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German-Canadian arms dealer Karlheinz Schreiber waves as he is transported from court back to Augsburg's prison, in southern Germany on August 4, 2009. (OLIVER LANG/OLIVER LANG/Getty)
German-Canadian arms dealer Karlheinz Schreiber waves as he is transported from court back to Augsburg's prison, in southern Germany on August 4, 2009. (OLIVER LANG/OLIVER LANG/Getty)

Is Karlheinz Schreiber finally out of secrets? Add to ...

The German newspapers call it "the Schreiber effect." It happens to conservative parties just as they are feeling confident about their election odds: Suddenly, a strange little German bagman appears and starts telling stories about the party's most beloved leader from two decades before, stories that cast a decidedly seedy light on the party.

For the past several years, this has been the fate of Canada's Conservatives. As of Tuesday morning, it was time for Germany's ruling Christian Democrats to feel the pain. Karlheinz Schreiber, lobbyist, arms dealer, fundraiser and political nightmare on legs, is back on Bavarian soil and promising to spill the beans.

Mr. Schreiber's deportation to Germany late Monday night, after he exhausted years of appeals in Canadian courts, has sent him into a country in the midst of an election campaign that the Christian Democrats, led by Chancellor Angela Merkel in an awkward coalition with the left-wing Social Democrats, had hoped to win neatly.

And if Brian Mulroney's envelopes containing hundreds of thousands in cash were Mr. Schreiber's party-wrecking bombshell in Canada, he promised to unleash something worse in Germany. After all, he is there to face trial for having paid millions of dollars in secret cash payments to the administration of Helmut Kohl, the Christian Democrat chancellor of Germany for 16 years in the 1980s and 1990s.

The German-Canadian businessman faces charges of tax evasion, bribery and fraud in connection with allegations that top officials from the Christian Democrats received millions for party slush funds delivered in cash-filled briefcases handed over in parking lots. After arriving at a jail in the Bavarian city of Augsburg, Mr. Schreiber was denied bail. He is contesting all the charges.

The timing couldn't be worse: With an election pending on Sept. 27, and being fought over issues of economic honesty amid the worldwide banking and credit crisis, the last thing Christian Democrats want is to be reminded of industrial-scale bribe-taking scandals in their past.

In fact, there's speculation in Germany that Mr. Schreiber's sudden deportation from Canada to Germany, which took place on the holiday Monday with unusual speed, was orchestrated by the Social Democrats in an effort to hurt their coalition partners in the election.

"It is embarrassing to have these things coming up right before an election," Oliver Schrom, the German writer who helped expose the bribe-making history of Mr. Schreiber in the 1990s, said in an interview from his Hamburg office. "And I'm certain it was deliberate - remember, the Justice Ministry is controlled by the Social Democrats."

To make matters worse, Mr. Schreiber has repeatedly suggested that he has more dark secrets to reveal should he find himself under pressure in court, just as he embarrassed his former friend Mr. Mulroney in an apparent effort to delay his deportation from Canada.

But Ms. Merkel, the Christian Democrat Chancellor, does not appear to be getting nervous. Her party commands a large lead in the polls - 36 per cent to the Social Democrats' 24 per cent - and hardly anyone in Germany believes it will be dented by Mr. Schrieber's sudden reappearance.

"It is not going to have any effect, none at all," Mr. Schrom said. "He does not have anything damaging to say, I am completely sure of that."

As with the allegations surrounding Mr. Mulroney, the ones involving the Christian Democrats have been around for a long time. They first broke in 1999, and they were damaging enough then to force Mr. Kohl from the chairmanship of the party. (His final term as chancellor had ended the previous year.)

Mr. Kohl's ouster from the party in 1999 was orchestrated by none other than Ms. Merkel. As a then-obscure party official, she wrote a newspaper article denouncing the apparent corruption of her former mentor, and led a drive to renew the party. This created a rift between the party's Kohl-era old guard and its dominant Merkel faction, but it also led Ms. Merkel to her current leadership.

Her government contains only one scandal-plagued Kohl-era figure, Interior Minister Wolfgang Schauble, who received large cash payments from Mr. Schreiber in 1994. But that scandal has been fully aired, and few expect it to create new embarrassments.

So today's Christian Democrats are almost as distinct from the party of Mr. Kohl as Stephen Harper's Conservatives are from Mr. Mulroney's erstwhile Progressive Conservatives. If Mr. Schreiber is going to have an effect on the election, he will have to make some truly surprising allegations from his Bavarian cell.

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