GERMANY: Former VW labour chief starts jail term
The former head of Volkswagen's works council has started a 33-month jail term for using his labour post to obtain sex and bribes, according to German press reports today.
Klaus Volkert started his sentence after exhausting all legal appeals against a conviction in February last year for breach of trust and breaches of German labour law.
Investigations originally centred on bribes from potential suppliers and the creation of dummy companies to secure lucrative contracts in India, Angola and other nations, but it widened to include claims about glamorous prostitutes and sex parties.
VW said it did not discover until June 2005 that its funds were being spent on sex parties and bribes.
Volkert was accused of setting up a dubious contract between VW and his Brazilian mistress under which she received EUR400,000 (US$589,560 at the time) without providing anything to VW in return.
It was also alleged that the labour leader and his girlfriend received money for for travel, hotel costs, shopping purchases and other "non-business-related activities".
The German press said the trial highlighted the cozy relations between management and VW unions and the lengths company bosses were prepared to go to keep labour leaders on their side.
In January 2007, former VW chief personnel officer Peter Hartz received a suspended two-year sentence and a EUR576,000 ($840,000) fine. He had admitted being the initiator of the abuse that saw nearly EUR2m ($3m) paid to Volkert between 1995 and 2004 in an attempt to win union support for company decisions.
Volkert was regarded as one of VW's most powerful figures. The former shop floor worker rose to become head of its works council between 1990 and 2005.
Under German law, works council leaders sit on supervisory boards and need to be consulted on major company decisions.