Donations to party did not influence Kohl, former CDU treasurer insists

Secret donations to his party did not influence the decisions of Dr Helmut Kohl's government, the Christian Democrats' former treasurer told a German parliamentary inquiry yesterday.

But Mr Walther Leisler Kiep, whose arrest last year sparked the illegal funding scandal that has rocked Germany's conservatives, offered little information about the network of secret accounts controlled by the former chancellor.

"In my 21 years as treasurer I have never had grounds to say decisions by Kohl and his cabinet were influenced by financial contributions," he told the inquiry.

Mr Kiep, who faces a criminal investigation into his receipt of DM1 million (£400,000) from the fugitive arms dealer Mr KarlHeinz Schreiber, denied receiving DM1 million in cash every year from Siemens and said he knew nothing about a labyrinth of bank accounts used to channel the illegal funds.

The former treasurer, who answered questions from parliamentarians for 50 minutes, insisted that he had no knowledge of any donation made to the CDU in connection with the acquisition by the French oil company Elf Aquitaine of an eastern German oil refinery.

The German media have claimed that the late French President Francois Mitterrand approved a substantial secret donation to Dr Kohl's party while the deal was being negotiated.

Despite his denial that Dr Kohl allowed cash to influence his government's decisions, Mr Kiep admitted that he interceded with the former chancellor on behalf of Mr Schreiber, who needed government approval for some of his business projects.

Mr Schreiber is in Canada, fighting an attempt by the German authorities to extradite him on corruption charges. Mr Kiep is under investigation for conspiracy to avoid tax.

After months of unpopularity following Dr Kohl's admission that he broke the law governing party funding, the CDU is now enjoying a revival in opinion polls.

The party's new leader, Dr Angela Merkel, is almost as popular as Chancellor Gerhard Schroder, and her youthful front bench team has made a good impression on the public.

The party is expected to strike a deal with the government to support a major reform of the tax and pension systems, but Dr Merkel will attempt to carve out a distinct profile on other issues, such as nuclear power, immigration and European policy.

The party's recovery has almost certainly come too late, however, to deprive Mr Schroder's coalition of Social Democrats and Greens of victory in next month's state election in North Rhine Westphalia.

And as the parliamentary inquiry and parallel criminal investigations into the funding scandal drag on, the CDU is prepared for further revelations that could shatter its new-found popularity.