Locked up

A court in the southern German city of Augsburg has sentenced German-Canadian arms dealer Karlheinz Schreiber to eight years in prison for tax evasion. The 76-year-old Schreiber was found guilty of failing to report money he received as kickbacks from armoured car sales to Saudi Arabia, helicopters and Airbus aircraft to Canada, and Airbus aircraft to Thailand.

Prosecutors say he evaded more than 7.5 million euros ($9.9 million) in taxes between 1988 and 1993, as well as making payments to secure government approval for the sale of armoured cars to Saudi Arabia.

Chief prosecutor Marcus Paintinger had originally requested that Schreiber be put in jail for nine and a half years. He justified this by saying that Schreiber had shown no regret for his actions and had failed to pay his outstanding tax bill.

"The only things counting in his favour are that he does not have a criminal record and that he is 76 years old," said Paintinger.

Shadowy deals

Schreiber was arrested in Canada in 1999 and fought for 10 years against extradition to Germany. He was accused of playing a key role in a funding affair which damaged the Christian Democratic Union during the 1990's and tarnished the legacy of former German Chancellor Helmut Kohl.

Schreiber was thought to have made an undeclared cash donation of one million deutschmarks (500,000 euros) to the Christian Democrats (CDU). The most serious allegation against the CDU was that the donations from Schreiber and other anonymous donors were kept secret because they influenced key government decisions.

Kohl had refused to name the other donors, saying they were "German citizens who had nothing to do with government decisions or policy in any sector," a move which put the CDU into a deep crisis.

Between 1993 and 1998, Kohl was found to have received cash donations nearing 1 million euros. In fact, the scandal helped to place Germany's current chancellor Angela Merkel at the head of the CDU.

In 1999, she wrote an editorial in the German daily Frankfurter Allgemeine Zeitung, calling for Kohl, her former mentor, to come clean over the funding scandal. Merkel's initiative to challenge Kohl increased her popularity and she was elected head of the CDU in 2000.

A tale of two countries

Schreiber's business deals with former Canadian Prime Minister Brian Mulroney also put both men at the center of controversy in Canada in recent years.

Schreiber alleged that he gave Mulroney cash payments totaling about 226,000 euros in his final days as prime minister. The deal was for Mulroney to lobby for the construction of an armored vehicle factory in Nova Scotia.

Mulroney has said that he did accept cash from Schreiber, but it was both less than the amount Schreiber declared and was after he had left office in 1993.

mk/Reuters/AFP
Editor: Chuck Penfold