German minister under fire over rail bonus row

By Dave Graham

BERLIN, Oct 31 (Reuters) - The German government on Friday defended Transport Minister Wolfgang Tiefensee against calls he resign because of his role in a row over bonus payments linked to the planned listing of national rail operator Deutsche Bahn.

Excessive executive pay has become a sensitive subject during the global financial crisis and many European leaders, including Chancellor Angela Merkel, have called for restraint.

Tiefensee has come under pressure since newspapers reported a week ago that the board of Deutsche Bahn was set to receive hefty bonuses for the hotly disputed partial privatisation of the firm, which was postponed this month due to market turmoil.

Merkel's chief spokesman, Ulrich Wilhelm, backed Tiefensee, who opposition politicians said should resign for his handling of the bonus affair.

"The Transport Minister still has the confidence of the Chancellor," Wilhelm said at a news conference dominated by 45 minutes of questions on Tiefensee, a member of the Social Democrats (SPD) who share power with Merkel's conservatives.

The Sueddeutsche Zeitung reported that Deutsche Bahn chief executive Hartmut Mehdorn stood to gain up to 1.4 million euros ($1.8 million) for the market listing, and that other board members could also reap millions, depending on its success.

Tiefensee on Wednesday fired junior transport minister Matthias von Randow, saying he had approved the payments without his permission, and urged Mehdorn to waive the perquisites.

Fritz Kuhn, parliamentary floor leader of the Greens in parliament, said Tiefensee had either known about the bonus scheme longer than he had admitted, or had failed to take proper charge of the listing that had been planned for Oct. 27.

"Tiefensee must resign," Kuhn said in a statement.

Tiefensee's spokesman Rainer Lingenthal told reporters at a regular government news conference the minister had known about the payments since mid-September.

Asked why it had taken Tiefensee so long to dismiss Randow, Lingenthal said the minister had not wanted to spark another public debate ahead of the listing, which was only given the green light after months of political wrangling.

The listing of Europe's biggest rail firm, which market analysts initially thought might raise up to 8 billion euros, was put on hold earlier this month due to market volatility.

Earlier on Friday, the company reported that revenues and profits rose by around 10 percent over the first nine months. Deutsche Bahn also said by the end of September, it had cut its debt by 1 billion euros to 15.5 billion euros.