Former VW Manager, Labor Leader Convicted in Bribery Scandal

The trial was the culmination of an investigation into claims VW managers bribed labor leaders in exchange for favorable policy votes from 1995 to 2005.

Former Volkswagen AG labor leader Klaus Volkert and Klaus-Joachim Gebauer, a former human-resources manager for the auto maker, were convicted today for their roles in a bribery scandal involving prostitutes and luxury trips.

Volkert, the former chief worker representative of VW’s supervisory board, was sentenced to 33 months in prison by a court in Braunschweig, Germany, for accepting improper bonuses and benefits, Bloomberg says.

Volkert, 65, was accused of demanding €2.7 million ($4 million) in perks for himself, other union representatives and his Brazilian mistress in exchange for favorable votes on policy.

Gebauer, 63, received a 1-year suspended sentence for providing luxury trips and other favors to labor officials. He was accused of organizing “side programs” involving prostitutes and extra benefits for work representatives, costing VW €1.3 million ($1.9 million).

The trial was the culmination of an investigation into claims VW managers bribed labor leaders from 1995-2005 in exchange for favorable policy votes.

The probe revealed the former managers cost the auto maker €5 million ($7 million) that was spent on travel, jewelry and bar bills. VW since has tightened its financial controls.

Former VW Chief Personnel Officer Peter Hartz also was convicted as a result of the investigation.

Hartz last year received a suspended 2-year sentence and a €576,000 ($853,691) fine after admitting he funneled €2 million ($2.9 million) to Volkert between 1995 and 2004 in order to win union support for company decisions.

Hans-Juergen Uhl, a former labor leader, was fined €39,200 ($58,108) last June after he admitted taking part in sex parties at VW’s expense.

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