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VW Raided by German Prosecutors Over Labor Chief's Pay

Nov. 15, 2017
The search is part of a probe into remuneration of works council chief Bernd Osterloh.

German prosecutors raided Volkswagen AG’s headquarters in an investigation of whether the carmaker’s leadership agreed to excessive payments to its top labor representative.

The search is part of a probe into remuneration of works council chief Bernd Osterloh, a Volkswagen spokesman said late Tuesday by phone, declining to provide further details. Sascha Rueegg, a spokesman for prosecutors in Braunschweig, the legal administrative center for Volkswagen’s hometown of Wolfsburg, confirmed the raids on Wednesday.

The investigation, which comes on top of various probes over the carmaker’s diesel-emissions cheating scandal, centers on allegations former and current management board members may have approved an inappropriately high compensation for Osterloh, the prosecutors’ office said in May.

Company and labor spokesmen reiterated on Wednesday that the payments were in line with the law and had been reviewed by an external expert, and that Osterloh wasn’t personally a target of the probe.

"Prosecutors also raided the office of Bernd Osterloh, that seems to be a regular in these kind of proceedings," the VW works council said in an emailed statement. "The state of affairs hasn’t changed: The probe doesn’t target Osterloh."

The offices Chief Financial Officer Frank Witter and personnel director Karlheinz Blessing were searched along with Osterloh’s.

While Osterloh isn’t a suspect, the probe comes at a delicate time for the works council head as it might taint his campaign to be re-elected early next year. Labor representatives have unusual sway at VW and Osterloh has been one of the most influential figures at the company over the past decade.

Osterloh’s base salary is about 200,000 euros (US$237,000) annually, while his highest total pay for a single year, including bonuses, was about 750,000 euros, a representative of the executive said in May. Last year, his total payment was about 500,000 euros, the representative said.

By Christoph Rauwald and Karin Matussek

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