Car Corruption Probe in Germany Widens | Business| Economy and finance news from a German perspective | DW | 26.07.2006
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Business

Car Corruption Probe in Germany Widens

Investigator probing allegations of bribery by Volkswagen employees have broadened their investigation to include two former BMW employees.

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Suspicions of bribery have spread to BMW employees

Prosecutors are investigating whether two former employees of BMW took bribes by French car parts supplier Faurecia SA in exchange for contracts, German prosecutors confirmed.

"Two purchasing managers are under suspicion," said Munich prosecutor Anton Winkler, noting that both were among three suspects already under investigation since last year in a separate automotive sector bribery probe.

A BMW spokesman confirmed the investigation and said that the two suspects had long ago stopped working for the company. BMW fired a purchasing manager last year for allegedly accepting bribes from several German suppliers. It is unclear if the two cases are related.

Followi n g VW probe

The case arose from Frankfurt prosecutors' investigation into whether Faurecia -- which is majority owned by French auto maker Peugeot SA-- bribed two employees and a former executive at Volkswagen and its subsidiary Audi to win contracts, officials said.

Kombo BMW VW Logos

The investigation into VW employees led to BMW staff

"We are cooperating and we hope that there will be clarity but until the end of the probe I cannot comment," Faurecia Chief Executive Pierre Levi told reporters in Paris on Monday. "It is in our interest that all the light should be brought to bear on this affair."

Frankfurt prosecutors are also investigating whether Levi knew of the bribery, according to

Focus, a German magazine.

Other carmakers i n volved?

Prosecutors have not said whether other companies were involved in the probe, which Frankfurt officials have said targets around 20 individuals.

VW Logo

VW is Europe's largest car manufacturer

The German operations of General Motors and Ford said no current or former staff are under investigation. DaimlerChrysler and Porsche also said they had not been contacted by prosecutors.

Frankfurt prosecutors said on Monday their year-long probe centered on whether the French auto parts manufacturer paid bribes which they suspected were worth up to 800,000 euros ($1 million) a year.

So far, two Faurecia managers and an employee of VW subsidiary Audi have been arrested, prosecutors said in a statement. One Faurecia manager has been released after a "comprehensive confession," they said.

Prosecutors said that one former and one current VW brand purchasing manager were among those still under investigation.

Fur n iture, free vacatio n s a n d cash

VW confirmed over the weekend reports that its dealings with Faurecia were under investigation. It said it too was cooperating with investigators.

The 64-year-old former VW manager, who left the Wolfsburg-based company in 2002, allegedly received 139,000 euros from Faurecia in cash in return for favors when awarding contracts. He also allegedly received 408,000 euros from another unidentified supplier.

The other VW manager, 46, allegedly received furniture, free vacations and substantial cash gifts. The Audi employee is accused of accepting at least 160,000 euros in cash. He also allegedly secured a well-paid job with a supplier for his girlfriend.

VW is already the subject of a separate investigation into allegations that two former executives set up fake companies in countries including India and the Czech Republic to defraud local authorities seeking business with VW.

German authorities are also looking into whether VW managers and members of its workers' council received illegal privileges including lavish foreign trips paid for by the company.

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