German auditors come up empty in CDU probe

Auditors in Germany have failed to find the source of secret donations to the Christian Democratic party (CDU), during a probe into party financing. The news raises the prospect that money deposited in Swiss banks may provide some important clues.

Auditors in Germany have failed to find the source of secret donations to the Christian Democratic party (CDU), during a probe into party financing. The news raises the prospect that money deposited in Swiss bank accounts may provide some important clues in the CDU’s spiralling political funding scandal.

Auditors for the CDU said they had found at least nine million Swiss francs worth of suspicious party funds – but that the party’s accounts did not show where they came from.

German investigators are hoping that clues to the identity of the donors may come from Switzerland. Prominent CDU officials, as well as businessmen with a history of ties to the party, have been named in connection with two investigations underway in Switzerland.

The first inquiry concerns a German request for legal assistance. Germany is seeking information about bank accounts in eastern Switzerland, which are alleged to belong to people who benefited from commissions on a German arms deal with Saudi Arabia. The Swiss authorities have frozen the request while a court in canton Nidwalden hears an appeal by some of the parties named in the case.

The other investigation concerns the sale of the former East German Leuna oil refinery to the French company Elf Aquitaine. This inquiry was triggered several years ago amid allegations of bribery in France involving a Swiss-based subsidiary of Elf.

Investigators suspect that Elf paid up to SFr70 million in bribes to secure the Leuna refinery deal. Magistrates in canton Geneva are trying to find out whether funds from any of the alleged bribes were deposited in Swiss bank accounts.

It is not clear whether Swiss investigators suspect the CDU of involvement in the Leuna deal. Geneva’s cantonal prosecutor, Bernard Bertossa, has declined to associate the CDU with the Leuna case, although his office has requested information about several CDU members from the German court investigating the allegations of illicit party financing.

The officials in question include: a former minister, a secretary of state, other senior party officials, as well as three businessmen with links to French or German intelligence.

Unless the Geneva investigation finds evidence of fraud, forgery or money laundering, the Swiss authorities cannot hand over any information to the German investigators. The reason is because Swiss banking secrecy laws can only be legally breached in a criminal investigation. And there is no equivalent of German laws on party financing in Switzerland, so banking secrecy cannot be lifted on that basis alone.

After drug traffickers, organised crime, countless dictators and Italian politicians involved in the “manipulite” bribery scandals in the early 1990s, members of one of Europe’s most respected post-war governments are emerging as the unexpected clients of Switzerland’s legendary banking secrecy. That may prove to have been their weakness. While they still apply to tax matters, banking secrecy laws no longer offer protection against criminal investigations.

By Peter Capella