How the Public Loses Out When Politicians Cash In
By joining the boards of Russian energy corporations that benefited from decisions he made while serving as Germany’s chancellor, Gerhard Schröder has clearly breached the trust of the German people. Why can politicians still get away with the kind of behavior that fiduciaries in business know to avoid?
NEW YORK – Three months after Russia launched its second war against Ukraine in a decade, former German Chancellor Gerhard Schröder finally resigned from his post as chair of the board of directors of Rosneft, the Russian state-owned oil conglomerate. Yet while Schröder had held this post since 2017, his entanglement with Russia’s lucrative energy sector is far older and even more dismaying.
On September 8, 2005, while still chancellor, Schröder finalized a deal with Russian President Vladimir Putin to build a natural-gas pipeline beneath the Baltic Sea. Since the project would allow the Kremlin to cut off natural-gas deliveries to Ukraine, Poland, and the Baltic states, it was controversial from the start.
Worse, Schröder lost the 2005 federal election to Angela Merkel just ten days later. She became chancellor in late November, and less than three weeks later, Schröder was offered a board position at Gazprom, the Russian state-owned gas giant that would build and operate the pipeline. Despite facing a backlash at home and abroad, Schröder did not hesitate long before accepting the offer.