German rail chief resigns over snooping scandal

30 March 2009

Hartmut Mehdorn, the embattled head of German rail carrier Deutsche Bahn, tendered his resignation on Monday after losing political support in the wake of a row over data protection. Mehdorn, who has run the state-owned company since 1999, has been under growing pressure amid disclosures that the rail operator had been accessing confidential staff data for more than a decade.

Earlier this year, it emerged that 173,000 of Deutsche Bahn's 220,000 employees had been screened this way in apparent contravention of data protection laws.

Over the weekend, further revelations surfaced that the company had monitored the emails of staff suspected of leaking information to journalists and had deleted a 2007 email sent by the train drivers union GDL to employees calling for strike action.

The firm admitted that it conducted a surveillance operation on staff, intended to tackle corruption. The company, Germany's biggest public entity, confirmed it employed investigators from a detective agency in Berlin to carry out covert surveillance operations on its employees. It has also admitted monitoring staff emails to check whether they were being critical of the company's policies.

Mehdorn, who presented the company's 2008 earnings today, told reporters in Berlin that he will ''take responsibility for all actions'' at Deutsche Bahn, though the probes by accounting firm KPMG and outside investigators have shown ''no legal violations.'' He said he offered his resignation, which the government accepted, and expects a successor to be named by summer.

Mehdorn's fortunes turned last year when Chancellor Angela Merkel's ruling coalition called off a planned share sale of the train-operating unit of Deutsche Bahn because of the financial crisis. Appointed in 1999 by then-Chancellor Gerhard Schroeder, the 66-year-old had for years pursued an initial public offering of Germany's last big federal asset to increase the railway's capital and upgrade its infrastructure with a view to making further acquisitions abroad.