The Caritas affair is posed to be remembered as one of the biggest cases – if not the biggest – of financial crime in the country's history.
Few could have imagines the scale of the scandal when the news broke during the summer holidays: Caritas, a prominent aid organisation, had been defrauded of 61 million euros within just six months. Especially because Caritas doesn't actually possess that much money.
"Caritas never had 61 million euros to begin with. When the whole affair started, Caritas actually had just 28 million euros in its account – roughly half the amount needed to operate annually," explained Caritas Director General Marc Crochet in July.
The public prosecutor's office described the crime as a presidential trick of theft. 8,200 transactions were made, credit lines totalling millions were drawn. It quickly became clear to the banks that professionals were at work. "When forged documents are used to authorise credit requests, those involved have to know exactly what they are doing. Approving such loans isn't a decision made by just a single person at a bank," says Jerry Grbic, CEO of the banking association ABBL.
It will probably take years to clear up the case. The money is gone, possibly stashed in bank accounts outside the EU. In an interview with RTL, public prosecutor Martine Solovieff explained: "We are completely dependent on the cooperation of foreign judicial authorities. Within Europe, this works reasonably well, but outside Europe – well, you send something and often get nothing back."
The months following the revelation have been turbulent for Caritas staff. Many feared for their jobs, and accountability within the organisation was initially unclear. Neither the Board of Directors nor the diocese stepped forward to assume responsibility. "In the beginning, there was virtually no communication. For an organisation rooted in religious principles, why didn't anyone come to the bishop to talk about it? Or to explain what had really happened," said Cardinal Jean-Claude Hollerich.
In the end, the Caritas employees were taken on for the national activities of the newly founded ASBL Hëllef um Terrain (HUT). Almost 350 employees transferred to HUT on 1 October. The president, Christian BIllion, said during a press conference: "I am confident that HUT will thrive in the future. Although the affair casts a shadow for now, the new organisation will soon operate smoothly." Former Ombudsman Claudia Monti will take over as the new President of the organisation in April.
Unfortunately, the scandal's financial implications curtailed both political advocacy and international collaborations. Many projects couldn't be taken on, a loss deeply felt by Caritas International's Michael Feit: "Now it really has come to this. And the realisation that Luxembourg Caritas will no longer exist in the future in terms of cooperation makes me very sad."
The Caritas affair was declared 'a matter for the boss' by the Prime Minister from the outset. However, communication was much criticised. Luc Frieden looks back: "I gladly accept the criticism that I should have communicated more. But I want to tell you that when you work intensively with colleagues on a solution in August and September, you can't communicate every day; you have to find a solution first."
What remains is the bitter aftertaste of how the affair was managed. "I believe that nowhere else in Europe would there be so little information about the case. We always say that the justice system is doing its job. But I also think that the public prosecutor's office could have provided more information about what happened," says ADR MEP Fred Keup.
LSAP MP Taina Bofferding adds: "Caritas belongs to the Church. The Cardinal and the others can't simply bury their heads in the sand and pretend they have no connection to the scandal. The cardinal wants to wash his hands of it."
In the last few days, the City of Luxembourg's municipal council has been criticised for its newest convention with HUT, which states that "all communication between the organisation and the press regarding the current project must be agreed with the City of Luxembourg." Green councillor Christa Brömmel believes that "we are dangerously close to a muzzle here."
The legacy of Caritas Luxembourg is secure here in Luxembourg. Nevertheless, the issue remains topical. And the search for a Director General for HUT continues.
