Alternative Funding Donation Scandal Hits German Right-Wing Populists

The right-wing populist party Alternative for Germany has long crowed that it is different than the "cartel parties." Now, though, it has been rocked by a far-reaching donation scandal. Party leadership may soon see a shake-up.

Alice Weidel of the Alternative for Germany party
HAYOUNG JEON/EPA-EFE/REX

Alice Weidel of the Alternative for Germany party

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Brigitte Hinger is extremely familiar with naturopathic treatments and yoga. Visitors to her website are greeted by the yoga teacher from the Lake Constance village of Markdorf standing in the "tree pose," standing on one leg with the palms of her hand pressed together over her head. The services she offers extend from auricular acupuncture to detoxification programs. Her motto: "Nature heals both body and soul."

But the 56-year-old also has another area of interest, one in which she isn't quite as knowledgeable. Hinger is the treasurer of the local chapter of the Alternative for Germany (AfD), the right-wing populist party that has been gaining support in the last several years. Since summer 2017, she has handled two huge donations totaling almost 300,000 euros -- the largest donations that any AfD chapter has ever received.

At least one of the donations was intended for Alice Weidel, the party's lead candidate in last year's national elections and today the AfD's co-floor leader in the Bundestag, Germany's parliament. But because the donations came from abroad via straw men and may have violated reporting requirements, the AfD finds itself facing possible fines in the hundreds of thousands of euros. The result has been a party scandal that reaches to the very top.

For Weidel, who is also a member of the AfD executive board, the affair could end up bringing her wildly successful political career to a premature end. In the last several days, she has lost the support of important allies, first and foremost Alexander Gauland, party co-leader and Weidel's partner in leading the parliamentary group. He is said to be furious at her tepid efforts at providing clarity in the scandal. Sources close to party leadership say tactical considerations are all that have prevented him from withdrawing his support completely.

For the party, the donation scandal is a catastrophe. Racist comments or other taboo violations from leading party officials hardly hurt the AfD at all. Indeed, many supporters gravitate to the party precisely because of its course discourse. A questionable support group whose anonymous benefactor forked over millions for posters and other AfD propaganda likewise didn't hurt the party's image among its supporters.

Old-School Financing Scandal

But the dubious donations contradict the AfD's self-drawn image as a fresh, uncorruptible power outside of the "system" of the "cartel parties." The party's platform states: "It is imperative to reform donation rules to make them stricter and immune to corruption." The party would also like to see corporate political donations to parties in the country banned. Now, one of the top leaders of this so-called "alternative" finds herself mired in an old-school financing scandal.

A closer look at the beginnings of the affair reveals a network of Weidel allies. The AfD chapter in the Lake Constance region is her power base, one that prior to last year's election apparently spared no effort to provide its candidate with sufficient funding.

The chapter is something of a family affair. In addition to the yoga teacher Hinger, the chapter also includes Weidel's father Gerhard and a close family friend named Hans Hausberger. The 62-year-old Austrian represents Weidel's interests in the top echelons of the Erasmus Foundation, which is closely linked to the AfD. Hausberger has developed a reputation within the party has having significant influence. And he knows how to secure political financing, having assisted the right-wing extremist party Republikaner in the 1990s with the establishment of a party foundation. In recent days, he has sought to protect Weidel, saying that none of the guilt lies with her.

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Public prosecutors in the region aren't so sure -- and are planning an investigation against Weidel for possible violations of party donation laws.

The affair focuses on two significant financial channels that were uncovered by the investigative network composed of the public broadcasters WDR and NDR along with the daily newspaper Süddeutsche Zeitung. One of the channels leads to Switzerland -- where Weidel also has a residence with her partner -- and the other to the Netherlands.

'What Do We Need to Pay Heed To'

It all began with a donation from Switzerland that Hinger discovered in the AfD chapter's bank account in summer 2017. Suddenly, money began arriving from the Swiss company PharmaWholeSale International AG -- a total of around 130,000 euros in 17 payments. The purpose noted in the money transfers: "Campaign donation Alice Weidel social media" -- an oddly precise specification. At the time, the party's social media campaign was being coordinated by the American agency Harris Media, which has tight links to senior Republicans in the United States.

When the first tranches from Zurich arrived, Hinger turned to Frank Kral, treasurer for the AfD chapter in the state of Baden-Württemberger, where Lake Constance is located. "A benefactor in Switzerland is supporting Alice Weidel with weekly payments of several thousand CHF," she wrote in an email sent at 10:24 a.m. on Aug. 10, 2017. CHF is the abbreviation for Swiss franks. "What do we need to pay heed to? Do I have to report these amounts somewhere or make them public?"

For Kral, a banker by training with 35 years of experience in the industry, the Switzerland connection should have set off alarm bells. Donations from abroad are fundamentally illegal insofar as the donor isn't a citizen of Germany or of another EU member state -- and Switzerland is not an EU member state. But three days later, Kral was more concerned with other details, such as whether the money had gone "directly to Ms. Weidel" or to the local chapter. "If the money is flowing through the (chapter) account, then it is a completely normal donation," he wrote.

Weidel's people used the money as though they had planned for it. They paid a law firm specializing in media law to go after critical journalists and money also went to social media experts who bought pro-Weidel ads on Facebook. Plus, the costs for a Weidel campaign video were paid from the donations.

In November, after the elections, Hinger tallied up the donations and reported to Kral that the local AfD chapter had received a total of 139,071.33 euros, likely a record for local party chapters. Kral was impressed: "That's a huge sum of money. I assume it was because of Ms. Weidel's candidacy."

Discomfort With the Payments

It is unclear whether the treasurer Hinger knew who was behind the donations from Switzerland. She did not respond to requests for comment.

Last week, Kral told party leaders in the state that Hinger had indicated on the telephone that she knows who the donor is. "I told her that she was only allowed to accept the donations from Switzerland if they were coming from a German citizen," Kral wrote in an email to party officials. "She confirmed that was the case."

How much did Weidel know about what was going on? She claims she was told about the large donations on the sidelines of a campaign event in September 2017. Afterward, she said, she trusted her party colleagues in the local chapter to check out the provenance of the donations.

In fact, though, by the beginning of 2018, her discomfort with the payments from Switzerland had grown and she got involved personally. On Jan. 21 at 7:27 p.m., she wrote to state treasurer Kral: "Please be so kind as to connect me directly with Ms. Hinger tomorrow morning. There are important questions that need to be cleared up as soon as possible."

A short time before, Hinger had also emailed Kral with a list of her questions pertaining to party donation law "that I am unable to answer myself." The two treasurers spoke on the phone, but it took three more months before the money was sent back to the donor in April 2018.

But apparently not all of it: Some 8,000 euros remains with the AfD to this day. The party now plans to hand over the money to Bundestag administration. And the party has ended up with significant amounts of egg on its face.

Just who is behind the donations from Switzerland still hasn't been revealed. It is only known that following the path to the company PharmaWholeSale International AG and beyond leads to a dubious milieu. Until recently, the Zurich-based company traded in pharmaceuticals, including the naturopath remedy Regulat, which is supposed to reduce "oxidative stress."

A Second Company

A few years ago, company head Kurt Häfliger was convicted of financial malpractice and received a suspended prison sentence. Häfliger had been part of a management team that navigated Switzerland's first mail-order pharmacy into bankruptcy. The court ordered him and two others to pay 10 million Swiss franks in damages.

Häflinger says he only sent along the AfD donations "in a fiduciary capacity for a business partner." The money, he says, didn't come from PharmaWholeSale International itself. He did not share the name of the business partner.

At the headquarters of PharmaWholeSale International, Häfliger also runs a second company, called Union Investment Privée AG. The company has nothing to do with the German financial group of the same name, but Häfliger's business partner is, in fact, German -- a man named Erhard M., who lives in Hamburg.

Last Tuesday, he opened his door to DER SPIEGEL, a 61-year-old man with designer stubble. Erhard M. insists he isn't the German citizen who had sent the money to Häfliger and says he has no idea who it could have been. He says he speaks with his business partner Häfliger on a daily basis, but when Häfliger wants to keep his clients confidential, he has to respect that wish. "Häfliger likely was unaware of what he was getting himself into."

Erhard M., too, has had difficulties with law enforcement, only recently having been charged with money laundering by prosecutors in Hamburg. M. is thought to have received two remittances from Belgium worth more than 41,000 euros which he -- minus a small provision for himself -- then sent onwards. It was a classic case of a straw man, just as Häfliger played straw man for the AfD donations. The two business partners appear to be experts in the field. The case against him was ultimately dropped in return for a monetary payment. When asked about the case, Erhard M. said he has paid his penance.

The AfD leadership is furious about the potentially scandalous donations. Weidel had already lost a fair amount of support among AfD lawmakers in Berlin on account of her authoritative leadership style. The same holds true for the conflict over the AfD party foundation last summer, one which resulted in wounds that Weidel has not shown much interest in healing. And she is also not particularly well-liked among the party's far-right wing due to her support for throwing Björn Höcke, a leading extremist voice in the AfD, out of the party.

'Serious Breach of Loyalty'

Furthermore, Weidel is gay, which has made it difficult to gain significant support within the party. But she hasn't needed that support so long as party leader Gauland stood by her. But the donation scandal appears to have irrevocably broken that bond. AfD sources say that Gauland screamed at her when he found out about the large donations, which Weidel had kept quiet, from elsewhere. Her behavior, Gauland allegedly said, "was deeply shoddy" and represented a "serious breach of loyalty." Apparently, senior party members even considered forcing Weidel to give up her party offices until the situation was resolved.

Thus far, though, Weidel has been saved by the fact that there isn't a clear replacement available. Were she to fall, the party would once again find itself consumed by a power struggle between competing wings.

The second donation was reported to the federal parliament by senior AfD official Hans-Holger Malcomess in an email sent at 10:28 p.m. last Tuesday. On Feb. 13, 2018, he reported, 150,000 euros landed in the account of Weidel's local chapter, this time as a single payment.

The sender was apparently a "Belgian foundation" called "Stichting Identiteit Europa," the AfD reported. But because the local chapter was unable to identify "either the identity of the donor or the purpose of the donation," the party reported, the money was sent back three months later.

By law, parties are required to report to German parliament all donations of over 50,000 euros immediately and not months later. But the mail from Malcomess reveals just how sloppy the party is when researching such donations. The foundation is not based in Belgium, but in Leidschendam-Voorburg in the Netherlands, an embarrassing mistake.

According to foundation documents, it was established on Dec. 3, 2015, in The Hague by Floris Marinus Berkhout, a retiree who is now 68 years old. Apparently, the organization, which is dedicated to "researching European identity," isn't particularly interested in public attention and only maintains a rather meager website.

Berkhaut himself isn't particularly talkative either. Yes, there was a donation to the AfD in Germany, he admitted in a telephone conversation last Thursday. But the money had been returned.

'Keep It Private'

Where did the 150,000 euros come from? "From the foundation." And who gave the money to the foundation? "I am not of a mind to make that public. It is a private foundation. We want to keep it private."

Did the money come from donors in Germany? "No." He was unwilling to provide any further information about the identity of the donor.

But this information could be dangerous to the AfD. Party donation laws forbids so-called straw man donations in which the identity of the donor is covered up.

Berkhaut would only say that there is no connection whatsoever to the Swiss company PharmaWholeSale International AG. And he said the money sent in February was the "first and only" such donation sent by his foundation to the AfD. He also denies having any personal contact to Weidel or her party. There were, he said, "other people," who were "involved." He also said the foundation had ceased operations in early October, after not even three years of existence.

The only thing that can be said about the party's anonymous donors is that they seem to have plenty of money. Which would seem to contradict a claim that Weidel made during last year's campaign. On Sept. 21, she took to Twitter with a call to AfD fans to provide financial support. "In contrast to other parties," she wrote, "we don't have any large donors." It was a tweet composed at almost the exact same time that Weidel apparently learned of the donations coming from Switzerland.

By Melanie Amann, Laura Backes, Sven Becker and Sven Röbel

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