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The Federal Government’s refusal to provide information on the Deutsche Bahn AG and financial market supervision was unlawful
Press Release No. 94/2017 of 07 November 2017
Judgment of 07 November 2017
2 BvE 2/11
In a judgment pronounced today, the Second Senate of the Federal Constitutional Court held that the Federal Government failed to fulfil its duty to give answers in response to parliamentary queries relating to the Deutsche Bahn AG and financial market supervision, and thereby violated the rights of the applicants and of the German Bundestag. Without sufficiently substantiating why, the Federal Government provided incomplete answers or refused to respond altogether to the questions in dispute concerning agreements between the Federal Government and the Deutsche Bahn AG on investments into the rail network; an expert opinion on the “Stuttgart 21” [construction] project; delays in train operations and their causes; as well as regulatory measures of the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) directed at various financial institutions during the years 2005 to 2008.
Facts of the Case:
In 2010, members of the German Bundestag as well as the parliamentary group BÜNDNIS 90/DIE GRÜNEN (hereinafter: the applicants) submitted several parliamentary queries relating to the Deutsche Bahn AG as well as financial market supervision. The applicants primarily requested information on discussions and agreements between the Federal Government and the Deutsche Bahn AG regarding investments into the rail network, on an expert opinion commissioned by the Federal Government concerning an economic feasibility assessment of the “Stuttgart 21” project, as well as on delays in train operations and their causes. Additional questions submitted by the applicants to the Federal Government related to regulatory measures of the BaFin directed at various financial institutions during the years 2005 to 2008. In the applicants’ opinion, the Federal Government did not sufficiently respond to any of the relevant queries. By way of Organstreit proceedings (disputes between constitutional organs), they therefore seek a declaration that the Federal Government, on grounds that are untenable under constitutional law, refused to provide the requested information, or did so insufficiently, and that the Federal Government thereby violated the rights of the applicants and of the German Bundestag under Art. 38(1) second sentence and Art. 20(2) second sentence of the Basic Law (Grundgesetz – GG).
Key Considerations of the Senate:
To the extent that they are admissible, the applications are for the most part well-founded.
1. a) The German Bundestag has the right to ask questions and to receive information from the Federal Government (Art. 38(1) second sentence and Art. 20(2) second sentence GG); this right extends to the individual members of the Bundestag, as well as to parliamentary groups in their capacity as an association of members of the Bundestag, and the right generally corresponds with a duty of the Federal Government to give answers. The parliamentary oversight of government and of the executive branch lends effect to the principle of separation of powers as one of the fundamental principles informing the functions and order set out under the Basic Law. Parliament cannot exercise its powers of oversight over the Federal Government if it does not partake in the Federal Government’s knowledge. Therefore, the parliamentary interest in receiving information is of paramount importance insofar as it relates to uncovering possible unlawful conduct or similar forms of misconduct within the government or the executive branch. At the same time, parliamentary oversight is also a manifestation of the Federal Government’s accountability to Parliament, which is derived from the principle of democracy.
b) The parliamentary right to information is subject to the limits of reasonableness (Zumutbarkeit). The Federal Government is under an obligation to provide all information at its disposal or which can be obtained through reasonable efforts. In this regard, the Federal Government is required to exhaust all available means of obtaining the requested information.
c) The parliamentary right to information is primarily designed for receiving the requested information publicly. The exchange of arguments and counter-arguments as well as public debate and discussion are essential elements of democratic parliamentarianism. Nevertheless, legitimate secrecy interests of the Federal Government or fundamental rights of persons concerned may give rise to a requirement to assess whether certain precautions regarding parliamentary confidentiality are necessary. Similarly, applying the Bundestag Rules on Confidentiality (Geheimschutzordnung des Deutschen Bundestages) when responding to parliamentary queries may, as a less restrictive measure, constitute a suitable means for striking an appropriate balance between the right to ask questions afforded members of the Bundestag and other legitimate legal interests.
2. The parliamentary right to ask questions guaranteed under the Constitution is, however, subject to limitations; any such limitation, including those set out by ordinary statutory law, must be rooted in constitutional law. For example, the right of the Bundestag and its individual members to receive information is, from the outset, limited to matters falling within the competence of the Federal Government and for which the Government is responsible. Further limitations may result from the fundamental rights of third parties and from the welfare of the Federation or a Land (welfare of the state).
3. If the Federal Government refuses to provide the requested information, it must state the reasons for its refusal or its decision not to make the information publicly available. In the event that the requested information is provided in the form of classified documents filed at the Secret Records Office (Geheimschutzstelle) of the German Bundestag, a specific duty to substantiate its reasons for doing so is incumbent upon the Federal Government. It is the responsibility of the Federal Government to state in a comprehensive manner its reasons for classifying the requested information as confidential and why it believes that the requested information should not be disclosed to the public where, as the case may be, even several years have passed or the matter in question has already been concluded.
4. With regard to its response to the questions in dispute pertaining to matters concerning the Deutsche Bahn AG, the Federal Government failed to adequately assess the scope of its duty to give answers and thereby violated the rights of the applicants and of the German Bundestag under Art. 38(1) second sentence and Art. 20(2) second sentence GG.
a) Where the Federation is the majority or sole owner of companies incorporated under private law, the activities of such companies fall within the Federal Government’s area of responsibility. This is due to the fact that the commercial business activities of the public sector require specific legitimation. In this regard, the Federal Government’s responsibility is not limited to exercising the oversight and intervention rights afforded it under the applicable statutory regulations. Given how interconnected the Federation and the Deutsche Bahn AG currently are, the Federal Government may be held accountable by way of parliamentary queries. For as long as the Federation retains the overall responsibility for guaranteeing the availability of both a rail network and public transport services, while also continuing to serve as the sole shareholder of the Deutsche Bahn AG, thereby giving it at least a certain degree of influence over the company’s business strategy, the Federation cannot be exempt from any and all responsibility in respect of the management of the company.
b) The fundamental rights of the Deutsche Bahn AG, specifically the protection of its corporate and company secrets (Art. 12(1) or Art. 14(1) GG), do not preclude the duty to provide information. Legal persons governed by private law but entirely controlled by the state – such as the Deutsche Bahn AG – do not have legal personality with regard to substantive fundamental rights. The fact that, in terms of future possibilities, ownership of the Deutsche Bahn AG might at some point fall to private shareholders, i.e. natural persons who carry fundamental rights, does not have any premature bearing on the present legal situation. Nor does Art. 87e GG confer upon the Deutsche Bahn AG independent rights vis-à-vis state authorities; it cannot invoke defensive rights against state influence on its management.
c) Disclosing corporate and company secrets of state-owned companies could impact the value of company shares as well as the business performance. It therefore potentially affects the fiscal interests of the state, and thus pertains to the welfare of the state.
d) Against this backdrop, with regard to the information provided in response to the questions in dispute, the Federal Government did not satisfy its duty to give answers in respect of the Interpellations “Fulda Round Tables of the Deutsche Bahn AG and Financing
Agreements regarding Projects under the Rail Requirement Plan” (Bundestag document, Bundestagsdrucksache – BTDrucks 17/3757); this is because the Federal Government may not justify its refusal to provide information by claiming a lack of annual and standardised lists, or a lack of statistics on the volume of federal funds paid towards eligible project costs, or the duty of confidentiality resulting from applicable statutory regulations of company law. Similarly, the Federal Government may not invoke the duty of confidentiality incumbent upon public accounts pursuant to § 43 of the Public Accounts Act (Wirtschaftsprüferordnung – WiPrO) nor the confidentiality agreements concluded with the Deutsche Bahn AG for the purposes of refusing to answer the Minor Interpellation (Kleine Anfrage) relating to the economic feasibility assessment of the project “Stuttgart 21” (BTDrucks 17/3766). As regards the Minor Interpellation “Delays in Train Operations” (BTDrucks 17/3149), the Federal Government was not entitled to refuse an answer based on the argument that virtually all requested information concerned matters relating to the business operations of the Deutsche Bahn AG, given that the Federation holds 100% of shares in the Deutsche Bahn AG; accordingly, the latter’s business operations fall well within the Federal Government’s area of responsibility.
5. With regard to the matters in dispute pertaining to financial market supervision, the Federal Government also failed, for the most part, to sufficiently meet its duty to give answers and thereby violated the rights of the applicants and the German Bundestag under Art. 38(1) second sentence and Art. 20(2) second sentence GG.
a) The Federal Government’s area of responsibility extends to financial market supervision as well as financial institutions controlled by it; in consequence, these matters can be covered by the right of the Bundestag and its individual members to receive information. As an interest pertaining to the welfare of the state, the effective supervision of financial institutions by the state may, however, reduce the Federal Government’s duty to give answers. To establish the need for confidentiality, it is not necessary to demonstrate that the oversight and regulatory functions of the supervisory authority would be jeopardised in the individual case. Yet, it does not suffice to assert that it would become more difficult for the supervisory authority to exercise its function. Nor can it simply be assumed, in the absence of specific fact-based evidence, that disclosing the requested information would lead to a decline in the willingness to cooperate as well as in the voluntary participation on the part of companies subjected to financial market supervision. If the statutory powers of the BaFin were found to be insufficient for adequately fulfilling its supervisory mandate, and if the BaFin were thus indeed entirely dependent on the voluntary and non-obligatory disclosure of information by the financial institutions it is tasked to supervise, it would in any case be incumbent upon the legislature to remedy this deficit.
b) Ensuring stability of the financial market as well as the success of support measures adopted by the state during the financial crisis constitute interests pertaining to the welfare of the state and as such set limits to the parliamentary right to receive information. It is inherent in the nature of the financial market that the effects of detrimental developments of the type which market supervision aims to prevent are not limited to the relevant financial institution but also impact, most notably, the market as such. It is true that the Federal Government is afforded a margin of assessment and prognosis in respect of the resolution of the financial crisis and the measures adopted in this context, and the assessment of the extent of impairments which would result from disclosure of the requested information, especially with regard to the asserted irrational reactions on the highly vulnerable markets. Yet, this implies by no means that transparency and democratic oversight were invariably superseded during the financial crisis nor can it automatically be assumed that these arguments remain valid even after considerable time has passed. Still, in the course of the financial crisis, the Federation has provided assistance worth billions of euros in taxpayer money to financial institutions in order to stabilise the banking and finance system and protect it against threats to its very existence. This goal would essentially be undermined if the disclosure of sensitive information were to subject one of these financial institutions to economic disadvantages or, worse, bring it to the brink of collapse.
c) In this context, the Federal Government also failed to comply with its duty to give answers as far as its responses to the parliamentary queries relating to IKB Deutsche Kreditbank/financial market supervision (BTDrucks 17/4350) are concerned. The Federal Government may not refuse to answer the queries in question by way of mere reference to contractual or statutory confidentiality obligations. Nor can it be successfully argued that the requested information has already been provided in a secret setting in a different forum and at a different time, or that the information could be filed by way of classified documents at the Secret Records Office pursuant to a decision of the German Bundestag. Similarly, the Federal Government failed, for the most part, to satisfy its duty to give answers with regard to the Minor Interpellation “Exercise of Parliamentary Oversight in Respect of the Financial Market” (BTDrucks 17/3740). Without further substantiating reasons, it cannot simply be assumed that public knowledge of the extent to which oversight measures of the BaFin are directed at selected financial institutions could lead to an irreversible loss of trust vis-à-vis the institution concerned and trigger similar reactions on the market; at least in this generalised form, such an assumption does not provide a sufficient basis for refusing answers to parliamentary queries. If this were the case, the activities of the BaFin would be completely exempt from parliamentary oversight. There are also no specific reasons to believe that disclosing which regulatory measures were adopted in the years 2005 to 2008 in relation to financial institutions – considering it is no secret that the relevant institutions did struggle and receive assistance during the financial crisis – would still cause tangible negative reactions on the market at the end of 2010 / beginning of 2011. Moreover, regarding the question relating to salary and bonus payments exceeding EUR 500,000 at financial institutions that received assistance, it was unlawful for the respondent to provide the requested information only in the form of classified documents. In this regard, the parliamentary interest in receiving a public answer, which serves the objective of exercising oversight in relation to the salary policy of institutions receiving assistance from the state and hence concerns the use of taxpayer money, outweighs the interest in keeping this information confidential. It is only in relation to information pertaining to the risk assessment (3x4 risk matrix –Zwölf-Felder-Matrix) of financial institutions during the years 2005 to 2008 that the Federal Government was entitled to provide its answer by way of filing the requested information at the Secret Records Office of the German Bundestag. Informing the public by only disclosing the risk assessments of certain institutions could potentially lead the market to consider, for lack of more detailed information, any rating below the highest score to be negative.