An investigation into corruption at Volkswagen has taken a surprise turn, with a claim that former chief executive Ferdinand Piëch knew the company was bribing union officials for their support at board level.
Mr Piëch (70) now Volkswagen's supervisory board chairman, has rejected a claim made to prosecutors that he knew of the so-called "Account 1860" slush fund.
Mr Klaus Volkert, the former head of the VW works council, went on trial last week accused of receiving €2.5 million-worth of holidays and prostitutes in Brazil through the account.
He now faces 48 counts of incitement to embezzlement. Also on trial is Klaus-Joachim Gebauer, a former VW manager accused of arranging the bribes.
Mr Piëch is expected to testify as a witness in the case next January. But speculation is growing that a separate investigation may now be opened into Mr Piëch, a respected and feared figure in the industry and the driving force behind Porsche's planned takeover of Volkswagen.
Half of the seats of VW's supervisory board are occupied by union leaders and their support is crucial for decision-making.
But two years ago it emerged that the wheels of this co-determination structure were greased with cash, perks and prostitutes.
To keep Mr Volkert and other union board members voting with management, they were allowed take first-class trips around the world and often provided with prostitutes. Mr Volkert flew regularly to visit a girlfriend in Sao Paolo and she was regularly flown to Germany to see him, all at company expense.
In January, former VW personnel chief Peter Hartz pleaded guilty to organising the payments to Mr Volkert from Account 1860. Mr Hartz, a friend of ex-Chancellor Gerhard Schröder and architect of the economic and social reforms that still carry his name, was given a two-year suspended sentence and a €576,000 fine.
When the scandal broke, Mr Piëch claimed to have known nothing of the corruption culture.
But lawyers for Mr Volkert have produced a letter in which Mr Piëch apparently granted him a more generous pension, a fact the lawyers suggest proves that he was aware the union man was getting special treatment.
Meanwhile state prosecutors, unimpressed by Mr Piëch's claims of ignorance, claim to have evidence to the contrary.
Mr Bruno Adelt, the former chief financial officer, allegedly informed Mr Piëch about the irregular movement of funds in and out of Account 1860.
According to the state prosecutor, Mr Piëch asked his then assistant Rupert Stadler, now Audi chief executive, to look in to the matter.
Mr Adelt and Mr Stadler have now been listed as witnesses in the trial and their testimony might make things difficult for the former chief executive.
"This trial may well lead to new information about (Piëch's) role," said Mr Joachim Geyer, a spokesman for the state prosecutors office in the western city of Braunschweig. "If he is implicated, we will start a probe. But we are not yet investigating Mr Piëch."
Volkswagen has said it is incorrect that Mr Piëch, chief executive until 2002, knew of the account's existence or ordered a probe of its purpose: "No such reviews took place because there was no evidence. The company and its former chief executive thus had no knowledge of the embezzlement."
Defence lawyers are trying to portray Mr Volkert and Mr Gebauer as minor figures in a larger web of corruption.
Mr Gebauer has testified that Account 1860 bypassed normal accounting control systems, something that could only have been arranged by a top manager.
That strategy suits state prosecutors, frustrated that the plea bargain with Mr Hartz in January prevented them uncovering the central figure behind the bribe system that operated from 1997 to 2002. Already industry analysts suggest that the allegations could damage Mr Piëch's authority at Volkswagen, and have consequences for the planned takeover by Porsche.
