Corp-Ethics.com - Report: Former VW boss admits corruption

Company	Volkswagen [Company Info]
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Date	Issue	Title
17th Jan 2007	Other Issue	Former VW boss admits corruption

Report

Volkswagen's former personnel chief Peter Hartz has admitted making illegal payments to union officials.

The confession, made through his lawyers, came at the start of his corruption trial in Germany.

A one-time advisor to former Chancellor Gerhard Schroeder, Mr Hartz faces 44 charges of breach of trust.

His confession means he is now likely to receive just a suspended sentence and a fine. He could have faced up to five years in jail.

After meeting prosecutors and defence lawyers at the start of the trial, Judge Gerstin Dreyer said "we came to the result that an arrangement on the sentence is possible".

Mr Hartz, who left VW in 2005, is accused of showering key union bosses at the carmaker with cash and other perks such as holidays.

He was also initially accused of using company funds to pay for prostitutes, but prosecutors have dropped that charge.

The opinion of union leaders is important to German firms because under German law union bosses sit on a company's board of directors, and must be consulted on major new initiatives.

Mr Hartz' lawyer, Egon Mueller said that no-one else on the VW board knew of Mr Hartz's payments.

Mr Mueller said Mr Hartz admitted that he had illegally paid 1.9m euros ($2.5m; £1.2m) to Klaus Volkert, the former head of VW's powerful employee council.

Mr Volkert was arrested in November, but was subsequently released in December and no formal charges have been brought against him.

So far, the other main person to be charged in relation to the case is Hans-Juergen Uhl - now an MP for the centre-left Social Democrats.

A former member of VW's works council, he has been charged with two counts of being an accessory to breach of trust, and five counts of making false statements while under oath.

Although federal lawmakers have voted to lift his parliamentary immunity so he can be prosecuted, he currently remains in parliament and has denied any wrongdoing.

The verdict against Mr Hartz is due to be announced next week.

Other Reports on Volkswagen
Date	Issue	Company	Report
25th Jan 2007	Other Issue	Volkswagen	Hartz sentenced in VW bribe case
22nd Jul 2005	Questionable Practice	Volkswagen	Scandal-hit VW in Indian payout
4th Jul 2005	Other Issue	Volkswagen	Scandal-hit VW 'halts India plan'
15th Sep 2004	Questionable Practice	Volkswagen	Volkswagen puts extra pressure on Unions

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