An autumn day in October 2016 marked a significant turning point in Peter G.’s life. After signing a contract to purchase a plot of land in Varel, Lower Saxony for 600,000 euros, his plans came crashing down. As a 60-year-old civil servant, he lacked the necessary funds to invest the required 1.6 million euros to build senior-friendly apartments on the property, and no bank was willing to loan him the money. Turning to the Elsflether Werft (EW), where he worked as a technical costs auditor, Peter G. requested financial assistance from the company’s board of directors to support his construction project. The agreement involved a sum of 400,000 euros and was directly tied to his role in approving invoices related to the renovation of the “Gorch Fock” sailing ship. However, suspicions of corruption involving inflated repair costs for the ship could not be substantiated, leading to Peter G.’s initial indictment.
The subsequent investigation revealed a pattern of mismanagement and embezzlement at the EW, with top executives Klaus Wiechmann and Marcus Reinberg engaging in fraudulent activities to supplement the company’s finances. Allegations included a discount scheme negotiated with subcontractors, where the EW would request a 15% rebate on invoices, which should have been returned to the Bundeswehr, the main contractor. Instead, Wiechmann and Reinberg withheld the amounts, discussing ways to conceal the transactions. This practice allegedly generated 7.2 million euros in profits over eleven restoration projects, resulting in further charges against the company’s leadership and subcontractors. The third case centered on the diversion of 19.5 million euros to companies owned or controlled by Reinberg, even as the EW faced financial difficulties and eventual insolvency.
The questionable financial practices at the EW came to light through an extensive investigation involving multiple indictments and a complex web of transfers and loans to obscure the origins of diverted funds. Testimonies from former employees and auditors revealed a systematic siphoning of resources, resulting in severe liquidity shortages and financial instability within the company. Despite warnings and advice to prioritize bill payments over providing large loans, the management continued to redirect funds, leading to the eventual collapse of the company in early 2020. With the subsequent change in ownership, the completion of the “Gorch Fock” restoration project, and the resignation of key executives, the repercussions of the scandal were far-reaching and implicated multiple parties.
Former Defense Minister Ursula von der Leyen faced scrutiny in connection with the scandal, acknowledging collective responsibility for the failures within her ministry and the oversight of defense contracts. Despite the upheaval, she remained in office until her appointment as President of the European Commission in December 2019. Meanwhile, Marcus Reinberg, a central figure in the case, transitioned to a legal career and presented himself as a certified compliance officer, emphasizing adherence to legal standards. Peter G., the central figure in the initial indictment, retired following his disclosure of the corrupt dealings, prompting an investigation that ultimately exposed the extent of corruption within the EW. As the legal proceedings unfolded, the failed construction project for senior housing served as a reminder of the personal and professional consequences resulting from the illicit activities uncovered at the Elsflether Werft.
