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Funds scandal: Kohl denies deals with Mitterrand

BERLIN: Former chancellor Helmut Kohl, fighting for his honour in Germany's slush fund scandal, denied on Sunday that late French president Francois Mitterrand sank money into his 1994 election bid at his behest.

Kohl's reputation as a statesman, built by peacefully reunifying Germany, has crashed amid disclosures that he managed a web of secret cash gifts for his Christian Democrats (CDU) from financiers he refuses to name.

A decade ago Kohl was basking in acclaim as he unerringly negotiated political and strategic minefields to unite Germany after the collapse of communism.

Now he is under criminal investigation and the CDU he led for 25 years until his 1998 election defeat is plunging in the opinion polls. Kohl has laid low for weeks but resurfaced briefly to defend himself in a Sunday newspaper interview.

He flatly denied French and German media reports that Mitterrand relayed millions into CDU campaign coffers as part of a $2.6 billion takeover of an east German oil refinery by the state-owned French energy giant Elf Aquitaine.

"Accusations that Mitterrand arranged for 30 million marks to be put into my election campaign in connection with the Leuna refinery are absurd and a lie," Kohl told the newspaper Welt am Sonntag.

"Mitterrand and I at no time talked about money in connection with elections or parties."

Elf agreed in 1992 to buy the decaying Leuna refinery under pressure from Kohl who could not find a German investor and used his friendship with Mitterrand to push the Elf deal through.

Kohl said Mitterrand supported Elf's takeover for the same reasons he did -- to solidify post-war German-French ties in a reunited Europe and help modernise the economy in Germany's depressed, formerly communist east.

Newspapers have said former Elf executives and middlemen paid hefty under-the-table "commissions" to CDU officials in connection with the 1992 sale, in part because Mitterrand, who needed Kohl to implement European economic union, feared the conservative chancellor might lose his 1994 election.

Former Elf chairman Philippe Jaffre has confirmed it paid 256 million francs ($39 million) in commissions for Leuna. The money went through a company based in tax haven Liechtenstein.

Where the money went from there remains a mystery but some German media have cited indications that it ended up in CDU campaign chests or in the pockets of senior party officials.

Kohl says the $1 million in undeclared contributions he has admitted to collecting went exclusively for party work in east Germany and he has denied running a government for sale.

Sleaze allegations have also hit the Social Democrats who ousted Kohl in 1998. President Johannes Rau and cabinet ministers in his home state of North Rhine-Westphalia are battling reports that they used executive jets for private ends at taxpayer expense.

Chancellor Gerhard Schroeder, aware that the funding and flight affairs could erode trust in German democracy, took the unusual step of writing commentaries for major foreign newspapers to stress that Germany was not going off the rails.

"The government has not for a moment been distracted from its political programme by the public fuss about the opposition party's affairs," he wrote in Saturday's London Financial Times. "A crisis in one political party is not a crisis of the state."-Reuters