Deutsche Telekom uncovers data misuse in spy probe

FRANKFURT, May 26 (Reuters) - Deutsche Telekom DTEGn.DE said that it has uncovered the illegal monitoring of phone calls while investigating claims that management had spied on rebel directors .

The German phone firm said it had informed state prosecutors about its discovery that the monitoring of phone call details took place in 2005.

Information about calls such as time, length and parties involved had been gathered, the company said, but it added that no conversations had been tapped, as had been alleged in a German magazine.

The Der Spiegel report said calls were monitored to spy on non-executive directors suspected of leaking information to journalists.

“I am completely shocked by the allegations,” Chief Executive Rene Obermann said after the report said Telekom had hired a Berlin-based specialist to spy on managers.

“We have involved the state prosecutors and will support them in their efforts to conduct a thorough investigation,” he said.

The monitoring of phone calls took place when Telekom was being managed by former Chief Executive Kai Uwe Ricke. Its then Chairman, Klaus Zumwinkel, recently quit after he became embroiled in a tax-dodging affair.

Der Spiegel reported both men as saying that they knew nothing of the monitoring of phone calls, which the magazine said took place in projects codenamed Clipper and Rheingold.

It said the consulting firm had mined through the records of “hundreds of thousands” of fixed line and mobile phone calls to identify contact between company management and journalists.

A spokesman for Zumwinkel told the magazine that any such analysis of phone records, if true, was not made with his approval.

Ricke said: “I never issued any illegal contracts and certainly not did I at any time give any orders to spy on telephone records.”

He confirmed, however, that top management -- which included Obermann, then head of Telekom’s mobile business --- had often spoken about leaks to the press and decided to “actively do something against it”.

“Telekom had as many holes as Swiss cheese,” Ricke was quoted as telling the magazine. (Editing by Andrew Callus)