[A-List] Germany: political crisis

["Michael Keaney" <michael.keaney@xxxxxx>]

German Christian Democrats vow to fight on against £14m corruption fine

John Hooper in Berlin
Wednesday February 12, 2003
The Guardian

Germany's main conservative opposition party said yesterday it would appeal
to the country's highest court against a decision that it should forfeit
£14m as a punishment for corrupt funding practices.

The penalty was imposed after revelations that the Hessen branch of the
Christian Democratic Union (CDU) had transferred £6m in undisclosed
donations to secret offshore accounts in the late 1990s. The cash was then
brought back into Germany in the guise of legitimate "bequests".

In 2000, the speaker of the lower house of parliament, Wolfgang Thierse, who
is responsible for overseeing party funding, ordered the CDU to forfeit the
whole of its state funding for that year. His ruling dealt a severe blow to
the party's coffers from which it has yet to recover.

The CDU has been appealing through various courts ever since. Yesterday, its
lawyers lost what was thought to to be the final contest, in the federal
administrative court in Leipzig. But the CDU's treasurer, Willi Hausmann,
said later that he intended to take the matter to the constitutional court
in Karlsruhe - Germany's highest tribunal.

Since the money that was due to the party has already been distributed among
its rivals, a victory would bring the Christian Democrats a huge windfall at
a time when their political fortunes are riding high.

Recent opinion polls have given the CDU and its Bavarian sister party, the
Christian Social Union, leads of up to 17 points over the rival Social
Democratic party of the chancellor, Gerhard Schröder. The surge in backing
for the right, primarily a result of popular dissatisfaction over the
government's handling of the economy, has effectively obliterated the last
traces of a funding scandal which only three years ago threatened to consign
the CDU to extinction.

The ruse uncovered in Hessen was the biggest single element in a network of
related scams that came to light after the former chancellor, Helmut Kohl,
admitted in late 1999 that he had secretly accepted contributions in the
1990s. German law at that time required him and his party to disclose
donations of more than 20,000 marks (£6,500).

He then created a scandal within a scandal by refusing to name the secret
benefactors.

It was repeatedly alleged that the Christian Democrats had hushed up the
contributions to hide the fact that they were made in return for favours
either promised or received. This was heatedly denied by Mr Kohl and his
subordinates. However, since the state in Germany gives parties an extra 50%
on top of all donations they receive and declare, it is hard to imagine why
else the CDU would have disguised the origin of its funding.

The federal administrative court's decision yesterday upheld a ruling by a
Berlin court last June. That, in turn, upheld an appeal by Mr Thierse
against a decision reversing his order.

The presiding judge in the original case concluded that the federal
parliament's speaker had no power to rule on the correctness of party
financial disclosures, and that party funding laws at the time did not set
out penalties for incorrect disclosure.