The Second Shoe Drops

So far, at least, nobody in Germany has attached the dreaded and overused suffix, -gate, as in Watergate. Yet the political funding scandal swirling around Germany's opposition Christian Democratic Union is beginning to sound uncannily familiar. A month ago, it left the reputation of former Chancellor Helmut Kohl in tatters. Now CDU party chairman Wolfgang Schäuble is besieged by the crisis, with even party loyalists publicly questioning his credibility and talking about possible replacements.

What's more, the almost daily revelations about money trails, secret bank accounts and a finger-pointing arms dealer have dramatically shaken Germany's normally mundane political life. Even the press, normally reserved and uncritical, has lunged at the CDU scandal with unprecedented zeal, competing for scoops and ferreting out a rash of embarrassing revelations.

For weeks, journalists had speculated whether there was a link between Kohl's confession to having kept secret bank accounts, with unreported political contributions of at least $1.2 million, and Kohl's successor as party chairman, the 57-year-old Schäuble. Appearing on a television interview program, Schäuble acknowledged last week that he had received a $52,000 cash contribution from Karlheinz Schreiber, an arms dealer who is fighting extradition to Germany from Canada. It was Schreiber's cash gifts to party treasurer Walther Leiser Kiep that caused a prosaic tax investigation to snowball into Germany's worst political scandal since reunification in 1990. Unlike Kohl, who admitted that he broke party financing rules, Schäuble maintained that he had violated no rules, turning the cash over to party treasurer Brigitte Baumeister. He said he only later found out that the donation was not reported, as required by German law. "I have done nothing, but my head is on the block," Schäuble told a press conference, repeatedly vowing not to resign.

"Schäuble's Confession," as the story was headlined in many newspapers, left a number of embarrassing questions for the CDU. For one, the money itself followed a mysterious trail after leaving Schäuble's hands and then apparently vanished. But more important was the question of why the party leader had waited a month after Kohl's own televised confession to admit his own relationship with the arms dealer. "If Schäuble had admitted earlier that he had accepted a donation it would not be an issue for him, but in this way the credibility of the whole party is in danger," said Jörg Schönbohm, a CDU leader in Brandenburg, the state that adjoins Berlin. Peter Gauweiler, former head of the CDU's sister party, the Christian Social Union in Munich, asserted that "Schäuble should know that he has to pay the consequences after all the double-talk, which has led to public indignation."

Those consequences began to become apparent even before the week had ended. An opinion poll by ARD television showed that popular support for the CDU had plunged 8% in a single month, the largest drop on record. Another poll said that 80% of Germans don't believe Schäuble, and two-thirds of CDU party members believes he knows more about the scandal than he is admitting. "The party seems paralyzed. Because there is no alternative [to Schäuble], nobody demands that he step down," commented the conservative Die Welt: "Alternatives are a question of courage."

The collapse in the CDU's popularity wasn't just an abstract political problem, either. The party had hoped to pull off an upset victory over Chancellor Gerhard Schröder's ruling Social Democrats in key elections in the state of Schleswig-Holstein on Feb. 27, but an early CDU lead in the opinion polls has vanished. Last week, the SPD was preferred by 40% of the voters in Schleswig-Holstein, compared with 37% for the CDU. "This could not have come at a more unfavorable time," said Volker Rühe, the CDU's leading candidate in the state election. Only last autumn, the CDU handily defeated the Social Democrats in a string of state elections.

One factor dragging the party down is the defiance being shown by Kohl, who was placed under criminal investigation by prosecutors in Bonn two weeks ago. Although accepting unreported contributions is a violation of Germany's political finance laws, it is a civil offense and carries no criminal penalties. The prosecutors decided instead to investigate Kohl for criminal breach of trust. Legal experts said the charge would be extremely difficult to prove because all Kohl needed was a statement from the CDU that it did not suffer any losses because of his actions as party leader. Meanwhile, as long as he is under official criminal investigation, Kohl can avoid appearing before a parliamentary inquiry into the scandal by asserting his right against self-incrimination.

Kohl, who was Chancellor for 16 years and was widely respected for having helped reunify Germany, has angered many former supporters by refusing to name the sources of the illegal contributions. He said that it was a matter of his personal honor that he had promised them anonymity, but this position has been viewed by many as arrogant for putting such a promise above the law. It seemed almost painful to watch Germany's grandfatherly cold war hero being grilled on television and replying, "I did not take bribes."

The problem for Schäuble is that he is increasingly being portrayed as part of "the Kohl system," a well-oiled party machine in which Kohl handed out political patronage in return for unquestioned loyalty. Some CDU officials have already suggested moving up the CDU's party conference scheduled for April, with the idea of electing a new, less tainted leadership. Ole von Beust, head of the CDU in Hamburg, for example, said that while he still did not doubt Schäuble's integrity, "everybody is replaceable." So even though Schäuble seems likely to avoid any legal involvement in the financing scandal, he may find that he can't escape the huge shadow being cast by his former mentor.

With reporting by Regine Wosnitza/Berlin