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When it comes to diplomacy, Wolfgang Ischinger means business

February 16, 2022 6:13 pm

Wolfgang Ischinger has transformed the Munich Security Conference into an elite global gathering — and done rather well for himself in the process.

MUNICH

It was the kind of tense moment that Wolfgang Ischinger was born to defuse. The veteran German diplomat and chairman of the annual Munich Security Conference was hosting a meeting between leaders from the Balkans and senior European and American diplomats when anger bubbled up over the slow progress countries from the region were making toward joining the European Union. 

“You have to tell us if you want us or not,” Serbian President Aleksandar Vučić said in the direction of the Europeans with visible frustration, according to witnesses. “We have no promises from anyone in Europe.” 

The A-list participants in the room included Andreas Michaelis, the powerful deputy German foreign minister, and Philip T. Reeker, a senior official from the U.S. State Department with responsibility for the region. Ischinger and his team couldn’t afford for the high-profile meeting to go off the rails. 

“Let’s be positive and take things forward,” Ischinger told Vučić in soothing tones, adding how happy he was that his conference had managed to pull off a “family reunion of the western Balkans.”

What Ischinger didn’t mention that day in February 2020 — and what few in the room atop Munich’s ritzy Bayerischer Hof hotel knew — was that the ambassador had a private commercial interest in the meeting’s success.  

Kosovo, represented at the gathering by its president and new prime minister, had been a client of Agora Strategy Group, the “boutique consultancy” that Ischinger founded in 2015. Just weeks before the conference, a new government had taken office in Kosovo and Agora was keen to keep the relationship alive.

As a diplomat, Ischinger had worked in the Balkans. But at such gatherings he had more than regional stability on his mind, a former associate said: “He wanted to make money.”  

Since his departure from Germany’s foreign service nearly 15 years ago, the ambassador has transformed the Munich Security Conference from a sleepy annual gathering of Cold Warriors and foreign policy wonks into a year-round traveling circus of global elites, populated by dozens of heads of state from Joe Biden to the president of Estonia, titans of Silicon Valley including Mark Zuckerberg, and even the likes of U2 frontman Bono. At this year’s instalment, which gets underway on Friday, U.S. Vice President Kamala Harris will be among the guests of honor. 

For Ischinger, however, the proceedings are about more than lofty debates on global issues or high-profile elbow-rubbing. The éminence grise of Germany’s foreign policy establishment, he has parleyed the ready access the conference gives him to the wood-paneled world of high-level politics into a lucrative sideline of peddling advice, access and lobbying to many of the same individuals, governments and institutions involved in the MSC, according to public filings and people familiar with his business dealings.  

Those activities have blurred the lines between his public and private roles and created a minefield of conflicts of interest, critics — including some former colleagues — say. Though legally structured as an independent nonprofit, the Munich Security Conference depends on the German government for both funding and legitimacy, making the role of chairman, in practice if not by law, a public one. Not only do government representatives sit on the MSC’s oversight committees, for example, but the German army provides logistics for the event, which is broadcast around the world by Deutsche Welle, a government-owned news channel.  

“From a governance perspective, it’s highly questionable because the German government has effectively granted him its official seal of approval, which he has used to meld public and private interests,” said a former associate of Ischinger who, like others familiar with his stewardship of the conference, spoke on condition of anonymity. 

Ischinger insists he has adhered to the highest ethical standards as chairman and rejects suggestions that he has ever put his own interests above those of the conference. 

“I’ve done my best over 14 years to ensure that there is no commingling of the duty to the Munich Security Conference with personal enrichment,” he said at a press conference to preview this week’s event.

‘Military-Science Encounter’

The son of a notary, Ischinger was born a year after World War II ended and grew up in southwest Germany near Stuttgart. His was the generation of West Germany’s Wirtschaftswunder, the “economic miracle” of the 1950s and 1960s that the country experienced as it rebuilt from the rubble of the war. 

Spared the horrors of the war, if not its long-term repercussions for Germany, Ischinger came of age firmly embedded in the Western fold. After studying in Europe and the U.S., he joined the staff of the U.N. Secretary-General Kurt Waldheim in 1973.  

Ischinger’s biggest break came in 1982, when he became the personal assistant to Hans-Dietrich Genscher, the legendary West German foreign minister who played a central role in bringing about German reunification. The job gave Ischinger a front-row seat at many of the events that have shaped our time, including what he has described as the highlight of his career, when in 1989 he accompanied a train full of East Germans who had taken refuge at the West German embassy in Prague to their freedom in the West. It was a watershed moment in the events that preceded the collapse of the Iron Curtain.   

Ischinger’s proximity to Genscher, the longtime leader of Germany’s liberal Free Democrats, vaulted him to the top tier of the country’s diplomatic corps. He would rise to become a deputy foreign minister during Chancellor Gerhard Schröder’s government as well as ambassador to the U.S., a post he started on September 11, 2001. 

Ischinger took the reins of the Munich Security Conference in 2008 at the request of the government. He had just capped his diplomatic career with the plum post of German ambassador to the United Kingdom (or, as he likes to put it, “to the Court of St. James’s”). He was quick to recognize the conference’s potential. 

Founded as a quiet conclave for Western security officials (both Henry Kissinger and Helmut Schmidt, the future German chancellor, attended the first meeting, held just one week after the Kennedy assassination in 1963) the “Internationale Wehrkunde-Begegnung” (International Military-Science Encounter), as the MSC was then known, was started by Ewald-Heinrich von Kleist, a German aristocrat who had taken part in the failed conspiracy to assassinate Hitler in 1944.  

Von Kleist envisaged the meeting as a roundtable discussion “between equal and active participants” on policy and strategy within the NATO alliance. Wehrkunde quickly became a fixed point on the transatlantic calendar, attracting prominent U.S. senators, security analysts and commentators.  

While the conference had lost some of its cachet in the years before Ischinger’s arrival, it remained an important date on the diplomatic agenda. Just a year before Ischinger took over, Russian President Vladimir Putin had delivered a landmark address in Munich, in which he made clear that Russia didn’t trust the West, a moment many see as a harbinger for what was to come. 

Under Ischinger, the Munich Security Conference has gone more global. Instead of taking a purely transatlantic focus, he widened its scope both geographically as well as thematically, to consider the impact of problems such as climate change and poverty on security. 

But while the conference remains a forum for thoughtful transatlantic dialogue, at least on the sidelines, the official program has moved more in the direction of what von Kleist had hoped to avoid: “endless speeches by politicians who enjoy speaking.” 

Davos with guns 

Whatever one makes of the content, Ischinger’s marketing strategy has been pitch-perfect. By culling the guest list of the octogenarians from the Dr. Strangelove era, he opened more of the roughly 500 places to a younger, more diverse group of participants. 

Over the years, the MSC has spared no expense in courting the media. The events offer select journalists not just ready access to global leaders, but an entrée into a realm most rarely experience — the lap of luxury.  

Unlike most think tank events, which are spartan affairs with stale pastries and lukewarm coffee, the MSC’s gatherings are sumptuous, with the best wine, food and lodging on offer.  

Illustration by Filip Peraić for Politico

In an effort to rekindle the MSC’s founding spirit of intimate gatherings, Ischinger has introduced smaller events throughout the year. A particular favorite is its annual December retreat to Schloss Elmau, a luxury hotel in the German Alps near Garmisch-Partenkirchen. Ischinger, who a few years ago led participants on a torch-lit hike through the snow there, describes it as “our most exclusive format.” The guest list, which in recent years has included Germany’s defense minister as well as Biden’s ambassadors to China and NATO, is limited to about 50.

(POLITICO Europe was a media partner of the Munich Security Conference in past years. Its Editor-in-Chief Jamil Anderlini was invited to Schloss Elmau last year but did not attend.)

Ischinger has rarely disappointed when it comes to luring top-rung policymakers. Not even COVID-19 dented his convening power. Though the pandemic scuttled plans for an in-person event in 2021, Ischinger managed to bring together an all-star cast for a slimmed-down event.  

Biden, who had only been sworn in only a few weeks earlier, stood in the East Room of the White House flanked by MSC signs to tell participants “America is back” and to “erase any lingering doubt” about Washington’s commitment to the transatlantic alliance. It was the first time an American president had addressed the gathering. Ischinger, standing on his usual stage in Munich, was beaming.    

In upscaling the conference, Ischinger also succeeded in building his own brand. For a man who spent his diplomatic career perfecting the art of remaining invisible, he proved remarkably adept in the limelight. A skilled raconteur, Ischinger can draw on an endless trove of anecdotes from his time as an active diplomat to titillate an audience.

Part fixer, part gatekeeper, part master of ceremonies, “Wolfgang” as the ambassador is widely known to MSC participants, is at the center of attention during the conference, moderating debates, conducting key interviews and even sporting an EU-themed hoodie one year to express his displeasure at Brexit.

Calm, telegenic and a smooth talker in both German and American-accented English, he settled into a role as Germany’s foreign policy go-to and never missed the chance to get in front of a microphone. (Last fall he even co-moderated a primetime public television debate on foreign policy with the candidates to succeed Angela Merkel as chancellor.)  

While Ischinger likes to describe the MSC’s flagship event as “the Oscars for security policy wonks,” a more apt metaphor might be “Davos with guns.”  

Notwithstanding the MSC’s high-minded ideal to promote “peace through dialogue,” its events are also driven by the same instincts that draw elites to its Swiss cousin: prestige, power and money.   

The influx of corporate cash is apparent in the MSC’s budget, which has ballooned since Ischinger took over — from just a few hundred thousand euros in public funding in 2008 to about €10 million today, mostly from corporate funds. While the limited capacity of the Bayerischer Hof, the Old-World hotel in central Munich that serves as the conference venue, has prevented the overall attendance from exploding, the available spots are more coveted than ever, especially for those from the worlds of defense contracting and other security-related fields for whom the MSC is the premier networking event on the calendar.  

“Whatever it was about before, now it’s about speed dating,” said one longtime diplomatic visitor to the conference.  

Official guests don’t pay to attend (they’re the main attraction), but corporations shell out millions to sponsor the conference. In addition to being tax-deductible, that support usually carries the privilege of sending company executives into the bowels of the Bayerischer Hof.

The money that corporations pay goes into the nonprofit organization that runs the Munich Security Conference. As it happens, many of those same businesses — including accounting giant EY, insurer Allianz, German defense contractor Hensoldt and Bahrain-based Investcorp, a global investment company — have (or have had) separate relationships with Ischinger, either as a client of Agora or with the ambassador serving as a member of their own boards.

With nearly unrivaled access to top world leaders and ultimate authority over the MSC’s guest list, Ischinger is a man many are eager to do business with. “They’re sitting ducks,” a German CEO who decided not to become an MSC sponsor said of his colleagues who attend. “They are dying to be there, and he determines the price.”   

‘Personal guests’ 

At first glance, it might seem normal for a former government official of Ischinger’s stature to sell his services to the highest bidder after leaving office.

Though it’s far from uncommon for former officials to try to cash in on their expertise, most do so after they’ve fully left government service. What makes Ischinger’s example notable is the semi-public role he plays as the head of the Munich Security Conference, without which his business career would likely have been much less lucrative.

(Ischinger declined to disclose how much he has earned from his various engagements outside MSC.) 

The MSC is a government-funded and sponsored event. Taxpayer money accounted for about 15 percent of its annual budget in 2020, the last in-person conference. The federal government and the state of Bavaria also recently helped endow the foundation that controls the conference with a combined donation of €3 million.  

Even though a flood of corporate sponsorships from Microsoft to Goldman Sachs has fueled the conference’s expansion under Ischinger, the event would be unthinkable without direct government engagement, whether in terms of securing prominent international guests or sending top German officials and politicians. 

In recognition of the special role he plays heading the conference, the German foreign office decided to allow Ischinger to continue to use his ambassadorial title (without the addition of “retd.,” as is customary for German ambassadors who have left the diplomatic service). 

“That’s a clear signal,” a senior German Foreign Office official said.  

A person close to the ministry said Ischinger is only permitted to use the title for as long as he remains chairman, noting that in that capacity he had performed duties of a diplomatic nature, including regular visits abroad to meet with high-ranking government officials.

Ischinger doesn’t draw a salary from the Munich Security Conference for his role as chairman, but his position, which grants him the exclusive right to decide who is allowed to attend the annual event, is worth its weight in gold.  

“The conference chairman extends invitations to participants and observers,” the MSC’s participant list reads, adding that all invitees are “personal guests of the chairman.”  

When Ischinger took over the MSC in 2008, the conference wasn’t his only job — or even his main one. The diplomat had another, more lucrative, engagement as the chief lobbyist for Munich-based Allianz, one of the world’s largest insurers. 

It was a symbiotic relationship. Many of the same governments Ischinger needed to lobby in the service of Allianz, such as China or India, also sent representatives to the conference. Michael Diekmann, Allianz’s then-chief executive, was another regular and served as a member of the MSC’s advisory council.  

Allianz was also an MSC sponsor and even supplied the conference with chairs. The MSC’s office in Berlin, where Ischinger resides, was located in Allianz’s grand Berlin headquarters overlooking the Brandenburg Gate, making it the perfect place to receive foreign guests. To outside eyes, the diplomat’s dual roles blurred into one.  

Allianz said in a written statement that Ischinger’s dual roles, which were explicitly permitted by his contract with the insurer, “never led to conflicts of interest.”  

In 2014, Ischinger quit his job as Allianz’s lobbyist amid broader changes at the insurer. To make real money, Ischinger told associates at the time, he needed to do something more ambitious. 

As it happened, Ischinger’s obligation to declare his outside business activities to the foreign office ended in 2014, three years after he reached the ministry’s official retirement age, according to the official close to the ministry.

By then, his efforts to modernize and expand the conference had already raised the event’s profile, and a surge in conflicts from the Middle East to Ukraine had put security issues back atop the global agenda.  

For years, Ischinger had quietly offered his take on the world to the likes of George Soros and other prominent conference contacts, free of charge. After leaving Allianz, he decided to try to sell that advice by founding his own consultancy in mid-2015. 

Agora Strategy Group offered the veteran diplomat an opportunity to reap the full financial benefits of what he built at MSC.  

On its website, Agora says the firm was “born from the Munich Security Conference.” In fact, it never cut the umbilical cord.  

The firm’s offices are just a stone’s throw away from the Bayerischer Hof. Its executives have in past years quietly handed out electronic access cards during the event to potential clients, inviting them to evening parties at Agora HQ.  

Stepping down but not out 

Along with Ischinger, who became chairman, the two men who took over responsibility for the day-to-day running of Agora both came from the Munich Security Conference. One of them, Benedikt Franke, never left. For years, he wore two hats: one as MSC’s chief operating officer, the other as Agora’s co-chief executive.  

Ischinger also brought in two of Germany’s best-connected businessmen as investors, according to financial filings: Christoph Walther, the former head of communications at carmaker DaimlerChrysler and founder of CNC, a Munich-based PR firm; and Kurt Lauk, a former member of DaimlerChrysler’s management board, member of the European Parliament and a longtime chairman of the Christian Democratic Union’s business lobby, known as the Wirtschaftsrat.     

Ischinger knew the two men well. Walther and Ischinger have strong ties to the Free Democrats, for whom the PR man had been a campaign strategist and adviser to party leaders.  

Lauk, a native of southwest Germany like Ischinger and born in the same year, moved in the same elite international circles. Both are veterans of the annual Bilderberg Meeting, a regular get-together of global business and political elites shrouded in secrecy. 

As with that closed-door gathering, Agora’s activities largely lack transparency. Full details of who Agora works for, what that work entails and how much it costs aren’t publicly available and the firm is under no legal obligation to make the information public.   

People familiar with the firm’s dealings say it generates between €2 million and €3 million a year in revenue, with a client list that has included the governments of Qatar, Georgia and Kosovo, as well as companies such as EY. What all these Agora clients share is a connection to the Munich Security Conference.  

In 2018, following rumblings within the firm about the risk of conflicts of interest between Ischinger’s dual operational roles at the MSC and Agora, the ambassador decided to step down as the consultancy’s chairman, according to people familiar with the matter. He was replaced on the board, which also includes Lauk and Walther, by a longtime confidant, Harald Braun, a retired deputy German foreign minister who spent decades with Ischinger in the diplomatic service.   

Several months after Ischinger stepped down, Franke also gave up his position at Agora to focus on the MSC, where he is now CEO. The MSC said Franke never received payment for his work at Agora and Franke said he sold his shares when he left Agora.

The MSC did not respond to questions about whether its board had discussed Ischinger’s decision to start Agora or whether the board was aware of who the consultancy’s clients were. Agora said that as a private company it couldn’t provide the details of its shareholder structure.  

After stepping down as head of Agora’s board, Ischinger assumed the title “honorary chairman” and remains the face of the firm’s promotional efforts. He placed his 30 percent stake in Agora into a “blind trust,” according to a person familiar with the matter.  

Yet his engagement with and for Agora remained active.

He continued to use MSC events to pitch the firm’s services to potential clients, for example. In a written response to questions from POLITICO about Ischinger’s links to Agora, the MSC said it saw nothing untoward about the practice because as a nonprofit forum, it could not offer such advice itself. 

“Therefore, Ambassador Ischinger, of course, would have mentioned Agora Strategy, an MSC partner, when issues regarding geostrategic analysis and advice were raised in discussions with other MSC participants,” MSC said. 

The MSC added that Ischinger “occasionally offers advice to Agora Strategy Group on a case-by-case basis for which he then receives a consultancy fee.” 

(After POLITICO approached the MSC about Agora’s connection to the conference and Ischinger, the company’s logo was added to the MSC website as a “sponsor.” The MSC said it signed a partnership deal with Agora on May 31, 2021.) 

In a statement to POLITICO, Agora said it was a partner with the MSC “among many other consultancies or further institutions and companies.” It stressed that “neither Ambassador Ischinger nor any other members of the MSC management team execute management or operational roles within the Agora Strategy Group.” 

Even without a formal operational link between Agora and the MSC, the overlap between the two operations is striking. 

In the fall of 2018, after Ischinger had stepped down, the MSC hosted what it called a “Core Group” meeting in Minsk, one of the smaller gatherings Ischinger introduced to extend the MSC’s reach beyond Germany. 

At the time, Belarusian strongman Alexander Lukashenko was flirting with the West. Sensing an opportunity, Ischinger organized a trip, putting together a delegation that included European Commissioner Johannes Hahn and a motley assortment of leaders and officials from the former Soviet Union, including Kassym-Jomart Tokayev, the current president of Kazakhstan (who recently crushed an uprising there) and Sergey Kislyak, Moscow’s former ambassador to the U.S., the man who was at the center of what Donald Trump called the “Russia hoax.” 

While the highlight of the trip was a discussion that Ischinger moderated with Lukashenko (during which the president said Westerners should “come to us to learn about democracy and living standards”) the program also included a lunch devoted to the tensions between Serbia and Kosovo, also hosted by Ischinger. Both Serbian Prime Minister Ana Brnabić and Kosovo’s then-President Hashim Thaçi spoke. 

At the time, Agora was trying to recruit the Kosovo government as a client, according to a person familiar with the matter. 

Agora’s entire executive team was on hand, trying to seal a deal. Not only were firm’s dual CEOs — Benedikt Franke and Tim Gürtler — in attendance; so were two of its founders — Ischinger and Lauk — as well as its Paris representative, Pierre Lellouche, a former French minister of state for European affairs as well as Braun, the former deputy German foreign minister. 

Several weeks later, Kosovo signed on the dotted line. 

Another example of the overlap is Qatar. 

The emirate, a client of Agora’s, has hosted, and helped fund and organize, two MSC side meetings in Doha, most recently in 2019 where Emir Tamim bin Hamad Al Thani was among those in attendance. Qatar’s former prime minister and foreign minister, Hamad bin Jassim bin Jabr Al Thani, sits on the MSC’s board of trustees, its most exclusive body, which is reserved for the conference’s biggest donors.  

While Agora’s brief for Georgia and Kosovo entailed helping those countries achieve major strategic objectives — NATO membership and EU visa liberalization, respectively — the marching orders for Qatar included helping to teach its ambassador to Germany, a member of the ruling family with a background in sports management, to navigate Berlin’s diplomatic landscape.  

Neither Qatar, Kosovo nor Georgia responded to requests for comment. EY said it has a policy of not commenting on “individual mandates that aren’t public.”

Droning on

In addition to whatever work he does for Agora, Ischinger also has a busy schedule on the paid-lecture circuit, where he often earns more than €10,000 per speech. He sits on the boards of about a dozen nonprofit organizations, from the Washington-based Atlantic Council, a think tank, to the European Council on Foreign Relations, as well as on those of Hensoldt, Investcorp and Kekst CNC, a communications firm with its roots in the PR company founded by Walther and now owned by France’s Publicis. Ischinger’s engagement with Hensoldt, a specialist in advanced radar systems and other technologies used in fighter aircraft and drones, illustrates how the ambassador’s competing loyalties can make it difficult to know who he’s working for at certain times. 

In Germany, the use of armed drones is a sensitive political issue that both the Greens and the Social Democrats have opposed. Hensoldt has been at the center of that debate because it supplies targeting systems for Turkish-made drones used in conflicts such as Yemen’s civil war. Those same drones were used in the fighting between Azerbaijan and Armenia in the disputed territory of Nagorno-Karabakh before Hensoldt became a supplier and are widely seen as having been a decisive factor in Azerbaijan’s victory. 

Ischinger doesn’t only sit on the board of Hensoldt, for which he is paid nearly €60,000 euros a year, he also secured the company as one of the MSC’s main sponsors. Hensoldt confirmed to Germany’s Der Spiegel this week that it was a client of Agora’s as well. 

In public, Ischinger has been a staunch advocate for the acquisition of armed drones by the German army, arguing that weapons are essential for protecting troops. 

“The drone is the weapon of the future that everyone who can afford it is already equipped with, except for us,” Ischinger said in an interview with the daily Tagespiegel in 2020, in which neither he nor the newspaper mentioned his connection to Hensoldt. 

He cited the events in Nagorno-Karabakh to underscore his point. “Nagorno-Karabakh is not an argument against the acquisition of drones, but rather a strong argument that we should purchase an adequate number of drones as soon as possible,” he said.

While some predict Ischinger’s grip on the MSC will soon loosen, there are reasons to believe that’s unlikely. 

He has designated Christoph Heusgen, Angela Merkel’s longtime foreign policy adviser, to succeed him as chairman of the conference after this year’s event.  

But he has no plans to depart the MSC. In 2018, he folded the nonprofit limited corporation that runs the event into the newly formed MSC Foundation. The aim was to put the conference on a more stable footing with the foundation’s endowment, which the German government and other big donors have helped to create. Even as he steps down as chairman of the limited company, he will remain president of the foundation council, ensuring that he will retain a strong voice on all important MSC matters.  

Ischinger also has allies in key positions. Walther sits with him on the foundation’s board and Lauk serves as a “special adviser” and sits on the “Security Innovation Board,” a special group of prominent MSC experts established to explore the “intersection of defense policy and cyber security and technology issues.” Both men serve on a “pro bono basis,” MSC said.  

The innovation group’s mission statement opens a window into how the MSC handles governance: “The chairman of the board is appointed by the chairman of the Munich Security Conference in agreement with the foundation council of the Munich Security Conference.” 

The holder of all three of those offices: Wolfgang Ischinger.

At his press conference this week, Ischinger was defiant in the face of questions he has faced from reporters in recent days about his tenure at the MSC and his relationship to its sponsors, insisting it was free from outside influence and a model of good governance.

But in the early stages of his transformation of the conference, he sensed the downsides of the plan.

 “The increasing level of scrutiny does have its drawbacks,” he wrote in an essay marking the MSC’s 50th anniversary in 2013.   

Nette Nöstlinger contributed reporting.

This article has been updated.