German spy chief took arms bribes

Roger Boyes, Berlin June 30, 2005

GERMANY'S former spy chief and junior defence minister has confessed to accepting 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 ahead of September's general election.

Ludwig-Holger Pfahls, 62, referring to a E1million ($1.58million) backhander for his help in an arms deal, said in court: "I really cannot explain how this slip-up came to pass."

A further E500,000 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.

Mr Pfahls's defence team has asked to call as witnesses Helmut Kohl, the former chancellor, and Wolfgang Schauble, 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 Chancellor Gerhard Schroeder in September.

The trial threatens to open a debate on alleged corruption at the heart of Germany's conservative political elite.

Mr 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, Mr 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 Mr Strauss wanted an ally in place to ensure a regular flow of contracts for the Bavarian-based arms industry.

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 Mr 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 ran very deep and could implicate senior politicians.

The Times

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