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Lambsdorff Convicted of Tax Evasion in Flick Affair

February 16, 1987

BONN, West Germany (AP) _ A court Monday convicted former Economics Minister Otto Lambsdorff of tax evasion and fined him $100,000, capping West Germany’s longest-running political scandal, the ″Flick affair.″

The scandal has distracted Chancellor Helmut Kohl’s government since 1984, when Lambsdorff resigned over the accusations and the chancellor himself acknowledged taking cash-stuffed envelopes from the Flick industrial empire.

Lambsdorff was convicted of helping Flick and other companies dodge $861,000 in taxes by ″laundering″ their campaign donations.

The outcome was ″more or less what I had expected,″ Lambsdorff told reporters after the court session. He had no further comment.

The three-judge panel, headed by Hans-Henning Buchholz, also convicted Lambsdorff’s co-defendants, Hans Friderichs and Eberhard von Brauchitsch, on tax evasion charges.

Friderichs, another former economics minister, was fined $35,000.

Brauchitsch, former manager of the Flick holding company, was fined $305,555 and given a suspended two-year prison sentence.

All three were acquitted of the more serious charges of corruption and bribery. They had pleaded innocent to all charges when the trial began 17 months ago.

Otto Schily, a Greens party lawmaker who played a major role in a parliamentary probe of Flick, said he thought the sentences were ″extremely mild.″

Buchholz said prosecutors did not prove charges that Lambsdorff and Friderichs gave Flick massive tax breaks in exchange for bribes from Brauchitsch. But Buchholz said ″suspicion″ about the matter remained.

The prosecution said it would appeal. The defense attorneys did not say whether they would file an appeal.

The trial was the most important to arise from the ″Flick Affair″ involving allegations of influence-peddling by what was then the country’s largest privately owned industrial concern. In 1985 the Duesseldorf-based Flick empire was sold to Deutsche Bank.

The conviction may cloud Lambsdorff’s plans for a political comeback, although legally he can still accept a Cabinet post. Lambsdorff is a top- ranking member of the business-oriented Free Democratic Party which governs in coalition with Kohl’s Christian Democrats.

Lambsdorff said last month a tax evasion conviction would not stop him from resuming political life. He recently was re-elected to Parliament.

Lambsdorff ran the Economics Ministry from 1977 to 1984, when he resigned over the Flick charges.

Buchholz said there continued to be a ″not inconsiderable suspicion″ about the corruption and bribery charges.

Prosecutors alleged Brauchitsch paid Lambsdorff and Friderichs $75,000 and $208,300 respectively for $444 million in tax breaks for Flick.

″But even if the payments had been made, that would not in itself have proved the charges of corruption and bribery,″ Buchholz said.

Lambsdorff has said he did not believe the elaborate ″money-laundering″ schemes he was accused of were illegal under West Germany’s complicated political donations laws at the time.

No other high-ranking public figure was charged in the affair.

But Rainer Barzel, the former president of the Bundestag, the lower house of Parliament, resigned in 1984 after allegations he had accepted money from Flick.

In November 1984, Kohl told a parliamentary investigative committee he had accepted envelopes with cash totaling $52,000 from Flick. He said he had passed them on to his party.

The committee probed revelations that Flick had distributed up to $30 million across the spectrum of West German politics while seeking the massive tax breaks in the 1970s.

The majority on the committee concluded, however, that the country’s politicians had not been ″bought.″

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