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German firms strategically donate money to political parties in small sums to pass under the radar of the country's lax party donations laws, a DW investigation has shown.

Insurance giants and major industry associations spread their donations to parties out over a year – whether it's campaign season or not – or pass money through subsidiary companies, so that they can donate to their favorite parties. The chief beneficiary often turns out to be Chancellor Angela Merkel's Christian Democratic Union (CDU).

Annette Sawatzki of the transparency campaign group LobbyControl, which recently released its own database of party donations, said there was certainly something "systematic" about how companies evade the disclosure threshold and yet still manage to donate six-figure sums to single parties every year. Though directly affecting party policies is illegal, transparency campaigners have often called out Germany's soft laws as an invitation for companies to exert influence unseen. The figures also make clear that parties with pro-business policies, such as opposing the minimum wage, receive the most financial support from industry associations.

Donations make up an average of 18 percent of the income of German political parties – as opposed to 50 percent in the United States – the biggest of which, the CDU and the Social Democratic Party (SPD), operate on a yearly income of between 150 and 165 million euros ($180 and $200 million).

German donation laws make it easy for major contributors to transfer a lot of money without much scrutiny. While parties must immediately report all donations of over 50,000 euros to Germany's lower house of parliament, or Bundestag, which publishes the information on its website, any individual contributions of between 10,000 and 50,000 euros are not disclosed until 18 months later, when each party's accounts are published. As for donations of less than 10,000 euros: Parties are under no obligation to disclose the donors at all.

Other countries have much lower disclosure thresholds. In the United States, the identity of any donor giving more than $200 directly to a party or candidate must be disclosed.

German companies are not slow to exploit the legal loopholes, by splitting donations and giving many times more money to political parties than is revealed to the public – at least at first. Since the last election year, 2013, all of Germany's major parties have received sums amounting to over 50,000 euros per year that have not come to light until much later – which means companies and wealthy individuals can easily hide any political influence.

Parceling up the cash

One of the most significant examples is the major financial consultancy Deutsche Vermögensberatung Holding, which, along with its subsidiaries (Deutsche Vermögensberatung AG, UBG Unternehmensberatung & Betreuung GmbH and Allfinanz), donated 403,000 euros to the CDU in 2013 alone. But the money did not have to be declared as a "major donation," even though it amounted to over eight times the 50,000-euro threshold, because it was split up in smaller parcels and distributed via different subsidiaries.

The Deutsche Vermögensberatung group is the second biggest donor in German politics, contributing a total of 1.4 million euros to various major parties since 2013. Major donors often justify donating to the biggest parties as a democratic duty – though the socialist Left party, the third largest party currently in the Bundestag, receives by far the least in major donations, much less than the pro-business FDP, which was not represented in the current Bundestag at all.

The Deutsche Vermögensberatung group splits these donations among its various parts: Party accounts for 2013 to 2015 show that Deutsche Vermögensberatung Holding donated 130,000 euros to all parties, Deutsche Vermögensberatung AG (DVAG) donated 689,500 euros, Allfinanz donated 260,000 euros, and UBG donated 130,000 euros in those years, all in payments small enough to fit beneath the 50,000-euro threshold. In addition, the company's founder Reinfried Pohl, who died in 2014, donated 220,000 euros in 2013 and 2014. Pohl was a consistent donor to the CDU and FDP throughout his career.

Given the group's generosity, it's perhaps unsurprising that the DVAG advisory board contains a number of former politicians, including ex-Chancellor Helmut Kohl's longtime finance minister, Theodor Waigel. While donating to a party to influence a policy is expressly forbidden, German transparency campaigners have often complained of the "revolving door" effect, which sees retiring politicians soon get jobs on the boards of major businesses.

Deutsche Vermögensberatung is just one case among many: Some 36 companies and individuals appear in party financial statements with yearly donations of over 50,000 euros, without having to declare them. In 10 more cases, the reported major donations were lower than what is eventually revealed in the party statements. In 20 cases, exactly 50,000 euros was donated – so just below the disclosure threshold.

A DVAG spokesman, Simon Kuklinski, told DW that all its donations are within the law: "In the context of its social responsibility, Deutsche Vermögensberatung regularly donates to different parties," he said in an email. "Our donations, like those of other companies and private citizens, are subject to legal disclosure obligations and are therefore transparent."

But Kuklinski refused to offer any further explanation of the donations strategy, saying only that it was an "internal company decision."

The association for Bavaria's chemical industries, VBCI, was similarly unwilling to discuss its strategy. The VBCI donated significantly more than 50,000 euros to the Christian Social Union (CSU) – Bavarian sister-party to Merkel's CDU – in 2013, 2014, and 2015, but did not have to register a single major donation.

Asked to comment, the association's general manager Markus Born would say only, "The fact that we support democratically elected political parties in Germany with donations has been known for decades, and happens under strict adherence to the relevant laws. This is an expression of our civic understanding of a representative democracy that includes political parties."

He added that any suggestions that the VBCI was deliberately avoiding full disclosure were "alien to us," and refused to answer further questions.

Money for the right people

Other industry associations were happier to offer explanations. METALL NRW, the association for the metal and electrical engineering industries in the state of North Rhine-Westphalia, also donated more than 50,000 euros to the CDU in both 2013 and 2015 – as well as 50,000 euros to the FDP in 2015, when the pro-business party wasn't represented in the Bundestag – but avoided having to declare major donations.

This was done, METALL NRW explained, to funnel the money to the preferred recipients. "We donated the donations to different branches of the CDU, or their organizations," executive board member Hubertus Engemann told DW. "The federal CDU got money from us, the CDU youth organization got money from us, the senior citizens' CDU got money from us, and the mid-tier business organization got money from us. The parties combine this money, and present it altogether in their financial statements."

"We want the donations to be given to the people we want to support. Dividing the donations up has absolutely nothing to do with avoiding immediate disclosure," he added.

Katja Schlendorf-Elsässer, spokeswoman for Bavaria's engineering industry association BAYME VBM also said donations were split up so that they could be donated to specific projects. "We support the work of democratic parties in Bavaria as part of our voluntary social and political duties. A smaller donation purpose justifies a smaller donation," she said in an email. "Also we don't see any necessity for avoiding the disclosure of major donations. If we see it as suitable, we donate larger sums, which we do regularly."

Nevertheless, party statements show that BAYME VBM donated 50,000 euros to the SPD in 2013, 2014, and 2015 – again in donations small enough to get under the radar. The association also paid the same amount to the FDP in 2015.

By far the biggest recipient of BAYME VBM cash, though, was Merkel's conservative allies in Bavaria, the CSU, which received several hundred thousand euros in each of those three years – though not all of it was transferred as a major donation. In 2013, BAYME VBM donated 642,332.50 euros to the CSU, but only 565,000 euros was declared immediately.

Some donors, such as the Chemical Industry Association (VCI), have made efforts to become more transparent in recent years. In 2016, the VCI began publishing all the previous year's party donations – even those below the 50,000-euro threshold – in an annual press release. However, the figures still come with a significant delay: the 2016 donations were only revealed on June 1. That means that a major donation made in January of one year could still take 18 months to become public - which is not unlike the rules under the current law.

A little more transparency

LobbyControl's Sawatzki argued that the explanation offered by the companies – that they prefer to donate to single organizations within a party – was all the more reason to bring in more transparency rules. "That is quite problematic," she said. "It's one of our demands, too: We'd also like to see who exactly was being donated to. Then you could see for example if a certain candidate was being supported by a specific industry."

Campaigners have often argued that Germany could learn much from other countries. "Britain would be a good model when it comes to transparency," said Sawatzki. In the UK, party donations have to be disclosed every quarter, with the disclosure threshold at 7,500 pounds ($10,200, 8,500 euros) for donations to a central party, and at 1,500 pounds to a local party branch. During an election campaign, those donations even have to be disclosed on a weekly basis.

Sawatzki believes that much of the suspicion surrounding German party donations could be avoided with a little more transparency. "You could say, 'Okay, then we'll make everything public from 10,000 euros, and as a citizen you can inform yourself.' And the donors just have to stand by their donations. That's what a democracy means."

You can find the source data for this article as well as information on our methodology here. If you have any comments or spot potential errors, feel free to contact us here: design.data@dw.com.