FT Reporter on the Downfall of Wirecard Head “I Asked Him Directly Whether He Was a Fraud”

Financial Times journalist Dan McCrum exposed the scandal at former German blue-chip company Wirecard. In an interview, he discusses how he discovered widespread fraud at the firm.
Interview Conducted By Tim Bartz und Martin Hesse
Markus Braun (archive): The former Wirecard CEO is currently in pre-trial detention.

Markus Braun (archive): The former Wirecard CEO is currently in pre-trial detention.

Foto: Lino Mirgeler / dpa

Even as the world is focusing on the United States presidential election, the German parliament has been addressing what appears to be the greatest financial scandal to have struck Germany in recent years. The Parliamentary Investigation Committee (PUA) is examining who bears political responsibility for the fact that Wirecard's misdeeds went undetected for so long, despite repeat indications of irregularities and fraud. 

Dan McCrum and Stefania Palma, two journalists with Britain’s Financial Times newspaper, presented evidence early on that a significant part of Wirecard’s business was fake. On Thursday, McCrum is traveling to Berlin to testify before the committee. In an interview with DER SPIEGEL, McCrum discusses his experience as a journalist hunting down Wirecard, a role for which a film is now even being planned.

About Dan McCrum
Foto: Charlie Bibby

Dan McCrum is a journalist for the British newspaper Financial Times. Since 2014, he has reported a series of increasingly critical stories about the German financial services provider Wirecard, reports for which he was discredited and investigated. It ultimately turned out that McCrum’s reporting had been correct. In June 2020, the head of Wirecard was forced to admit that billions of euros were missing from the company’s balance sheets. Wirecard collapsed.

DER SPIEGEL: Mr. McCrum, what is like to be summoned before a parliamentary investigative committee?

McCrum:. I have received an invitation from the committee to appear there as an expert. That was it. But it would be fantastic if this committee could help to ensure that something like Wirecard does not happen again.

DER SPIEGEL: Will you be there in person?

McCrum: Yes. A corona rapid test has been arranged for 11 a.m., after which the hearing will take place.

DER SPIEGEL: Have you ever been to Germany?

McCrum: So far, only once.

DER SPIEGEL: Have you also been to Aschheim, which is the home of Wirecard’s headquarters on the outskirts of Munich?

McCrum: (laughs) No. But I am looking forward to coming to Munich sometime. I can hardly wait.

DER SPIEGEL: You could also stop by the Munich public prosecutor's office, which for a time had opened preliminary proceedings against that have since been dropped. Did the investigators ever contact you?

McCrum: No, but our lawyers are in contact.

DER SPIEGEL: Perhaps you will be back in Berlin soon. Danyal Bayaz, a Green Party member of parliament, has nominated you and your colleague Stefania Palma for the Federal Cross of Merit, Germany’s highest civilian honor.

McCrum: I don’t know what to say to that, but it is of course very kind.

DER SPIEGEL: How has your life changed since the discovery of fraud at Wirecard?

McCrum: A huge load has fallen off my shoulders, and that also applies to Stefania and all colleagues who have supported us. On June 18, at the latest, when Wirecard had to admit that 1.9 billion euros were missing from the till, the relief was great.

DER SPIEGEL: Did you celebrate that?

McCrum: I did raise a glass at home. We actually wanted to celebrate a little in the editorial office, but the pandemic came up because it meant that only six of us were allowed to meet. So, we cancelled the party. Now we mostly work from home, so I haven't seen many colleagues again. But we'll make up for that. I am also writing a book about Wirecard, which will hopefully be published in German in about a year's time. And I'm working on a documentary with the Academy Award winning Passion Pictures.

DER SPIEGEL: It is hard to imagine such a crazy story with so many bizarre facets repeating itself. Perhaps it was the high point of your career.

McCrum: There will always be fraud, possibly even on this scale. But the Wirecard case, with its intrigues and the criminal and bizarre behavior of its protagonists, is already unique. I would be surprised if a manager of a financial group tried once again to set up a mercenary militia in Libya, as Jan Marsalek, the partner of former Wirecard boss Markus Braun, has done.  

"It felt as if the world was turned upside down.”

 DER SPIEGEL: In recent years, did you even have any doubts that Wirecard was cheating?

McCrum: In view of the many dirty tricks, we were always pretty sure that we were dealing with a criminal company. But the scale was not clear to us for a long time. And there were phases, especially in 2017 and 2018, when I thought Wirecard could get away with it.

DER SPIEGEL: What was the most bizarre experience during your research?

McCrum: When my boss Paul Murphy told me that someone wanted to offer us $10 million if we stopped reporting on Wirecard. And when I was suddenly able to read my e-mails on the Internet because someone had hacked the mail account of a contact. And, of course, when I read in DER SPIEGEL that the Munich public prosecutor's office has started investigations against my colleague Stefania Palma and me. It felt as if the world was turned upside down. Now that we know how it really was, we can laugh about it, but back then it was a really crazy thing. After all, the reputation of the Financial Times was in jeopardy.

DER SPIEGEL: Of course, you could have gone to the editor in chief with the $10 million offer and demanded a pay rise.

McCrum (laughs): No way, the FT has always been very supportive. But there was something I thought about for a while.

DER SPIEGEL: What do you mean?

McCrum: Legal action against Commerzbank. A bank analyst has put me in touch with criminals.

DER SPIEGEL: You mean the Commerzbank analyst who, in January 2019, in response to your FT article at the time, spoke of "further fake news" from a journalist who was attacking the financial services provider "quasi in series?”

McCrum: Yes. On the other hand: I do not think that journalists should contribute to increasing the number of libel suits. Then I did not do it.

DER SPIEGEL: Wirecard's former boss Markus Braun, who is now in prison, once told us that he had only had contact with you once in all these years. Is that true?

McCrum: Yes. In December 2014, we had a long phone call, but since then we have only communicated in writing because Wirecard wanted us to. After my first articles, anyway, only Wirecard's lawyers answered my questions. A normal relationship was no longer possible. Moreover, Marsalek tried to make the FT and me look bad behind the scenes. He hired shady guys to talk bad about us. By the way, the communications consultancy FTI Consulting also took part in dirty tricks. They tried to convince other media that we are corrupt.

DER SPIEGEL: A allegation that FTI Consulting would not comment on. Have you ever met Jan Marsalek?

McCrum: Unfortunately not.

DER SPIEGEL: What impression did Braun make on you during your phone call?

McCrum: A strange one. During our telephone call at the end of 2014, I asked him directly whether he was a fraud. That is not a completely normal question. But his answer was strange. He was downright bored, as if he was asked that all the time. He said that Wirecard had a lot of envy and was not understood.

DER SPIEGEL: Some German media portrayed Braun almost to the end as a weird but brilliant visionary and showed little critical distance. For a while, the reporting read like "Frankfurt against London" or "German model company against Anglo-Saxon predatory capitalists." How did you perceive this?

McCrum: Wirecard was undoubtedly good at portraying itself as a German corporation that has to defend itself against evil Anglo-Saxon speculators supported by a major British business newspaper. They were very successful in this.


McCrum: To answer this question, there are better people to talk to than me. But what is striking is that there were some great, critical reports in German media, while others preferred to play the stenographer of a very successful and popular CEO and did not follow up on the indications of fraud that existed.

DER SPIEGEL: Could it be cultural or habitual problems that Germans have with how the capital market works?

McCrum: I cannot look so deeply into the German soul. But it is clear that many investment companies let Wirecard off the hook because they wanted to believe that the company was successful somewhere in a gray area where it was just about legal. And the auditors of EY must of course ask themselves why they signed off Wirecard's balance sheets for years.

DER SPIEGEL: What about BaFin, the German financial supervisory authority?

McCrum: With the latter, I wonder where they were looking in the first place, but above all, where they were looking away. It is strange how Wirecard's critics bounced off the BaFin. Short-sellers, for example, who bet on falling prices: Apparently, they are automatically considered to be malicious, no matter what they have to say. That would not have happened to the U.S. Securities and Exchange Commission (SEC), for instance.

DER SPIEGEL: Has BaFin President Felix Hufeld ever apologized to you? His authority has investigated you and your colleague Palma, but not Wirecard.

McCrum: Well, nothing has reached me.

DER SPIEGEL: Are you surprised that there are no personnel consequences at BaFin?

McCrum: I can say little about that. Except that I do not want to anticipate the hearing.

DER SPIEGEL: Would the scandal also have slipped through the British supervisory authority FCA?

McCrum: There are accounting scandals in the United Kingdom, too, but the FCA understands the role that short selling, for instance, plays.  In Britain, these critical voices are tolerated on the capital market. But you can criticize the FCA for other things.

"To pretend that only short-sellers have financial interests and not bankers, managers, shareholders and all the others is simply ignorant."

DER SPIEGEL: How do you generally see the role of short sellers at Wirecard? There were already early attacks by people who bet on falling prices.

McCrum: The fact that short-sellers already made accusations against Wirecard in 2016 via the information platform Zatarra, but remained anonymous, did not help the matter. But that does not excuse the fact that the BaFin did not take a closer look. Zatarra's reports were casually worded, but much was well documented and contained few substantive errors. Wirecard was merely very effective in discrediting its critics as malicious short-sellers.

DER SPIEGEL: According to Zatarra, almost all criticism of Wirecard, especially from the FT, was dismissed as a short-seller attack.

McCrum: And that was definitely not the case! As a financial journalist, it is important to understand that everyone involved in the history of a company has a financial interest in that history. Investors want the stock to go up, management receives stock options, so they are paid to make the stock go up. To pretend that only short-sellers have financial interests and not bankers, managers, shareholders and all the others is simply ignorant.

DER SPIEGEL: Are short-sellers now offering you more frequent revelations?

McCrum: Of course, people come to me with information, but you should not forget that everything the FT wrote about Wirecard from the beginning of 2019 had nothing to do with short-sellers. The stories were based on information from whistleblowers who thought something was going wrong, and on documents that these insiders provided us with. This is why it was so unbearable that Wirecard managed to dismiss all this as a speculative attack and to make the authorities aware of it.

DER SPIEGEL: What are the most important lessons from the scandal?

McCrum: That criminals are in the top echelons of companies and that they use all means to hide crimes. One has to question why high-ranking managers are paid so much reverence, also in comparison to politicians.

DER SPIEGEL: In Germany, there have been more investigations and court cases against managers in recent years than in the past. But is the fight against white-collar crime not tough enough?

McCrum: It is not only about Germany. Take Tesla: There are serious regulatory issues there, without any recognizable follow-up by supervisory authorities. Another important finding is that most people who work in the financial scene do just as much as they absolutely have to. Many assume that someone else is already doing the work. I experience this again and again.

DER SPIEGEL: What do you mean?

McCrum: Everyone. Auditors, investors, supervisors, banks: they all look only at the others and their reputation. They rely on the fact that one of them will have audited everything. Fraudsters take advantage of that. Business is based on trust, and it would be madness to check everything all the time. After all, most people are law-abiding. But unscrupulous people abuse that. This should be clear to everyone, especially in the financial world.

DER SPIEGEL: If you could ask Markus Braun something today, what would that be?

McCrum: When he started manipulating the numbers. I am convinced that it started at least 10 years ago. Or even earlier.

Die Wiedergabe wurde unterbrochen.