GERMANY: Germany's conservatives found themselves embroiled in a new political fundraising scandal yesterday when Bavaria's ruling Christian Social Union (CSU) was accused of pocketing over €3 million in improperly-declared party donations.
A parliamentary investigation has begun into the allegations, which could damage the CSU party leader, Mr Edmund Stoiber, until now the firm favourite to run against Mr Gerhard Schröder in September's general election.
According to a report in Stern magazine, the CSU sold over €6 million worth of subscriptions to its party paper, the Bayernkurier, in the mid-1990s.
Half of the money raised went to the newspaper, the other half went to the CSU as a political donation.
However the party issued receipts to donors for the full amount of each subscription.
With these receipts worth €6 million, the party received 50 per cent matching federal funding of over €3 million, double their entitlement under funding laws.
The CSU general secretary, Mr Thomas Goppel, denied any wrongdoing.
Mr Goppel said that all the income of the Bavarian party had been registered in accordance with party funding and other regulations.
He said the allegations were part of a "malicious campaign" against the party leader and Bavarian premier, Mr Edmund Stoiber. "If someone comes out with such slander at a time like this, then it's obvious what he wants," said Mr Goppel.
In two weeks the CSU and its sister CDU party will decide who will lead them into this year's general election campaign.
Mr Stoiber's only challenger is the unpopular CDU leader, Ms Angela Merkel.
Over two thirds of conservative voters favour Mr Stoiber and recent polls show that under his stewardship, the conservatives stand a chance of returning to power.
These new allegations, however, could change the minds of many in the CDU, still smarting from the fundraising scandal that destroyed the reputation of the former chancellor, Dr Helmut Kohl, and forced the resignation of his successor as CDU leader, Dr Wolfgang Schaeuble.
Leading government figures were quick to respond to the allegations.
With the economy faltering, they know that business-friendly Mr Stoiber could make the economy an election issue, at their cost.
"If what is suggested is true, Mr Stoiber is in the midst of a new political fundraising scandal," said Mr Franz Muentefering, the general secretary of the Social Democrats.
He said Mr Stoiber would have to "answer a few questions" about the matter before he is selected as the conservative chancellor candidate.
