Feb. 18 (Bloomberg) -- Germans watched the latest corporate scandal unfold live on the breakfast television shows.

Prosecutors raided the Cologne home of Deutsche Post AG Chief Executive Officer Klaus Zumwinkel on Feb. 14 as TV crews broadcast live from the street outside. Zumwinkel, 64, resigned the next day as prosecutors investigated allegations that he evaded 1 million euros ($1.5 million) in taxes by transferring money to Liechtenstein.

Zumwinkel's departure follows a bribery scandal at Siemens AG and charges that labor leaders at Volkswagen AG used company funds to pay prostitutes, feeding public anger at corporate greed in Germany. At the same time, German unions are staging a series of one-day strikes to demand an increase in wages that have trailed consumer price inflation every year since 2004.

``I just can't understand the greed,'' said Aid Kfzavic, 26, a Frankfurt store detective who catches shoplifters at Saturn, a German electronics store. ``How many millions does Zumwinkel make? Why does he need more?''

Zumwinkel's attorney, Hanns Feigen, declined to comment on the investigation.

Sixty-nine percent of Germans say the country's wealth is unjustly distributed, according to a Feb. 7 survey of 1,000 people by Infratest Dimap for ARD television. No more than 15 percent believe they're benefiting from Germany's economic expansion, which the DIHK business lobby forecasts will extend into a fourth year in 2009.

``A pronounced feeling of injustice is increasingly taking hold in Germany,'' said Manfred Guellner, head of polling company Forsa. ``It's the country's elite that's chiefly responsible for the anger.''

`Questionable Payments'

Former Siemens CEO Klaus Kleinfeld and ex-Chairman Heinrich von Pierer left Europe's largest engineering company in April amid a bribery probe. The Munich-based company has uncovered about 1.3 billion euros of so-called ``questionable payments,'' funds that employees used as bribes to win orders. Both men have denied any wrongdoing in the case.

Peter Hartz, the former Volkswagen AG personnel chief, a year ago received a two-year suspended sentence and a 576,000- euro ($747,000) fine after he pleaded guilty to approving 2 million euros of improper bonuses for a labor leader.

Hartz was the architect of former Chancellor Gerhard Schroeder's labor policy, which included cutting benefits for the unemployed.

Ackermann's Salute

German politicians and union leaders criticized Deutsche Bank AG CEO Josef Ackermann for showing disrespect to the judicial system when he flashed a two-fingered victory sign while standing trial on breach-of-trust charges in 2004. The case focused on Ackermann's approval of more than 57 million euros in bonus and pension payments to Mannesmann directors during Vodafone Plc's 154 billion-euro takeover of the phone company.

Ackermann and five former Mannesmann directors agreed to settle the case for 5.8 million euros without admitting guilt. The case became a symbol of executive greed in Germany and led to a law that required all public companies to disclose management compensation.

German prosecutors said Feb. 15 they are investigating several hundred people for possible tax evasion in connection with the Zumwinkel probe. A spokesman for the prosecutor's office in Bochum said the Liechtenstein foundations were apparently created for the ``sole purpose'' of evading taxes.

`Shameful'

Liechtenstein has been branded an ``uncooperative'' tax haven by the Organization for Economic Cooperation and Development.

``We have to run around all day just to make a little money,'' Frank Meier, a 35-year-old carpenter, said while standing by his truck in Frankfurt's city center. ``It's shameful when a guy who makes that much crimps on his taxes.''

Zumwinkel received compensation of 3 million euros in 2006, according to Bonn-based Deutsche Post's annual report.

Zumwinkel first earned criticism in December when he exercised stock options and sold 4.73 million euros of Deutsche Post shares after Merkel and her coalition partners agreed to introduce a minimum wage for postal workers.

The change increased costs for Deutsche Post rivals such as Pin Group mail services, which was forced to fire workers. Meanwhile Deutsche Post shares rose as much as 18 percent.

Tax fraud ``will outrage people and harm the public's faith in our model of society'' that's based on social cohesion, German Finance Minister Peer Steinbrueck told reporters Feb. 15.

German companies have made progress in the fight against corruption, said Peter von Blomberg, vice-president of the German branch of Transparency International, which fights graft around the world.

Tighter Compliance

Companies including Siemens have tightened internal controls and hired more compliance officers, Blomberg said. Outside classes for corporate counsels have multiplied and legal publishers have expanded their programs to include handbooks on compliance and corruption prevention.

``There are immense efforts in many German companies to sharpen awareness for compliance,'' Blomberg said. ``There is certainly also a backside to this. People are frustrated to see low moral standards. But this dissatisfaction is the humus on which the will for change grows.''

Kfzavic, the store detective, isn't convinced anything has changed.

``It won't be long till the next story about someone like him cheating on his taxes comes along,'' he said. ``It happens all the time.''

To contact the reporters on this story: Andreas Cremer in Berlin at acreamer@bloomberg.net; Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net.

Last Updated: February 18, 2008 02:41 EST