Senior figures from Germany's pro-business Free Democratic Party (The Liberals) continued their two-day emergency strategy conference in Berlin amidst a major funding scandal on Friday.

Originally called to discuss ways to restore the FDP's credibility after its poor performance in September's general elections, the delegates are now trying to limit the fallout from a police investigation into the party's finances in the state of North Rhine-Westphalia.

The former national deputy party leader Jürgen Möllemann is accused of using undeclared contributions to pay for a campaign pamphlet attacking the Israeli government and a prominent member of the German-Jewish community. Möllemann headed the state party in North Rhine-Westphalia at the time. He has now resigned from all party offices.

18 years as part of the government.

The Free Democrats once seemed to be a permanent fixture in the German government. After entering into a coalition with Chancellor Willy Brandt's Social Democrats in 1969, they remained in government with the SPD until 1982.

Siding with the Christian Democrats and their Bavarian sister party, the Christian Social Union, during a vote of confidence in Brandt's successor, Helmut Schmidt, kept them in government when Helmut Kohl took over as Chancellor. The Union-FDP coalition would hold for 18 years.

The FDP Foreign Minister Hans-Dietrich Genscher played a major role in German unification in 1990. He was followed by another FDP politician, Klaus Kinkel, at the Foreign Ministry.

Their 18-year government run ended in 1998 when Gerhard Schröder of the SPD was elected chancellor and formed his coalition with the Green Party. This past election, the FDP suffered a drastic setback, netting only 7.4 percent of the vote. The mark was far below the 18 percent mark they set for themselves as campaigning began.

Party leader's office knew about pamphlet

Senior members are blaming the party's electoral setbacks on Möllemann's actions. But FDP leader Guido Westerwelle is now also under fire after admitting that his office was informed of plans to publish the anti-Israeli leaflet a week before the election.

Westerwelle says he wasn't personally informed of the matter, but party treasurer Günter Rexrodt told German television that the party leader still bore responsibility for the oversight. He later attempted to play his remarks down.

The funding of the pamphlets is another potential minefield. Rexrodt says entries in the North-Rhine Westphalian party's accounts point to illegal cash transactions totalling more than 100,000 euro between September and October. Möllemann, who was recently hospitalized for a heart condition, has refused to say where the money came from.

Westerwelle last week reacted scathingly to Möllemann's refusal to come clean. "I think anyone in good enough condition to make long airplane flights should be able to name the donors," he said. "We've taken legal action. It's in the interest of both the public and the FDP to get everything out on the table."

The FDP's parliamentary leader, Wolfgang Gerhardt, on Friday called for the resignation of the entire party leadership in North Rhine-Westphalia.

In spite of the financial scandal, the conference did manage to adopt Westerwelle's new strategy paper. Retiring the now-disgraced Möllemann's election target of 18 percent of the vote as an official policy, the delegates backed the leader's proposal to make the FDP a strong and independent alternative to all other parties.