In the summer of 2024, following the revelation of the multi-million-euro fraud, the government halted all further funding to Caritas. That decision set the tone for what followed and the Caritas crisis committee scrambled to find solutions. Were the decisions taken the right ones?
Listen to Episode 6 with English subtitles in the video below, or read the full transcript.
Pia Oppel Hi! Quick voice note to document what’s happening today.
Léonardo Kahn Wednesday, 4 September 2024. The government holds its first official session after the summer recess.
Pia Oppel The government met this morning and we were given a heads-up that Caritas would be on the agenda.
Léonardo Kahn Having lost millions of euros to fraud, the Catholic organisation is on the brink of bankruptcy. Time is running out for a rescue plan.
Pia Oppel But that crisis management is being left to such a small group of people. Who knows what Luc Frieden is going to say this afternoon?
Luc Frieden Good afternoon, ladies and gentlemen. Welcome back from summer recess.
Léonardo Kahn The PM concludes the press conference by announcing that a new Caritas is to be set up by October.
Luc Frieden Once they have found the right members, once they have found the money to set up the new Caritas.
Léonardo Kahn That’s not how it panned out. A new Caritas was not launched. And yet Luc Frieden has stuck to one statement ever since that press conference in early September.
Luc Frieden I have always said that the government will do everything to ensure that these activities can continue.
Léonardo Kahn But what exactly did the government do during those two summer months? The months after which Caritas’ had to give up its activities?
Taina Bofferding I recall the PM saying this was a matter he would take charge of.
Marc Baum We think that the crisis management from the government was actually rather poor.
Léonardo Kahn My name is Léonardo Kahn and this is Scene Change, the 100.7 documentary podcast. Our second series of Scene Change is called The Caritas Affair. Across eight episodes, we will chart the timeline of a scandal where more or less everything that could have gone wrong, did. An investigation by Pia Oppel and Jean-Claude Franck.
Episode 6: Political Decisions.
Léonardo Kahn On 16 July 2024, it was discovered that Caritas had lost millions to fraud. It is immediately clear that there is not much time left for a rescue plan. We’ve just heard that the first details of how exactly Caritas could be saved were not made public until early September. Pia, Jean-Claude, what exactly happened in the intervening weeks?
Pia Oppel Well one of the things that happened was pretty banal. Namely that the whole country went on summer break as usual at the end of July.
Djuna Bernard If we’re being honest, the political world pretty much goes on hiatus from end of July or August at the latest.
Jean-Claude Franck That summer recess comes exactly as Caritas is in need of crisis management.
Luc Frieden We couldn’t say, we’ll look into it after the break. Absolutely not.
Pia Oppel And there’s no public debate over what should have been done differently until the autumn, after all the decisions have been made.
Léonardo Kahn Meaning? Could this story have ended differently, could Caritas have been saved?
Jean-Claude Franck That’s exactly what we asked the people who made the decisions during those summer months. And also the people who subsequently criticised those decisions in the autumn.
Pia Oppel So today, we’re going to tell the story of the summer 2024 from multiple perspectives. Starting with the government. Because they were calling the shots initially.
Pia Oppel Morning, Pia Oppel from radio 100.7. We’re here for an interview with Mr Frieden.
Luc Frieden I remember it really well because Ms Jacobs actually texted me late in the evening saying I needed to give her a call.
Jean-Claude Franck On the evening of 16 July, Luc Frieden gets a text from the President of Caritas, Marie-Josée Jacobs.
Luc Frieden She’s an old government colleague, so she had my number.
Pia Oppel The PM is then informed the next day that €61 million have been stolen from Caritas.
Luc Frieden And she texted me again the next morning saying I needed to call her urgently.
Jean-Claude Franck Which Luc Frieden does before heading to the office.
Luc Frieden And she said, I have something to tell you. Something awful has happened, Caritas is bankrupt. We’ve lost all our money. And so I asked her, how is that even possible? I didn’t understand any of it. And she said, we don’t know either. She was crying and saying all their money’s gone.
Pia Oppel That conversation between Luc Frieden and Marie-Josée Jacobs takes place on 17 July. A Wednesday. A day when the coalition government also has a meeting.
Pia Oppel And w the government took up the issue, was it already clear at that point that you needed to switch to a sort of crisis mode, crisis management? What word would you use to explain the situation at that moment?
Luc Frieden Crises actually always bring out the best in me, in a way. As in, it sounds strange now, but I tell myself, if ever there’s a time for cool heads to prevail, it’s now. I also immediately thought back to the financial crisis.
Jean-Claude Franck A comparison that has often been made in the Caritas affair. Because in 2008, when Luc Frieden was Minister of Finance, the Luxembourg government spent billions bailing out two banks.
Pia Oppel And it seems that initially a bailout was the plan for Caritas as well.
Luc Frieden In my head, it was obvious that the state had to intervene because the implications were enormous.
Jean-Claude Franck The minutes from the board of directors’ meeting at Caritas on the evening of the 17th record your initial reaction which Marie-Josée Jacobs related to the board.
Pia Oppel Namely that the state is going to support Caritas financially to maintain operations.
Jean-Claude Franck Did you actually say that to her?
Luc Frieden Obviously I can’t remember the exact words I used. But I certainly did tell her we were going to help. Because we value Caritas, we need it. And that was my line from minute one. Again, like when we bailed out the banks.
Léonardo Kahn We know now that that is not what happened, ultimately. The state did not offer up any cash, as it did when it bailed out the banks. Caritas lost its more than 500 employees and abandoned or terminated all of its charity projects. So why does the government change its position?
Jean-Claude Franck Well, Luc Frieden says it’s because the government received new information.
Luc Frieden Because at that point in time, as in, the very first day, we did not have any knowledge of the loans that had been taken out.
Jean-Claude Franck Quick recap: The CFO of Caritas went overdrawn on the organisation’s accounts with BGL BNL Paribas and Spuerkeess by a total of more than €30 million. That’s a big problem. Half of the stolen money is made up of lines of credit.
Pia Oppel So by July, Caritas is sitting on a mountain of debt. The banks are saying that the lines of credit have to be repaid. After all, two members of the management signed off on each of them.
Jean-Claude Franck Meanwhile, the board at Caritas is saying the banks shouldn’t have granted the lines of credit. Because management wasn’t authorised in any way to borrow money.
Pia Oppel So Caritas is contesting the lines of credit. And the government ends up in the middle of this conflict.
Léonardo Kahn What do you mean exactly?
Pia Oppel Well, Spuerkeess and BGL would obviously like to get back the more than €30 million they lent Caritas between March and July.
Jean-Claude Franck And when they signed the two contracts for the lines of credit, the management put up the state funding Caritas gets for its activities as collateral.
Luc Frieden It’s an assignment of debt. When you receive a notice of assignment, then as the debtor, which the state is with respect to Caritas, it pays Caritas something, then you have to respect it.
Pia Oppel In other words, Caritas could no longer pay back the money itself and had assigned its state payments to the banks for that eventuality. The government’s assessment was that any financial assistance it gave Caritas would have wound up going to the banks instead.
Léonardo Kahn And were they right in their assessment? Was there really no way of giving Caritas money without the banks helping themselves to it?
Pia Oppel So the government actually sought legal advice on this question. And as several sources told us, the conclusion was clear-cut. The government itself can’t challenge the assignments. And if it gave Caritas money, there would indeed be a massive risk that it would end up with the banks.
Luc Frieden So the government wasn’t able, and a lot of people don’t understand that, including a lot of people at Caritas, but we would have had to pay the banks €30 million first before we could have saved Caritas. That’s not what we’re here for. That’s not our job.
Jean-Claude Franck In any case, the government is not willing at this point to take the risk of looking for alternatives and somehow wriggling out of the assignments of debt.
Luc Frieden So there was only one way to do that, which was to set up a new entity. But that was in their hands.
Pia Oppel The hands of the Caritas board, that is. The PM’s position was they were going to have to find their own solution if they were to start getting state funding again. Which passed the buck to someone we mentioned briefly back in Episode 3.
Christian Billon I am Christian Billon and I have been very involved in the social sector with my skills in the fields of accounting, corporate auditing and governance.
Jean-Claude Franck Christian Billon had nothing to do with either Caritas or the Church before this crisis. But in the summer of 2024, he suddenly finds himself playing a pivotal role in efforts to somehow save the Catholic organisation.
Pia Oppel How did that come about?
Christian Billon It came about quite unexpectedly one Friday evening.
Pia Oppel Friday, 26 July. Ten days after the fraud has been uncovered internally, Caritas’ board of directors decides to shake up its approach to crisis management. With the help of a consulting firm.
Christian Billon I received a phone call from François Mousel who said: So, we are looking for someone to help us resolve the Caritas affair.
Jean-Claude Franck François Mousel is head of PriceWaterhouseCoopers, or PwC, in Luxembourg. They are the largest consulting firm in the country. And a former employer of Christian Billon’s.
Pia Oppel The board of Caritas decided to bring PwC on-board pretty early on, as a way of providing administrative support in place of the management team. But the board was still looking for help with crisis management as well.
Jean-Claude Franck They first ask former Caritas director, Erny Gillen. But he turns them down following a call with the Cardinal. Because it’s clear that the Diocese is washing its hands of Caritas.
Pia Oppel So then they ask Christian Billon.
Christian Billon And well, at the time I still said: give me 24 hours to think about it.
It was quite a shock.
Jean-Claude Franck While it’s clear that, as things stand, neither the Diocese nor the government are going to save the Catholic organisation, Christian Billon says yes.
Christian Billon Quite simply, I thought, this is a very important organisation in Luxembourg, which plays a major role in the social sector. On first reflection, I said to myself, no one is going to abandon such an organisation. That was my very first reaction.
Jean-Claude Franck On Sunday, 28 July, the board of Caritas decides that from now on, a small group made up of four board members should take charge of day-to-day crisis management. This new crisis committee includes Nathalie Frisch, Marc Hengen and Philippe Sylvestre, the three lawyers on the board.
Pia Oppel They are joined on this committee by Caritas President Marie-Josée Jacobs but she essentially doesn’t play a role because she is no longer fit for such an extraordinary situation.
Jean-Claude Franck It’s important to stress, though, that the board of directors remains the highest authority at Caritas. It makes all major decisions and responsibility lies with them. On paper, at least.
Pia Oppel Because, in practice, the crisis committee takes the wheel. And Christian Billon is appointed president of this committee.
Christian Billon I want to point out that I was doing this on a voluntary basis. I'm 73 years old, I've have a pension, I don't need to earn more money.
Pia Oppel A brief note here on Christian Billon’s professional background. He worked as a statutory auditor and set up a company which advised clients clients on how to set up legal entities in Luxembourg. Usually with the goal of paying less taxes.
Jean-Claude Franck But he also had links to the charity sector even before the crisis at Caritas, whether as long-time president of charity CNDS or as an advisor to the Red Cross.
Léonardo Kahn And now, in July 2024, he is appointed president of the Caritas crisis committee.
Jean-Claude Franck Exactly. He takes on the role as an external consultant, so he is not personally a member of the board. His assignment is set out in writing: he is to represent Caritas’ interests and help find a solution that will allow the organisation to continue its activities.
Pia Oppel And because there’s often been confusion, we should also mention this: It’s different to the situation with PwC. In principle, the consultancy is taking on purely admin tasks. But in return they get quite a lot of leeway, making it look as if Caritas is essentially being managed jointly with PwC.
Jean-Claude Franck But PwC still reports to the board which takes responsibility for decision-making. The consultancy is also getting paid, by the way. We were told by insiders at Caritas that their services have cost the organisation at least €1.2 million.
Pia Oppel A third of which has been paid so far. And PwC isn’t the only company Caritas owes money to. But we’ll come back to that later.
Léonardo Kahn Returning to Christian Billon. He is contacted on a Friday at the end of July and by Sunday Caritas has a crisis committee with a new, independent president. How does Christian Billon approach his new mission?
Jean-Claude Franck The first thing he needs to do is learn about the internal workings at Caritas.
Christian Billon Well, I've never experienced a tsunami. But intellectually, it was a tsunami.
Pia Oppel He gets to know the board of directors, and he meets the heads of the individual departments.
Christian Billon So people were obviously extremely shocked. But what I have to say is that they were immediately there to help.
Jean-Claude Franck Caritas and its more than 500 employees, and all their different departments for looking after homeless people, asylum seekers, child refugees and so on. Caritas has to continue to function. Which it does, even though there’s almost zero cash left.
Christian Billon That was the staff's first concern: would we get paid? So we succeeded; we immediately reassured them that August would be paid. However, we also knew that September was at risk.
Pia Oppel It then also becomes clear that Caritas doesn’t just owe the banks money. It also has debts with numerous suppliers, like the caterers delivering food to Caritas’ various shelters.
Christian Billon I can't tell you how many suppliers threatened to stop deliveries; we were completely blocked. In fact, that's another reason why it was becoming hellish to continue within these entities: the suppliers had turned off the taps.
Jean-Claude Franck Caritas also hasn’t been paying its taxes and social security in full for the duration of the fraud. We were told by the board that Caritas has around €10 million in debts. That’s on top of the €30 million in lines of credit with the banks.
Pia Oppel And in the summer, it’s unclear how Caritas will manage to pay back these debts. Because whether they’re going to get the stolen money back or whether they could maybe reach a settlement with the banks – these are not things you clarify overnight.
Jean-Claude Franck Because of that, by August, Caritas comes to the same assessment as the government: if they want to continue their activities, they’re going to have to set up a new Caritas. This plan is made public in early August.
[100.7 news jingle]
Pierre Reyland: Good morning, Caritas Luxembourg has released a statement saying that the newly created crisis committee has decided to create two new entities.
Léonardo Kahn So the idea is to leave the old Caritas behind, together with all its debts. Like a “bad bank”, where all the problems are essentially parked until the lawyers can sort them out. The activities will then continue under a new organisation. So is that then Christian Billon’s actual job in August, to get a new Caritas up and running?
Pia Oppel Exactly, and this is where the summer recess enters the frame.
Christian Billon Let's put it in context: it's August. August in Luxembourg is the month when there's no one there. Several comments were made afterward. We should have brought together several stakeholders. First of all, bringing together several stakeholders in August is difficult. It's simply a real struggle. It was going to take time.
And time is something we didn't have.
Léonardo Kahn So the summer recess makes the crisis committee’s job harder. What do they do to ensure progress isn’t stalled?
Jean-Claude Franck The first thing the committee does is test the waters at the Diocese, despite the less than encouraging signals. We discussed that last time. There’s a meeting on 7 August, after which it is clear the Diocese isn’t going to cough up money for the rescue.
Pia Oppel What is your conclusion at this point?
Christian Billon What are we going to do now? We're not going to give up, we're going to keep on insisting.
Pia Oppel After that, they try all sorts of other avenues, each of which fails for one reason or another. Asking other Catholic groups for help, for example.
Jean-Claude Franck They also float the idea of transferring Caritas’ activities to the Red Cross. Or to another Caritas entity that hasn’t been affected by the fraud. But none of it pans out.
Pia Oppel Which leaves them the option of setting up a new Caritas. But for that you need seed capital. The figure being mentioned that summer is around five to six million.
Jean-Claude Franck That’s the estimated amount it would take to get such a large organisation off the ground. Even if the majority of activities were subsequently funded by the state.
Pia Oppel And by August, Caritas still hasn’t managed to scare up the money. Which they also notify the government of. Christian Billon remains in close contact with a group of senior civil servants who are monitoring the situation. And mainly with the PM, Luc Frieden.
Pia Oppel You said: we're not giving up, but did that ever mean: we go back to Mr. Frieden and tell him either you help us or it's over? What were the options?
Christian Billon We didn't use that kind of approach, but I obviously kept the PM informed of the situation. Every step of the way, he was aware of what we were doing. And he was very attentive to what was happening.
Pia Oppel The way Christian Billon and Luc Frieden describe it, these exchanges largely centre around the question of how to put together agreements with a new organisation in such a short space of time.
Christian Billon The ministries said, yes, we can help by making new agreements.
Jean-Claude Franck So the government wants to support the setting up of a new organisation by getting new agreements drawn up in record time. These are contracts governing the state financing of an organisation. And there are still a lot of details to iron out if that’s going to happen.
Léonardo Kahn OK, so Christian Billon is given assurances that, at least in purely organisational terms, the state will help make the relaunch happen in the autumn. But it’s still not clear whether they can raise enough money to actually get a new Caritas up and running. How does that play out?
Pia Oppel So this is where Christian Billon taps into his networks.
Christian Billon You pick up the phone and call people you know. And you call X who calls Y, etc. And you say: is there anyone in this world, are there philanthropists, who are willing to give us money and help?
Pia Oppel What’s interesting is that often the people who are mobilised here are also connected to the CSV or to Luc Frieden who has been a friend to the Luxembourg business world throughout his career.
Jean-Claude Franck In the end, there are three foundations willing to put up the cash. Fondation La Luxembourgeoise, the André Losch Foundation and Fondation Félix Chomé. All three were set up by businesses or entrepreneurs specifically in order to support projects for good causes.
Jean-Claude Franck But what’s also interesting is that some of the people, who sit on the boards of these foundations, themselves have links to the Diocese.
Christian Billon That reassured me. I said to myself, well, it's not the Church directly, but indirectly, it's still the Church that's there. So it could save Caritas. For me, we were saving Caritas. At no point did I have the idea of doing something different. For me, it was Caritas.
Léonardo Kahn OK, so over the summer the crisis committee has found three foundations willing to cough up the money to save Caritas’ charity projects. And there is still hope that the new organisation they are planning to set up will also be called Caritas. As we know, that ultimately didn’t happen. Why not?
Jean-Claude Franck Actually, the idea of a new Caritas is on the cards throughout the summer. Which explains Luc Frieden’s statement on 4 September which we heard at the top of the episode.
Luc Frieden A new Caritas which the state would then enter into new agreements with. This Caritas would also have a new governance structure, with new people.
Pia Oppel It’s important to know that in order to be part of the international Caritas network, as in, to set up a genuine Caritas, so to speak, an organisation needs the blessing of the Diocese. A blessing it still does not have in September.
Jean-Claude Franck On Wednesday, 4 September, the same day that Luc Frieden holds his press conference, Christian Billon takes the initiative to as the Diocese for another meeting. Because the Cardinal had asked to see the statutes of any new organisation before making a decision.
Christian Billon If he had received me on the 5th, we would have shown him the statutes. And then perhaps we would have negotiated and checked with the founding members if they also agreed. But that's not what happened.
Pia Oppel Because the Diocese is quite slow to react. They propose a meeting nine days later.
Christian Billon So, nine days. Nine days at that moment was a very long time. We were perfectly aware that 30 September was going to be the end of it. We were aware that we still had to negotiate new agreements with the government. And so we had to make decisions.
Jean-Claude Franck By this point, Christian Billon wasn’t exactly expecting much from the Diocese. Plus, despite a few connections to the Diocese here and there, the new founders were generally against calling the new organisation Caritas from the outset.
Christian Billon When you have philanthropists who agree to invest money in an organisation, they're the ones who have something to say. And there was a consensus that it couldn't be called Caritas.
Pia Oppel And what were the arguments?
Christian Billon I don't know the underlying arguments. But, as an outsider, I thought, yes, it might be difficult to call it Caritas given the negative image the fraud has created.
Jean-Claude Franck So the decision is made before the sit-down with the Cardinal. On 12 September, the day before Caritas meets with the Diocese, this announcement is made.
[100.7 panorama jingle]
Sophie Morang: A new non-profit called HUT is set to take over Caritas’ national activities from 1 October.
Léonardo Kahn So Caritas has now lost the best part of its charity activities and 350 people move to Hëllef um Terrain, or HUT for short. What does the board of directors make of this development?
Jean-Claude Franck It’s a pretty bitter pill to swallow because their priority was finding an internal solution. But equally they couldn’t see any other way out, says Nathalie Frisch who was then a member of the Caritas crisis committee.
Nathalie Frisch I mean, in a sense we weren’t involved in the decision. There was a solution that would mean the employees kept their jobs and the beneficiaries got their services. But I’m not sure you can really talk of a decision when there’s only one option. Essentially there was only option left.
Pia Oppel The fact that Christian Billon is then made president of the new non-profit, HUT, does not go down well on the Caritas board. And the outcome of the whole crisis management process leaves them feeling let down.
Léonardo Kahn During this summer of crisis, the government turned off the money tap and the Diocese let Caritas go under. Nathalie Frisch says that under those conditions, there was really only one way out. Is that also your conclusion?
Pia Oppel I really think Caritas didn’t have any other choice at this point. They weren’t the ones making the important decisions that summer. The Diocese and the government were.
Léonardo Kahn The Diocese didn’t care enough about Caritas to spring into action, we spoke about that last episode. But what about the government, did they not care about the outcome of the rescue, so long as the services themselves continued?
Jean-Claude Franck Yes, that’s essentially the position the government took during this summer of crisis. A position they have since been criticised for.
Pia Oppel Because a number of opposition parties in Parliament are convinced that better solutions could have been found. Which is why a special committee was created in October so that Parliament could find out what went wrong.
Léonardo Kahn So, Parliament stirs from its summer slumber in the autumn. Once all the decisions have already been made. Could no-one have seen that coming? That ultimately Caritas’ national activities would have to be handed over to another organisation?
Pia Oppel Good question. I mean, let’s start with some self-reflection: the media, including 100.7, failed to raise the possibility of something like this happening. Partly because it was tough to get hold of information over the summer.
Jean-Claude Franck There wasn’t much communication from either Caritas or the government. Information was only shared with a very small circle on both sides.
Pia Oppel And we went on our own holidays in August. While we didn’t put the investigation entirely on ice, we didn’t really make any progress on this point, as I told Jean-Claude.
Pia Oppel Everyone at Caritas is really nervous about talking to the press. They are worried about their jobs. Because PwC is saying no-one is allowed to say anything about internal stuff.
Jean-Claude Franck We’ve seen an e-mail that a PwC employee sent to the entire workforce at Caritas on 9 August, with the subject line: “If the press contacts you, do not respond”.
Léonardo Kahn How is that instruction justified?
Jean-Claude Franck Well, the message is that if you care about the future of Caritas, don’t say a word. So that also plays a role that summer. A lot of people thought talking about this stuff publicly would make it harder to find a solution.
Pia Oppel Lots of our sources are reluctant to offer more details until it becomes clear that the solutions identified aren’t those that were initially on the table. And that started at the end of August.
Pia Oppel Hi, back in Luxembourg. Bit of a hectic return journey at the end there because I suddenly got this message that at Caritas they’re now being told that the international projects are definitely going to be terminated, effective immediately. Which was a shock, obviously, because we’ve always assumed that they’d try as much as they could to save all their activities.
Jean-Claude Franck We then reported that at the start of September, one week before it was officially confirmed. We’ll look at Caritas’ international projects in more detail later.
Pia Oppel We then also started hearing rumours that it wasn’t a definite that the new organisation was going to be called Caritas. But we were still surprised by that press release on 12 September about the founding of Hëllef um Terrain.
Jean-Claude Franck The opposition parties felt similarly.
Djuna Bernard Hi!
Pia Oppel Hi, thank you!
Djuna Bernard I’m Djuna Bernard, I’m a member of Parliament for The Greens and I also have a background in the charity sector, having worked in and studied it.
Pia Oppel The Greens are the opposition party that asks the most questions in Parliament that summer about the Caritas affair. Questions which, for the most part, go unanswered. But Djuna Bernard, is not worried about the silence at this point.
Djuna Bernard I think at that moment we as the opposition thought, okay, we should let those responsible work on finding solutions.
Jean-Claude Franck Even when rumours start going around that there are difficulties.
Djuna Bernard So I went on holiday on 20 August and switched off for ten days. I was back for 1 September. And that’s when you do start hearing the first rumours that there’s this new organisation that has nothing to do with Caritas.
Pia Oppel The first parliamentary committees don’t convene again until 16 September to talk about Caritas. By which point all the decisions have been made, as we mentioned.
Djuna Bernard The real question is, if this had happened in November, December, what would have happened then? I mean, at least in political terms, things would have gone differently.
Léonardo Kahn But how exactly would the outcome have been different? What is it about the chosen solution that Parliament takes issue with in the autumn?
Jean-Claude Franck Well first it needs to be stressed that not all the parties are as critical about what went down. The majority parties, the DP and CSV, obviously felt the government had made the right decisions, but so did opposition party ADR.
Pia Oppel The criticisms they do have are aimed more at the Diocese because they didn’t help out. Or at the new non-profit, HUT, because it’s taking on Caritas’ employees but without bringing their old contracts with them.
Jean-Claude Franck CSV parliamentary leader, Marc Spautz, even attended a demonstration held by the OGBL trade union outside parliament in September.
Marc Spautz We have labour law in Luxembourg which clearly defines what a transfer of business entails.
Pia Oppel But most of the criticism surrounding the Caritas affair absolutely comes from the left-wing opposition parties. In short, their position is that Caritas isn’t just some service provider and so it has to be saved.
Jean-Claude Franck The search for solutions should not have been left to a circle of wealthy business people and to PwC. The state should have fulfilled its responsibilities. That’s the line taken by the Pirate Party and also by Taina Bofferding of the LSAP.
Taina Bofferding There was no sit-down, at the crucial moment, with these individual stakeholders, with the Diocese, the government, the banks, with Caritas, to actually sit down and take a look at how exactly one might proceed.
Pia Oppel Djuna Bernard of The Greens says the state, not philanthropists, should have coughed up the funding needed to get a new Caritas up and running.
Djuna Bernard Also in the knowledge that that is far from unusual. The Red Cross is currently building new headquarters with a substantial contribution from the state. And as a gift, at that, not a loan.
Jean-Claude Franck And Marc Baum, member of Parliament for The Left, draws comparisons to the 2008 financial crisis when Luc Frieden took a different decision.
Marc Baum I mean, if Caritas were a bank, our PM would probably be bailing them out right now.
Pia Oppel This is also where the fundamental contradiction in the government’s response to the whole affair actually lies.
Léonardo Kahn What do you mean exactly?
Pia Oppel You might remember Luc Frieden’s statement from the beginning of the episode regarding his first conversation about the crisis with Caritas President Marie-Josée Jacobs.
Luc Frieden I certainly did tell her we were going to help because we value Caritas, we need it. And that was my line from minute one, again, like when we bailed out the banks.
Pia Oppel But then the government declined to assist financially with setting up a new organisation. Why was that not possible? Given that, according to Luc Frieden, the old Caritas, if it hadn’t had any debts, could have received government funding despite having just suffered a €61 million theft.
Léonardo Kahn Good question, what does the PM himself say?
Jean-Claude Franck Well then he says that, actually, that’s not a legal decision, it’s a political decision.
Luc Frieden That was their job, not ours. It’s also normal that that isn’t our job. Because I would find it a bit odd if we went around setting up NGOs.
Pia Oppel An NGO being a “non-governmental organisation”.
Léonardo Kahn But does Luc Frieden not have a point here, actually? As in, would it not be out of the ordinary for the state to help relaunch a civil society organisation?
Jean-Claude Franck That’s certainly one way of arguing it. And that’s the choice the government ultimately took here.
Pia Oppel The opposition parties have a different opinion, though. They’re saying that this was an extraordinary situation. And that it was about damage limitation. So as not to lose everything Caritas was. Its decades of experience, its values, its mobilisation of volunteers and indeed its advocacy work on social policy.
Jean-Claude Franck Hëllef um Terrain has none of that. And so the opposition feel that civil society has lost a powerful voice.
Pia Oppel But is it up to the state, to politicians, to save that?
Djuna Bernard Not to save it, but to support it. To create the conditions that would allow it to grow. You get the feeling that some members of the government were far from upset about a critical player shutting up shop.
Pia Oppel The argument put forward by Djuna Bernard, and the opposition’s criticism more generally, is hardly free from contradictions either though. Because if Caritas provided a critical voice through its advocacy work, then that was because it was also relatively independent of the government. Which is exactly what it risked losing if it got bailed out by the state.
Léonardo Kahn The opposition clearly feel that Caritas’ advocacy was a really valuable part of its work. Pia, could you maybe explain briefly what exactly that work meant in practice?
Pia Oppel I actually asked someone who was responsible for that work for many years to explain.
Carole Reckinger Our advocacy was actually meant to give a voice to those in our society who don’t normally have one. Meaning the poorest, the most marginalised in our society.
Pia Oppel I met Carole Reckinger in the Gare district of Luxembourg City where Caritas also has its headquarters.
Carole Reckinger I’ve always really enjoyed taking this route to work. I really enjoyed working there. I loved my job. And I loved working with the other people who worked there.
My work also always enabled me to speak openly with the people working on the ground, with the employees, but also with the people we were helping. Really what my work was about was formulating these people’s concerns in a way that could be presented to politicians.
Jean-Claude Franck Caritas financed its lobbying work with its own funds, which came mainly from donations.
Carole Reckinger The advantage of that was that it made us one-hundred per cent independent. Meaning I knew that no-one could tell me, listen here, if you say that, then you get no more money.
Pia Oppel Carole Reckinger lost her job last year. A job, that had anyway already stopped to exist. Because following the fraud, the strong, bold organisation Caritas used to be has also ceased to exist.
Léonardo Kahn But why hasn’t the new organisation, Hëllef um Terrain, taken over the advocacy or tried to revive it in a new iteration?
Pia Oppel It seems the continuity of the social advocacy was not a priority for the new founders, in part because it has to be self-financed.
Jean-Claude Franck But it’s not just Caritas’ lobbying work that dies in September 2024.
Luc Frieden The international activities, the practical projects out there, because we are less familiar with them than with activities in Luxembourg, they were not the subject of our discussions in the government meetings.
Jean-Claude Franck In autumn 2024, Caritas’ international activities are terminated across the board. Impacting thousands of people in the poorest countries on earth.
Pacoto David Langoya People are asking themselves, what’s next? What’s the future? This is horrible. That means someone if they can’t send somebody to school, we are killing dreams.
Pia Oppel Join us next time.
Léonardo Kahn That will be our seventh episode in the Caritas Affair. Thank you, Pia and Jean-Claude!
Pia Oppel Pleasure, Leo!
Jean-Claude Franck Yes, thanks and until next time!
Léonardo Kahn You’ve been listening to Scene Change, the 100.7 documentary podcastScene Change is produced by Pia Oppel, Charlotte Bruneau, Tessy Troes and me, Léonardo Kahn. With additional help by Jean-Claude Franck, Yves Stephany, Semir Demic, Jo Diseviscourt, Anke Meiser, Ana Angel and Chris Zeien.
Sound and mixing: Sam Erpelding and Ingo Dumlich.
To make sure you never miss an episode, subscribe to Scene Change wherever you get your podcasts. And if you have any questions or want to give us feedback, drop us an e-mail at doku@100komma7.lu.
Translation: Rob Myatt and Pia Oppel.
