In spite of a conviction for tax evasion, the ex-CEO of one of the world's leading logistic giants is legally entitled to his $26 million pension -- a revelation that has German politicians seething.
Zumwinkel's $26 million payoff was called 'scandalous'
One of the world's leading postal and logistics companies paid 20 million euros ($26 million) in pension claims to its disgraced former chief executive Klaus Zumwinkel, reported the German national newspaper Frankfurter Allgemeine Zeitung (FAZ) in its analysis of Deutsche Post's 2008 annual report.
The news about Zumwinkel, who is currently living in a chateau in Italy's Lake Garda, unleashed cries of outrage from a panoply of German politicians and commentators.
German's Deutsche Post is one of the world's largest logistics firms
Zumwinkel, 65 -- who was forced to resign as Deutsche Post's CEO in February of 2008, was convicted in January, 2009, of evading nearly one million euros in taxes by hiding the sum in a secret trust in the Alpine tax haven of Liechtenstein. A German court penalized Zumwinkel with a one million euro fine and two-year prison sentence, which he has yet to serve.
But at a time when the global financial crisis has led to Germany's worst recession since World War II, the news of the payout has sparked public outrage.
Politicians of all stripes have jumped on the bandwagon to denounce business leaders who continue to rake in high salaries and bonuses despite falling profits and management failures that have run their companies to the ground.
On Sunday, Bavaria's premier and CSU party chief Horst Seehofer told German newspapers the 20 million payout was "scandalous."
"These are the kind of people who destroy our social market economy," said Seehofer, whose conservative CSU is the Bavarian sister party to German chancellor Angela Merkel's Christian Democrats. "The average person is worried about his job, and Mr. Zumwinkel is stuffing his pockets full of cash," he said.
Since the German state is a big stakeholder in Deutsche Post, which was formerly a government monopoly, Seehofer even called for an investigation into the justification for such a huge pension payout.
The Social Democrats (SPD) in Merkel's governing coalition were just as scathing. "This is such an insult to all those in our country who work hard, pay their taxes and stick to the rules," said SPD general secretary Hubertus Heil.
The huge pension payout comes at a time Deutsche Post had been hit by losses totalling nearly 1.7 million euros for 2008.
Zumwinkel legally entitled to huge pension payout
Zumwinkel hid nearly one million euros in Liechtenstein.
The company's spokeswoman Silje Skogstad however told the business news website Bloomberg that Zumwinkel was entitled to his full pension payout according to the terms of his executive compensation package.
"The financing of Zumwinkel's pension claims is completed," she said. However, Skogstad declined to comment on the 20 million euro sum cited by FAZ.
The outrage even reached the ranks of some Free Democrats, the German political party that favors market liberalization. Leading FDP politician Dirk Niebel told the FAZ: "Not everything that is legal is legitimate."
Police raid Zumwinkel's chateau
In another scandal possibly implicating the former Deutsche Post boss, police raided his chateau in Italy's scenic Lake Garda last week, said German prosecutors on Friday. Zumwinkel's other homes-- an old villa in Cologne and a home in Switzerland-- had also been raided by the police.
The raid was linked to an investigation into an alleged eavesdropping scandal among employees at Deutsche Telekom. Telekom workers were said to have leaked company information to journalists in 2005-2006, where Zumwinkel had served as supervisory board chairman at the same time he was Post chief.