German tale of intrigue blows up to haunt mighty

[Ulhas Joglekar]

6 December 1999 :
German tale of intrigue blows up to haunt mighty
BERLIN: Few Germans noticed as prosecutors in a Bavarian town chased
evidence of alleged bribe-taking by a defence official.
Then, there was a break: A witness fingered an arms dealer as a cash conduit
for former Chancellor Helmut Kohl's revered party.
Now the probe is shaking the top levels of German politics, with Kohl
accused of shady party financing or, worse, possible corruption. Some
already view the case as a broad alert that Germany's hard-won democracy
must gird itself against influence peddling by powerful business interests.
With parliament just starting its own inquiry, charges seem certain to
multiply against the longtime leader and the conservative party he ran with
an iron grip for 25 years until his election defeat last year.
"A whiff of corruption is wafting across the land," the weekly Die Woche
said in a front-page commentary. "The cracks in the Kohl monument are
getting bigger day by day."
Lawmakers want the inquiry, launched last week, to examine whether
government decisions during Kohl's 1982-98 chancellorship were influenced by
illicit payments -- a notion he has huffily rejected as "preposterous."
"The accusations and suspicions will collapse," Kohl predicted in an
interview Friday on Mitteldeutscher Rundfunk.
In fact, no one has produced a shred of evidence that Kohl took bribes or
could face charges.
Yet prosecutors in the Bavarian town of Augsburg have suspected for some
time that a deputy defence secretary under Kohl, Holger Pfahls, took a 3.8
million mark ($1.95 million) kickback to lobby for a 1991 arms sale to Saudi
Arabia -- a charge Pfahls denies.
While investigating that case, the prosecutors discovered another tale of
intrigue that kicked the probe dramatically up the ladder and implicated the
former chancellor himself.
Last month, prosecutors hauled in an elegant, silver-haired man who once was
Kohl's party treasurer and questioned him about a million mark ($515,000)
campaign contribution handed over in Switzerland in 1991.
Walther Leisler Kiep acknowledged the handover and the deposit into one of
the party's secret accounts, but said he never told Kohl. He says he split
it between himself, the party's tax adviser and another associate. He faces
possible charges so far for tax evasion.
In both cases, the alleged moneyman was Karlheinz Schreiber, a businessman
with connections to the political elite and Germany's spy agency. Currently
fighting extradition from Canada to Germany on tax evasion, he denies all
the charges.
The tangled trail now is leading back to an ongoing French investigation
into whether kickbacks flowed for the construction of an oil refinery by
France's Elf Aquitaine in eastern Germany.
Germany's parliament is now also looking into the project's financing, and
one investigator, Friedhelm Julius Beucher of the Social Democrats, was
quoted by Bild am Sonntag newspaper this week as saying Kohl's
administration destroyed files and erased computer data relating to the
refinery deal.
Under pressure from his own Christian Democrats to come clean, Kohl admitted
last week he had run secret party accounts.
It was a wrenching confession by a man accustomed to holding unchallenged
sway over his party and his government. But it only sparked off new
questions that will now be examined in parliament: Who made the
contributions, in what amounts and were they linked to specific favors?
Though many people knew that Kohl ran his party by personally keeping
contacts down to the local level -- a style dubbed the Kohl System --
details of how he pulled the financial strings are being revealed only now
that he's out of power.
Even his own party now accuses Kohl, once a reassuring symbol of German
dependability, of flouting the rules of democracy and undermining trust in
elected officials.
Such conduct leads to "votes for extremist candidates and dwindling
confidence in political parties," the Frankfurter Rundschau newspaper said.
Some critics say Kohl's failings are especially grave since laws were
tightened after a huge party financing scandal in the 1970s and '80s.
"It creates the impression that the politicians of 1999 simply closed their
ears in the last 20 years," Eberhard von Brauchitsch, a former industry
manager at the centre of the earlier scandal, told the newspaper Die Welt.
"Such a lack of clarity in the financial books is unforgivable."
Under German party financing laws, the Christian Democrats could be slapped
with millions in fines if they kept contributions off the books, but Kohl
himself faces no sanctions.
Such legal loopholes have prompted suggestions from some politicians on the
left to wean political parties off corporate campaign contributions
entirely. Leaders of the Christian Democrats as well as Chancellor Gerhard
Schroeder's Social Democrats swiftly rejected the idea.(Associated Press)

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