Germany's beleaguered spies face a fresh scandal

Barely a week after German parliamentarians began debating a new law to grant the country's foreign intelligence service sweeping new powers, prosecutors delivered a bombshell: news of one of the biggest security breaches in the agency's history. Perpetrated, they allege, by its former chief.

For months, the German government has carefully put together the public and legislative case for bold new rules aiming to return the Federal Intelligence Service, the BND, to the top table of international intelligence.

Tuesday's revelations threaten to call that case into doubt. They also raise a deeper question: what, if anything, new laws might do to change the culture of the BND and restore morale among its employees at a critical juncture in its history.

In the early hours of Tuesday morning, August Hanning, BND chief from 1998 to 2005, was arrested at his home in north-west Germany.

For much of the past 16 years, prosecutors allege, the 80-year-old former spy chief had been secretly acquiring classified information from a former protégé at the BND.

About 2,000 sensitive documents -- intended for the eyes of Germany's political leadership only -- were found in Hanning's possession.

In at least one instance, prosecutors say, Hanning tried to sell information gleaned from those materials to a foreign intelligence agency.

Hanning did not respond to a request for comment.

Officials close to the investigation are choosing not to disclose which country the foreign intelligence agency was answerable to. They have only indicated it is not Russia.

That, however, is scant relief. Documents such as those alleged to have been found in Hanning's possession are kept within extremely close circles for a reason. Their presence in an unsecured format, at a private residence -- or worse, in digital form on hackable personal private devices -- has shocked security-conscious officials and has raised concerns among the BND's closest international partners.

Since his retirement from public office in 2009, Hanning has plied his trade as a consultant, selling his expertise, discretion and diplomatic skills to the business world.

Among his peers it is a well-worn path: former heads of the CIA, MI6 and France's DGSE have all found later careers as geopolitical and strategic consultants.

Such roles can lead former spy chiefs in unexpected directions. Investigators began looking into Hanning's affairs as a result of an unrelated probe: a search was ordered of his home in 2025 linked to a high-profile child custody case involving the multi-millionaire heiress of a German steakhouse restaurateur, in which Hanning had provided consultancy services.

At the same time, such roles have always carried a built-in tension. In life after office, former spies are expected to continue to abide by a compact of secrecy about their government work, even as they try to make money from the experience.

In Hanning's case, prosecutors allege that not only did he choose to ignore the rules that previously bound him, but he also recruited a serving BND official and induced him to steal documents for financial gain.

"Intelligence agencies are all about getting people to commit acts of betrayal," said one former senior European intelligence official. "But the irony is that successful intelligence agencies are also built on trust."

Trust must be maintained between intelligence agencies and their supervisors -- and within an organisation itself.

It has been a rocky few years for the BND on both counts.

The trial has not concluded for the former senior BND spy Carsten L, who was arrested in 2022 on treason charges. The former head of department at the agency fed classified intelligence to Russia for years, prosecutors claim.

Former BND chief Bruno Kahl, who retired in 2025, has testified that the leak was a "catastrophe" for German intelligence.

A few years earlier, in 2014, BND employee Markus R was arrested on charges of spying for the CIA. He passed more than 200 documents to Langley and was sentenced to eight years in prison in 2016.

The BND, set up in West Germany in 1956, has also had to contend with an increasingly restrictive set of legal operating rules.

In 2020, Germany's supreme court issued a landmark judgment in favour of a group of civil rights campaigners who had been challenging the BND over its surveillance practices since the Edward Snowden revelations of 2013.

The judgment declared that the BND must extend a range of privacy protections guaranteed to German citizens to all surveillance targets -- including foreign nationals living abroad.

One employee of the BND at the time, who has since retired, said that working for the agency in the past few years had become an exercise in box-ticking. It could take days to complete even the most basic of analytical tasks, they said.

When the agency produces "up-to-the-minute intelligence" for Berlin or its allies, joked one current senior career officer recently, everyone receiving it first needs to ask if what is meant is "a BND minute or a real minute"?

Such concerns about the agency's approach, and the emerging scandal over Hanning, come at a critical time. The BND's current chief, Martin Jäger, this week warned Russia was seeking to perpetrate acts of mayhem and murder on German soil.

Berlin, the Kremlin believes, is its primary adversary in Europe, Jäger told German lawmakers.

The BND, he pointed out, is Germany's "first line of defence".