Deutsche Bank Lawyer Failed to Stop Spying Plan, Report Shows
An employee at Deutsche Bank
Sept. 17 (Bloomberg) -- A former Deutsche Bank AG lawyer failed to stop an operation to monitor a dissident shareholder, according to portions of an internal report on the spying scandal at the company.
Reinhard Marsch-Barner, then a senior counsel, took part in 2006 meetings that led to the hiring of private detectives to monitor Michael Bohndorf, according to part of a report by a law firm retained by Deutsche Bank and obtained by Bloomberg News. The report details how investigators took pictures of Bohndorf’s home on the Spanish island of Ibiza and attempted to place an intern at a law firm representing a client suing the bank.
The information is part of a 180-page report by Cleary, Gottlieb, Steen & Hamilton LLP on four incidents that are now the subject of a probe by the German financial regulator and are also being reviewed by prosecutors in Frankfurt. The involvement of a lawyer in the planning might make it hard for Germany’s biggest bank to “shift the blame to others,” said Thomas Hoeren, a professor of media law at the University of Muenster.
“If there was a nod from the legal department, then Deutsche Bank has a problem,” Hoeren said in an interview.
Deutsche Bank has taken all steps necessary to clear the issue, company spokesman Ronald Weichert said in an interview. The lender is confident that the Cleary investigation was thorough and drew upon all available information, he said.
Deutsche Bank’s management and supervisory board members didn’t authorize “the questionable methods,” the company’s supervisory board said in a statement July 28. The bank had previously said it found four incidents where privacy laws may have been violated by surveillance from 2001 through 2007.
‘External Company’
Marsch-Barner didn’t reply to two phone calls and an e-mail seeking comment. He retired in 2008 and is now an attorney at Linklaters LLP in Frankfurt.
Marsch-Barner later told his boss, Hans-Dirk Krekeler, then general counsel, that information was collected about Bohndorf by an “external company.” Krekeler didn’t look into the matter, according to the report.
Krekeler, who retired in 2007, said in an interview that Marsch-Barner only told him in two sentences that the bank had employed an “outside company” to collect information about Bohndorf. An outside company could have been a mainstream data provider and from what he was told, there was no indication that he needed to take additional steps, Krekeler said.
Annual Meeting
Bohndorf attracted the attention of the bank at the June 1, 2006, annual meeting where he criticized the election of Chairman Clemens Boersig and asked the bank questions about a conflict between the lender and German businessman Leo Kirch. Kirch sued Deutsche Bank several times over the collapse of his media empire which he blames on the lender. Marsch-Barner worked on cases involving Kirch at the bank.
Boersig asked Wolfram Schmitt, the head of investor relations, after a meeting on July 5, 2006, whether the department should know more about Bohndorf, the report said. After the meeting, Schmitt contacted Rafael Schenz, the then head of the bank’s German corporate-security unit.
Schenz and Schmitt were fired in July and have both sued the bank for improper dismissal.
In the Deutsche Bank case, Schenz on July 7, 2006, contacted Bernd Buehner, the head of detective firm Private Risk Advisors, who said he could submit a quote for his services within a few days, according to the report.
Vacation Apartment
Marsch-Barner sent Schmitt Bohndorf’s addresses in Hamburg and on Ibiza, where the shareholder had moved in 1991. The corporate security department found a link to Bohndorf’s Ibiza home on the Internet, which he offered for rent as a vacation apartment, according to the Cleary report.
On July 14, Schmitt, Schenz and Marsch-Barner discussed the matter with Buehner. According to the report, it couldn’t be determined whether they met in person or talked on the phone.
Buehner said his company would investigate Bohndorf in Hamburg and on Ibiza for 35,000 euros ($51,000) plus expenses for an operation that was to last for about 12 weeks, the report said. Cleary couldn’t determine who eventually told Buehner to go ahead with the plan. One goal was to find out whether Bohndorf was working with Kirch.
The Cleary lawyers said it was “unclear” whether Marsch-Barner commented on the project from a legal perspective. “Prof. Dr. Marsch-Barner told us that he didn’t consider himself as a legal consultant for the project,” the report said.
Relationship
A company can only take such actions if there’s concrete suspicion of illegal activity, said Hoeren. The only information was that Bohndorf had a relationship to Kirch, he said.
“Suspicion of having contact with Kirch isn’t sufficient grounds to spy on someone,” Hoeren said.
As part of the operation, one of Buehner’s men rented Bohndorf’s home on Ibiza, took photos and found files pertaining to lawsuits against Deutsche Bank. None of Bohndorf’s papers were photographed, the report said. One or two people also talked to Bohndorf, who during the conversation mentioned his litigation with Deutsche Bank.
In an interim report delivered on a conference call with Schmitt, Schenz and Marsch-Barner on Aug. 9, 2006, Buehner said that a “subcontractor” hired a lawyer who applied for an internship at Kirch’s law firm and that she could start a week later. Buehner was told to drop the plan, the report said.
‘Disturbing Feeling’
Schmitt told the Cleary lawyers that he had a “disturbing feeling” when Buehner talked about the intern and Kirch’s law firm.
On Sept. 12, 2006, Buehner gave an oral final report to Schmitt, Schenz and Marsch-Barner. Buehner brought a CD-ROM containing photos taken of Bohndorf’s apartment on Ibiza, the Cleary report said.
“In the course of our interview, Dr. Schmitt told us, he experienced a strong disturbing feeling when viewing the pictures, which was also shared by Prof. Dr. Marsch-Barner,” the Cleary report said.
The next day, Schmitt told Boersig that an investigation into Bohndorf didn’t show that the shareholder cooperated with Kirch.
Deutsche Bank Chief Executive Officer Josef Ackermann and Chief Risk Officer Hugo Banzigersaid they learned about the incidents in April 2009, according to the Cleary report.
Deutsche Bank first announced on May 22 it had uncovered possible data-protection violations at its corporate-security department.
Buehner’s final invoice was booked under an investor relations account and was marked confidential, according to the Cleary report. Deutsche Bank marks invoices for confidential management or supervisory board matters, limiting access to them through the electronic accounting system, Cleary’s lawyers wrote.
To contact the reporter on this story: Karin Matussek in Berlin at kmatussek@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons in London ataaarons@Bloomberg.net;
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