The Harder They Fall

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One newspaper headline cried out: "Father murder!" Some of Germany's most experienced, cynical politicians broke down and wept. The "father" was none other than Helmut Kohl, the Chancellor who unified Germany and helped exorcise the ghost of Adolf Hitler from the Continent. No blood was spilled. The "murder" was of his political reputation. Kohl was forced to resign as honorary chairman of the opposition Christian Democratic Union, because of a blossoming financial scandal. The statesman who counted Bill Clinton and former Soviet leader Mikhail Gorbachev among his peers had been brought down by the likes of a French wheeler-dealer nicknamed Dede the Sardine.

The political demise of Kohl quickly took on the elements of a Greek tragedy, complete with reversals of fortune and fatal character flaws. It probably reached its nadir late last week when Wolfgang Hüllen, the official in charge of finance for the CDU's parliamentary faction, committed suicide as the Bundestag opened its investigation into the scandal. While the reasons for the suicide were hazy, Hüllen apparently feared arrest for diverting cash from party coffers to his own account.

Kohl's fall struck at the very heart of German politics and threatened the future of the CDU. As recently as last November he was hailed as a national hero at the Brandenburg Gate for deftly steering his country through the fall of the Berlin Wall in 1989. Last week he was demonized as a national embarrassment. The mass circulation magazine Stern ran Kohl's photo on its cover showing the former Chancellor dappled with mud. Television's most popular interview show lampooned him as Helmut Kohleone, a Teutonic gangster godfather.

Throughout the public humiliation, the 69-year-old Kohl remained stubbornly defiant, at times dropping his grandfatherly demeanor in a burst of anger. As he had since the scandal first erupted late last year, he steadfastly refused to name the sources of at least $1.2 million in unreported campaign contributions. He acknowledged using the cash to set up secret bank accounts and then funneling money to favored CDU politicians, all of which was illegal under stringent campaign laws introduced by none other than Kohl himself during his 16 years as Chancellor. Kohl angered even his most stalwart supporters by implying that his promise of anonymity to the sources of the illegal money was more important than the law.

"I regard myself as incapable of breaking my promise to several people who supported my work in the CDU financially," Kohl said in announcing his resignation as honorary chairman of the party. While acknowledging having made mistakes, Kohl insisted that honor and duty prevented him from saying more. But the CDU presidium, which demanded Kohl's resignation, noted that "Kohl fails in his duty as honorary chairman if he refuses to contribute to the efforts to overcome the crisis."

The scandal quickly engulfed the leadership of the CDU, threatening the party's election prospects and leaving a question mark hanging over the entire German political system. Wolfgang Schäuble, Kohl's handpicked successor as party leader, offered to resign after admitting that he had also received a $52,000 cash contribution from an arms dealer that went mysteriously unreported, but the party's leadership threatened a mass resignation if he quit. "The party is in danger of falling apart and if that happens you have to wonder which parties will attract right wing voters," said Peter Lösche, a political scientist at the University of Göttingen. Lösche noted that the German People's Union, financed by a right-wing publisher, had recently scored electoral gains. "This scandal could be important for the entire German political structure, not just the CDU."

In the short term, the scandal was a godsend to Germany's current Chancellor, Gerhard Schröder, who defeated Kohl in Bundestag elections in September 1998. Schröder found his own popularity rising nearly as fast as Kohl's sank. An opinion poll published last week by the Forsa polling organization said that Schröder was supported by 44% of voters, up 3%, compared with only 14% support for the CDU's Schäuble, a depressing decline of 6% over the previous week. Before the funding scandal erupted last November, Schröder's ruling Social Democratic Party had been trounced by the CDU in five state and local elections because of popular discontent with Schröder's economic policies. The next election face-off comes next month in the key state of Schleswig-Holstein, with early indications showing the spd heading for an easy victory.

It was still not clear whether Kohl would agree to appear before the Bundestag's official committee of investigation, which included seven members of the opposition spd and five CDU loyalists, to discuss his role in the scandal. At least one key detail had already emerged from the committee's first day of work: Schröder's office confirmed that it had searched the official archives for material at the request of the committee and found that a number of key documents "seem to be missing," according to Schröder spokesman Bela Anda. Schäuble used the first day of the parliamentary debate to finally apologize to the nation for the party's misdeeds. The CDU, he said, had "quite clearly violated the law and damaged trust in the integrity of democratic institutions."

In addition to the parliamentary inquiry into the funding scandal, Kohl also faces criminal investigation by prosecutors in Bonn for breach of trust, which carries a maximum sentence of five years. According to legal experts, the case could be difficult to prove unless officials of the CDU are willing to testify to having been victimized by Kohl, who led the party for 25 years. Trying to bolster their case, prosecutors raided the apartment of a Kohl confidant in a search for incriminating documents.

It was also clear that there were many more damaging disclosures still to come. Party officials disclosed that an audit of the party's books by the accounting firm of Ernst & Young revealed nearly $5 million in additional donations whose source could not be determined. Perhaps even worse, the party branch in the state of Hesse admitted that in the 1980s the party "parked" $4 million in secret Swiss bank accounts. By the 1990s, the sum had mysteriously grown to $15 million and $2 million of the total had disappeared without a trace.

Manfred Kanther, a former Interior Minister who had publicly claimed to be stamping out corruption while in office, became the first political casualty of the funding scandal when he resigned his seat in parliament after admitting the illegal cash movements when he was head of the CDU in Hesse. The Social Democrats quickly announced that they would seek to throw out the results of the most recent Hesse election, won by the CDU by a slim margin, claiming the tainted money gave the CDU an unfair advantage.

If it wasn't bad enough to admit money laundering, the CDU's former treasurer in Hesse, an aristocrat named Casimir zu Sayn-Wittgenstein compounded the party's problems by suggesting initially that the funds weren't illegal, but bequests from deceased Jews. Michel Friedman, deputy leader of the Central Council of Jews, reacted angrily to the suggestion of Jewish involvement. "This is a scandal within a scandal, infamous, irresponsible and dangerous," Friedman said.

While most Germans said they accepted Kohl's contention that he had not personally benefited from the secret donations, the illegal payments nonetheless rankled many voters because, in the words of political scientist Hajo Funke, "the fear is that government policy was bought."



The Harder They Fall

A central figure in the scandal is Karlheinz Schreiber, an arms dealer who has both Canadian and German citizenship. It was Schreiber's gift of a suitcase stuffed with $500,000 in cash to the CDU's then Treasurer Walther Leisler Kiep in a Swiss parking lot that touched off a tax investigation in Germany that eventually forced Kohl to admit keeping secret accounts. While Kohl has adamantly denied that the contributions affected his decision making, Schreiber has said that he gave money to Kiep and other CDU officials only six months after the German government approved the sale of 36 German armored cars to Saudi Arabia in 1991. Schreiber, who was also instrumental in opening the Canadian market to Europe's Airbus aircraft, is currently fighting extradition to Germany, where he is being investigated for tax matters. Schreiber tantalizingly says he can implicate many other German officials but has so far refused to name them.

Another potential source of the secret funds was Elf Aquitaine, the giant French petroleum company recently taken over by its French rival, Total. An 80-year-old Moroccan-born Frenchman, Andre Guelfi, has appeared on German television and admitted passing nearly $40 million in fees received from Elf Aquitaine to CDU party officials. Guelfi, who is known in France as Dede the Sardine because of his ownership of a now-defunct Moroccan fishing company, said that both Kohl and French President François Mitterrand were aware of the payments to party officials. He has since backtracked on many of his accusations, which French and Swiss justice officials are investigating.

The payments were allegedly made between 1989 and 1993 when Elf Aquitaine was wholly owned by the French government. It was privatized in 1994 and Elf acknowledges that under its state-run management the company paid $125 million to Guelfi's Liechtenstein-registered shell company called Nobleplac. The huge payment was listed in Elf's accounts simply as "studies and lobbying services" in connection with the company's purchase in 1993 of the Leuna oil refinery and a chain of gasoline stations in eastern Germany that were sold off by a German state organization set up to dispose of failing assets of the collapsed East Germany.

The decision to build a new $2.5 billion refinery at Leuna was the largest ever Franco-German cooperation project, and there were reports at the time suggesting that Kohl and Mitterrand had taken a personal hand in ensuring the project's success. One theory was that Kohl, who was dragging a reluctant Germany into a French-sponsored project to adopt the single European currency, sought in return French help in rebuilding economically devastated eastern Germany. The Kohl-Mitterrand partnership has been widely credited as the defining force behind European unity, a project that helps ensure that the nationalism that existed under Hitler will not return to Germany. The unity was sealed last year when a single currency, the euro, was adopted by 11 member states of the European Union. The daily Berliner Zeitung reported that Liechtenstein had frozen a number of bank accounts, including one controlled by Dieter Holzer, a lobbyist close to the CDU, that contained a balance of almost $25 million. It quoted Holzer as saying that the money represented a "rather poor fee" paid by Elf Aquitaine for his help in winning Kohl government support on the Leuna refinery project. But Holzer denied paying bribes.

For some Germans, it still seems astonishing that a revered father figure like Kohl could have been involved in such controversial deals. With his love of bratwurst and immense frame, Kohl has been a lovable and often humorous figure to the Germans he led for 16 years. A new and starker image has begun to emerge, portraying him as a kind of schizophrenic leader capable of appearing avuncular in public while running the party with an autocratic hand behind the scenes.

Kohl brooked no criticism and quickly dispatched opponents to obscurity. "The system Kohl was a special way of running the country," notes Karl Rudolf Korte, a Kohl biographer at the University of Munich. "He let his friends and his entourage have access to only a small piece of the system. It was the same with policy making and the same with money. There was no transparency. After 25 years as head of the party, you begin to think that you make the rules."

Part of the problem facing the CDU is that most of the current leaders owe their positions to Kohl's largess. Schäuble, for example, was the leader of the Bundestag CDU faction while Kohl was party leader. That helps explain why it took the party so long to come out with public criticism of Kohl. Only after Kohl was forced to drop his honorary chairmanship, which he received after his election loss last year, did younger members come forward to criticize him. "The CDU does not accept that anybody puts himself outside the legal system," said Christian Wulff, CDU leader in Lower Saxony, Schröder's home state. Heiner Geissler, a longtime foe of Kohl, said that Kohl's "silence about the origin of party donations not only damages the CDU, it also damages democracy." Angela Merkel, general secretary of the party and another Kohl protège, called the decision to oust him an "extremely difficult process."

While Schäuble's offer to resign was rejected by the CDU leadership, a party conference has been scheduled for April when new leaders could be chosen, especially if the party fares poorly in the Schleswig-Holstein election next month. Because of the suddenness of the scandal, there are not a lot of candidates in the wings. Wulff, the 40-year-old leader in Lower Saxony, is part of a group of younger leaders in the party who have been dubbed the Young Wild Ones by their more conservative peers. Also in this group is Peter Müller, the 43-year-old premier of Saarland, who led the CDU to victory in state elections last year. Wulff has been defeated twice by Schröder, so may not offer the party much of an alternative, while Müller lacks a power base at the federal level.

Another possible successor to Schäuble is Kurt Biedenkopf, the party chief in Saxony and one of Kohl's most outspoken critics, who said last week: "I am completely at a loss in regard to Helmut Kohl's behavior." At 69, however, many political observers consider him too old to lead the party.

One potential benefit of the Kohl affair is the likelihood that even if no one goes to jail, stringent reforms will be adopted, such as limiting a Chancellor's maximum period in office to eight years. But the scandal may also provide an impetus for revising Germany's outdated system of encouraging cosy relationships between business leaders and government officials. Politicians often serve on the boards of directors of many large companies, for example, and receive "expense stipends" of up to $50,000 a year for attending a handful of meetings. Not coincidentally, their oversight of management is less stringent than in the private sector. State-owned companies have also been lavish with their gifts to government figures. A scandal involving spd officials, including German President Johannes Rau, has resulted from newspaper revelations that they received free charter flights paid by Westdeutsche Landesbank, a state-owned bank in North Rhine-Westphalia.

If the Kohl scandal can force the current parliament to consider a serious demarcation between the state and private business, both will probably be better off. Mannesmann, a former rust belt firm that reinvented itself as one of Europe's biggest mobile phone operators, recently rejected an offer of government protection in a takeover battle with the British firm Vodafone AirTouch, saying it prefers to leave its fate to the free market instead. Kohl may have suffered from the flaw of relishing power so much that he used illegal means to keep it. But if the government had not wielded so much power over businesses, it's doubtful that so much money would have been at his disposal in the first place.

History may be kinder to Kohl than the present controversy suggests. Even Richard Nixon is being reevaluated as a statesman and his role in Watergate, though not forgotten, put in a different perspective. The difference is that Germans had long believed that their party system was not subject to the kind of corruption that existed in Italy. There is a distinct danger that the demise of that myth may seriously damage not just the CDU, but the country's entire system of checks and balances, enacted after World War II to ensure that another dictator would not come along to haunt Europe's history. How ironic that old King Kohl now claims he was only helping shore up his country's democratic future.

With reporting by Regine Wosnitza/Berlin and Bruce Crumley/Paris


Lord Acton, the great British political thinker, acquired fame with this iron law of politics: "Power tends to corrupt, and absolute power corrupts absolutely." Watching the slow, torturous fall of Helmut Kohl, we might amend the law thus: " ... and an eternity in power corrupts even more."

Here is Kohl as we knew him. Larger than life, he towered over all other leaders who populated Europe's political stage in his time--excepting, perhaps, Margaret Thatcher. With 16 years at the helm, he ruled three years longer than Franklin D. Roosevelt and just three years fewer than the all-time record holder, Prince Bismarck. But unlike the "Blood and Iron" Chancellor, Kohl unified Germany without a single shot--not against, but with Europe. And then he dragged Europe and a reluctant Germany forward into monetary union, the grandest unification venture of them all.

That is enough for two history books. And yet, tucked away in that monumental mantle, there was a standard-size pol afflicted with the most banal of flaws: a petty greed for power. If the allegations that have already forced him from the honorary chairmanship of his Christian Democratic Party are true, Kohl was hardly different from Britain's sleaze boys during the Major era or Italy's crime-and-corruption czars in 50 years of Democrazia Cristiana rule.

Kohl's looks to be the familiar tale of money accepted and influence sold. It is the story of slush funds that bought loyalty in his own party and, in turn, helped to lay low the Chancellor's internal enemies. Nor is this all. As we watch in awe and bewilderment, there is Kohl of the smoke-filled room, who elevates the code of cronyism above the law of the land. No, he won't divulge the identity of his party's benefactors because he was sworn to give them anonymity. That adds insolence to injury, for German campaign finance law is quite harsh on this point. Anything above 20,000 deutsche marks, a bit more than $10,000, must come with the donor's name attached, or else.

It is a trite story, endlessly told. And there is just as tired a reason: longevity in power. This strand unites Britain's Tories (down and almost out) with Italy's Christian Democrats (down and gone) and Germany's Kohlistas (sinking fast). Margaret Thatcher and John Major governed Britain for 18 years. The Democrazia Cristiana practically owned Italy for half a century. And Kohl was king for 16 years.

Tenure creates its own iron law: the law of inflating arrogance. Those who win election after election succumb to fantasies of eternal power. The Helmut Kohls who manage to beat off any intraparty rival begin to think of themselves as being like Achilles without the heel--invulnerable. Helmut Kohl was beaten for the chancellorship in 1976, slipped into office in 1982 and then proceeded to win in 1983, 1987, 1990 and 1994. Why, then, would he conceive of himself as an ordinary politico--especially since he had always come from behind to overtake whoever the Social Democrats had fielded? Adversity builds character first and cockiness after.

So what is a little extra cash among giants? After all, that $1 million he is accused of accepting did not go into schnitzels and saumagen, the German version of haggis (Kohl's calorific favorite), but into funds that helped history's chosen servant to prevail against the chatter of small minds. Indeed, Kohl must be thinking, let history be my judge.

The legal verdict is not in; the process of discovery is still in motion. But the contours of history's judgment are visible already. It might read like this: You, Helmut, have achieved greatness. But since 1215, when the Magna Carta was signed, rulers have been supposed to live beneath, not above the law. You risk history's judgment that you have violated not only the law, but also the public trust, the most precious gift a democratic people can bestow on its leaders.

Of course, Helmut Kohl might still avert so cruel a ruling by naming those he is hiding, by apologizing and atoning. But what might come naturally to a child does not seem to be given to leaders who have triumphed over calamity so often. Richard Nixon, the original comeback artist, had to be forced from office in 1974. Bill Clinton fibbed all the way to his impeachment. And Kohl will do what he knows best: aussitzen, sitting it out.

In the meantime, his Christian Democrats will continue to sink, especially since so many of their leaders, including the current chairman, Wolfgang Schäuble, who has the allegations hanging round his neck of illegal contributions totalling $17 million. History suggests what will happen next. To dodge the fate of Italy's Christian Democrats, their German brethren will look for a scapegoat. And given the size of the scandal, the sacrifice will have to be just as substantial.

Forcing Kohl from the party's honorary chairmanship was the first step. Observe the drama as it unfolds--and watch a great man being felled blow by blow. This tragedy will not inspire fear and pity, as the ancients had it. It will be all pulp and no catharsis.