Corrupt German ex-minister took £1m bribes on arms sales

GERMANY’S former spy chief and junior Defence Minister confessed that he accepted bribes on arms sales to Saudi Arabia.

His trial on charges of tax avoidance, bribery and corruption is expected to implicate senior politicians and threatens to embarrass the political class during the general election campaign.

Ludwig-Holger Pfahls, 62, referring to a €1 million (£665,000) backhander for his help in an arms deal, said: “I really cannot explain how this slip-up came to pass.”

A further €500,000 was paid for his help in the sale of tanks to Saudi Arabia in the 1990s. “I would like to stress that I would have supported these deals in any case,” he said. He claimed in court that the bribes were transferred to his account by Karl-Heinz Schreiber, an arms dealer whose extradition is sought from Canada.

Herr Pfahls’s defence team has asked to call as witnesses Helmut Kohl, the former Chancellor, and Wolfgang Schäuble, the former head of the Christian Democrat parliamentary group. They will be asked to testify about the approval of the Saudi deal. Both men play important roles in the election campaign of Angela Merkel, the Christian Democrat leader who is well placed to topple Gerhard Schröder, the Chancellor, in September.

The trial threatens to open a debate on alleged corruption at the heart of Germany’s conservative political elite. Some of the profits from arms deals in the early 1990s flowed back to Germany as party donations to the Christian Democrats.

Herr Pfahls was a member of the Bavarian Christian Social Union, the sister party of the Christian Democrats. Thanks to the patronage of Franz Josef Strauss, then the Bavarian prime minister, Herr Pfahls became chief of the Office for the Protection of the Constitution — the German equivalent of MI5 — in his 40s.

He was promoted to junior Minister in the Defence Ministry because Herr Strauss wanted an ally in place to ensure a regular flow of contracts for the Bavarian-based arms industry.

After leaving the Defence Ministry, Herr Pfahls worked for a while as South-East Asia representative of DaimlerChrysler. Then, tipped off that prosecutors were closing in on him, he disappeared.

On July 3, 1999, Herr Pfahls flew to Hong Kong where he had arranged to surrender to German police. Somewhere in the Hong Kong transit area he disappeared. Detectives later found that he had booked seven simultaneous flights to different destinations and had become virtually untraceable.

There were sightings in Bali, Beijing and London. Former security service colleagues apparently spread stories that he had died in Asia. Finally, tired and running out of money, Herr Pfahls allowed himself to be caught in France last year.

In return for a full confession, Judge Maximillian Hofmeister is willing to hand down a sentence of only about 27 months in jail, much of which has been served on remand.

But the question is how far Herr Pfahls is willing to go: he has so far admitted only to the bribes, which are documented and difficult to deny. The arms pay-off network, however, ran very deep and, if newspaper reports are to be believed, could implicate senior politicians.

In Times online June 29,2005