Migrant integration crisis in Saxony after funding scandal

Two Years After Its Collapse, Report Reveals How State Institutions Drove Saxon Migrant Umbrella Group Into Bankruptcy

Saxony's migrant support network collapses amid funding and political disputes

Two years ago, the Umbrella Association of Saxon Migrant Organizations (DSM) filed for insolvency. This Friday, the Council for Migration in Dresden presented an expert report shedding light on the association's perspective on its own downfall—one it claims was orchestrated by state institutions.

According to Eter Hachmann, chair of the Umbrella Association of Migrant Organizations in Eastern Germany, the DSM's bankruptcy is no isolated case but rather symptomatic of deeper structural failures. She argues that civil society groups in Germany are not being supported by "sound policy," citing as an example the Federal Ministry for Family Affairs' planned cuts to the "Democracy in Action" (Demokratie leben) program.

Kanwal Sethi, the DSM's former chair, echoed this sentiment, stating that the way the association was "dismantled" had set back integration efforts in Saxony "by decades." Remaining organizations now live in fear of suffering the same fate.

Initially, the DSM was seen as a success story in Saxony. Founded around a decade ago, it grew into a key player, uniting over 60 migrant-led initiatives. The association positioned itself as a bridge between these groups and policymakers, organizing projects and drafting position papers to advocate for migrant interests.

Criticism of the State Audit Office

The DSM funded its work in part through grants from the Free State of Saxony, disbursed by the Saxon Development Bank (Sächsische Aufbaubank). Yet in 2024, the bank demanded the repayment of funds—over €150,000—for projects spanning multiple years, some already completed. While no criminal wrongdoing was alleged, the bank claimed the grants had been improperly awarded and subsequently froze further funding.

The demand followed a special report by the Saxon Court of Auditors, which found that funding for "integrative measures" targeting refugees and migrants had been allocated in a manner that was "largely unlawful." The selection criteria, it argued, had been unclear.

The report also criticized projects funded by the Saxony State Ministry of Social Affairs (led by the SPD) for taking political stances—"almost exclusively against right-wing and conservative parties"—thereby violating the ministry's obligation of political neutrality. It claimed the line between political education and lobbying had been blurred.

A legal opinion commissioned in 2024 already questioned whether the Court of Auditors was even authorized to rule on neutrality requirements. It also cast doubt on the court's interpretation of those requirements, arguing that civil society organizations are not bound by political neutrality—even when receiving public funds.

A Damning Assessment

The new report, presented in Dresden, was commissioned by the Umbrella Association of Migrant Organizations in Eastern Germany. Unlike the earlier legal analysis, it focuses on structural processes and conflicts rather than legal technicalities. It alleges that the Court of Auditors' review lacked transparency and that early administrative errors by the DSM were not addressed constructively. Instead, years later, they were weaponized against the association. Dialogue was minimal, and tensions ultimately escalated into a full-blown crisis.

The report warns that this approach poses a broader threat to civil society. If organizations face retroactive clawbacks years after completing projects—simply for expressing political views—it creates a climate of uncertainty. The DSM's collapse, it argues, sets a "precedent on the path toward electoral autocracy"—a stark claim reflected in the report's provocative title.

Notably, the report largely adopts the DSM's perspective, which may stem from its methodology: its author, Felix Hoffmann, a cultural and social anthropologist with the Council for Migration, interviewed the association's leadership and reviewed internal documents. According to Hoffmann, the Ministry of Social Affairs, the Saxon Development Bank, and the Court of Auditors all declined to participate in the report.