Wirecard versus the FT was unequal fight but we could not back down, says reporter Dan McCrum

Dan McCrum FT journalist at Wirecard doc premiere| — |

The Financial Times journalist that led the newspaper’s reporting taking down fraudulent German fintech giant Wirecard has warned “we don’t have equality of arms” against companies with practically unlimited resources.

But Dan McCrum said he hoped publishers realised the “brand benefit” of investigative journalism, and that the six-year Wirecard saga demonstrated the importance of editors.

McCrum first received a tip-off about allegations of money laundering at Wirecard in 2014. He wrote several stories but did not make a big splash – other than some sinister attention from the company including attempts to listen in to editor Lionel Barber’s office and legal threats – until 2018 when Wirecard joined German stock market index DAX, making it one of the biggest tech companies in Europe. With the help of a whistleblower, the FT subsequently revealed a number of frauds taking place within the company.

At this point, McCrum and his colleague in Singapore, Stefania Palma, were investigated by German police over accusations of colluding with short sellers, and the FT felt it had to commission its own investigation to prove it was not corrupt. Both the journalists were ultimately vindicated, but during this period one of the world’s largest tech investors gave Wirecard $1bn. It wasn’t until months after McCrum’s October 2019 story revealing the extent of suspect accounting practices at Wirecard that the company finally went down, admitting €1.9bn in cash was missing.

Throughout this six-year period there were multiple points where the FT could have given up. Instead,it gave McCrum weeks on end to pore through documents in a bunker in the middle of the FT building, flew him to Bahrain and Singapore, and spent hundreds of thousands on legal fees alone.

‘We don’t have equality of arms’ says Dan McCrum

In an interview for Press Gazette’s Future of Media Explained podcast, McCrum said the FT could not give up the story because it felt it had to defend and vindicate itself.

But, McCrum said, it did have to deal with legal threats from Wirecard through firms including Schillings, Herbert Smith Freehills and Jones Day.

As a result, he added: “We don’t have equality of arms, particularly in corporate reporting. You’re going up against large companies with effectively unlimited resources sometimes.

“In some ways I was very lucky because the mistake Wirecard made was to attack the reputation of the Financial Times itself. Because it said we were corrupt and the FT had somehow given its pages over to this criminal reporter, the FT couldn’t walk away from the story.”

He added that despite the hundreds of thousands spent on legal bills and the internal investigation, and €600-per-hour criminal lawyers for himself and Palma, “money wasn’t an object at that point because it was more existential than that.

“We literally can’t as an organisation let them attempt to damage our brand like that.”

It also became hard for McCrum personally, who found it “impossible to walk away” after being accused of being a criminal and subject to an investigation by his own employer – his “lowest moment” despite knowing they did back him.

But he said: “Whilst it was terrible, the journalist in me at the same time was going ‘wow, I can’t wait till one day I’m going to be able to tell the world about this and they are not going to believe it’.”

‘Brand benefit’ of investigations

Despite the reputational risks, McCrum set out why investigations are so worthwhile for publishers like the FT.

“What I would hope publishers would recognise is the value that funding investigative journalism does for your organisation, because you get the brand benefit – because really what are we after? Great stories. And investigations is one way to get tremendous stories that people want to read.

“But it also has, I think, these sort of halo effects in that you develop a culture within the newsroom that leads to aggressive reporting. The FT has had lots and lots of terrific stories since the Wirecard affair,” he said, pointing to its reporting of ex-Prime Minister David Cameron’s lobbying relationship with Greensill Capital that won the politics and investigation prizes at the British Journalism Awards 2021.

He also pointed to an FT scoop on the day of this interview in which it was revealed the chief executive of German media company Axel Springer had used his tabloid Bild to campaign against a rent freeze by Adidas during the Covid-19 lockdown – when he was an Adidas landlord.

McCrum said he felt “very lucky that the FT recognised the importance of the story and effectively said, ‘okay, don’t do anything else, just focus on this'”.

Importance of editors ‘fighting for the story’

Paul Murphy, Dan McCrum and FT editor Roula Khalaf attend the Financial Times Netflix premiere of Skandal: Bringing Down Wirecard in London on 14 September 2022. Picture: Financial Times

He said one of the biggest lessons he would share from his experience is the “importance of editors”, citing investigations editor Paul Murphy and his approach to “let journalists follow their nose and give them encouragement and advice when they need” it, and also “fight” for the story.

Despite Wirecard’s downfall, McCrum has continued to live the story for the past two years. He wrote the book Money Men, which became the inspiration for a Netflix documentary featuring him and several of his FT colleagues. In his interview with Press Gazette, a “wanted” poster for the missing ex-Wirecard chief operating officer Jan Marsalek could be seen on the wall of his home over his shoulder.

Asked if the investigation had become personal and whether that emotional attachment should be avoided, McCrum said: “I’m not a big fan of that sort of American pose of dispassionate neutrality when it comes to journalism because I think it’s a fiction. Everything you write involves a choice – the words, the framing. It’s impossible to pretend that there is no angle.”

He continued: “I kind of feel like fairness to the subject is a sort of more attainable and justifiable goal. You might think they’re a fraud, but we have certain procedures and things that we go through. We’re going to get their version of events. We’re going to share it with the reader. We’re going to treat them reasonably. So, I think you can do that while sort of coming from a clear perspective that we’re locked in a war with this company and we have to show the world the truth of it.”

At the same time, though, McCrum had to deal with the knowledge of potential risks to his family. He and his wife would talk about the story with their phones in a different room, knowing they may both have been hacked, and he lived for a while with the “nagging fear” and “paranoia” that something could happen.

In both the documentary and this interview McCrum became emotional at this thought: “If you put the people who you love in danger, like, what are you doing that for? For a story?”

Picture: Financial Times