Kohl's offshore funds architect 'laundered drugs cash'

A close friend of Helmut Kohl, who helped set up the former German chancellor's secret offshore accounts, is being investigated over alleged links to a Latin American drug ring.

A close friend of Helmut Kohl, who helped set up the former German chancellor's secret offshore accounts, is being investigated over alleged links to a Latin American drug ring.

The authorities in Liechtenstein have confirmed that Herbert Batliner, one of the central figures in Germany's slush funds scandal, is suspected of money laundering. But officials in the principality's capital, Vaduz, did not comment on a Swiss press report alleging that he laundered £17m for a suspected Ecuadorian drugs baron, Jorge Hugo Reyes-Torres.

Mr Batliner is already being investigated in Germany for suspected complicity in tax evasion. The accusation of a possible link to organised crime has, however, put a far more sinister complexion on hisdealings, and raises further questions about Mr Kohl's clandestine business activities.

Mr Kohl had met the Liechtenstein lawyer in Salzburg, Bonn, Berlin and Vaduz. Earlier this year, he told the Bundestag's sleaze-busting committee that he never discussed business with his friend.

Mr Batliner has been administering Christian Democrat slush funds for 40 years. In 1960, he set up the "Aspe" foundation, a tax-free hoard in Liechtenstein containing undeclared donations from German business. In the 1970s and 1980s, he was the trustee of two other foundations used to stash more secret money abroad.

The CDU's two biggest transactions - thus far unexplained - passed through his hands. Mr Batliner says he dealt not with the CDU, but with its disgraced financial wizards, Uwe Lüthje, the former CDU treasurer, and Horst Weyrauch, the party's financial adviser.

The latest allegations come as Liechtenstein tries to clean up its image. Stunned by German reports, leaked by the German intelligence agency BND, portraying the principality as a "money-laundering haven", Liechtenstein has hired the Austrian prosecutor Kurt Spitzer to investigate the charges.

In a report earlier this week, Mr Spitzer rejected most of the allegations, but his inquiry has led to the arrest of eight people in Liechtenstein, including two judges, an MP, and the brother of the Deputy Prime Minister.