Uproar in an election year: IBB overloads Berlin cultural organisations with repayment claims

Emergency aid IV: Rapid assistance for Berlin’s cultural organisations during the coronavirus lockdown

Anyone who remembers the pandemic knows that cultural organisations were often the first to close and the last to reopen. Income was lost, but fixed costs continued. Emergency Aid IV was an instrument used by the Berlin Senate to secure liquidity in order to prevent insolvencies – an issue close to the heart of Klaus Lederer, the Senator for Culture at the time.

At the same time, there were also federal aid programmes(bridging aid, November aid, December aid). These programmes were designed differently, served different purposes and were announced and specified at different times. The cultural organisations often waited months for the payments to be made; in the meantime, they were left high and dry and could no longer pay their running costs.

Mass reclaims: a merciless practice by the IBB

The emergency aid was paid out in 2020/2021. More than five years later, numerous cultural institutions are faced with repayment claims – running into the millions. In many cases, this jeopardises the economic existence of the cultural institutions that support the city. Those affected have been left high and dry, especially as they are currently under pressure anyway: exploding costs (rents, staff, energy), declining tourist numbers and an audience that is often no longer able to afford culture.

Berlin event venues and clubs are being hit particularly hard. Berlin boasts that “techno culture in Berlin” has been recognised as intangible cultural heritage. At the same time, club operators are exposed to administrative practices that jeopardise the survival of Berlin’s club scene.

The procedure of the Investitionsbank Berlin is disconcerting in several respects. It is hard to imagine that the Berlin Senator for Culture would approve of this procedure. The clawback procedure lacks any sensitivity towards those affected and is:

• non-transparent (unclear calculations, lack of derivation),
• standardised (text modules instead of individual case examination),
• concise and difficult to understand (justifications that do not cover the specific case),
• procedurally problematic (extremely short deadlines, an extension of the deadline is generally not granted).
• Affected parties repeatedly report that they are not in a position to examine calculations and allegations in a comprehensible manner or to respond appropriately during the hearing procedure. After taking more than five years to carry out reviews, those affected are now confronted with formulaic procedures and often six or seven-figure repayment claims. Discussions with IBB officials are not planned. This is more than questionable in terms of the rule of law.

Blatant illegality of reclaims

Reclaims are often blatantly unlawful, especially when:

• the IBB does not prove any specific misrepresentations to the affected parties, but simply takes the position that liquidity was received by the affected parties at a later date;
• the appropriate use of the emergency aid to secure liquidity is beyond question;
• federal aid is offset across the board, even though it was designed differently, had different conditions, pursued a different funding purpose and could not eliminate liquidity bottlenecks simply because it was only paid out several months after the application was submitted.

Particularly critical are constellations in which reclaims are justified by a schematic offsetting of later federal aid without clearly distinguishing between the following points:

• Time of application (what was known at the time, what was eligible for application?),
• Purpose and system of the respective aid,
• individual circumstances (liquidity situation, fixed cost structure, actual outflow of funds).

Practical tips

It is important to note the following when receiving a hearing letter or a recovery notice:

• Check and compare the IBB’s underlying calculations to prepare the statement or grounds for appeal
• Observe the deadlines: While non-compliance with the hearing deadline has no legal consequences, a reclaim notice can no longer be contested once the objection deadline has expired. The date noted on the delivery envelope is decisive. If the notification was sent by ordinary letter, the date of receipt is decisive. The deadline is one month from receipt.
• Submitting an objection: Without a lawyer, the objection must be submitted in writing and signed by hand by post; in particular, objections by e-mail are inadmissible and will be rejected without a substantive examination. The reasons for the objection do not have to be submitted at the same time as the objection.

Cultural and location policy inadequate

Lawyers can of course help those affected to protect their rights in reclaim proceedings. However, contentious proceedings before the administrative courts usually take many years. Years of uncertainty that jeopardise the existence of the cultural institutions concerned. It is therefore urgently necessary – especially in an election year – to discuss whether Berlin can really afford the IBB’s merciless approach.