The Gustl Mollath Affair – Who Is the Paranoid?

by Dirk Ehnts, Econoblog101

The following story is mind-boggling. The Guardian reports what has been reported in Germany over the last few weeks and led to a campaign to free Gustl:

A German man committed to a high-security psychiatric hospital after being accused of fabricating a story of money-laundering activities at a major bank is to have his case reviewed after evidence has emerged proving the validity of his claims.

In a plot worthy of a crime blockbuster, Gustl Mollath, 56, was submitted to the secure unit of a psychiatric hospital seven years ago after court experts diagnosed him with paranoid personality disorder following his claims that staff at the Hypo Vereinsbank (HVB) – including his wife, then an assets consultant at HVB – had been illegally smuggling large sums of money into Switzerland.

Mollath was tried in 2006 after his ex-wife accused him of causing her physical harm. He denied the charges, claiming she was trying to sully his name in the light of the evidence he allegedly had against her. He was admitted to the clinic, where he has remained against his will ever since.

That, I believe, is the most horrible abuse of the legal system by the financial sector in Germany by far. The bank (HVB) kept a 2003 (!) report secret that would have substantiated Mr Mollath’s claims. The report is available on the website of SWR (in German). Mr Mollath is still locked up, but now it seems that his case will be revised. After the NSU affair where the German secret service did not recognize a Neonazi terrorist group killing 9 people with foreign roots, among other things, over a period of six years, the revelation that the justice system locks up a whistleblower as paranoid will further erode trust in the German state.

Meanwhile, in the UK the Leveson report calls for an end to self-regulation of the press, which repeatedly broke its ethics code. Europe has a political problem: institutions have been taken over by those who are supposed to be regulated, who in turn use their influence to maximize their private profits, silence critics and evade any competition. This has been a problem everywhere at any time, but the size of it I think is relatively large today. A change in the democratic system towards more transparency and more participation is warranted. Without it, honest people like Mr Mollath will continue to be locked up and people without morals and a strong sense of entitlement make and enforce the rules.

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About the Author

Dr. Dirk Ehnts is a research assistant at the Carl-von-Ossietzky University of Oldenburg (Germany). His focus is on economic integration and economic geography, covering trade, macro and development. He is working at the chair for international economics since 2006 and has recently co-authored a book on Innovation and International Economic Relations (in German). Ehnts has written at his own blog since 2007: Econblog 101. Curriculum Vitae.