Monday

Sex, Lies, & VW's Money

German politicians crawled into bed, quite literally, with VW and now heads are rolling.

The next fraud trial is set to start June 14 wtih Hans-Jürgen Uhl, who represented the co-governing Social Democratic Party (SPD) in the German Parliament for years. Just months ago he resigned and publicly admitted that he had lied about his role in the VW scandal.

"I have not told the truth in dealing with the allegations made against me in this context," Uhl said. "As a result, the assurances I made under oath in court examinations carried out in various media were, to a considerable degree, also false." Well, at least no one named Monica showed up on the list of party-people.

Prosecutors have lined up a 29-year-old Russian prostitute who they say is willing to testify at Uhl’s trial that Uhl took part in a sex orgy in a bungalow in Hanover, Germany. Five other prostitutes are also expected to identify him as a “beneficiary” of the VW-sponsored sex parties. Uhl was a member of VW's works council in 2001. His will be the second trial in the “Sex, Lies & VW Money” affair that has Germany’s corporate world shaking its corporate head.

In the first case, Peter Hartz, a former senior manager at Volkswagen, was got a two-year suspended sentence and was fined $747,000 in January, after he agreed to cooperate. Hartz admitted that he began the corporate abuse that paid millions of dollars in illegal bonuses to the then-head of the company's works council, Klaus Volkert.

Newspaper reports claimed that VW used a slush fund to pay for a Brazilian escort girl, named Josélia, flown from Rio de Janeiro to Mr Hartz’s bedroom in the George V hotel in Paris. He was attending a meeting of the VW board.

Initially Mr Uhl denied any involvement in the VW affair and he provided five affidavits to support his innocence. Now he has admitted publicly to lying.

The court in Wolfsburg will decide whether Mr Uhl knew that the car company was picking up the bill for his entertainment. Twenty-one witnesses, including the prostitutes, will give evidence. If found guilty Mr Uhl would face a fine and a jail term of up to three years.

The VW scandal, which surfaced in June 2005, originally centered on allegations of bribes from potential suppliers and the creation of dummy companies which were used to secure lucrative contracts abroad. But it quickly widened to include claims that VW paid for so-called pleasure trips for work council members to win their allegiance. This included allegations about flying around high-class prostitutes.

Apparently new cars have more to do with sex appeal than one may have thought - even in Europe. Well, when your sexy new car turns into a citrus flavor, call us. We don’t care about the sex part, but the lies and the money part, that we’ll go after for you.