GERMANY: German labour reformer Peter hartz on trial in bribery scandal

The architect of Germany's biggest post-war labour reforms and former Volkswagen personnel chief, Peter Hartz, has gone on trial for his role in a corruption scandal at Europe's biggest car maker. The case, which erupted in 2005, has damaged Germany's corporate reputation and spawned hundreds of headlines about sleaze at Volkswagen. The once-esteemed VW executive is charged with 44 counts of bribery and breach of trust which the court said could mean a hefty fine and a two-year suspended sentence. Angry protesters shouted "traitor" when he arrived at the court in the northern town of Brunswick, close to VW's headquarters in Wolfsburg. The manager, who had won national respect for drawing up a raft of labour reforms to boost Europe's biggest economy under former Social Democrat Chancellor Gerhard Schroeder, resigned from VW in 2005 after allegations of bribery emerged. He is accused of engineering a system that regularly plied senior worker representatives with company money, including paying for sex trips to brothels from Brunswick to Brazil. He is also accused of having paid VW's works council boss Klaus Volkert a total of 1.9 million euros ($2.5 million USD) on top of his regular salary between 1994 and 2005, although the labour leader had rendered no additional services to the company. Defence lawyer Egon Mueller told the court that his client had admitted to the factual contents read out in the charges, adding that Hartz was responsible for keeping good relations with the works council. Driving up to the court building in a luxury VW Phaeton saloon, the 65-year old was greeted by chants of "traitor" and "into the slammer with him" from protesters. Hartz joined VW in 1993 and won praise for introducing innovative policies, including the four-day week, to save jobs. Later, he devised a model under which VW employed 5,000 unskilled labourers to build the Touran compact van and the forthcoming Tiguan compact offroader. As the brains behind Germany's controversial labour market reforms under Schroeder, Hartz was widely viewed as a lateral thinker who could devise imaginative solutions to save jobs. In Wolfsburg, where Volkswagen has its headquarters, the people were critical. "If they are in the dirt, why is it always the small fry they pick on, why can't the big fish be got as well?" asked Helmut Foerster. "He made a mistake and should pay for it. If we make mistake we end up in jail or sacked," Antonio Joaquino agreed.

ITN Source | January 18, 2007

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