Hartz Sentenced, Fined in VW Sex-and-Bribery Trial

A former senior Volkswagen manager got a suspended two-year sentence and a fine for his part in a sex-and-bribery scandal that rocked Europe's biggest carmaker.

Peter Hartz, 65, was sentenced on Thursday followed his confession earlier this month to sanctioning illegal payments in a scandal that first emerged about 18 months ago. The illegal payments were aimed at winning union support for company decisions.

In addition to the suspended sentence, the former VW manager was fined 576,000 euros ($747,000).

Hartz is known as the architect of tough labor-market reforms introduced by former Chancellor Gerhard Schroeder's Social Democrat-led government; his name is still attached to the reforms, which were partly aimed at forcing Germany's long-term unemployed to seek work.

Bribing suppliers

Hartz had expressed regret for his actions in the bribery-and-sex scandal, and has accepted "criminal responsibility" for them, his lawyer told the court at the trial in the north German city of Braunschweig.

The scandal surfaced in June, 2005. It originally centered on allegations of bribes from potential suppliers, and the creation of dummy companies that were used to secure lucrative contracts abroad.

But it quickly widened to include claims about flying around high-class prostitutes, visits to brothels, and sex parties financed with company funds.

Ties to unions

Altogether, Hartz faced 44 counts of breach of trust. He was the first person to stand trial in the case, which helped to turn the spotlight on the often cozy relations between unions and employers in corporate Germany's consensus-style management system.

Hartz admitted being the initiator of abuse that saw nearly 2 million euros in illegal bonuses paid to the then-head of the company's works council, Klaus Volkert.

The payments, made when he was director of Volkswagen's personnel department, were allegedly used to finance lavish foreign trips by Volkert and his Brazilian mistress, Adriana Barros.

Hartz left the company in July 2005. He said he ordered preferential treatment be given to Volkert because of the important role he played in the company. Under German law, works council leaders need to be consulted on major decisions taken by leading German companies.

DW staff (jen)

Deutsche Welle 01/2007

Germany Boosts Research in Fight Against Terror

Germany plans to fund a multifaceted program for civil security research, to better position the country in the booming security-technology market.

Germany plans to earmark 123 million euros ($160 million) in the next four years for training and research in civil security.

Currently, Germany is one of the most secure countries in the world, Research Minister Annette Schavan noted. Further development of security technology aims to help it stay that way.

"We want to tap into the market for security technology and services," she said on Wednesday. "We want to promote the competitiveness of German companies, and we aim to become leaders in some specific security technologies.

Fast-growing market

The world security-technology market is growing at a rate of around 7 percent a year, and German companies are well positioned for the market, Schavan said. In Germany alone, sales reach some 10 billion euros per year.

In agreeing to earmark the R&D funds on Wednesday, the cabinet signaled its aim to improve networking between business, research and security agencies.

For example, the money could go toward helping various disciplines within the security field put their technologies together into a single product, therefore getting a boost in the world market, Schavan said.

Another aspect of the program is to help protect transportation and energy providers from terror attacks. And of course, the plan hopes to make civil security more effective for individual German citizens.

Benefits of technology

"Dogs cannot be trained to detect all dangerous materials," Schavan said. "They can't detect them from a distance, and they can't get around in subway shafts, for example. We want to develop electronic 'noses' that will be able to detect poisons, explosives, biological weapons and nuclear agents."

Because the term "security" covers a broad range of issues, including terrorism, criminality, and natural catastrophe, various ministries will be invited to bid on the funds, Schavan said. Bidding processes will begin in March.

Nina Werkhauser (jen)

Deutsche Welle 01/2007