German Chess Federation Faces Crisis As $550,000 Goes Missing
With more than 87,000 members and 2,400 clubs nationwide, the German Chess Federation (DSB) is one of the biggest and most powerful chess associations in the world.
But after years of infighting, alleged mismanagement, and controversy, this grand old ship of European chess is struggling to stay afloat amid a series of scandals.
On Thursday, April 27, a tournament organizer named Dr. Dirk Jordan was convicted of 27 counts relating to bribery and breach of trust between 2015 and 2018. He was reported to authorities by the DSB for accepting hotel commissions on the back of organizing the German Amateur Championships. Dr. Jordan's wife Martina was also fined 4,500 Euros for "wilful money laundering."
Yet this case is just the latest blow to German chess.
The DSB is also facing calls for investigators to probe why at least 500,000 Euros ($550,000) appears to have vanished from its coffers. The black hole is so serious, it is now threatening the DSB’s very existence.
The scandal was first revealed in February after the influential German chess blog Perlen vom Bodensee, run by Conrad Schormann, published screenshots from a video called presidency meeting that outlined concern about the DSB’s finances.
On February 24, the DSB’s President Ullrich Krause and Vice President Lutz-Rott Ebbinghaus outlined the actual figures, stating that the DSB’s reserves were about to go down to 82,000 Euros. In mid-2020, the DSB had close to 700,000 Euros in the bank.
The previously cash-rich federation had lost a lot of money. Krause and Ebbinghaus blamed miscalculations, additional expenses incurred, and inflation.
But that wasn't the worst of it. Ominously, they also revealed that while a deficit of 89,500 Euros had already been planned for the year, revised figures expected a deficit of more than 300,000 Euros. As a result, the DSB was now facing a financial meltdown.
Four days later, the DSB dropped the bombshell that it was canceling the 2023 German Chess Summit, which was due to take place in the northern city of Braunschweig in July. Having heard about the mess the DSB was in, the local authority withdrew its funding.
This was a hammer blow to German chess. The summit includes the federation's two flagship events, the German Masters and the German Masters for Women. Neither will now run in 2023 unless a new backer can be found. The same is true for a string of German championship events in individual, blitz, senior, and disability categories.
While this has been happening, German chess has suffered both at the grassroots and elite levels. Since 2020, chess has experienced a well-publicized boom in the rest of the world, fuelled in part by the hit Netflix show The Queen's Gambit. Membership of the DSB, however, has dropped significantly in that time. Numbers are down from over 93,000 to 87,672 last year.
There have also been reports of key volunteers leaving the federation in droves, although the number is unknown. Volunteers are not the only people left disenchanted. In 2021, the German international GM Georg Meier announced he would leave the federation and play for Uruguay instead. Meier referenced concerns about bullying.
#ajedrez #chess My federation change has been initiated: 🇩🇪⇨🇺🇾 @UyDeporte
— Georg Meier (@GMGeorgMeier) October 10, 2021
I hope to lift the profile of Uruguayan chess! In my youth I spent a lot of time between Colonia, Salto, MVD and Punta. My mother was born and raised in MVD after her parents escaped the #Holocaust
Other top players have also threatened to stop playing for Germany under the DSB's leadership. Meier went as far as initiating an open letter to the DSB signed by 12 internationals demanding the dismissal of then-national coach GM Dorian Rogozenco.
There has also been a looming vacuum at the top. Krause has held the post since 2017 and was expected to step down at the DSB congress on May 20, but with no obvious successor.
In yet another shocking announcement, the DSB's potential savior pulled out of the running to replace Krause. Wadim Rosenstein, the founder and CEO of WR Group, came seemingly out of nowhere to host and organize the star-studded WR Masters that took place in Dusseldorf in February. He put up a prize fund of 130,000 Euros for the event, which was won by Levon Aronian. Shortly after, Rosenstein announced his intention to stand for the DSB presidency.
Liebe Schachfreundinnen und Schachfreunde, ich habe mich entschlossen, als DSB-Präsident zu kandidieren. Ich hoffe, meine Kandidatur findet euren Zuspruch. Gemeinsam können wir viel für den Schachsport in Deutschland erreichen.https://t.co/jNVwDN5Ycb
— Wadim Rosenstein (@WadimRosenstein) March 11, 2023
Rosenstein faced some scrutiny on social media after he was pictured playing with the banned Russian Grandmaster Sergey Karjakin, but was seen by many as a way out for German chess.
CEO of WR Group in Moscow, May 2022
— Goran Urosevic (@goranurosevic) September 13, 2022
A "non-Russian" sponsor for FIDE
Photo archive found by @TadeasKriebel https://t.co/ucEOWnIGMm pic.twitter.com/ilvvBXkq0g
Rosenstein's decision to pull out followed a new name putting herself forward to take the reins as DSB president. WIM Ingrid Lauterbach, a FIDE arbiter who is on sabbatical from her job with Deutsche Bank, is now the favorite to take over. For the first time, the DSB could now be run by an English woman. On Twitter, Rosenstein described her as an "excellent candidate."
Schormann, who followed every step for Perlen vom Bodensee, told Chess.com the situation has got so bad it is time for a "reboot."
"I don't overlook the almost first 146 years of its history, but from what I gather, this is unprecedented. We've had scandal after scandal and catastrophe after catastrophe and that is excluding the ruin that has followed it all."
“We are now a federation without money and with many storylines and people who argue with each other. There's so much going on it would now be better to shut down and reboot the whole thing.”
So what went wrong?
An article in the German tabloid Bild pointed to the entry of "The Professor," the name it gave to Marcus Fenner, the DSB's former managing director.
Fenner was welcomed into the DSB in 2018 after having returned to Germany from the U.S., where he held the post of managing director at the famous Marshall Chess Club in New York.
Alarm bells started ringing for some.
"He came from the Marshall and he really made a big impression on the, shall we say, quite mediocre chess guys," said Schormann. "They were happy to find him and gave him the job immediately. He just sent them an application letter.
"Very early on it became, I would say, obvious that something was wrong with this guy. Very soon any criticism was not allowed anymore, while within the federation, it was close to revolution many times."
Indeed, in 2020 GM Meier publicly called out the leadership on Twitter saying: "The president is overwhelmed and disoriented. He lets himself be guided by an impostor whose motives are a mystery."
Das trifft hier nicht zu. Mein Eindruck in Bezug auf den Bereich Leistungssport: der Präsident ist überfordert und orientierungslos. Er lässt sich von einem Mann führen der blendet, und dessen Motive ein Mysterium sind. Zugeben würde er das wohl nie.
— Georg Meier (@GMGeorgMeier) November 14, 2020
Fenner moved to an "executive director" role, but by September 2022, he had left. Now following the DSB's financial revelations questions are being asked about his tenure.
In a statement to Chess.com, a DSB spokesman said: "After the departure of our former Executive Director in September 2022, our new Executive Director Dr. Anja Gering discovered at the end of 2022 that the plans in the budget of the German Chess Federation did not match the actual income and expenditure situation."
"For 2022, significant revenues that had been planned for did not materialise, and many positions turned out to be more expensive than expected."
The DSB blamed inflation, a 100,000 Euro loss on the 2022 German Chess Summit and 60,000 Euros spent on "additional projects" that were not counter-financed. It added that a three-Euro increase in membership fees, from 10 to 13 Euros for adults, has been proposed to bridge the gap for 2024 and will be voted on by the General Assembly.
Chess.com contacted Fenner. Through a lawyer, he denied any responsibility for the DSB's financial problems.
The lawyer said: "Since August 2022, our client was no longer involved in operations. The interim result as of 07/31/2022 published in the Ulm October 2022 congressional brochure was -31,132.92 Euros with an account balance of 542,279.72 Euros, significantly higher than at the beginning of our client's employment.
"The finances seem to have developed disastrously after the departure of our client. Therefore, the accusation that our client is in any way responsible for this development is in no way comprehensible and not supported by any evidence. Upon his departure, our client demonstrably sent detailed status reports to his successor and the president and repeatedly offered to provide information and help in the future as well. This offer was not taken up."
Fenner himself added: "I am deeply saddened by the catastrophic developments at the GCF after my departure. These are in no way related to my work as managing director. It is my strong personal belief that some of the developments, especially with regards to finances, were rather caused by my departure and could have been avoided. Since 2019 there has been a character assassination campaign against me, motivated by several decisions of the board in which I was involved."
Michael S. Langer, President of the Lower Saxony Chess Association for 16 years, also told Bild: “I have not yet been given any fully understandable reasons for this catastrophe. The money was there; in 2019 it was over 600,000 Euros. The Association of Lower Saxony, together with Württemberg and NRW, has submitted an application for the appointment of an auditing company.”
As Schormann put it: "I desperately wish that someone independent seeks and finds the answer to this question."
Founded in Leipzig in 1877, the DSB is one of the largest chess associations in the world. It has survived two world wars and the partition of its country. The DSB has overseen the development of talents such as the great Emanuel Lasker and, more recently, its rising star GM Vincent Keymer.
But can it survive 2023?
