CHRISTIAN DEMOCRATIC PARTY OPENS PANDORA'S BOX OF SECRET ACCOUNTS

by Haig Simonian in Frankfurt

Germany's embattled Christian Democratic Union (CDU) on Friday admitted it had operated an extraordinary web of secret onshore and offshore accounts, run in parallel to its official finances, for three decades.

Releasing statements from two of the key people who managed its financial affairs since the 1970s, the party opened a Pandora's box of secret accounts, safe deposit boxes in Switzerland and million D-Mark payments made via the intelligence services to political parties in Spain and Portugal.

The revelations put the spotlight back on Helmut Kohl, the former chancellor and CDU chairman who late last year plunged the party into crisis when he admitted he had received "up to DM2m" (£619,000) in undeclared donations. Mr Kohl has refused to disclose the source of the donations.

The new disclosures provided unprecedented detail of the system of secret party funding that has emerged gradually since last November. "We have broken the cartel of silence but unfortunately there are still some contradictions," said Angela Merkel, the CDU general secretary.

The details follow meetings between CDU leaders and Horst Weyrauch and Uwe Lüthje, two of the party's key functionaries.

At a news conference on Friday it was revealed that the CDU held accounts in Switzerland to handle undeclared contributions. Much of the money stemmed from funds collected by German industrialists since the 1950s and subsequently declared illegal by the Constitutional Court.

Up to DM6m may have come from Siemens, the engineering group, and an unspecified amount from Leo Kirch, the German media magnate. However, Siemens cast doubt on the claim and the Kirch group denied making any payments.

Wolfgang Schäuble, Mr Kohl's successor as CDU chairman, said the CDU was handing all its information to public prosecutors in Bonn, who are investigating the funding scandal.

He said the party had contacted UBS, the Swiss bank where its safe deposit box and some accounts were held, to obtain details of the amounts and the precise flows between Switzerland and Germany.

Friday's information represented a further attempt by Mr Schäuble to present himself as the man to lead the party's clean-up campaign.

But the information will increase the financial pressure on the CDU, already facing potentially big penalties under Germany's generous-but-strict state funding system.

Wolfgang Thierse, the president of the Bundestag - the lower house of Parliament, which administers the scheme - must decide by the middle of this month whether to unlock the next tranche of state funding due to the CDU and resolve the highly contentious issue of penalties.