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Campaign Finance Scandal Prompts Czech Christian Democrat Party To Leave Ruling Coalition in

November 29, 1997

Campaign Finance Scandal Prompts Czech Christian Democrat Party To Leave Ruling Coalition in Move That May Doom the GovernmentBy ONDREJ HEJMA

PRAGUE, Czech Republic (AP) _ A campaign finance scandal that has exposed the seamier side of the Czech Republic’s shift to a market economy is threatening to collapse the country’s ruling coalition.

The government seemed doomed Friday night when Vice Premier Josef Lux announced his Christian Democrat party was leaving the ruling coalition because of the scandal. Lux planned to discuss the matter with President Vaclav Havel.

Fighting for his political life, Prime Minister Vaclav Klaus, the focus of the controversy, was expected to hold a vote of confidence today within his own Civil Democratic party. Klaus has little support because two of his party’s three vice chairmen already have called for his resignation.

Klaus has denied knowing until recently that a prominent businessman contributed $220,000 to his party in late 1995.

The scandal over the donation has revealed the shady side of the Czech transition to capitalism. In this case, the businessman, former tennis star Milan Srejber, had acquired a large stake in a steel manufacturer privatized by Klaus’ government just before making the political contribution.

Two influential members of Klaus’ party, Ivan Pilip and Jan Ruml, said the prime minister’s political troubles were eroding the party’s credibility.

In an interview Friday with Czech television, Pilip called the situation ``unbearable.″

But Klaus appeared determined Friday not to step down without a fight.

``I have been under similar pressure several times already and I do not intend to give in,″ he said.

Others predicted it was only a matter of time before Klaus would resign.

``This country is going to have a new government in about a week,″ Interior Minister Jindrich Vodicka, an ally of the prime minister, told Nova TV Friday.

He said he could see a new government of the same three coalition parties _ the Civic Democratic Party, Christian Democrats and the Civic Democratic Alliance _ but without Klaus.

The finance scandal, largely ignored for 19 months, attracted attention after Foreign Minister Josef Zieleniec resigned last month. He cited secrecy surrounding party financing as one reason for quitting.

Earlier this week, Klaus identified Srejber as the anonymous contributor of $220,000, saying Srejber hid his true identity for fear of being accused of seeking favors from the government due to his involvement in many of the country’s privatization deals.

Zieleniec said Thursday the party’s top officials knew all along Srejber was behind the money, a charge Klaus has repeatedly denied.

Other parties have been embroiled in campaign finance scandals involving bigger sums. But the current scandal appears aimed at ousting Klaus, who has come under escalating criticism since being forced to form a minority government after losing June 1996 elections.