German Court Proposes Fine to End VW Employee Sports Case

Volkswagen AG (VOW) employees and former managers at a Deutsche Telekom AG (DTE) unit may be able to settle a German trial over alleged soccer-team sponsorship bribery by agreeing to fines, the judge overseeing the case said.

Stuttgart Regional Court is proposing that two employees at Volkswagen and three who used to work at Deutsche Telekom’s T-Systems network-services division agree to fines to end criminal proceedings against them, Judge Thomas Wessels said by phone. The court isn’t aware yet whether the managers have accepted the plan, he said.

Prosecutors charged the five people with bribery in 2011. The probe is focused on whether the T-Systems managers tried to get a 345 million-euros ($455 million) order for telecommunications supplies from Volkswagen, Europe’s biggest carmaker, in exchange for continuing a sponsorship deal with German soccer club Vfl Wolfsburg for 16 million euros. VW owns the team, which is based in the manufacturer’s home town.

Volkswagen and Francisco Javier Garcia Sanz, the head of parts procurement who is also chairman of Vfl Wolfsburg, are under investigation in a parallel, administrative court case begun this year on whether they failed to prevent an illegal deal. Authorities are likely to demand a fine in that lawsuit, Claudia Krauth, a spokeswoman for the prosecutor’s office, said by phone. She declined to comment on a report in Sueddeutsche Zeitung earlier today that said the penalty demanded would be a “single-digit” million-euro sum.

Harald Lindlar, a spokesman at Bonn-based Deutsche Telekom, declined to comment on the possible settlement, saying that the three T-Systems employees involved had left the company in 2010. Eric Felber, a spokesman at Wolfsburg-based Volkswagen, declined to comment.

Internal Review

The alleged irregularities were discovered after an internal review at Deutsche Telekom, which alerted prosecutors and dropped the program. Prosecutors said in the indictment that the sponsorship deal was an aggravated case of bribery because of the amount of the payment the club would have received. Part of the action took place in the Stuttgart region, so prosecutors brought the case there.

Under German law, companies can’t be suspects in criminal cases. They can be investigated under administrative rules that punish failure to organize a company in a manner that would prevent illegal actions. The rules were also used in a bribery case against Munich-based engineering company Siemens AG. (SIE)

To contact the reporter on this story: Angela Maier in Munich at amaier8@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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