"We're investigating whether there is adequate factual evidence for relevant prosecution," Hamburg prosecutor Rüdiger Bagger said on Friday.
Bagger said he doesn't yet know when the video was taken, or whether it's authentic. "That continues to elude us," he said.
The prosecutor's office has only released a shortened version of the video, but the full-length video contains explosive statements about Hamburg politics and the results of a hair sample test he underwent in 2002, according German tabloid daily Bild and daily Hamburger Morgenpost. Schill was already under suspicion of cocaine use in 2002, but the hair sample test he mentions in the video proved inconclusive.
The video shows Schill snorting a white powder off a tray and saying, "Now I feel the coke, I'm totally awake."
Prosecutor Bagger told reporters that international law applies to narcotics use, which means German officials have the authority to prosecute in cases such as this.
Schill, 49, was a judge in Hamburg from 1994 to 2001 and developed a reputation as "Judge Merciless" for doling out draconian sentences. In 2001 he became Hamburg interior minister as head of his own law and order party. He was dismissed from the position in August 2003 because his character was considered "unsuitable" for the position.
After his exit from political life Schill has lived in Brazil, though he returned to Hamburg briefly last year because his passport expired. During his time back in Hamburg he acted as a witness in a state government committee investigation.