World

A Swamp of Sleaze

A massive scandal over political donations disgraces Helmut Kohl and threatens to destroy his once-mighty conservative party

Barry Came February 7 2000
World

A Swamp of Sleaze

A massive scandal over political donations disgraces Helmut Kohl and threatens to destroy his once-mighty conservative party

Barry Came February 7 2000

A Swamp of Sleaze

World

A massive scandal over political donations disgraces Helmut Kohl and threatens to destroy his once-mighty conservative party

Barry Came

The weather outside is grim, almost as wintry as the atmosphere inside the basement boardroom in the Charlottenberg district of western Berlin. Some 40 stalwart members of the local Christian Democratic Union are on hand, having braved the wind and sleet to hear a report from headquarters on the current sad state of the party that once reigned supreme in German politics. For more than an hour, they listen as Matthias Wambach, landesgeschäftsfiihrer—national manager—of the CDU’s Berlin branch, recites the litany of horrors that has prompted a “significant wave of resignations” from the party’s membership lists. For another hour, they heatedly debate the reasons. But in the end, it is a frail, grandmotherly figure in green cardigan and pearls who best captures the mood. “I joined this party on Jan. 1, 1946,” says Sigrid Gödecke, voice quavering. “Never before have I felt as I am now, as if there has been a death in my family.” Gödecke, who later allows to being “over 70,” leaves no doubt who she thinks is responsible for the desperate plight facing Germany’s Christian Democrats, now mired so deeply in a spreading financial scandal that the party’s very existence is at stake.

“It is all the fault of this evil man,

Karlheinz Schreiber,” Gödecke angrily declares as the small band of CDU faithful assembled in the Charlottenberg basement thump their tabletops in noisy agreement. “He is a devil.”

An exaggeration, but reflective of the havoc Schreiber has wrought in the land of his birth.

Whatever his other attributes, the German-Canadian businessman currently fighting extradition in a Toronto court does seem to possess a certain malignant power, at least in his ability to enmesh even the most remote of associates in a clinging web of trouble. His middleman role in Canadas 1995 Airbus scandal came perilously close to destroying the reputation, among others, of

former prime minister Brian Mulroney. And now he is a central figure in the still unfolding tale of German corruption, involving millions of dollars stashed in secret political slush funds, that has disgraced former German chancellor Helmut Kohl, smeared the late former French president François Mitterrand, tarnished the integrity of dozens of leading figures in the German political and business establishment and, indirectly at least, provoked the suicide of a CDU financial official, Wolfgang Hüllen.

Even more ominous, Schreiber may have unwit.» tingly set in motion a train of events that could even| tually lead to the disintegration of the CDU, the cen| |J||| tre-right conservative party, now in opposition, that f ■ has governed Germany for 36 of the past 50 years. 1 Hi That would be a far-reaching development, one that would not only refashion the face of Germany’s political system, but also seriously affect the power dynamic in the rest of Europe. Already, the Christian Democrats are in free fall as far as their immediate electoral prospects are concerned. “They’ve dropped between 10 and 15 per cent in approval ratings in the last month alone,” says Patrick Altsdorfer of the Berlin-based Forsa public opinion research institution. “And I don’t have any sense yet that they have hit bottom.”

The potential demise of the Christian Democrats is something that even Chancellor Gerhard Schröder s ruling Social Democratic Party finds unsettling. “The decline and fall of the CDU, as the biggest conservative block in Germany, is a concern to every convinced democrat,” warns Peter Struck, SPD leader in the Bundestag, the country’s parliament. The fear is that the disappearance of the CDU will undermine the stability of the German political system, which since the end of the Second World War has been solidly balanced on the existence of two great volksparteien,

peoples parties: the CDU to the right of centre and the SPD to the left. Without the CDU, there are widespread worries that Germany’s conservative vote may stray even further right, towards a triad of nationalistic, xenophobic parties that were once on the lunatic fringe, but have recently been garnering more and more electoral support, particularly among young and unemployed voters in what used to be Communist East Germany.

Germany’s jittery politicians are already glancing south, wondering if the political drama unfolding in neighbouring Austria is a harbinger of their own future. Last week, the Austrian Freedom party embarked upon negotiations in Vienna that could well see Europe’s largest extreme-right political movement soon enter a coalition government. Led by populist firebrand Joerg Haider, the Freedom party, which won 27 per cent of the vote last October, is not very different from the three German parties of the far right. All advocate policies that are inward-looking and blatandy nationalistic, laying much of the blame for difficult economic conditions on Europe’s large immigrant community. They also have a fondness for neo-Nazi symbolism. “I really worry about the power of the Austrian example,” says Forsa analyst Altsdorfer. “It legitimizes extremist political opinion. Never mind that it is also happening in the land of Adolf Hider’s birth. We all know what happened the last time Germany went down that particular road.”

The view may seem apocalyptic. But the fact that it is being widely voiced in Germany is a measure of the political crisis gripping the country. Almost every day there are new revelations about the scandal. It first erupted in November when Walter Leisler Kiep, CDU treasurer for more than 20 years, gave himself up to the authorities in the southern German town of Augsburg, where he was wanted on suspicion of tax evasion. The patrician, silver-haired Kiep, well-known in Canada as a result of his chairmanship of Atlantik-Brucke, a privately funded body designed to promote GermanCanadian economic co-operation, admitted that in 1991 he had met Schreiber in a Swiss parking lot to accept a suitcase stuffed with one million German marks in cash (now worth about $720,000). The money, Kiep alleged, was a no-stringsattached political donation to the CDU’s electoral coffers. But it occurred just six months after Schreiber had earned undisclosed millions in commissions for helping to engineer the sale of 36 German-manufactured Fuchs armoured cars to Saudi Arabia.

That incident opened the floodgates. At first, Kohl, chancellor in 1991, denied all knowledge of the affair. But back in Toronto, Schreiber, free on bail, soon began to talk, acknowledging two payments he said were donations and adding darkly: “All is still far from coming to light.” Before long, Kohl was admitting that in his 16 years as chancellor

and 25 as CDU chairman he had not only accepted at least $1.4 million in undeclared cash donations from various sources, but had also secreted the money away in as many as 10 clandestine bank accounts. The funds, Kohl claimed, were used to reward CDU followers and finance party projects.

Even though there has never been any suggestion that Kohl benefited personally, the confession stunned the Germans, not least because it clearly violated strict laws, enacted by Kohls own government, requiring disclosure of all donors paying more than $14,000 to any German political organization. “We believed in an eternal chancellor,” remarked German foreign minister Joschka Fischer at the time. “What was once unthinkable is today coming to light as fact.”

Since Kohls shocking admission, the scandal has engulfed many of the former chancellor’s closest associates both at home and abroad. Kohl’s handpicked successor as CDU leader, the wheelchair-bound Wolfgang Schäuble, confessed after initial denials that he, too, had accepted 100,000 German marks in cash (now worth $72,000) from the ubiquitous Schreiber. Manfred Kanther,

Kohl’s law-and-order interior minister, resigned his parliamentary seat after disclosing that he had stashed away more than $21 million in illegal “black” accounts, many of them located abroad in Switzerland and Liechtenstein.

The affair has even managed to reach into the grave, touching Mitterrand. Media reports, still under judicial investigation in Paris, suggest the former French president helped Kohl’s Christian Democrats receive more than $20 million in diverted commissions from the 1992 sale of a petroleum refinery and a chain of gas stations in the former East Germany to the French oil conglomerate Elf Aquitaine, at the time a state-owned corporation.

The central figure in that scandal is not Schreiber, but another consummate middleman. André Guelfi is his name, but he is better known in France as Dédé the Sardine as a result of his onetime ownership of a Moroccan fishing concern.

There are still no accurate tallies of how much money disappeared into the vast swamp of sleaze. But ongoing audits suggest that as much as $30 million may have been illicitly funnelled into the CDU’s network of black accounts in the dying years of Kohl’s reign as chancellor, which ended with the 1998 election of current Chancellor Schröders SPD. In the process, the once towering image of Kohl as the man who reunified Germany has suffered enormous damage. Only last November, he was being feted as a hero at Berlin’s Brandenburg Gate along with Russia’s Mikhail Gorbachev

and former U.S. president George Bush. Now, he has become, in the phrase of more than one German commentator, a Godfather-like “Don Kohleone.”

Kohl has not helped his own cause by stubbornly refusing to identify the sources of all of those political donations. “As I understand honour,” he defiantly declared earlier this month, “it means keeping your word. In all of my years in power, I could never be bribed.” Perhaps not. But one nagging question remains. Just what did those legions of anonymous benefactors expect to receive in return for their largesse? Judicial and parliamentary investigations in Germany, France, Switzerland, Liechtenstein and Canada may come up with some answers. But Helmut Kohl may already know. And for the moment at least, he is not talking. E3