Bribery scandal at Volkswagen

FRANKFURT — A bribery scandal yesterday looked set to snowball at German car giant Volkswagen in what threatens to deal a fresh blow to the image of Europe’s biggest car maker just as it is beginning to steer itself out a long crisis.

By (AFP)

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Published: Sat 2 Jul 2005, 10:28 AM

Last updated: Thu 2 Apr 2015, 4:35 PM

The full extent of the burgeoning scandal, triggered by the shock resignation two weeks ago of the personnel chief at VW’s Czech arm Skoda, Helmuth Schuster, was far from clear yesterday.

But VW announced it was hiring independent auditors to review the situation. “We have contacted auditors KPMG and intend to commission them to review independently all that has happened,” a spokesman quoted chief executive Bernd Pischetsrieder as saying.

Schuster last month quit amid allegations he took bribes from potential suppliers and claims in magazine reports that he used camoflage companies to secure lucrative VW contracts abroad.

But conspiracy theories began to circulate freely on Thursday when the long-serving head of VW’s general works council, Klaus Volkert, also announced he was stepping down nine months earlier than planned.

The online version of the weekly magazine Der Spiegel alleged that Volkert was also involved in Schuster’s dubious dealings.

And the weekly WirtschaftsWoche claimed that Volkert was simply that “tip of the iceberg” and that more resignations would follow, including that of VW’s head of personnel, Peter Hartz. Both Schuster and Volkert are close allies of Hartz.

Perhaps more symptomatic of the traditional summer “silly season” in Germany than on the basis of any hard facts, media reports even went as far as to claim that a number of the top-level politicians and union functionaries were similarly involved in what one magazine proclaimed could be one of the biggest corporate scandals in Germany in years.

The politicians and trade unionists concerned immediately secured a court injunction preventing any media from mentioning their names in connection with the affair.

And VW issued a firm statement saying that personnel chief Hartz was not quitting.

“Peter Hartz is and will remain personnel chief at VW,” a company spokemsn said.

VW CEO Pischetsrieder promised a “complete and thorough investigation” into any suspicion of financial misdeed, but refused to indicate the possible extent of the damage.

Pischetsrieder already has his hands full with his efforts to put the car maker’s recent disappointing results behind it and revitalise the ageing core VW brand.

The car maker filed a suit against Schuster and an unnamed second person with the public prosecutors on allegations of fraud. But a spokesman for the prosecutors said that Volkert was not that second person.

For his part, Volkert vehemently denied being involved in any wrongdoing.



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