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Germany: CDU Faces Heavy Penalties In Finance Scandal

A new high point in Germany's political scandal is expected tomorrow (Tuesday) when the Christian Democratic Party (CDU) learns how much it will be fined for secret financial transactions under former Chancellor Helmut Kohl. Correspondent Roland Eggleston says the amount of the fine is important for the financial health of Germany's main opposition party.

Munich, 14 February 2000 (RFE/RL) -- Reports now say the fines and other financial penalties slapped on Helmut Kohl's Christian Democrats could be as high as 41 million marks (about $20 million).

The amount is expected to be announced tomorrow by the president of the federal parliament, Wolfgang Thierse, who says he will abide strictly by regulations approved by parliament for violations of the rules on political finances.

The penalties differ for various offenses. For some of the illegal financial transactions, the penalty is twice the amount involved. For others, it can be as high as ten times the amount involved.

The new leader of the Christian Democrats, Wolfgang Schaeuble, said over the weekend the president of parliament should "show moderation." Schaeuble argues his party was already financially distressed and that heavy penalties could drive it into ruin. He says a penalty of just a few hundred thousand marks would place the CDU in considerable difficulty.

The Social Democrat chancellor, Gerhard Schroeder, has rejected the demands by Schaeuble and other CDU leaders. Schroeder says it is not the place of the accused to tell the judge what the punishment should be. His views are supported by several German newspapers, although most agree the CDU should not suffer what a Munich newspaper called "a financial death sentence."

The financial penalties are a result of investigations which revealed that for years the CDU under the leadership of Helmut Kohl broke the regulations regarding financial donations to the party.

German law requires that any donation which exceeds 20,000 marks (around $10,000 ) must be declared. Investigators discovered that the CDU received millions of marks from various sources which were not declared but hidden in so-called "black accounts," some of them in Switzerland and Liechtenstein. The size of these is still uncertain as independent accountants hired by the investigators continue to find new, previously hidden sums.

Helmut Kohl says the money was donated by Germans who for various reasons do not wish to be identified. He has refused to name them despite frequent appeals from the leaders of his embattled party.

But the deputy leader of the CDU, Christian Wulff, said in a TV interview at the weekend that many now question Kohl's explanation that the money came from honorable men who asked for nothing in return. A well-known arms dealer, Karl-Heinz Schreiber, has said he gave large sums of money to the CDU in return for favors. Schreiber's statements have forced several CDU leaders to admit accepting money for the CDU from him.

Across the border in France, the press and TV have published allegations that some of the CDU money may have come from dubious financial deals, including one involving the sale of an East Germany oil refinery to a French company. There are also suggestions that late President Francois Mitterrand was personally involved in arranging large sums to go to the party led by his friend Helmut Kohl. These allegations are being investigated but none has been proved.

Wulff and other CDU officials say it is unclear how the secret funds were used. Kohl says much of the money was given to party branches and individuals, particularly in eastern Germany. But German prosecutors are investigating allegations some of the money may have been used for bribery or other criminal offenses. The German investigators have spread their inquiries to France, Switzerland, and Liechtenstein.

The investigations unexpectedly disclosed another scandal involving the local branch of the CDU in the province of Hesse. This involved the transfer of at least $9.5 million to Swiss banks in violation of campaign finance laws. The CDU also faces financial penalties over these secret transfers.

The personal political fallout from the complex affair has also been heavy for CDU leaders. In Hesse, the CDU provincial premier Roland Koch has admitted lying about his knowledge of some aspects of the financial scandals but refuses to resign. His coalition partners, the Free Democrats, agreed at the weekend that he should stay in office. As a result they have come under heavy fire from their own federal leadership.

Another politician under pressure is the new federal leader of the CDU, Wolfgang Schaeuble. At the beginning of the investigation, Schaeuble was presented as one of those most anxious to clean up the CDU. But then it was disclosed he had lied about his own role in accepting donations for the CDU from the arms dealer, Schreiber. He has now admitted accepting around $100,000 in at least two meetings.

The continuing scandal may cost the CDU a provincial election this month. Voters in the northern province of Schleswig-Holstein go to the polls February 27. Until a month ago, the CDU candidate Volker Ruehe was expected to win. But Ruehe's chance of winning has slipped.

Ruehe's name has not surfaced in any of the investigations -- but, as one commentator said, mud sticks even to the innocent. Opinion polls show Ruehe and the CDU now trailing the Social Democrats.