Bro. Karlheinze Schreiber Trial Begins in Augsburg


German fraud trial may throw light on slush fund affair

Arms dealer and lobbyist Karlheinz Schreiber, 75, denies bribery and tax evasion

Monday 18 January 2010
Kate Connolly in Berlin

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An elderly arms dealer and lobbyist accused of playing a major role in a slush fund affair that plunged Germany’s Christian Democrats into chaos in the 1990s and set the chancellor, Angela Merkel, on the road to power, went on trial today for alleged fraud.

Karlheinz Schreiber, 75, who has joint Canadian and German citizenship, pleaded not guilty to charges of bribery, tax evasion and being an accessory to fraud, in a trial that is being watched closely by political and business communities, not least because of revelations he might make over who knew what about the funding scandal.

His friends and contacts with whom he famously shared a table at Munich’s Oktoberfest, included intelligence agents, state secretaries and arms manufacturers.

Prosecutor Marcus Paintinger told the court in Augsburg, southern Germany, that Schreiber had withheld €13.3m in taxes from the €32m commission he received from sales of Airbus aeroplanes to Thailand, helicopters to the Canadian coastguard, and a tank deal with the Canadian military, which flopped.

Schreiber had “built up an obscure house of lies”, Paintinger said, setting up fictitious firms in Liechtenstein and Panama in order to deceive the tax authorities. As he entered the courtroom, Schreiber told reporters: “Today we are where my case belongs”.

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