Hitting the Road

Kohl tries a change of scene

The plea for special treatment came from a staunch conservative friend and West European ally, so President Reagan was happy to comply. He made a date in his appointment calendar, and this week the White House will roll out its best red carpet for West German Chancellor Helmut Kohl. The one-day working visit will be used by Kohl to fill Reagan in on the latest Franco-German efforts to promote West European political unity and on Bonn's views of East-West relations. But that does not fully explain the Chancellor's eagerness to become the first major West European leader to visit the President since his reelection. Another Kohl motive: to get a breather from the so-called Flick affair, a 33-month probe into alleged political payoffs that has become one of the worst political scandals in West German history.

The name refers to Friedrich Flick Industrieverwaltung KGaA, a Duesseldorf-based firm that is one of the world's largest industrial holding companies. A $3.4 billion concern, Flick has substantial interests in steel, chemicals and banking. It is now run by Friedrich Karl Flick, 57, the youngest and only living son of Friedrich Flick, who began the business in 1915.

In Bonn, the Flick group is known also for dispensing large amounts of under-the-table money to members of West Germany's established political parties. In all, the company is said to have paid some $8.3 million during the 1970s, some of it allegedly in return for political favors. The disclosure of those alleged payments, which began after a tax-related seizure of company documents in 1981, is now reverberating through the West German political system, seriously undermining the effectiveness and perhaps the future of Kohl's coalition government.

The toll of Flick victims has been growing steadily. In June, Kohl's Economics Minister, Otto Graf Lambsdorff, resigned amid accusations that he had accepted $50,000 in 1979 and 1980 in exchange for allowing the Flick firm generous tax writeoffs. Lambsdorff faces trial next January on criminal charges. In October, Rainer Barzel, president of the Bundestag and a senior member of Kohl's Christian Democratic Union, also stepped down. The weekly Der Spiegel published a Bonn prosecutor's report that the Flick company had paid more than $700,000 to a Frankfurt law firm, and that the firm had paid the same sum to Barzel. The prosecutor drew no connection between the two fees, but Der Spiegel concluded from the payments' timing that the Flick group had decided to use Barzel, then chairman of the Christian Democratic Union, as a consultant in 1973 after he agreed to step down as party leader in favor of Kohl.

Early in November it was the Chancellor's turn to feel the heat. During nearly seven hours of testimony before a special parliamentary committee, Kohl admitted that from 1977 to 1980, when he was leader of the opposition, a Flick executive had repeatedly come to his office to give him envelopes stuffed with cash. Kohl said that he had passed along all the money, which totaled $53,000, to the party. The Chancellor nearly roared his denials to Bundestag Deputy Otto Schily, a member of the environmentalist Greens party, as Schily asked whether Kohl had ever inquired what one of the envelopes contained, or whether he had counted the money. Fumed Kohl: "I see no sense in these questions."

But the Chancellor could offer no explanation for Flick records showing that the firm had paid him more than $200,000 from 1974 to 1980. Nor could he explain other Flick documents indicating that Kohl had offered his party's support for a multimillion-dollar tax break given to the company between 1976 and 1980 by the Social Democratic government of former Chancellor Helmut Schmidt.

The payments, Kohl insisted, were "nothing unusual" because "all political parties have violated the law." Indeed, West Germany's stringent legislation governing political parties, which was finally altered last year, virtually mandated subterfuge in political financing. Under the old law, individuals and business firms were allowed only insignificant tax deductions for political donations. Furthermore, the country's political parties were not classified as tax-deductible beneficiaries for the purpose of such gifts. Accordingly, donors channeled money to recognized nonprofit organizations, such as charities, thus laundering funds that were then passed to the parties. The limits on tax-deductible political contributions have since been substantially raised, and political parties are now classified as tax-deductible organizations.

Kohl's defense managed to slow some of the momentum of the Flick affair, but not much. After the Chancellor returns from Washington and a Dec. 3 summit meeting of West European leaders in Dublin, the special parliamentary committee is expected to resume its cross-examination of Franz-Josef Strauss, the Christian Social Union leader who is the Chancellor's major coalition partner. Last week Strauss angrily denounced the hearings as "a forum for political combat."

The latest public opinion polls show that Kohl's coalition has only 47% support among voters, compared with the 55.7% it gained in the 1983 national elections. The only winners so far in the scandal have been the idiosyncratic Greens, who have increased their popular support from 5.6% in 1983 to 11%. Some Kohl opponents are even predicting that the Chancellor may eventually be brought down by the Flick affair. That still seems highly unlikely. The important damage caused by the scandal so far is that it has overshadowed the Bundestag's other priorities and eroded public confidence in West Germany's political institutions.