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Two raised fingers anger Germans

"Ackermann and his accomplices just don't get it: they were merely stewards for the value that thousands of Mannesmann employees built up over generations."

Bernd Herzog in a letter to the ``Hamburger Abendblatt''

Rarely has public opinion been more divided over a trial than during this month's hearings against German corporate bosses over multi-million-euro bonuses paid to phone-company executives after their firm, Mannesmann, was taken over by Vodafone.

Josef Ackermann, chief of executive of Deutsche Bank, is among six men on trial for alleged breach of fiduciary duty, an offence with a maximum penalty of 10 years in jail. He is not accused of taking the money for himself, but of distributing it wastefully.

Top figures in the German business world as well as German Economics Minister Wolfgang Clement lined up this week to declare their horror at the persecution of Swiss-born Ackermann and to denounce the prosecutors as mean-minded small-towners.

Siemens chief executive Heinrich von Pierer said the threat of prosecution hampered freedom of enterprise.

V for VICTORY

At the start of the trial on Wednesday, Ackermann beamed with confidence and raised two fingers in a V-for-victory gesture in the courtroom before the judges arrived.

It was the pose of a dissident who knows that right, if not might, is on his side.

It was too much for many ordinary Germans, who remember only too well how an earlier chief of Deutsche Bank once described 50 million marks as "peanuts."

In 1994, Hilmar Kopper used that derisive term for the claims of small builders against a crooked property tycoon.

By Friday, Germany's popular press was cheering with one voice for the prosecution in the high-profile Mannesmann case.

Under a huge photo of the offending fingers, the conservative daily Die Welt said business leaders were diving for cover, with few willing to speak up in Ackermann's defense any more.

"Will the bosses buy their way out this?" sneered a headline in the mass-circulation Bild, reporting that Ackermann's legal counsel would offer to pay a quasi-fine in exchange for closing down the trial.

The Hamburger Morgenpost was more damning, heading a photo montage of Ackermann and other grinning defendants with the words "Germany's top rip-off."

The paper warned that inexperienced prosecutors were matched against some of Germany's most brilliant defense lawyers.

To reporters this week, Ackermann derided the prosecutors, saying, "This is the only country in the world where successful people who create value are hauled before the courts over this sort of thing."

"How cynical," retorted Lutz Mohaupt, Lutheran pastor of the central Hamburg Church of St. James.

"Everyone who works for a company creates value, not just a handful of executives," he said.

Mohaupt called the bonuses paid to Mannesmann chiefs "odiously high."

"Ackermann and his accomplices just don't get it: they were merely stewards for the value that thousands of Mannesmann employees built up over generations," said Bernd Herzog in a letter to another newspaper, the Hamburger Abendblatt.

The stewardship concept is deeply ingrained in Germany, where it is a part of Christian Democratic political philosophy.

BREACH OF DUTY

The breach of duty charges at the trial are based on the notion that Mannesmann, now defunct, was entitled to have its money prudently spent.

The defense in the trial has mocked that view, saying the venerable engineering company, which reshaped itself as a mobile phone provider just before it was gobbled up by Vodafone, was nothing more than an investment vehicle for shareholders.

Investors made big profits when Vodafone bought the company for 154 billion euros (US$196 billion).

Ackermann asserts that chipping off a 30 million euro golden handshake for retiring Mannesmann chief executive Klaus Esser was, if anything, too modest. Shareholders richer, boss happy, end of story.

ADMIRED INSTITUTIONS

That is not how many Germans remember the demise of Mannes-mann, admired as one of their finest business institutions.

Early in the 1990s, Mannesmann devised a daring plan: to build a phone network from scratch, challenging state-owned monopoly Deutsche Telekom.

Among its cleverest moves was to buy a half-share in the wires that run alongside railways as the backbone of its network.

It sold millions of mobile phones, and gradually disinvested from smokestack industries like metal manufacturing.

Then along came Vodafone with a huge takeover offer. Esser fought back.

Full-page advertisements said an independent Mannesmann was bound for greater things. Esser became a German hero.

On Feb. 3, 2000, Esser caved in.

A day later, the Mannesmann board authorized the huge bonus.

Prosecutor Johannes Puls told the court Wednesday that the bonus was in fact offered to Esser three days before Mannesmann's surrender.

A key issue before judge Brigitte Koppenhoefer, 52, is likely to be why.

The trial resumes Wednesday.
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