MUNICH -- The former head of Volkswagen AG's works council, Klaus Volkert, has started a 33-month jail term for using his labor post to obtain sex and bribes, German press reports said today.
Volkert, 67, started his sentence in a German prison after exhausting all possible legal appeals against a conviction in February 2008 for breach of trust and aiding and abetting it, as well as breaches of German labor law.
The trial arose from an investigation that originally centered on bribes from potential suppliers and the creation of dummy companies to secure lucrative contracts in India, Angola and other nations, but it widened to include claims about glamorous prostitutes and sex parties.
VW said it did not discover until June 2005 that its funds were being spent on sex parties and bribes.
Volkert was accused of setting up a dubious contract between VW and his Brazilian mistress Adriana Barros, under which she received 400,000 euros ($589,560 at the time) without providing anything to Volkswagen in return.
It was also alleged that the labor leader and his girlfriend received a further 290,000 euros for travel, hotel costs, shopping purchases and other "non-business-related activities."
The trial highlighted the cozy relations between management and VW unions and the lengths company bosses were prepared to go to keep labor leaders on their side.
In January 2007, former VW chief personnel officer Peter Hartz received a suspended two-year sentence and a 576,000-euro fine. He had admitted being the initiator of the abuse that saw nearly 2 million euros paid to Volkert between 1995 and 2004 in an attempt to win union support for company decisions.
Volkert was regarded as one of VW's most powerful figures during his long tenure as the company's powerful labor leader. A former shop floor worker, he rose to become head of its works council between 1990 and 2005.
Under German law, works council leaders sit on supervisory boards and need to be consulted on major company decisions.