Hesse/Roland Koch in Party Financing "Blackmail" Scandal

UNCLAS FRANKFURT 007910 SIPDIS DEPARTMENT FOR EUR/AGS SIPDIS SENSITIVE E.O. 12958: N/A TAGS: PGOV PINR TBIO GM SUBJECT: Hesse/Roland Koch in Party Financing "Blackmail" Scandal REF: Berlin 3333 Sensitive but unclassified; not for Internet distribution. ¶1. (SBU) SUMMARY: A week before Hesse Minister-President Roland Koch (CDU/Christian Democrats) expects to be elected CDU national deputy chairman, he finds himself entangled in a scandal over taxpayer-funded campaign financing. Koch is accused of using public financing to entice a competing party not to enter 2008 state elections. Koch's culpability is unclear, but the scandal could "stick" nonetheless, due to his role in the CDU's major financing improprieties of the 1990s. END SUMMARY. -------------- Murky Legal Foundations -------------- ¶2. (U) The Freie Waehlergemeinschaft/FW (Free Voters Party),an independent party in Hesse currently represented only on the local level, has accused Koch of "bribing" it into not fielding candidates for the next Hesse state elections. The controversy revolves around a meeting between FW leadership, Koch, and Hesse Interior Minister Volker Bouffier in April 2006 (several days after Hesse local elections in which the FW polled a strong five percent). FW Chairman Thomas Braun -- an old CDU hand and former friend of Koch -- claims Koch and Bouffier offered to enact a bill that to retroactively reimburse the FW (and any other local movements winning at least three percent of the vote) for the March 2006 communal elections, at the rate of one Euro per vote received. Koch and Bouffier allegedly said they would only enact the bill if the FW agreed not to campaign in state elections set for January 27, 2008. ¶3. (U) Hesse SPD and Greens have seized on the issue as one of "blackmail" and using "taxpayer money" to eliminate competition to the CDU. FW voters stem largely from Koch's base, namely the conservative middle class. The opposition will likely succeed in launching an investigation into the affair in the Landtag (state parliament). ¶4. (SBU) Following weeks of silence on the issue, Koch is now defending himself vigorously. He points out that the new bill was never intended to compensate state-level parties and that the FW itself threatened repeatedly to campaign at the state level if it did not receive public funding for local campaigns. (NOTE: in any case, proposed funding would only apply to parties who do not run on the state level, since there is a separate funding mechanism for those elections. END NOTE). -------------- ... But Real Damage to Koch, CDU -------------- ¶5. (SBU) COMMENT: The scandal may have an unclear legal basis, but it centers on Koch's greatest political liability: his spotty credibility following the CDU illegal funding scandal of 1999-2000 (which nearly ended his political career at the time). It also represents a rare chance for Hesse's typically weak opposition to gain ground from the daily stream of embarrassing headlines ("Koch Can't Remember," "Koch Denies Blackmail" and so on). ¶6. (SBU) The stakes are high for Hesse state elections in January 2008: even if Koch remains in office, the CDU could lose its absolute majority in the state, giving the FDP or another coalition partner a veto over Hesse's five votes in the Bundesrat. While state elections remain a year off -- and the Hesse CDU is known for its solidarity in support of Koch -- the affair comes shortly before the CDU annual convention in Dresden November 27 (reftel), potentially affecting Koch's near-term prospects within the national party. END COMMENT. ¶7. This cable was coordinated with Embassy Berlin. POWELL