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Deutsche Post Suffers 'Moral Damage' by Zumwinkel

Reuters
Friday, 15 Feb 2008 | 5:57 AM ET

German Finance Minister Peer Steinbrueck said on Friday that prosecutors' investigations into suspected tax dodging by Deutsche Post chief executive Klaus Zumwinkel were damaging to public confidence.

Police raided the home and offices of 64-year-old Zumwinkel on Thursday, pursuing an accusation that he dodged a million euros ($1.46 million) in tax by transferring money to trusts in Liechtenstein.

"The moral damage is considerable -- just as it was with his dealing with his share options," Steinbrueck told a group of journalists on his way into parliament.

Zumwinkel controversially sold 200,000 share options worth 2.24 million euros in December just after Deutsche Post's share price rose following a deal to introduce a minimum wage that would affect lower-cost rivals. He later said his actions were a regrettable mistake.

"If the public has something like this as a role model then they'll start having doubts about this economic and social system," Steinbrueck said. "I didn't think this was possible."

Steinbrueck and other leaders in the centre-left Social Democratic party (SPD) have complained about sharp increases in wages paid to managers while at the same time pointing out that there is no general minimum wage in Germany for workers.

Another SPD leader, Peter Struck, also expressed dismay, though he noted that Zumwinkel had only been charged and not convicted.

"When someone has so much money and nevertheless believes there is a need to hide money from the state, then a lot of people will believe there is a lack of justice. The ordinary taxpayer has to pay his taxes to the tax office.

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