debate.
Scholz has also come under fire over Germany’s “cum-ex” tax fraud saga, a complicated share dividend scam that went on for years and is estimated to have cost the state some 5.5 billion euros.
The former mayor of Hamburg has denied putting pressure on the city’s tax authorities after meeting with the owner of a bank implicated in the scandal in 2016.
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