Ex-Communists Yield German Holdings : Reform: With election near, the party will turn over 80% of wealth estimated at more than $1 billion.

Amid growing controversy and scandal, the former East German Communist Party on Sunday promised to give up 80% of its vast holdings, estimated at well over $1 billion.

“The less there is, the less can be manipulated,” the party’s beleaguered chairman, Gregor Gysi, told a news conference.

The move comes just three weeks before the first free all-German elections in nearly 60 years.

Polls have suggested that the party still may be able to win the 10% of 12 million votes in eastern Germany that are needed to secure seats in the Bonn Parliament.

Sunday’s decision came after a 16-hour overnight meeting in Berlin, where debate over how much to give away was sometimes interrupted by the sounds of revelers celebrating the first anniversary of the opening of the Berlin Wall.

The party assets are to be turned over to a government trust that is overseeing the disposal of state property in what used to be East Germany.

But exactly how much the party actually owns is the topic of much debate here. Some estimates put the party’s fortune four times higher than its own account.

Even after Sunday’s move, the party, by its own accounting, is keeping about $300 million of its declared assets of $1.5 billion.

Gysi said the $300 million is the minimum the party needs for its political survival.

“We are making a cut that really hurts,” Gysi said after the marathon meeting. “This clean cut will enable us to step into the political future with our heads held high.”

The party emerged last fall from the ruins of the corrupt Communist regime toppled in a bloodless grass-roots revolution. Renaming themselves the Democratic Socialists, the mostly young leaders of the restructured party touted it as the voice of opposition and reform.

Critics repeatedly have demanded that the party be stripped of all holdings and be forced to start from scratch.

The party already had given up a small percentage of its holdings before Sunday.

But its “new and improved” image was badly tarnished last month when three key officials admitted they smuggled $71 million out of the country to Moscow to avoid confiscation by Bonn after the two Germanys merged.

Gysi denied any involvement in the secret transfer of funds, and he won a vote of confidence from the party when he offered to resign.

The party also decided Sunday to slash its central staff from 212 to 75 paid members and to give a piece of its prime Berlin real estate to the civil rights groups that spearheaded last fall’s revolution.

The old Communist Party employed 44,000 full-time officials; the Central Committee headquarters alone boasted 800 offices.