It's lurid. And at least two high-ranking executives may wind up in the pokey. Volkswagen's corruption trial features allegations of prostitution, romp rooms (and free Viagra), slush funds, company-paid shopping sprees and kick-backs to labor leaders. It has already brought down Peter Hartz, VW's personnel chief, who admitted to paying bribes and received a two-year suspended sentence and a 500,000 Euro fine.
The trial has Germans everywhereriveted because it reveals the underside of a source of national pride: labor relations. Volkswagen is still partly owned by the government and it has historically been a bulwark of worker rights. In Germany, workers are guaranteed the same number of seats in the company boardroom as shareholders are. While this practice has helped keep wages up and executive salaries well below the obscene levels that many American companies bestow on their managers, it shows the problems that arise when labor leaders and executives get too cozy.
Sources: Bloomberg, New York Times, Reuters
