New German Scandal Hits Battered Christian Democrats

Just as Germany’s Christian Democrats were holding up their heads in public again after a financial scandal that besmirched the legacy of former Chancellor Helmut Kohl, a key figure in the affair has disclosed another suspected slush fund.

Former party Treasurer Walther Leisler Kiep stirred fresh calls Thursday for a parliamentary interrogation of Kohl and other Christian Democratic Union officials by revealing that he had transferred 1 million marks, or about $460,000, to the party coffers.

He claimed to have found the money in his personal bank account and said he believes it belongs to the CDU.

For the conservatives’ new leadership, the disclosure is proving an embarrassing reminder of the shady donations and influence peddling suspected during Kohl’s quarter-century tenure as party chief and 16 years as chancellor.

Kiep’s revelation also raised suspicions that there remains a minefield of dirty money waiting to blast the already rattled opposition, since the former treasurer was one of at least three party figures alleged to have handled secret bank accounts in Liechtenstein and Switzerland.

In a letter sent to the party more than a month ago but made public only Thursday, Kiep explains that he handed over the money without certainty of its source or owner to avoid further delay and a possible penalty if it turns out to belong to the CDU.

But German media are casting the transfer as either a confession by Kiep or revenge against the new party leadership, which is trying to wash its hands of the earlier affair by making scapegoats of Kohl lieutenants.

Kohl and Kiep will be called again to testify before a parliamentary investigative committee in light of the newly disclosed funds, panel Chairman Volker Neumann of the ruling Social Democrats announced.

The questioning will take place before autumn, but not before a June 8 deadline that the former chancellor faces to pay a $138,000 fine to close a criminal investigation into alleged wrongdoing that was launched more than a year ago by a federal prosecutor in Bonn. Until the criminal case is officially settled, Kohl can refuse to cooperate with the parliamentary probe by invoking a right against self-incrimination.

Chancellor Gerhard Schroeder’s Social Democrats demanded that the money Kiep transferred to CDU accounts be turned over to parliament, saying the conservatives have no right to keep and use unreported and therefore illegal donations.

Kiep says in his letter that he is uncertain he can trace the origin of the money he found during a review of his account, because some records regarding party finances from the early 1990s have disappeared.

However, the daily Die Welt reported that witnesses who testified before the parliamentary committee last year said that Kiep and another former party official, Uwe Luethje, had closed out a Liechtenstein-based bank account in 1992 and divided up the money. The account belonging to the Norfolk Foundation, an entity based in Liechtenstein that even some CDU officials believe was set up to launder money, shielded unreported donations from the Siemens electronics giant, several newspapers reported. Siemens has denied the allegations.

The new CDU leaders, who only last month managed to pull off an election victory in Baden-Wuerttemberg state--thus seemingly emerging from the scandal that has cost them control of other areas--have demanded that Kiep and his contemporaries clear up the uncertainties surrounding the latest chapter of the donations drama. But none have conceded that the money might have been ill gotten, and speculation has been rife in the media that Kiep made the transfer to trip up CDU leader Angela Merkel’s plan to get compensation from those implicated in the scandal for the fines and punishment levied against the party.

“The party leadership should have recognized that Kiep’s letter of March 21 represented a time bomb,” the conservative Frankfurter Allgemeine Zeitung newspaper observed in an editorial.

Speaking for average Germans who also thought the funding scandal was behind them, the mass-circulation Bild newspaper screamed in its lead headline: “Don’t Think We’re So Stupid, Mr. Kiep! How Does One Simply Overlook a Million Marks in His Bank Account?”