Constitutional Crisis in Saxony-Anhalt (Part 2)

From the IBG Scandal to the Refusal to Conduct an Audit: How Saxony-Anhalt Is Losing Its Political Memory – and Thus Becoming a Case for Scrutiny Again

A country that does not learn from a scandal the duty to scrutinize

has not worked through it, but has merely survived it.

The first part of this series dealt with a petition I filed to protest the way the judiciary, public prosecutors’ offices, the Ministry of Justice, and state legislative bodies had handled my long-standing dispute in Saxony-Anhalt. It also concerned a criminal investigation I had initiated against the Petitions Committee and the President of the State Parliament with the Magdeburg Public Prosecutor’s Office. The Petitions Committee had rejected my request on grounds that were factually untenable and referred the matter to the state parliament for a decision. This second part focuses on another body that dealt with the same issue: the Saxony-Anhalt State Court of Audit. My correspondence with them can be found here.

Last September, I asked its president to conduct a review. The State Court of Audit oversees the state’s budgetary and financial management; so it made sense to me to also examine how public funds, funding structures, petitions, and criminal complaints are handled. Specifically, the issue concerned the handling of my petitions by the State Parliament’s Petitions and Legal Affairs Committee, as well as the handling of my criminal complaints against a presiding judge at the Saxony-Anhalt Finance Court by the Dessau-Roßlau Public Prosecutor’s Office, the Naumburg State Attorney General’s Office, and the Ministry of Justice. In the end, I had the same experience as I had previously with the Petitions Committee: there was no substantive review.

This article asks what this evasion means – politically, institutionally, and with regard to a state that should have learned from past scandals involving funding and oversight. It also asks what reasons might have guided the president of the Saxony-Anhalt State Court of Audit in his decision.

“The ways of the Lord are inscrutable,” as the saying goes. This idea goes back to the Apostle Paul’s letter to the Romans (Romans 11:33–36):

Oh, what depth of riches – both the wisdom and knowledge of God! How unsearchable are His judgments and His ways past finding out! For “who has known the mind of the Lord, or who has been His counselor?” Or “who has first given to Him, that God should repay him?” For from Him and through Him and to Him are all things. To Him be glory forever!

Life offers many opportunities to dwell on this thought: What a miracle, what good or bad fortune, what a twist of fate. It is not uncommon to dwell on this thought when it comes to human actions.

Yet while the inscrutability of God calls for humility, the inscrutability of human action must not be used as an excuse. Where people act, where officials make decisions, where oversight bodies investigate or fail to investigate, inscrutability is not fate. It must be understood as a call to uncover the nature of the action. For even evasion has its reasons. Even a failure to audit does not simply arise out of nowhere. It is part of a broader context, protects interests, avoids conflicts, and produces effects. Precisely for this reason, political analysis begins where a decision is not explained but merely formally settled.

One thing in particular remained inscrutable to me: how the president of the State Court of Audit reacted to my audit request. I had asked him to investigate how the public prosecutor’s offices, the Ministry of Justice, and the State Parliament’s Petitions and Legal Affairs Committee had handled a criminal complaint against a judge at the Saxony-Anhalt Finance Court and the resulting petition. Later, I expanded the request to include a second line of inquiry: the state’s handling of funds that had flowed into an innovation supported by public funds – my reading machine MIRAKEL – where they were exposed to avoidable loss of value, with the knowledge of relevant decision-makers in Saxony-Anhalt. His final response, dated January 15, 2026, read:

The numerous reviews conducted at various levels of the administration, the judiciary, and the political sphere reinforce my belief that the proceedings were handled properly.

...

I can see from your comments that you do not share my view. Nevertheless, with this response, I consider your matter resolved and ask that you refrain from further correspondence on this issue, as I will not be providing any further response.

Set against this was my own assessment: some 300 pages of facts and analysis. Yet, just as the Petitions Committee had done – see Part 1 of Constitutional Crisis in Saxony-Anhalt – the State Court of Audit also steadfastly maintained that the previous institutions had already properly examined the matter.

Yet Saxony-Anhalt’s State Budget Regulations require the State Court of Audit to monitor and audit the state’s budgetary and financial management – and thus also to examine whether allocated funding fulfills its purpose or turns into a loss of value. This concerns not only the formal allocation and initial use of funds, but also the long-term success and preservation of value of the funded projects. If invested grant funds are damaged by the actions or misconduct of third parties and are thereby devalued prematurely or avoidably – in other words, if the funding fails to serve its original purpose – this directly affects the Court of Audit’s mandate to audit and raise objections. This is particularly true when government agencies have either enabled this risk through glaring control deficiencies, supervisory failures, or inadequate project management, or have knowingly tolerated it.

Where public funds, guarantees, equity investments, and a potential loss of value converge, the issue is no longer a private matter but concerns the state’s own fiscal and economic management. This is not a legal dispute, but rather a question of whether the public funds allocated have served their intended purpose, whether identifiable risks were assessed, and whether government agencies have fulfilled their responsibility to preserve value, exercise control, and prevent damage.

When a state audit office justifies its refusal to conduct an audit by stating that there have already been numerous audits “at various levels of administration, the judiciary, and politics,” this effectively amounts to a relinquishment of its own oversight function – and this in light of an experience that will be addressed later in this article: the IBG affair, in which state politics and the judiciary came into view because of allegations of misuse of subsidies, backroom deals, delays, and political interference in the judiciary.

But the president of the State Court of Audit was apparently not interested in this. So I wrote to him:

The Liske case is the real scandal within the IBG case group, because while corruption and nepotism have always existed, obstructing the successful use of subsidies is of a different order..

But what could have been the reason for not applying the State Budget Regulations in my case – and for ignoring the fact that the European Anti-Fraud Office (OLAF) later recommended the recovery of 162.3 million euros in EU funding in connection with the same funding structure? The following considerations will explore these reasons.

Background

We must first look back more than twenty years. In October 1995, the Stadtsparkasse Magdeburg terminated a loan without notice or explanation – an event that, following an experience during my military service, drove me to the brink of suicide for a second time. To avoid having to give up my company, my only option was to take out additional loans from Stadtsparkasse and KfW and to accept an investment from the Innovation and Investment Company of Saxony-Anhalt (IBG). The way the Stadtsparkasse continued to treat me was unspeakable; and while I later described the actions of the Saxony-Anhalt Finance Court as “white torture,” this had an entirely different quality to it. The Stadtsparkasse, the guarantee bank, the IBG, the Chamber of Industry and Commerce (IHK), and other institutions were part of a network in which politicians, interest groups, banks, and the business community juggled public funds, and state interests and prospects often served merely as a façade to serve individual interests.

As early as June 2006, I reached out to the then-Minister of Economic Affairs, Dr. Reiner Haseloff. My argument was that the savings bank’s conduct and the relevant authorities’ failure to act threatened to destroy a venture into which around four million euros had been invested – innovation funding, equity investments, loans, and my entire revenue. I wrote to him:

In my view, it is incomprehensible that an innovation initiative – driven by approximately 4 million EUR in innovation funding, equity investments, loans, and total revenue – which a struggling country like ours could use to promote itself and demonstrate its capacity for innovation, should be destroyed by actions for which I still hesitate to find the right words, as I am still searching for a way out.

In my desperation, I filed a complaint in July 2006 against the Ministry of Economic Affairs – to no avail – alleging a violation of the Small and Medium-Sized Enterprise Promotion Act. I also reached out to Ralf Seibicke, who was then president of the State Court of Audit. There, too, the core issue was the same: Can a state allow an innovation co-financed with public funds to fail while the responsible agencies pass the buck to one another, each claiming the matter falls under the other’s jurisdiction?

With our MIRAKEL development, the state of Saxony-Anhalt now actually has a tool at its disposal that could help it create solutions for a wide variety of problems and pursue innovative goals in the areas of e-government, education, and economic development – without having to import expensive software and even more expensive projects from outside.

This background story could be told in much greater detail. Here, it serves primarily to provide context for a case that brought Saxony-Anhalt national – one might even say international – attention: the IBG scandal.

The IBG Scandal

It was primarily Handelsblatt that brought the scandal to national attention in 2013. To this day, the IBG scandal is considered one of Saxony-Anhalt’s most serious subsidy scandals. At its center was the state-owned Innovation and Investment Company (IBG), which was supposed to use state funds and EU structural funds to support small, innovative start-ups in the region. Instead, millions were embezzled, misappropriated, and funneled opaquely into networks involving management, investments, and political connections. In some cases, funds ended up in shell companies without the jobs promised locally that had been contractually guaranteed. As a result, the Ministry of Finance and the Ministry of Economic Affairs came under pressure due to massive failures in oversight. State Premier Reiner Haseloff (CDU) was particularly in the crosshairs, as the abusive structures had largely emerged during his previous term as Minister of Economic Affairs and Chairman of the IBG Supervisory Board. For Haseloff, this crisis was nothing new: the waste scandal in the Jerichower Land district and the Dessau subsidy affair had already exposed glaring deficiencies in oversight.

To address this government failure, the opposition demanded political consequences – and initially met with determined resistance from the governing coalition. Kay Barthel, then the CDU parliamentary group’s spokesperson on fiscal policy, initially tried to prevent the establishment of an investigative committee.

However, this does not require an additional investigative committee funded by taxpayer money. The matter can also be resolved through the existing committees, as demonstrated by the special session of the Finance and Science and Economy committees in August.

In the end, the opposition’s the opposition’s minority rights forced the establishment of the investigative committee. Over the course of two and a half years, the committee examined the ministries’ inadequate administrative and technical oversight and, in a final report of nearly 300 pages published in 2016, called for stricter regulatory oversight mechanisms. Even while the committee was still at work, a remarkable change of role took place: Kay Barthel became president of the Saxony-Anhalt State Court of Audit. From then on, he was no longer a party politician but the state’s chief financial auditor – in other words, precisely the person who was supposed to investigate and, if necessary, object to loss of value, failure of purpose, and inadequate safeguards for public funds.

At the same time, the scandal expanded to the European level because substantial sums originated from the European Regional Development Fund (ERDF). The European Anti-Fraud Office (OLAF) intervened and identified serious violations of funding regulations. It was later publicly reported that OLAF had recommended the recovery of 162.3 million euros. Even if the budgetary settlement ultimately was not to be understood as a simple transfer of this sum to Brussels, the political conclusion remained severe: Saxony-Anhalt had a control problem of statewide and European significance in the administration of public funding.

The Overlooked Audit Case

It was not until years later that I fully realized the significance of the fact that my case played no role in this reckoning, even though I had written early on to Dr. Haseloff, the president of the State Court of Audit, to members of the state parliament, and to other authorities. For the investigative committee was not merely concerned with individual cases of personal enrichment. Its mandate extended further. It was also tasked with clarifying whether the actions or omissions of the state government and subordinate agencies had caused economic harm to companies in which the IBG or its funds and subsidiaries held stakes:

The committee is to investigate, for the period from 1997 to October 2013, whether – and, if so, to what extent and in what manner – actions or omissions by the state government, particularly within the purview of the Ministry of Science and Economy (formerly the Ministry of Economy and Labor) and the Ministry of Finance, as well as subordinate authorities and institutions, ... companies in which Beteiligungsgesellschaft Sachsen-Anhalt mbH, IBG Innovationsbeteiligungsgesellschaft Sachsen-Anhalt mbH, IBG Beteiligungsgesellschaft Sachsen-Anhalt mbH, or the subsidiaries or fund companies of the aforementioned companies held an equity interest may have suffered economic damage.

The final report also includes a recommendation whose focus is directly relevant to my case:

The following recommendations are made regarding the state’s involvement in the area of public venture capital: As a first step, an analysis must be conducted to determine the extent to which there is actually a failure of the venture capital market. How many cases are there in which young, innovative entrepreneurs in Saxony-Anhalt have failed for financial reasons despite having an innovative business approach?

That question should have reached me. It should have reached MIRAKEL. It should have reached the letters in which I had drawn attention to these problems years earlier. An investigation that asks such a question yet fails to address a case of this nature – one that was documented early on – falls short of its own standards.

To this day, I wonder whether Reiner Haseloff took my complaint personally – and whether my involvement was blocked because I had already drawn attention to the problems years earlier. My case was also of a special nature. In January, I wrote to the president of the State Court of Audit:

The Liske case is the real scandal within the IBG case group, because while corruption and nepotism have always existed, obstructing the successful use of subsidies is of a different order.

Kay Barthel and Political Memory

Against this backdrop, the inscrutable ways of things become understandable – and only arguments, not assurances, can counter the following thesis: As a CDU member of the state parliament and his parliamentary group’s spokesman on fiscal policy, Kay Barthel played a political role in ensuring that Minister President Reiner Haseloff emerged unscathed from the IBG affair. Subsequently, he became president of the State Court of Audit of Saxony-Anhalt. Years later, of all times in the run-up to the upcoming state elections, he seems to feel obligated to shield Reiner Haseloff and the CDU from further trouble. To that end, he is willing to ignore his duties under the state budget regulations, turn a blind eye to the loss of value in public funding – and leave Saxony-Anhalt unaudited precisely where the state’s own history would require an audit.

What Saxony-Anhalt Must Learn

The Dessau subsidy scandal involved the misuse of EU and state funds and ministerial responsibility. The waste scandal surrounding Möckern and Vehlitz involved illegal dumping, regulatory failures, and the question of when the ministry knew what. The IBG affair involved private management structures, oversight, and the loss of public purpose. The incidents are not identical, but that is precisely why they are revealing. They show how a state can weather its scandals without deriving from them a lasting obligation to conduct audits.

My initiative regarding the Saxony-Anhalt State Court of Audit is not simply another detail in the context of the IBG affair. It serves as a lesson. It raises the question of whether public funds are being used for their intended purpose, whether oversight begins early enough, whether political accountability truly means accountability – and whether a state is willing to learn from its mistakes. The fact that the State Court of Audit issued sharp criticism at the time and later criticized the state government again for its unwillingness to learn is not merely a historical footnote. It is a benchmark for the present – a benchmark that evidently still has no effect.

A state does not lose its political memory by forgetting its scandals. It loses it when the lessons no longer create an obligation. Saxony-Anhalt knows where a lack of oversight can lead. It knows that funding policy entails a special responsibility to ensure the funds are used as intended and in a sustainable manner. It knows that responsibility can get lost behind private management structures, supervisory boards, ministries, committees, and government agencies. It knows that the European Union scrutinizes very closely whether its funds are being handled with care. It knows all of this – and yet, in my case, it acts as if failing to investigate is the most reasonable way to handle the matter.

For me, this is where the constitutional crisis lies here too. The State Court of Audit of Saxony-Anhalt is complicit and protects structures that it is legally obligated to audit – yet instead of conducting an independent audit, it acts as if it were politically bound. The crisis manifests itself in the internal erosion of a system that functions formally but turns a blind eye to the substance. Letters are answered, proceedings are conducted, responsibilities are examined, and decisions are made. Yet the core remains untouched. The truth remains outside, while the form maintains its order inside.

Only the truth offers hope. Saxony-Anhalt does not need yet another culture of shirking responsibility, yet another art of politely letting matters slide, or yet another refinement of institutional self-reassurance. It needs a culture of scrutiny that does not ask how to deal with unpleasant incidents, but what they say about the state. It needs a political system that derives not only reports but also obligations from past scandals. It needs institutions that do not protect one another, but hold one another accountable to the law.

The conspiracy of silence in Saxony-Anhalt may still believe it can sit out my case. But in doing so, it is putting more at stake than just my rights. It is jeopardizing the future viability of a state that faces enormous challenges and cannot treat truth as a luxury, but rather needs it as a prerequisite for any renewal.

And, incidentally, I take the liberty of asserting my own rights as well.

There is no crime, no trick, no ignorance, no complacency, no stupidity, no ruse, no deception, no fraud, no vice that should be spared from scrutiny and exposure. Meet their lack of respect with respect; expose their silence as cowardice, their logic as deceitful, their speeches as serving their own interests rather than the common good, their scheming in place of their integrity – but do not ridicule them in full view of everyone, for we are a people who have a future only if we stand together: Do not lower yourselves to their level, but transform yourselves through engagement with them. And sooner or later, public opinion will recognize the value of this. Debate and truth alone are probably not enough – but they are the only means without which all others fail.

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