Prison for Illegal German Donors

In an effort to clean up the image of German politics in the wake of a spate of embarrassing slush fund scandals, the German Parliament approved legislation on Friday that tightens party financing rules and introduces jail terms for those who break them.

Under the new law – which will take effect in July – cash donations to parties will be limited to 1,000 euro, while donors giving over10,000 euro must be named.

Donations of over 50,000 euro must be reported to the President of the federal parliament.

Those who improperly declare party income will face jail terms of up to three years.

The law also specifically forbids parties from accepting money from a donor hoping to win political or economic favour.

"The demand for transparency has been fulfilled as never before," Inge Wettig-Danielmeier, treasurer for the ruling Social Democrats, told parliament

The law was approved by four of the five parties represented in the lower house, with the former communist party, the PDS voting against it, saying the proposed legislation was merely scratching at the surface of the problem.

The blow was dealt by Kohl

In recent months Chancellor Gerhard Schröder’s SPD (Social Democratic Party) has suffered much loss of face after local officials of his ruling party in Cologne admitted last month of receiving 424,000 euro in kickbacks linked to the building of a local waste incineration plant.

The SPD has insisted that the funding irregularities are confined to local branches and has fired some members involved in the scandal and promised a speedy investigation.

The scandal has since become a hotly debated national affair with some of Schröder’s closes aides facing awkward questions of how much he knew of the affair.

It spells bad news for the Chancellor’s party ahead of general elections in September.

Germany’s repute as a politically clean country took a severe battering two years ago when the opposition Christian Democrats were thrown into disarray after former Chancellor Helmut Kohl admitted receiving some $ 1 million in undeclared donations.

Kohl, who ruled for 16 years till 1998, still refuses to name the donors, but avoided a damning criminal fraud probe when he paid a penalty of $ 135,000.

Law doesn't do enough

But the present proposed legislation has come in for much criticism from sceptical members of the PDS as well as from Transparency International, the independent watchdog body that compiles an annual corruption ranking.

In the body’s 2001 Corruption Perceptions Index, Germany ranked 20th of 91 nations – it slipped down from 14th in 1999.

Transparency chairman Dieter Biallas said the limits on donations were still too high and regretted that the law did not ban individual politicians from receiving funds.

In an interview with Reuters he said, "The law does not draw the consequences that were to be expected after the recent donations scandals."