'Politically driven'

Officials will read Schreiber the arrest warrant against him on Tuesday and then bring him before a judge, who will decide whether to keep him in custody pending a trial, Karl-Heinz Haeusler, Augsburg state court spokesman said.

Court officials and prosecutors said they hoped to move forward quickly with a trial but Reinhard Nemetz, one of the prosecutors, said a trial was unlikely to begin before the election.

Schreiber, a dual German and Canadian citizen, was arrested in Canada in 1999 under a German warrant.

He allegedly gave a cash donation in 1991 to Walther Leisler Kiep, the CDU's treasurer while Kohl was in power.

Schreiber maintains he is innocent of the charges against him and says his extradition from Canada is politically driven.

Kohl fine

The allegations against Schreiber triggered a scandal that only deepened with Kohl's 1999 admission that he had personally accepted off-the-books, and therefore illegal, donations from supporters.

Merkel was one of the first in her party to break with Kohl over the funding scandal [AFP]
The affair tainted the reputation of Kohl, who was chancellor from 1982 to 1998, and led to a criminal investigation against him.

Prosecutors eventually closed the case in 2001 without charging Kohl after he agreed to pay a $142,000 fine.

Merkel won the party leadership in 2000 after becoming one of the first in her party to break with Kohl over the scandal - and Schreiber's extradition is not expected to have much impact on the September 27 elections.

"I think the CDU donations affair from back then won't have any real significance for the election campaign, it's too far back," Max Stadler, a politician for the opposition Free Democrats said.

Canada hearing

Schreiber has also been associated with a separate Canadian political scandal.

Public hearings on Schreiber's controversial financial dealings with Brian Mulroney, the former Canadian prime minister, drew to a close last week.

Mulroney has denied any wrongdoing in his dealings with Schreiber, who claims the Canadian leader agreed to take money from him while still in office.

Mulroney acknowledges he accepted money from Schreiber in exchange for promoting a project involving a light armored vehicle factory on behalf of Germany's Thyssen AG, but only after leaving politics.