French and German intelligence agents gather at a posh hotel in Geneva under orders from the highest levels of their governments. Millions of dollars slosh across Europe, moving surreptitiously from mysterious bank accounts to dummy companies in the tax haven of Liechtenstein. Key executives vanish without a trace. It all sounds like pulp fiction rather than high diplomacy. Could this be the real story of how Europe's triumphal unity was sealed? With the suddenness of a major earthquake, the investigation into financial irregularities by former Chancellor Helmut Kohl's Christian Democratic Union has rippled across Germany's borders to France and Switzerland, uncovering a widening trail of allegations about high-level influence peddling.
The Christian Democrats had plenty of worries at home, too. Last week, the CDU was forced to admit that the party had taken $6.1 million in undeclared contributions between 1989 and 1998 in violation of Germany's strict political funding laws. When the scandal broke in December, Kohl only admitted to having received $1.2 million in illegal contributions. After he refused to name the contributors, the 69-year-old "unification Chancellor," the party's leader and standard bearer for 25 years, was forced to resign as honorary chairman. Compounding the party's woes, the CDU branch in the state of Hesse revealed that a new audit had discovered the party leadership had falsified the books to hide $10 million in funds sent to secret bank accounts in Switzerland, far higher than the $4 million previously disclosed.
Germany's biggest postwar political scandal showed no sign of ebbing, either. The flood of allegations, now coming out of France and Switzerland as well as a newly emboldened German press, could redraw Germany's political boundaries. While the scandal has proved a huge windfall for Chancellor Gerhard Schröder's ruling Social Democratic Party, fears multiply that the basis for the country's postwar stability may be undermined.
Swiss authorities disclosed last week that they had joined German and French investigators in pursuing the scandal. A judge in Geneva has issued international arrest warrants for Alain Guillon and Hubert Le Blanc-Belleraux, both former officials of the giant French oil company Elf Aquitaine. The judge, reportedly, has questions about alleged embezzlement, fraud and money laundering in connection with payments by Elf to help organize the purchase of the Leuna oil refinery and the Minol chain of gasoline stations, assets of the former East Germany that the Kohl government sold to the French company in 1992. Guillon, who was head of Elf's refining operations at the time, is currently in a French jail while under investigation.
A joint investigation by Germany's ARD television and France 2 channel alleged that Kohl's 1994 election campaign was financed in part by a secret $15.8 million payment from Elf. The broadcasters said that French President François Mitterrand had personally intervened with the management of the then state-owned Elf to arrange the payment in support of Kohl, his main partner in the effort to forge European political and monetary union. Kohl's CDU won the election in October, 1994 by a narrow, 42-seat majority over the Social Democrats, then headed by Rudolf Scharping. Among the allegations was that the covert funding was arranged at a meeting in Geneva's Richmond Hotel by top agents of German and French intelligence.
Kohl reacted angrily to the charges about Mitterrand, saying in a statement that they were "completely fictitious and invented." The story was also denied by former aides to Mitterrand. Elisabeth Guigou, a former secretary of state for European affairs at the time of the Leuna deal, told French newspapers that Mitterrand, who died in 1996, could never have issued such orders. Philippe Jaffre, who served as chairman of Elf from 1993 until October last year, confirmed last week that the company had paid $39 million in 1992 to a Liechtenstein-registered company called Nobleplac, which is owned by a French businessman named Andre Guelfi. The payment was for "studies and lobbying" in connection with the German oil refinery deal. The 80-year-old Guelfi, known in France as Dede the Sardine, has claimed on German television that he passed the money on to German politicians.
The German news program Tagesschau claimed that Guelfi's Nobleplac transferred $36 million to an account in Liechtenstein controlled by Dieter Holzer, a former agent for Germany's spy agency, the Bundesnachrichtendienst, and a political lobbyist close to the CDU, and a further $6 million was paid to Pierre Lethier, a former agent of the DGSE, France's external security organization. Holzer has acknowledged taking a fee for helping arrange the sale of the refinery, but he has given sworn testimony that he didn't pay money to German politicians. "I didn't do anything wrong," he said.
Kohl, who was revered in Germany for helping reunify the country, is currently the focus of an investigation by the Bonn prosecutor's office on criminal charges of breach of trust as well as being the subject of a full-scale inquiry by the lower house of Germany's parliament, the Bundestag, into whether government policy was influenced by the large sums secretly paid to the CDU. One line of investigation involves a suitcase containing $570,000 which a former party treasurer has admitted receiving from a German arms dealer in 1991, six months after the German government approved the controversial sale of 36 armored cars to Saudi Arabia.
The CDU last week backed off its threat to use the courts to force Kohl to reveal the names of the anonymous contributors to the party. Party chairman Wolfgang Schäuble, apparently responding to polls showing that Kohl's popularity remains high despite the widening scandal, said he wanted Kohl "to remain at the heart of the party." At the same time Schäuble said the party may take legal action against Horst Weyrauch, the party accountant who helped set up secret bank accounts to funnel money to favored politicians to force him to identify the contributors.
The CDU needs all the help it can get. Martin Morlock, Director of the Institute for German and European Party Law in Hagen, said that the party could be penalized anything from $4.5 million up to $200 million for violations of the campaign finance laws. Along with the heavy fines, the potential political fallout threatens to drastically change the election landscape in Germany. Some commentators have expressed concern that the CDU could split into warring factions or collapse. Schäuble told a newspaper interviewer last week that the party finally has "the ground under our feet." But like the days following a destructive earthquake, the Kohl scandal is showing that the CDU's ground is still prone to aftershocks.
With reporting by Helena Bachmann/Geneva, Thomas Sancton/Paris and Ursula Sautter/Bonn