A former president of the European Investment Bank is being investigated for signing off on a million-euro exit package for an ex-employee who was at loggerheads with the institution, insiders told Follow the Money.
European prosecutors have been probing the deal between former president Werner Hoyer and Henry von Blumenthal, the former employee, for potential fraud and corruption.
Henry von Blumenthal was the deputy chief of the EIB Institute – the bank’s charity arm supporting research and culture – when he signed a confidential agreement with the bank to settle his departure in April 2023.
As part of the deal, von Blumenthal received a gross sum of more than 1 million euros, and the bank agreed to close several disciplinary files against him, a person close to the investigation said. Blumenthal, in turn, agreed to drop pending legal actions against the EIB, the person said, without elaborating.
This raised suspicions with the European Commission’s anti-fraud watchdog OLAF, which found that the settlement went beyond its usual practice for departing employees, the person said. Former Spanish economy minister Nadia Calviño replaced Hoyer at the beginning of this year.
Hoyer said the allegations against him are “downright absurd and unfounded”. He expects them “to be fully investigated and clarified.” His lawyer, Nikolaos Gazeas, added that his client “was never involved in the negotiations surrounding the employee’s departure”, which were led by “the department in charge”.
Police searched Hoyer’s and von Blumenthal’s respective houses in Luxembourg and Germany in May this year. This became public a month later, after the European Public Prosecutor’s Office (EPPO) announced that the EIB agreed “to lift the immunity of two former officials”.
The allegations are “downright absurd and unfounded” – Hoyer
This will allow the prosecutors to expand their investigation into both individuals, who are suspected of corruption, abuse of influence, and the misappropriation of EU funds, including by searching the EIB’s offices.
The EIB said, when justifying its decision to lift the immunity, that OLAF’s report suggests a “long term criminal collusion” between Hoyer and von Blumenthal, according to a person close to the investigation.
Von Blumenthal’s lawyer Frank Rollinger said that “there is no direct relation” between his client and Hoyer. They only met twice at official events since 2015.
“There is nothing that my client did or did not do that would justify a criminal case,” he said.
Spokespeople for the EIB, the EPPO, and OLAF declined to comment.
The high-profile investigation follows years of turbulence at the EIB with allegations of harassment, overpayment of allowances and revolving doors under Hoyer’s reign between 2012 and 2023.
Between 2010 and 2016, von Blumenthal served as a spokesman of the EIB’s college of staff representatives.
After seven years as the vice dean for the EIB institute, von Blumenthal in 2022 applied to succeed the departing dean, according to three people briefed on the matter. Hoyer, however, decided to appoint Shiva Dustdar instead. Von Blumenthal was told that Hoyer wanted a woman for the job and contemplated suing the bank for gender-based discrimination, two of the people said. It is unclear whether this was part of the legal actions dropped by von Blumenthal when signing his exit package.
There is also disagreement over whether the more than 1 million euros he received was too high of an amount. It covered von Blumenthal’s salary for the remainder of his contract, which ran for another 34 months, and a pension payment. According to OLAF, von Blumenthal seemed to have been rewarded with the deal, a person close to the investigation said.
A person familiar with similar EIB exit payments called the amount “outrageous”. Another person, equally familiar, said that depending on the pension savings, it could be an appropriate amount. Both had heard about EIB exit packages for departing staffers in the recent past which seemed more advantageous.
This article was updated on 03.07.2024 at 20:28.
