Kohl-era scandal

The 75-year-old, who holds dual Canadian and German citizenship, arrived in Munich on Monday after fighting extradition from Canada for 10 years.

His arrival in Germany could spell trouble for Chancellor Merkel's Christian Democrats (CDU) before next month's federal elections because it's expected to dig up past allegations over party slush funds which led to the fall of former Chancellor Helmut Kohl.

A spokesman for the court in Augsburg, Karl-Heinz Haeusler, said it was not possible to say whether the politically sensitive trial would begin before national elections on September 27.

"That would be a case of reading tea leaves. One can only speculate," Haeusler told AFP.

Scandal led to Merkel's rise

Schreiber is accused of playing a key role in the massive slush fund scandal that rocked the Christian Democratic Union (CDU) in the 1990s. It also ended the political career of former Chancellor Helmut Kohl and paved the way for current Chancellor Angela Merkel's rise to power.

Schreiber, a long-time member of the Christian Social Union, the Bavarian sister party of the CDU, is believed to have made an undeclared one million deutschmark (500,000 euros) donation to the CDU.

The funding scandal forced the resignation of Wolfgang Schaeuble as CDU chairman in 2000 and Kohl was forced to quit as honorary president after admitting accepting illegal party donations. Schaeuble is currently Germany's interior minister.

Merkel, who was CDU general secretary at the time and a Kohl protégé, described her mentor’s involvement in the scandal as a tragedy for the CDU.

She said in unequivocal terms that Kohl, who was chancellor from 1982 to 1998, could never again be the Christian Democrats’ candidate for chancellor.

Merkel was elected head of the party in 2000, largely owing to the fact that she was one of the first in the CDU to break with Kohl over the scandal.

Charges politically motivated?

Speaking to reporters on Sunday, Schreiber said there was a political dimension to his extradition, with a general election less than two months away.

"The Social Democrats won three elections with my case in the past," he said, referring to the junior partner in Merkel's coalition government. "If I come now that would be the greatest thing, it would start a huge investigation and ... they would think they could win the next election."

Opinion polls put the Christian Democrats – currently the dominant party in Germany's governing grand coalition – well ahead of the Social Democrats, led by Foreign Minister Frank-Walter Steinmeier.

Controversial arms deals

Schreiber is also wanted by prosecutors in Augsburg for tax evasion, bribery and fraud.

The former arms lobbyist stands accused of evading taxes on millions of euros in income from weapons deals as well as offering bribes to ensure government approval for the sale of armored cars to Saudi Arabia.

Schreiber was arrested in Toronto in 1999 on a German warrant. After a 10-year court battle, a court in Ontario on Sunday finally approved his extradition to Germany.

"Over a 10-year period, Mr. Schreiber was given every reasonable opportunity to challenge his extradition," Canadian Justice Minister Rob Nicholson said. "His surrender to Germany was in full accord with the law and consistent with the spirit and purpose of extradition."

Last year, Canada's government agreed to allow Schreiber to stay in Canada until he testified at a public inquiry into cash payments he made to former Prime Minister Brian Mulroney.

That investigation centered on cash payments Schreiber made to Mulroney as part of a lobbying operation to secure support for building a German light armored vehicle factory in Canada.

The inquiry held its final hearing in Ottawa last Tuesday and is expected to issue its report by the end of the year.

Mulroney has denied any wrongdoing.

sp/AFP/Reuters/AP
Editor: Susan Houlton