Herbert W Armstrong

In West Germany, a widening scandal involving the top leadership of the government — including perhaps Chancellor Helmut Kohl himself — is tugging at the very foundations of that nation's comparatively short-lived democratic structure. In simple terms, the Friedrich Flick conglomerate, a giant holding company, has made periodic, highly questionable "campaign contributions" to major officials in all three parties — the Christian Democrats, the Free Democrats and the Social Democrats. As a result of the revelations in what is known as the "Flick affair," public confidence in elected officials is falling in West Germany. This is an ominous sign, given that nation's history and proclivity to embrace strong, totalitarian leaders in order to solve national problems. Here is an overall summary as editorialized in the November 23, 1984 LOS ANGELES TIMES:

In democratic societies decisions are made by parliaments elected by the people. But politicians running for office need money. As a result there is a constant temptation for business and other special interests to tilt the machinery in their favor through campaign contributions, legal or illegal. That is true in the United States, and, as recent events show, it is true in West Germany. The trouble is that democracy is much less firmly rooted in West Germany, which means that political scandals are much more worrisome.

The present scandal began with the sale by the Flick industrial group in January, 1975, of a substantial interest in Daimler­ Benz. The transaction left Flick facing a big tax unless it could qualify for a tax exemption based on reinvestments that created jobs or increased exports. Flick won that huge tax break in 1976 from the previous Social Democratic government — but only after spreading contributions totaling about 25 million marks, more than $8 million at present exchange rates, to all three major political parties. Under West German law political contributions are legal so long as they do not constitute bribery, do not exceed the equivalent of $6800 and are publicly disclosed together with the donor's identity.

In the opinion of the West German courts these criteria were not met by Flick. Last June Otto Lamsdorff, the economics minister, resigned shortly before being indicted by a Bonn court, along with Flick's chief lobbyist, on charges of accepting bribes from Flick in return for granting the tax exemption. In October Rainer Barzel, president of the West German parliament, resigned amid allegations that he, too, was involved.

Now Chancellor Helmut Kohl has acknowledged that, during a two­ year period before his Christian Democrats came to power, he accepted contributions totaling $53,000 that were not made public in keeping with the law. Similar payments, he said, had gone to all three major parties that in each case did not make full disclosure.

The whole affair is deeply embarrassing to Kohl, who could be forced out of government as a result.... It is self-evident that the Christian Democrats, as the dominant member of the ruling coalition, have a special obligation to clean their own house instead of indulging in futile attempts at a cover-up. If Kohl and his Christian Democrats shirk this responsibility, West German democracy — and the Western alliance of which it is a part — will be the losers.

The spreading scandal, as noted, encompasses the leadership of the Free Democratic Party, the junior member of the ruling coalition. Meanwhile, the senior Christian Democrats are reeling under the downfall of Rainer Barzel, considered the number two man in the country. Herr Barzel was president of the Bundestag, a position largely ceremonial, but one which symbolized the dignity and morality of the parliament itself. Here is a report from the November 7 INTERNATIONAL HERALD TRIBUNE:

Chancellor Helmut Kohl's coalition partners, the Free Democrats, have acknowledged receiving more than 6 million Deutsche marks (about $2 million) from an unknown source and are making a public appeal to the benefactor to reveal his identity. The party's embarrassing move came Monday after the gift was reported by several newspapers and at time when a growing number of West Germans appear ready to believe that many of their politicians are open to influence peddling....

Foreign Minister Hans-Dietrich Genscher, the Free Democrats' party leader, was to be questioned Thursday by the commission. Free Democratic officials acknowledged that the 6-mi11ion-mark contribution was received in December and that the source was listed as "unknown" in the party's records.... The revelation of the mysterious contribution followed severe losses in a series of local elections and came as the Free Democrats are being gradually replaced as the country's third party by the Greens, the new party of anti-nuclear militants and ecologists....

Christian Democratic leaders acknowledged receiving dramatic reports of dismay among the party faithful throughout the country last week when Rainer Barzel, one of the leading figures in the party was forced to resign as president of the Bundestag. He resigned after he was unable to convince the commission that there was no basis to accusations that he had received 1.7 million marks from Flick after he resigned [in 1973] the chairmanship of the Christian Democrats.... [His] resignation opened the way for Mr. Kohl's eventual bid for the chancellorship.

An earlier report in the INTERNATIONAL HERALD TRIBUNE (October 23rd) credited the discovery of at least the "Barzel Affair" portion of the widening scandal to the news weekly DER SPIEGEL, which has often acted as an unofficial watchdog of West German democracy:

The Barzel affair was first raised by the news weekly DER SPIEGEL.... The magazine hinted that the purpose of the payments by Flick was to induce Mr. Barzel to give up the position of Christian Democratic Union party chief in favor of Mr. Kohl, thus opening the way for Mr. Kohl to eventually try for the chancellorship. Mr. Kohl and Mr. Barzel have denied the allegation....

The magazine reported that Mr. Kohl's name repeatedly appeared on a list of "unofficial payments to the Christian Democratic Union" by Rudolf Diehl, who was Flick's chief accountant at the time. As quoted by the magazine, the entries on the purported lists did not say that the payments were made to Mr. Kohl but "because of" Mr. Kohl, apparently implying that they were made as goodwill gestures to him.

According to the magazine, Mr. Diehl's accounts also listed 950,000 DM in payments to foundations and other institutions "because of" Franz Josef Strauss, the premier of Bavaria, and a comparable amount to foundations supported by Foreign Minister Hans­ Dietrich Genscher. All the payments were in the late 1970s, the magazine claimed.

Just what is the Friedrich Flick conglomerate? Another INTERNATIONAL HERALD TRIBUNE article, this time in the October 30 issue, is headlined "Only Business’ for Germany's Flick Is the Business of Owning Businesses." The huge holding company, it is interesting to note, was founded by Friedrich Flick, a major bankroller of the Nazi party.

The Friedrich Flick group...is a wealthy, sprawling empire with interests in almost every major aspect of industry. With reported world revenue of nearly 10 billion Deutsche marks ($3.3 billion) and a workforce of 42,500, the giant holding company formally known as Friedrick Flick Industrieverwaltung KGaA is West Germany's largest family-held industrial enterprise.

But unlike Siemens AG, Daimler-Benz AG and other manufacturing stalwarts of the West German economy whose market power is visible daily through myriad products bearing their label, Flick has no business of its own other than the business of ownership. And it is this business — buying and selling stakes in industrial companies — that is the root of Flick's troubles and the accusations that it used bribes in the mid-1970s to elicit favorable government tax treatment....

Specifically, the company's tax-evasion imbroglio, dubbed the "Flick Affair," dates back to 1975 when it netted just under 1.9 billion DM from the sale of a 27 percent stake in Daimler-Benz to Deutsche Bank. State investigators say that in an effort to avoid having to pay large capital gains taxes on that profit, Flick's management, then [under former deputy chairman Eberhard] von Brauchitsch, bribed high-placed Bonn officials to obtain an 800-million-DM tax exemption....

Last year, Flick was ranked as the 26th-largest of all West German companies…. But the real potential of today's Flick group and its management is not to be gauged so much by its ranking on charts as it is by the breadth of its industrial activities, including tanks, paper, chemicals, machinery and steel....

While the day-to-day operations are run by [Hans Werner] Kolb and others out of company headquarters in Duesseldorf, the chairman, Friedrich Karl Flick, charts his company's broader course in the quiet of his private home outside Munich. Mr. Flick, 57, recently was listed as the second wealthiest person in Europe by Quick, a popular West German magazine that estimated his worth at 6 billion DM. He assumed full control at Flick in 1982, upon the death of his father, the group's founder, Friedrich Flick, who spent several years after World War II in Allied prisons after being convicted of bankrolling the Nazi party and employing slave labor at his factories.

One of Germany's most influential political analysts is Theo Sommer, an editor of the weekly newspaper DIE ZEIT. In the October 26 issue he wrote, in an article entitled "Buying and Being Bought," that the "Flick affair" is similar to the way the same company bribed its way in the corridors of power of the ill-fated, post World War I Weimar Republic. Inherent in Sommer's remarks is that an increasingly angry public, distraught with their democracy being destroyed by the democratic leaders themselves, may demand another leadership — one stronger and incorruptible.

The question is: Who is actually conjuring up the danger, that Bonn is becoming a Weimar Republic? Who is undermining the morals of the West German society? Who is to blame for the corruption of our political structure.... Such bestowing of gifts to parties and politicians for promoting their own business interests has become a tradition in this company; and here is the real connection to the Weimar Republic. In this way, Flick raked in the money back in [Chancellor] Bruening's time when he was successful in selling his Gelsenberg shares to the State during the world economic crisis. In the same manner, Flick's manager Ebarhard von Brauchitsch strove to gain influence in the 70s with well-spread payments....

This poorly thought out endeavor to corrupt State servants and leaders has been unprecedented in the history of the Federal Republic.... Such insensitivity is taking the breath away from our citizens who are concerned about our democracy. Doesn't anyone in the capital know how the people feel? "They have all gone crazy; they are all from the tribe of 'take'; they cut back the pocket money of the elderly and rake in two or three times as much for themselves; they are more concerned with getting their money instead of giving their service." These are typical remarks of sincere Democrats. Resentment is spreading; dangerous resentment....

If this supposition is not refuted, we will have to fear for Bonn's system.... It isn't the enemies who are ruining our democracy. Germany's democracy could very well be ruined by the Democrats themselves.

The NEW YORK TIMES top political analyst, Flora Lewis, came to some of the same conclusions in her October 27 dispatch from Bonn:

The West German government is in trouble. One respected commentator warns of the Weimar Republic, the ineffective democratic regime established after World War I that slid into chaos and collapsed, making way for Hitler. Another writes of banana republics.

A conservative politician says his constituents' mood evokes a Wagnerian Gotterdammerung [a catastrophic collapse of society). That, too, is an exaggeration, but also a disturbing sign that public confidence, which must underpin a sturdy democracy, is being eaten away by scandals about politics and money....

The train of revelations about shady deals is reminiscent of Watergate, in the sense that it keeps inching closer to the top. Opponents are trying to implicate Chancellor Kohl himself.... The greater problem is that all the major parties have been involved in payoffs and tax evasion charges that have filtered into public view over several years. The result is growing public disgust and disillusion with politicians in general. That is why commentators are fretting aloud about the future of German democracy....

The chancellor's junior coalition partners, the Free Democrats, have already been shaken by the Flick scandals. The party is melting away into impotence and insignificance. Opposition Social Democrats are deeply divided, essentially leaderless and increasingly irresponsible. The anti-military, often anti-U.S. left wing is growing — without offering any clear substitute program beyond a vague commitment to peace and better relations with the East.

The only beneficiaries of the decline of traditional parties are the Greens, who present themselves as the "alternative" to what is shown as a sleazy establishment system.... They have yet to decide whether they would deign to accept the responsibility of joining the government if they got the chance, and no one can foresee how they would use authority if they had it. But their hostility to the whole spectrum of politics is spreading among a public that does not necessarily support any of their specific causes. Attempts by Christian Democrats to charge them with Nazi-style disruption have boomeranged. The Greens' criticisms are more credible than the official denials.

The outlook is for continued erosion of political authority in three crucial state elections next year. Mr. Kohl has until 1987 to face the voters. This does not mean West Germany is about to fall apart, or make a sea change from allegiance to and cooperation with the West. Communism is discredited; even the far left disdains the Eastern system. It does mean that the stolid, physically reassuring figure of Chancellor Kohl stands on shifting ground, and there is no one in sight to bring the country back to firm self-confidence. The questions about the future of West Germany are getting bigger and hazier. The answers keep receding. A feeling of fragility is especially upsetting here, given the horrible past and the ambiguous issue of nationhood.

We'll try to keep everyone posted as more Flick affair revelations (Flick­ gate?) are made.

— Gene H. Hog berg, News Bureau