Cablegate: German Political Icon Count Otto Lambsdorff Passes Away

DE RUEHDF #0048/01 3411738
R 071738Z DEC 09



E.O. 12958: N/A

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1. (U) Summary: Germany's political establishment remains in
shock after Count Otto Lambsdorff -- a strong force in
transatlantic relations and one of the country's most prolific
politicians in the post-World War Two era -- passed away on
December 5. Lambsdorff served as the Free Democratic Party's
(FDP) Chairman and Economics Minister under Chancellors Helmut
Schmidt and Helmut Kohl. His reputation as a German proponent
of the free market was unrivalled. Together with his party
colleague Hans-Dietrich Genscher, he was the dominant force in
the FDP from the mid-1970s to the mid 1990s. Lambsdorff also
made a name for himself as a staunch supporter of close U.S. -
German ties; he was well-traveled in the United States and he
made a point of visiting Capitol Hill and successive U.S.
Administrations on a yearly basis. Although Lambsdorff retired
from active politics in 1998, he served as former Chancellor
Gerhard Schroeder's government commissioner for the compensation
of forced laborers and was instrumental in setting up a special
5 billion Euro fund for the compensation of Nazi victims in
Eastern Europe in 2001. In statements made on December 6 and 7,
Chancellor Angela Merkel, Foreign Minister Guido Westerwelle,
and North Rhine Westphalia (NRW) Minister-President Juergen
Ruettgers paid tribute to Lambsdorff's merits and achievements.
End summary.

From Reich to Republic, from business to politics

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2. (U) A member of an old noble family from the Baltic region
that was part of the Czarist Russian Empire, Lambsdorff was born
in the Rhineland and grew up in Berlin. A WWII veteran (he lost
a leg as a 17-year old on the Italian front in 1944), he
returned from the war eager to participate in the reconstruction
of a new democratic Germany, making his home in NRW. A lawyer
by profession, Lambsdorff first pursued a successful career in
banking and insurance before running for the Bundestag in 1972,
where he served until 1998. He joined the FDP in 1951 and
served as treasurer of the party in NRW from 1968 to 1978. This
state party function proved to be of fateful significance for
his later career.

The longest serving Economics Minister after Erhard

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3. (U) As economic policy spokesman for the FDP Bundestag group
from 1972 to 1977, and then again from 1984 to 1997, Lambsdorff
made a name for himself as an outspoken champion of the free
market economy. In October 1977, he was appointed Economics
Minister in Chancellor Helmut Schmidt's second cabinet and
continued in the same function in Schmidt's third cabinet. In
September 1982, he wrote a memorandum to the Chancellor (later
known as the "Lambsdorff Paper") in which he called for and
outlined new budgetary policy guidelines. This paper was
instrumental in bringing down the SPD-FDP government coalition
and opening the way for the new CDU/CSU-FDP coalition under
Helmut Kohl. Lambsdorff kept his portfolio under the new
Chancellor, but at the end of June 1984 he resigned from his
cabinet position that he had held for almost 7 years (longer
than any other of the 15 German Economics Ministers since 1949,
except for the FRG's first Economics Minister, Ludwig Erhard
(CDU)). During his period as minister, he made it his mission
to travel annually - if not more often - to Washington, meeting
with USG officials and on Capitol Hill, building the personal
relations that became his hallmark. He was regarded in Germany
and in the United States as a force for promoting U.S.-German

Resignation from the cabinet, followed later by election as FDP

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4. (U) Lambsdorff resigned as a result of a criminal
investigation on charges of abetting tax evasion (during his
time as FDP treasurer in NRW) in connection with dubious party
financing deals that became public in the wake of the so-called
"Flick scandal" of the early 1980s. Other parties, not only the
FDP, were involved in this scandal as well, but Lambsdorff was

DUSSELDORF 00000048 002.3 OF 002

the most prominent politician affected by this scandal and its
aftermath. In 1987, he was sentenced to a DM 180,000 fine by
the Bonn regional court. Since his integrity was never in
doubt, he remained active in politics, and in 1988 was elected
the FDP's national chairman. He was re-elected to that a
position several times before he retired as chairman in 1993,
but carried on (together with Genscher and former German Federal
President Walter Scheel) as honorary chairman of the FDP.

Commissioner for Forced Laborer compensation and chairman of
Naumann Foundation

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5. (U) As an elder statesman, Lambsdorff continued to play an
important role in Germany's political scenery, even after he
retired from the Bundestag in 1998. He served as chairman of
the Friedrich Naumann Foundation, a political foundation closely
affiliated with the FDP, from 1995 to 2006. In 1999,
then-Chancellor Gerhard Schroeder asked Lambsdorff to take over
as the government's commissioner for the compensation of forced
laborers. It was mostly thanks to Lambsdorff's negotiating
skills that it was possible to set up a special 5 billion Euro
fund for the compensation of such Nazi victims in Eastern Europe
in 2001.

Germany's Political Elite Pays Tribute to Lambsdorff

--------------------------------------------- --------------

6. (U) In public statements on December 6 and 7, Chancellor
Angela Merkel, Foreign Minister Guido Westerwelle, and NRW
Minister-President Juergen Ruettgers paid tribute to
Lambsdorff's merits and achievements. Merkel said Lambsdorff
"had a tremendous influence on German economic policies for many
years and will be remembered as one of the great personalities
of our social market economy." Westerwelle and Ruettgers spoke
in a similar vein. Ruettgers praised Lambsdorff's "ability to
explain complicated economic contexts and facts in a simple, yet
powerful language." Lambsdorff is survived by his wife
Alexandra and three children from a previous marriage.

7. (U) The Ambassador is sending a letter of condolence to
Countess Lambsdorff and we recommend the Department do the same.

8. (U) This message was coordinated with Embassy Berlin.

© Scoop Media

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