State demands nine years for Canadian-German arms dealer

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German prosecutors on Monday demanded more than nine years in prison for an arms dealer extradited from Canada over a party funding scandal that helped catapult Chancellor Angela Merkel to power.

State prosecutors called on the court in the southern city of Augsburg to hand down a jail sentence of nine and a half years to Karlheinz Schreiber, 76, who holds dual Canadian and German citizenship.

The defence pleaded for his acquittal on charges of tax evasion and obtaining illegal advantage. A verdict is expected Wednesday.

Prosecutors say he withheld more than 7.5 million euros (9.9 billion dollars) in taxes between 1988 and 1993 and made payments to ensure government approval for the sale of armoured cars to Saudi Arabia.

He is also accused of playing a key role in a sprawling slush-fund affair that rocked the Christian Democratic Union (CDU) party in the 1990s and tarnished the legacy of former chancellor Helmut Kohl.

In demanding a surprisingly tough sentence, chief prosecutor Marcus Paintinger said Schreiber had shown no remorse for his actions and failed to this day to pay his outstanding tax bill.

"The only things counting in his favour are that he does not have a criminal record and that he is 76 years old," he said.

Schreiber is believed to have made an undeclared one-million-mark (500,000-euro) cash donation to the CDU, prompting a political scandal that claimed the scalp of then party head, Wolfgang Schaeuble, now finance minister.

During the affair, Merkel wrote an editorial in the Frankfurter Allgemeine Zeitung daily in 1999 calling for Kohl to come clean over the funding scandal and for the party to break with its murky past.

Merkel's willingness to challenge her former mentor during the scandal rapidly inflated her meagre profile and she was elected head of the CDU the following year.

The verdict will bring back bitter memories for the party only four days before a key regional election that could cost Merkel's coalition its majority in the Bundesrat, Germany's upper house of parliament.

© 2010 AFP

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