Volkswagen corruption trial gets under way

15th November 2007, Comments 0 comments

15 November 2007, Braunschweig - Two former Volkswagen employees went on trial Thursday in the latest round of a long-running sex-and-bribery scandal at Europe's biggest carmaker.

15 November 2007

Braunschweig - Two former Volkswagen employees went on trial Thursday in the latest round of a long-running sex-and-bribery scandal at Europe's biggest carmaker.

Klaus Volkert, who headed the powerful works council for 15 years, is charged on 48 counts of incitement to breach of trust, while ex-personnel manager Klaus-Joachim Gebauer faces 40 charges of breach of trust.

Both men looked nervous when they appeared at the regional court in Braunschweig, near the northern German city of Wolfsburg where Volkswagen has its headquarters.

Some 18 witnesses are due to give evidence at the trial, among them VW board chairman and former chief executive Ferdinand Piech, who has denied any knowledge of the illegal payments.

Proceedings are expected to last until January 24, 2008. If convicted Volkert could face up to 10 years in prison and Gebauer five years.

It is the third trial related to the scandal, which highlighted the cozy relations between management and VW unions and the lengths company bosses were prepared to go to in order to keep labour leaders on their side.

In January, former senior VW manager Peter Hartz received a suspended two-year sentence and a 576,000-euro (750,000-dollar) fine for his role in the scandal, which first emerged in June 2005.

Hartz, better known for tough labour market reforms introduced under former chancellor Gerhard Schroeder, had confessed to sanctioning illegal payments.

Hartz admitted being the initiator of abuse that saw nearly 2 million euros in illegal bonuses paid to Volkert in an attempt to win union support for company decisions.

Volkert, 64, is accused of setting up a dubious contract between VW and his Brazilian mistress Adriana Barros under which she received 400,000 euros without providing anything in return.

It is also alleged that the works council chief and his girlfriend received a further 290,000 euros for travel, hotel costs, shopping purchases and other "non-business-related activities."

The scandal originally centred on bribes from potential suppliers and the creation of dummy companies to secure lucrative foreign contracts, but it widened to include claims about high-class prostitutes and sex parties financed with company funds.

Under German law, works council leaders need to be consulted on major company decisions.

Another former VW works council member, ex-member of parliament Hans-Juergen Uhl, was fined 39,200 euros in June after admitting to taking part in sex parties at company expense.
DPA
Subject: German news

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