SCANDALS IN GERMANY.

New Zealand Herald, Volume LXII, Issue 18941, 12 February 1925, Page 9

SCANDALS IN GERMANY.

PRUSSIAN BANK CASE, EX-MINISTER ARRESTED. ALLEGED ABUSE OF TRUST, Bj> Telegraph—Press Association— Copyright. (Received 8.5 p.m.) A. and N.Z. BERLIN. Feb. 11. Herr Hoefle, who resigned his portfolios as Minister for Posts and Telegraphs, and for Occupied Territories during the term of Dr. Marx's Cabinet, when he was accused of complicity in the Prussian Bank scandal, has been arrested. He was first questioned by the Public Prosecutor. It is alleged that Hoeflo was guilty of the negligent administration of large sums of money which had temporarily accumulated in the coffers of his department. The charges have sine© extended and he is now accused of personal abuse of trust. It is reported that criminal proceedings . have also been commenced against Herr Bauer, formerly Chancellor of the Reich, The Berlin correspondent of the Daily Telegraph reported on February 1 that as the Prussian State Bank scandal (in which the Barmat Brothers and the 'Russian company promoter, Kutisker, aro implicated) developed it became more and more a matter of cardinal political importance to Germany, Europe and the world. It was, he said, the hardest blow against the Democracy which had been struck in Germany since the war, and the best piece of luck for the Monarchists and militarist parties which were rapidly forcing their way back to power. A previous message said: Sensational disclosures aro promised in connection with the Prussian State Bank scandals. Herr Ruche, one of the directors, has been arrested in connection with tho loss of £500,000 advanced to Kutisker, a Russian company promoter. It is alleged that other large advances were made on flimsy security. Kutisker and his 19-year-old son are awaiting trial on charges of promoting bogus companies. It is estimated they got at least £750,000 from tli® Prussian State Bank by bribing leading officials to grant a series of loans at a time when even the Deutsche Bank could not raise a loan. Kutisker represented himself as the owner of numerous factories, and appointed his son managing director of a motor company. Much money was obtained on the security of bills of exchange signed by the youth, who now pleads that he signed on his father's instructions and therefore he is not responsible. On December 31' the Berlin poHco arrested Barmat Brothers, who own 40 concerns, including ironworks, textile and other factories. They are charged with obtaining loans totalling hundreds of thousands of pounds by corrupting bank officials. Barmat Brothers were among the largest food contractors to the German Army. They were arrested in their palatial residence on an island in Wann Lake, near Berlin. Motorboats patrolled the lake to prevent their escape.