Schmidt, one of the most experienced of the top-rank SPD figures, was exonerated by a preliminary report from the audit office at the weekend, prompting SPD chancellor candidate Frank-Walter Steinmeier to bring her into his election team.
“The initial report is clear and specific, and thus Ulla Schmidt is part of my team,” he said.
Explaining his initial exclusion of Schmidt from his team, Steinmeier said, “For me it was always a rule of fairness towards an experienced minister to wait for the result of the audit office before making any further decisions.”
Schmidt, who has been Health Minister for eight years and a member of parliament since 1990, has been damaged by the car affair.
It was stolen while in Spain, a story which led to revelations of how she had told her chauffeur to drive from Berlin to her holiday home so she could undertake some official business.
Although she had flown to Spain on her own cost, the seeming profligacy of getting her car to meet her there was a topic for debate and argument, particularly during an economic crisis.
Now the audit office says she registered the 2,500-kilometre trip to Spain as a private matter, writing off just 72 kilometres as official.
Schmidt said on Saturday of the audit report, “The result is clear – there was no detriment to the Federal Republic of Germany. The separation of official and private transport was correct,” she said.
She said she regretted that, “initially the impression was created that the rules concerning the use of the official car were not correctly used.” And she said she could well understand how this impression could have annoyed citizens.
“I will, in the future, strictly separate official appointments from my holidays in order that it does not appear that private and official are mixed,” she said.
But the Focus magazine this weekend quotes unnamed party insiders saying that Steinmeier and party leader Franz Müntefering have already decided she should remain out and her career is over, no matter what the audit office says.
“She is an enormous burden for us in the election campaign, the whole topic damages us hugely,” a source identified only as a "top politician" is quoted as saying.
The election will be held on September 27. Currently the SPD is attracting just 20 percent support according to pollsters Forsa, 17 percentage points behind Chancellor Angela Merkel's Christian Democratic Union.