BERLIN — Martin Selmayr was on a mission.
By “we,” de Geus meant the organization he has led since 2012, the Bertelsmann Stiftung, a foundation controlled by the wealthy German family behind Bertelsmann SE & Co., the giant media group where Selmayr worked as a Brussels-based lobbyist until 2004.
At a time when Europe is under threat from all sides, the Bertelsmann empire is stepping into the breach. With its staunchly pro-European ideals, deep pockets and broad reach across the ContinentÂ’s political landscape, itÂ’s uniquely placed to do so; Message control has been a Bertelsmann specialty for nearly two centuries.
Martin Selmayr, the European CommissionÂ’s secretary-general | Olivier Hoslet/EPA
Nonetheless, the budding alliance is not without risk. Even if there are no financial strings attached to BertelsmannÂ’s help, there is a big catch: In joining forces with the Bertelsmann foundation, the Commission is tacitly allying itself with the corporate interests of the media giant that bankrolls it.
With its far-flung holdings and liberal ideals, Bertelsmann epitomizes the “globalist” values that are fueling populist resentment across the West. The EU’s close association with the group, however well-intentioned, could end up giving Europe’s anti-establishment forces just the kind of ammunition they’re looking for.
Though many Europeans may have never heard of Bertelsmann, it touches almost all of their lives. With operations scattered from Tallinn to Athens, the closely held group is not just a “société européenne” in name. Its stable of properties includes Europe’s biggest commercial broadcaster, RTL, which reaches millions every day over dozens of television and radio stations across the Continent. It also controls Penguin Random House, the world’s largest book publisher, with authors ranging from Michelle Obama to Dan Brown and Jamie Oliver.
The company, which employs more than 100,000 people, also has a major presence in music, magazines (its Gruner + Jahr unit owns Germany’s Stern and has a 25.5 percent stake in Der Spiegel, for example), education and more. Last year it posted revenue of nearly €18 billion and a profit of more than €1 billion, making it far and away Europe’s largest media concern.
A big chunk of those earnings flow into the Stiftung.
Personal relations
Part management consultancy, part think tank (de Geus likes to call it a “do-tank”), the non-profit Bertelsmann Stiftung uses its nearly €90-million budget to offer governments advice on everything from foreign policy to education.
Founded in 1977 by Reinhard Mohn, BertelsmannÂ’s post-war patriarch, the Stiftung was originally conceived as a vehicle to keep the company under family control. Mohn had resurrected Bertelsmann from the rubble of World War II, and he wanted to ensure that GermanyÂ’s inheritance tax didnÂ’t force his heirs to sell. Placing his controlling share in a foundation was the easiest way to avoid that.
The Bertelsmann company itself was established in 1835 in Gütersloh. It started as a provincial publisher of hymnals and religious texts and expanded over the decades to become one of Germany’s largest book publishers by World War II. During the war, Bertelsmann collaborated with the regime, doing brisk business printing pro-Nazi literature. That would have normally disqualified the company from continuing to print books after the war, but Reinhard Mohn held back those details when applying for a publishing license, and the British occupying authorities granted him one.
A picture of Reinhard Mohn at his 2009 memorial service | Friedemann Vogel/Getty Images
MohnÂ’s sleight of hand paid off. In the decades that followed, he and a cadre of senior managers turned the company into one of the worldÂ’s largest media groups. (The truth about BertelsmannÂ’s wartime history
broke into the open in the late 1990s, and the company was forced to come clean.)
Early on, Mohn, who died in 2009 at the age of 88, saw the importance of cultivating politicians at the local and national level. He enlisted a succession of German presidents to speak at foundation events and co-sponsor projects.
At the same time, he curried favor with countryÂ’s government leaders. As if to hedge his bets, Mohn invited members of both the center right and the center left. Above all, what distinguished Mohn from most other corporate leaders was his longevity. He developed personal relationships with virtually every German chancellor in the post-war period, including Merkel.
“You are leading our country at a time of significant societal and economic change with prudence, confidence and an extraordinary sense of responsibility" — Liz Mohn to Angela Merkel in 2014
When Mohn died, Merkel placed a personal call to his widow Liz Mohn to offer her condolences. The two women, whose friendship predates MerkelÂ’s tenure as chancellor, still meet regularly in private. Liz Mohn also sends Merkel letters, sharing personal thoughts and insights she has gleaned from foundation events.
“You are leading our country at a time of significant societal and economic change with prudence, confidence and an extraordinary sense of responsibility,” she wrote to Merkel in 2014, according to an excerpt published by Der Spiegel. Mohn, who organizes an exclusive summer gathering of German-speaking politicians in Austria called the “Salzburger Trilog,” also shared the group’s insights with the chancellor, adding that she looked forward to their next meeting.
‘Citizens dialogue’
Over the course of reporting this article, POLITICO spoke to more than a dozen current and former Bertelsmann executives. While Bertelsmann insists that the company and the foundation are strictly separate, it doesnÂ’t try very hard to hide the appearance of conflict. ItÂ’s been common, for example, for the chairman of Bertelsmann to serve concurrently as the head of the foundation, a practice that began with Reinhard Mohn.
Gunter Thielen, de GeusÂ’ predecessor as head of the Stiftung, was also the chairman of BertelsmannÂ’s corporate board and had been the companyÂ’s CEO before that. He also ran BertelsmannÂ’s printing and services division for a number of years.
Liz Mohn serves as deputy CEO of the Stiftung and holds a seat on the boards of both the foundation and corporation.
Karin Schlautmann, BertelsmannÂ’s head of communications, a key post in any media company, came to the company in 2011 after running communications at the Stiftung for several years.
And just last year, Carsten Coesfeld, a manager in BertelsmannÂ’s services division and a grandson of Reinhard Mohn, joined the StiftungÂ’s board.
Liz Mohn at an awards ceremony in Dortmund, Germany in 2018 | Andreas Rentz/Getty Images
In terms of ownership, Liz Mohn, together with two of her three children, controls the foundation and by extension Bertelsmann. The family owns just 19.1 percent of the companyÂ’s shares directly with the remaining 80.9 percent parked in the foundation.
A holding company led by Liz Mohn, the Bertelsmann Verwaltungsgesellschaft, exercises all of the voting rights, ensuring the familyÂ’s full control over both entities.
After a
complicated romance with Reinhard Mohn that began when she was just 17, Liz Mohn came to control the company and the Stiftung only late in life.
She appears to have no plans to let go any time soon.
Now 77, Mohn quietly repealed the holding company rules that would have forced her to resign at 75.
“We see today that the issues we have are global in nature" — Liz Mohn at Davos
A regular at the World Economic Forum, Mohn continues to travel the world and mingle with the great and good in the service of the family business and foundation.
“We see today that the issues we have are global in nature,” she told an interviewer at this year’s meeting. “Everyone can see that it’s politics, business, technology, artificial intelligence, questions of freedom and liberty.”
Over the past year, the “Stiftung,” as insiders call it, has quietly helped the Commission improve its public outreach and what de Geus calls “positioning.” Part of the initiative involves a series of interactive events such as the “EU Citizens Dialogue,” which bring regular Europeans in border regions together with senior EU officials such as Selmayr and Commission First Vice President Frans Timmermans.
At a recent installment in Passau, for example, the Stiftung assembled a group of 120 Austrians, Germans and Czechs in the cityÂ’s ornate town hall. With the help of a dozen interpreters, they spent several hours debating issues such as refugee policies and cross-border cooperation amongst themselves and with Selmayr in a vast baroque chamber.
“One of the main points for me was that in many cases, more bright ideas were produced in a single evening by citizens from border region countries who met in Passau than in several days and nights of committee meetings by ministers in Brussels,” Selmayr said at the event.
Aart Jan de Geus has led the Bertelsmann Stiftung since 2012, a foundation controlled by the wealthy German family behind Bertelsmann SE & Co | Fjodor C. Buis /Hollandse Hoogte via Belga
Another project, dubbed “Repair and Prepare,” aims to come up with ways to fix the eurozone and bolster the region’s economy.
To that end, the Stiftung co-hosted a conference with European Central Bank President Mario Draghi and German Finance Minister Olaf Scholz in Berlin last fall.
Still another initiative focuses on how to promote democracy and “market-economy reforms” in the so-called EU neighborhood — countries in the region that aren’t members of the bloc. In December, it released a study making the case for a Europe-wide unemployment insurance.
The Stiftung’s overarching goal? “With our ideas, concepts and other instruments we empower decision-makers,” de Geus said.
For its part, the Commission downplayed its ties with Bertelsmann, noting that it has organized “1,600 dialogues” with citizens across Europe since Juncker came into office and that the Stiftung is just one of its many partners. A spokeswoman also stressed that no money has changed hands between the Commission and the Stiftung.
Friends in Brussels
Such projects would appear to benefit all sides: The Commission wins the opportunity to engage more directly with Europeans; the Stiftung lives up to its mission to promote “freedom, solidarity and goodwill”; and Europe gets a citizenry that is better informed about the issues of the day.
Yet whatever benefits accrue to the European demos, the biggest winner in the long run is the corporate titan that made it all possible.
An image analysis undertaken by the Stiftung in Germany found that most people associate the Stiftung with the company, suggesting that to the degree the public supports the foundationÂ’s agenda, BertelsmannÂ’s corporate image will also benefit.
And then thereÂ’s the bottom line. Across a range of issues, from e-learning to combatting populism, the StiftungÂ’s interests dovetail nicely with the corporationÂ’s own agenda. For example, while the Stiftung seeks to assuage public worries about digitalization, the corporation wants to harness the opportunities presented by artificial intelligence. From a corporate perspective, the more open-minded the public is about such technologies, the better.
MEP Elmar Brok was Martin Selmayr's mentor | Clemens Bilan/EPA
The greatest advantage Bertelsmann derives from its affiliation with the Stiftung, however, is more prosaic: access.
Many of the same figures and institutions that interact with the Stiftung are also in positions that could affect BertelsmannÂ’s prospects.
By cloaking itself in the decidedly pro-EU ideals of the Stiftung, Bertelsmann has managed to burrow itself into the fabric of EU institutions via an extensive network of friendly officials and politicians, current and former Bertelsmann executives say. Even where the connections are clear, it can be difficult to spot just how deep the companyÂ’s influence runs.
The most prominent example is Selmayr, who served as BertelsmannÂ’s chief lobbyist in Brussels before joining the Commission. The Commission secretary-generalÂ’s mentor at Bertelsmann was Elmar Brok, the long-serving center-right MEP, who for decades earned a salary as a senior Bertelsmann employee and corporate adviser, even as he served in parliament.
BrokÂ’s close friend Jean-Claude Juncker is no stranger to Bertelsmann either.
“I’m really very happy to be back in Gütersloh, because I know I’m among friends" — Jean-Claude Juncker toward Liz Mohn in 2013
RTL was founded and remains based in Juncker’s native Luxembourg, where he served as premier for many years. In late 2013, when Juncker was preparing his run for Commission presidency, he visited Gütersloh, the provincial Westfalian town where Bertelsmann’s headquarters is located, at the invitation of Liz Mohn in order to bestow the Stiftung’s highest honor on former United Nations Secretary-General Kofi Annan.
“I’m really very happy to be back in Gütersloh, because I know I’m among friends,” Juncker said in Mohn’s direction, addressing her as “Dear Liz.” “A true friendship is a sustainable one, and the friendship that binds my country with Bertelsmann is a lasting one that I’m grateful for.”
Juncker’s compatriot Viviane Reding, the European commissioner who oversaw the media and tech portfolio for several years, is also fond of Gütersloh. After stepping down as a Commissioner in 2014, she joined the Stiftung’s board of trustees (Selmayr worked as Reding’s chief of staff before he took over Juncker’s team). Reding was a member of the European Parliament until last year.
Bertelsmann Chief Executive Thomas Rabe, who grew up in Brussels (his father worked for the European Coal and Steel Community) also has a Commission connection: He began his career there as a lawyer in the 1990s. Rabe, who worked as RTLÂ’s CFO in Luxembourg for several years, also knows Juncker.
Corporate strategy
Given its status as EuropeÂ’s largest media company, BertelsmannÂ’s interests in the Brussels bubble run deep. It was an influential voice in shaping the legislation to strengthen EU privacy rules last year, for example.
Even where the company doesnÂ’t get everything it wants, as with the privacy rules, its connections often help it soften the impact of BrusselsÂ’ rule-making machine.
Among its other priorities in Brussels are shaping regulation for the EU’s digital single market, especially ensuring that its U.S. tech competitors are not given preferential treatment. Here, the Stiftung has been a reliable ally. “Fair taxation of digital behemoths is key to a level playing field,” the Stiftung wrote in March.
Bertelsmann — both the foundation and company — were also early proponents of the transatlantic trade deal known as TTIP and helped put it atop Brussels’ agenda. Popular resistance in Europe and U.S. President Donald Trump ultimately killed the deal, but it may have never gotten as far as it did without Bertelsmann’s behind-the-scenes prodding.
Bertelsmann’s structural breadth and geographic reach are what make the Stiftung such a valuable complement to its corporate strategy. Though separate legal entities, the Stiftung and Bertelsmann remain closely linked in spirit, deed and even geography — their headquarters sit side by side, overlooking a circular manmade lake on the fringes of Gütersloh.
Tony Blair and Angela Merkel in Berlin in 2007 | Sean Gallup/Getty Images
With the help of the Stiftung, Bertelsmann has cultivated close ties to senior leaders across Europe for decades, ensuring the company’s executives ready entry into the upper echelons of European politics. Angela Merkel, Tony Blair and even the King Felipe VI of Spain have all paid their respects in Gütersloh over the years.
Such access has never been more important for the company. At a time when Bertelsmann faces tectonic shifts in its core media businesses and intense competitive pressure from the likes of Netflix and Facebook, the company is racing to defend it territory.
Last year, Rabe warned in an op-ed for POLITICO that Europe’s creative industries are “under threat — in large part because of European regulations that put the Continent’s creative companies at a disadvantage in their competition with U.S. tech platforms.”
The EU took a step toward addressing such concerns last month with the passage of new copyright rules, aimed at protecting the rights of European content producers. Bertelsmann was among the companies lobbying for the reform. (Axel Springer, joint owner of POLITICO Europe, also pushed for the changes.)
One of the key figures behind the initiative, European Commissioner Günther Oettinger, is a regular in Bertelsmann circles. As digital commissioner until 2016, his portfolio ran right through the heart of Bertelsmann’s businesses.
Once a year, the company throws a lavish party for about 800 guests at the Kommandatur.
In late January, Oettinger delivered a fiery speech in Berlin about the myriad threats Europe faces as part of the StiftungÂ’s campaign for the Commission to improve public engagement ahead of the election.
“If we want to preserve our system of values for ourselves, our children and grandchildren in Berlin, Brussels and Europe … then we have to fight for it,” he told a packed room.
The event, broadcast on German public television, illustrated the blurred lines between the Stiftung, the Bertelsmann corporation and the Commission. Organized on behalf of the Commission by the Stiftung, Oettinger held his address in the corporationÂ’s Berlin base.
Asked by an audience member after his speech what the Commission could still accomplish before the end of its current term, Oettinger was quick to answer.
“One example, that I can mention in these surroundings, is copyright,” he said.
Influence-peddling
Oettinger is a frequent guest in BertelsmannÂ’s Berlin home, a reconstructed Prussian-era villa known as the Alte Kommandatur. Once the residence of the capitalÂ’s garrison commander, the Kommandatur today projects a more subtle, if no less potent, form of influence.
Once a year, the company throws a lavish party for about 800 guests at the Kommandatur. Attendees are typically a motley group of politicians like Oettinger as well as prominent figures from the worlds of business and entertainment.
One recent instalment included the American actor Wesley Snipes and Wolfgang Schäuble, the former German finance minister who is now the president of the Bundestag.
Over several floors, star chefs presented guests a dazzling array of dishes, from sushi served on an ice bar to pulled pork burgers and “king crab meatballs.” On a rooftop terrace overlooking central Berlin’s main boulevard, Unter den Linden, guests could take to the dance floor or sip gin cocktails mixed with elderberry liqueur and blue Curaçao.
“Brussels has always been very important to Bertelsmann" — Thomas Schuler, journalist
Such extravagance has made BertelsmannÂ’s annual party a rite of summer for BerlinÂ’s political and media elite.
Liz Mohn describes the affair as “the best night of summer.”
ThereÂ’s nothing illegal about BertelsmannÂ’s cultivation of powerful political figures through such affairs and the Stiftung. For the most part, its influence-peddling is in plain sight.
In private, executives on both sides of the divide acknowledge the arrangementÂ’s difficult optics, but itÂ’s not a subject they are eager to raise with Liz Mohn.
Outside pressure for a clearer division and transparent governance is growing. In Germany, the Stiftung has come under fire in recent years for what many perceive to be its outsized influence on public policy in areas such as welfare reform, refugee policy and education.
European Commissioner Günther Oettinger is a frequent visitor to Bertelsmann HQ | Aris Oikonomou/AFP via Getty Images
Journalist Thomas Schuler, whose 2010 book “Bertelsmann Republik Deutschland” chronicled the Stiftung’s influence on German politics, says little has changed in the years since he wrote the book because most politicians are wary of challenging the company’s power.
As Bertelsmann wades deeper into EU affairs, however, calls for a stricter division between the Stiftung and corporation, and for more transparent governance, are likely to get louder. ThereÂ’s the risk too that these last five years, when Juncker, Brok and Selmayr occupied positions of power in the EU, will mark the companyÂ’s high-water market in terms of influence. With two, and possibly three, of the men are on their way out, Bertelsmann may soon have fewer friends in high places.
That said, if the past is any guide, the more likely outcome is that Bertelsmann will find new friends.
“Brussels has always been very important to Bertelsmann,” Schuler said.
The Selmayr Appointment and Associated Scandals: How the Bertelsmann family is turning the EU into a 4th Reich
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Originally Posted by Abdülmecid I
