Frey's official reason for forming a party at the time was his disappointment with the German conservative-liberal Federal Government in regards to foreigners, security and policy towards East Germany. The new party formed an alliance with the NPD, generally agreeing not to compete with each other in elections. The DVU was financially well-off, courtesy of Frey's personal wealth, but lacked election expertise, while the NPD had the latter but was financially weak. In September 1987 the DVU became the first far-right party in Germany in 20 years to win a seat in a state parliament when it entered the Parliament of Bremen, courtesy to winning 5.4 percent of the votes in Bremerhaven. Despite missing the five percent cut off in Bremen overall, gaining only 3.41 percent of the vote in the city-state, the special provisions in Bremen allowed for a party to enter parliament if it passed the five percent mark in one of the two parts of the state. Frey had spent more money on the Bremen campaign than the major party in the state combined and benefited from targeting protest voters. Karl Heinz Sendbühler, a high-ranking member of the NPD, stated in 1989 that, with Frey's money, the charisma of Franz Schönhuber, leader of The Republicans at the time, and the NPD organisation, no German parliament would be safe from such an alliance. However, the personal dislike between Schönhuber and Frey made such an alliance impossible, with Frey accusing Schönhuber of being in league with the German conservatives while the latter called Frey a trader of devotional articles. Frey continued to spend heavily on elections, investing DM 17 million on the 1989 European Parliament election, but winning only 1.6 percent of the votes in Germany, compared to 7.1 percent for their right-wing competitors, The Republicans (REP). Despite this financial and political defeat, the DVU expanded its membership to 25,000 by 1989, and won six seats in the Parliament of Bremen in 1991, becoming the third-largest party there. In the following year it won 6.3 percent in the state elections in Schleswig-Holstein but failed to win seats in the Hamburg state election in September 1993, where competition between the DVU and REP kept both out of parliament. By 1994 the DVU was in a financially difficult situation while also experiencing a breakdown of relations with the NPD. A short-term alliance with the REP did not last and it was