45-year-old Sebastian Edathy admitted to downloading child pornography images and video onto his official parliamentary laptop, paving the way for the court proceedings to be stopped. He will have no criminal record.
"I've now realised that I made a mistake, and it took me too long to realise it," Edathy, who was born in Hannover as the son of a migrant from Kerala and a German mother, said in a statement read out by his lawyer.
The court ordered Edathy to pay USD 5,600 to the Child Protection Federation of Lower Saxony in exchange for the judges ending the prosecution.
"In the criminal case against Sebastian Edathy on possession of child pornography, the proceedings... Are stopped," the judge said.
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The controversial "Paragraph 153" rule, under which a trial can be abandoned if prosecution and defence agree and a fine is paid to a "public interest organisation", leaves Edathy without a blemish on his criminal record, the Local reported.
The state prosecutor's office in Hannover, which filed a case against him at the regional court in Verden, had also alleged that he was in possession of an illustrated book and a CD containing child pornography material.
He had earlier admitted that he had downloaded naked photos and videos of under-aged children, but insisted that he did not violate the rules as those material were not classified as child pornography under the German law.
His name had surfaced in the records of a Canadian company which sold pornography featuring children and minors to clients all over the world.
The case gave early jitters to Chancellor Angela Merkel at the start of her third term. Then agriculture minister Hans-Peter Friedrich resigned after coming under pressure over suspicions he leaked confidential information about the probe.