2 leaders of former Communist Party in E. Germany held for fund diversion

October 27, 1990|By Ian Johnson | Ian Johnson,Special to The Sun

BERLIN -- The former East German Communist Party sank into its deepest crisis yesterday when two leading members were arrested for having illegally sent $72 million in party funds abroad.

Party leader Gregor Gysi, who had managed to rejuvenate the party after the Communist state collapsed last year, said he accepted full responsibility for the scandal and will offer to resign today. Although the offer probably will not be accepted, the affair has again tarnished the party's image and left it with a bleak future.

Looking tired and speaking haltingly, the usually vivacious Mr. Gysi admitted that his treasurer, Wolfgang Pohl, and an assistant had secretly sent 107 million marks to bank accounts in Belgium and Norway of a Soviet company called Putnik. The company is believed by Berlin police officials to be a front for the Communist Party of the Soviet Union.

"As far as these two comrades are concerned, it was absolutely not a question of personal gain," Mr. Gysi said.

Mr. Pohl said he had sent the money abroad to secure the party's future operating funds. In the near future the party is likely to be stripped of much of its wealth, which it accumulated in sometimes questionable fashion over the 40 years it ruled East Germany. Mr. Pohl said that his party owed the Soviet Communist Party money and that this was why the funds were transferred.

But a moment later he admitted he was trying to stash money away from German legal officials.

"It was done to save party property from confiscation. My only motive was to help the party," Mr. Pohl said.

Mr. Pohl then announced his resignation. Ten minutes later, as he left the party's headquarters, he was arrested by Berlin police on charges of illegal financial transactions.

Yesterday's events were the culmination of a weeklong investigation by Berlin police into the finances of the former Communist Party, now

renamed the Party of Democratic Socialism. Last week the PDS headquarters were searched by police without a warrant, and the parliamentary immunity of Mr. Gysi's office was alleged to have been violated.

But throughout the week Berlin Interior Sen. Erich Paetzold maintained that PDS finances weren't in order, and on Tuesday, Berlin police went to the city of Halle and searched more offices. Mr. Gysi stoutly defended his party's integrity and charged Mr. Paetzold with wanting to ruin the party's reputation.

Even if Mr. Gysi emerges personally unscathed, it seems unlikely that he will be able to continue to claim that his party has made a clean break with its past. After East Germany became a democracy this spring, the party managed to establish itself as the defender of social security and became the country's third largest party.

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