Chancellor Gerhard Schroeder's Social Democrats in Cologne have admitted secretly taking donations in a case linked to a bribery investigation involving local firms.
Bribery scandal threatens Germany's "clean" reputation
The atmosphere is tense at the SPD headquarters in Berlin. There is hardly a question that doesn’t touch on the subject of party funding, however tentatively.
The party is sinking further into scandal because a local party leader admitted taking more money in suspect donations than previously thought, and the revelations are sure to have implications on a national level.
Prosecutors in Cologne said the leader, Norbert Ruether, who has resigned as head of the party in the Cologne city council, told them €424,000 ($374,000) in improperly declared donations flowed into local party coffers. The figure was previously thought to be €255,000.
The SPD is trying to limit the fallout by promising a rigorous investigation.
But the opposition is making a meal of it, hoping that it will overshadow their own problems with the funding irregularities involving former Chancellor Helmut Kohl that threw the conservatives into turmoil two years ago.
The SPD has said the Cologne scandal does not involve the national party and that the two cases therefore cannot be compared.
But the case has led to concern that corruption is rife in Germany and that things aren’t the way they used to be.
"Germany is on the way to becoming a banana republic," wrote the Berlin daily Tagesspiegel.
Last year, sleaze allegations concerning the opposition, surrounding losses at state-owned Bankgesellschaft Berlin AG brought down the city government in the German capital.
Trailing the conservatives ahead of the September elections, the SPD is at pains to insist the funding scandal is restricted to the party’s local organisation in Cologne. But it has implications for the party at national level.
Uncomfortabe for Schröder in an election year.