A DECADE on, the man behind the political donation scandal that rocked Germany’s Christian Democrats (CDU) has gone on trial in Germany accused of tax evasion.
Karlheinz Schreiber (75), a former arms lobbyist with dual German-Canadian citizenship, allegedly funnelled money from German armaments companies to leading politicians in exchange for weapons export permits and other favours. He sat out the last 15 years in Canada as lawyers fought over his case. But last August, his final legal avenue was exhausted and he was extradited to Germany.
As well as claims of bribery and accessory to fraud, state prosecutors are concentrating on a central charge of evading €12 million in tax on an estimated €33 million in fees earned on aircraft and tank sales between 1988 and 1993.
German tax authorities accuse Mr Schreiber of funnelling this money through companies in Liechtenstein and Panama disguised as trusts.
“He created an entire construction of lies to keep the money from the fiscal authorities,” said state prosecutor Markus Paintinger.
In an Augsburg courtroom yesterday, Mr Schreiber denied the charges “vigorously and fully” and portrayed himself as a small player in a much larger system.
“Millions flowed through accounts that formally belonged to me but behind which, though, stood other people,” he said in a statement read by his defence lawyer, Jan Olaf Leisner. “There was never a bid without favours in return and no business deal in which leading politicians didn’t get involved in decision-making.”
Remarks like that have set German journalists salivating at the prospect of learning more about his political donations to the CDU that cost Wolfgang Schäuble, currently finance minister, his job as party leader. He was dragged into the affair over a 100,000 mark (€50,000) donation he said later he had no recollection of receiving.
The scandal propelled German chancellor Angela Merkel to the CDU leadership after she distanced herself publicly from Mr Schäuble and Helmut Kohl.
Observers are divided over whether the trial will bring to light any new facts. The original state prosecutor has said Bavarian politicians anxious to protect their reputations have interfered to ensure Mr Schreiber can cause them no further damage.
“He might know a lot but he’s also a notorious bluffer,” said Ottfried Nassauer, an arms industry watcher. “The state prosecutor has to decide if he wants to take that risk or offer him a deal.”