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Schreiber: The man who would topple kings

g and compass

The Guardian

Schreiber: The man who would topple kings

A German businessman's revelations have prompted a string of investigations, and he may have only exposed the tip of the iceberg

Friday January 14, 2000

John Hooper in Berlin

Multinational businessman Karlheinz Schreiber, whose donation disclosures are at the root of the scandal rocking German politics, is one of the most intriguing figures to have been thrust into the floodlit glare of the international stage.

His revelations have set off a string of investigations - by prosecutors, politicians, police and journalists - which have entangled Germany's pre-eminent statesman, Helmut Kohl, and Mr Kohl's successor as the leader of the Christian Democrats (CDU), Wolfgang Schäuble.

But Mr Schreiber is also a central figure in another probe involving sums of money vastly greater than any shown to have been given to Germany's conservatives.

When he was arrested in Toronto last August, the Mounties found Mr Schreiber, who holds dual German and Canadian nationality, was carrying a bag containing the equivalent of £12,500 in nine currencies.

Dubbed the "King of Schmooze" by the Canadian press, the silver-haired Mr Schreiber has forged an astonishing network of powerful connections on both sides of the Atlantic; his bail was arranged with the help of two former Canadian cabinet ministers - one from each of the main parties.

Though often described as an arms dealer, Mr Schreiber is in no sense a professional in the business of weapons trading. Born in Bavaria in 1934, he grew to maturity in the tough, bleak environment of devastated, post-war Germany. He left school at 16 and went to work in a department store, but was soon trading on his own account, importing carpets from what was then Persia.

At a press conference earlier this week, Mr Schäuble provoked chortles when he said that he had been introduced to Mr Schreiber as someone whose firm put the lines on autobahns - yet it was true. In the late 1950s or early 1960s, Mr Schreiber took a stake in a company near Munich that specialised in paving and road marking.

He later acquired control. Firms such as these depend almost entirely on public-sector contracts. So, from an early stage in his business career, Mr Schreiber coveted political contacts and goodwill.

In the mid-70s, he went international. Opec had just sent oil prices soaring and Mr Schreiber expanded into the booming, petroleum-rich Canadian province of Alberta. It was not long before he had moved on from roads to real estate. He founded several property investment companies and persuaded a number of leading figures in Alberta's ruling Progressive Conservative party to sit on his companies' boards.

His influence later grew to the extent that, as a friend of the late Franz Josef Strauss, then head of the Bavarian government and chairman of Airbus Industrie, Mr Schreiber helped to broker a $1.5bn sale of 34 Airbus jets to Air Canada in 1988.

It was not just the biggest aircraft order in Canada's history, but it also the cause of one of the country's most explosive political controversies.

In 1995, with the RCMP digging into the circumstances surrounding the deal, a government lawyer wrote to the Swiss authorities asking them for help. The letter alleged that Mr Schreiber had used a Zurich bank account to pay the former prime minister, Brian Mulroney, a C$5m (£2.1m) kickback.

Mr Mulroney sued and two years later won an apology and a settlement of C$2m. The government also apologised to Mr Schreiber, but did not offer him any compensation.

When the RCMP arrested Mr Schreiber in August, it was for a different, though related, reason. The security force was acting on an arrest warrant issued by prosecutors in Bavaria, who accused Mr Schreiber of failing to pay tax of DM25m (£8m) on commission it said he received from deals he brokered in the late 80s and early 90s. One was for the sale of German armoured vehicles to Saudi Arabia.

Mr Schreiber's disclosure that he handed more than DM1m in cash to the CDU in the same year was the match that lit the fuse under Germany's Christian Democrats.

Though the personalities and circumstances of the two men are quite different, Mr Schreiber's role in German politics is starting to resemble that which Licio Gelli, head of the powerful P2 Masonic lodge, once played in Italian affairs.

Unlike Gelli, Mr Schreiber has never been convicted of any offence. But, as with Gelli, there is a pattern of affinity with the political right.

Mr Schreiber, moreover, has shown that, like Italy's "puppet master", he is the keeper of many explosive secrets. And, as he battles to avoid extradition from Canada to his native Germany, he has let some of those secrets filter out to devastating effect.

What remains to be seen is how much more he can - and indeed wants to - reveal.

Last November, he said: "I promise it will become very nasty."

So far, he has been as good as his word.

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