VZCZCXRO4851
PP RUEHAG RUEHDF RUEHLZ
DE RUEHFT #7910 3250909
ZNR UUUUU ZZH
P 210909Z NOV 06
FM AMCONSUL FRANKFURT
TO RUEHC/SECSTATE WASHDC PRIORITY 8575
INFO RUCNFRG/FRG COLLECTIVE PRIORITY

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