BRUNSWICK, Germany Jan 15 A supplier's tip-off
that Volkswagen (VOWG.DE) officials solicited him for a bribe
triggered a corruption scandal at the carmaker, ex-Chief
Executive Bernd Pischetsrieder testified on Tuesday.
Pischetsrieder, who was forced out as CEO in 2006, told a
German court he had no idea before the tip in June 2005 that
company funds were plying VW labour leaders with perks and
prostitutes, as emerged when the scandal erupted.
Former VW works council head Klaus Volkert is charged with
incitement to breach of trust in the case, while his management
liaison, Klaus-Joachim Gebauer, is accused of breach of trust.
Pischetsrieder said he sought out VW's personnel director,
Peter Hartz, when the unnamed supplier came forward to say he
had received the dubious contract signed by Gebauer and Helmuth
Schuster, then personnel director at VW Czech unit Skoda.
"Mr Hartz was shocked," Pischetsrieder recalled, but Hartz
hesitated "not a second" in declaring both men had to go should
the bribery suspicion turn out to be true.
Gebauer and Schuster left the company, and Gebauer revealed
details about lavish spending on works council members to keep
them loyal to management.
VW Chairman Ferdinand Piech last week also denied any
knowledge that the carmaker was showering money and women on
labour leaders when he was chief executive from 1993 to 2002.
Hartz, who was convicted in the case last year, has
testified that he -- not Piech -- decided to pay Volkert
lucrative bonuses so that he felt like a senior executive and
would be inclined to support management's restructuring plans.
Attorneys for Volkert and Gebauer hope to show that top VW
management was aware of the pay-offs so that the defendants get
more lenient sentences.
Volkert, once a powerful VW figure who stepped down when the
affair came to light, is accused of soliciting nearly 2 million
euros ($2.97 million) in company funds for personal gain. He
denies he put his employer up to the payments.
Witnesses have testified that VW labour leaders -- key
players under the German system that gives workers a big say in
running companies -- were extensively wined and dined for years
at VW's expense, including visits to nightclubs and prostitutes.
The court is expected to give its verdict on March 27.
(Reporting by Sabine Ehrhardt; Editing by Louise Ireland)