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Sleaze German style

Posted by Richard Sunday, July 31, 2005

An interesting commentary in The Business catalogues what amounts to a tidal wave of corporate sleaze emerging in Germany.

It is not only Volkwagen, about which we wrote earlier, but a whole raft of firms, from the state television company, Hessischer Rundfunk, and the Commerzbank, where it was revealed that a number of former and current bank employees are under investigation for laundering money from Russian telecom assets.

Then there's Infineon. Management board member Andreas von Zitzewitz resigned after reports he collected a quarter of a million euros in bribes, and at least one other manager has been named in the probe.

However, notes The Business, a slew of federal, state and local politicians on the payroll of big German corporations were not even admonished earlier this year despite criticism from public and press. In addition, no change to this policy is under consideration.

It seems that the ones who make laws are also the ones who are profiting from corporate cash. A German manager cannot take money from interests that may interfere with his judgement or illegally pad his bank account, but politicians can accept a virtually unlimited amount of pay from former employers or consulting fees from those who would affect policy.

Neither are politicians and top managers alone in their greed. Defrauding the state by hiring black market workers has become a national pastime, the result of a slow economy and massive labour costs driven up by high taxes and employer contributions. Hiring "under the table" for a fraction of the quotes from above-board contractors is rife.

Therein lie the seeds of damnation. Clearly, when politicians and business are corrupt, and the law oppressive, the ordinary "Fritz in the street" takes the same view of the law – an inconvenience to be circumvented whenever possible. But, once you take an à la carte view of the law, the very fabric of society starts to break down.

Those in this country, and their brethren in Brussels who rush to create laws at a moment's notice, would do well to note. There comes a point when the disadvantages of more law outweigh the advantages. The law of diminishing returns applies to the law as well.

Of course, the lessons will not be learned. They never are. Welcome to Sleazeville.