Repairing Spying Scandal Damage New Era of Openness Dawns at Deutsche Bahn

The new boss of Deutsche Bahn, Rüdiger Grube, is determined to put an end to the culture of secrecy at the company, which spied on its own employees. He is getting rid of four board members and restructuring the company -- and starting a much-needed modernization of Germany's national railway company.


For visitors to Deutsche Bahn headquarters at Berlin's Potsdamer Platz on Wednesday, it was impossible to miss the fact that a new era has begun at the company. A table right at the entrance to the press room had reports on the company's spying scandal piled up in large stacks, available for everyone to take. They did, admittedly, bear the words "strictly confidential." But when at the start of the press conference the company's spokesman encouraged journalists to take a copy, one thing became clear: Germany's national railway company wants to put an end to its culture of secrecy.

The new and old bosses of Deutsche Bahn: Rüdiger Grube (left) took over from Hartmut Mehdorn at the beginning of May.

The new and old bosses of Deutsche Bahn: Rüdiger Grube (left) took over from Hartmut Mehdorn at the beginning of May.

As recently as a few weeks ago, politicians and journalists could only get the report about the spying affair at the company, which was compiled by special investigators, if someone slipped them a copy on condition of absolute secrecy. It's not surprising: The document contains details of what Werner Müller, the boss of the supervisory board, described at Wednesday's press conference in surprisingly blunt terms as "the biggest load of bullshit" which he said had taken place "over a number of years."

What that means in concrete terms is described in detail over 190 pages in the report, which was compiled by investigators from the accounting firm KPMG working together with former Interior Minister Gerhart Baum and former Justice Minister Herta Däubler-Gmelin. According to their findings, the company had repeatedly and on a large scale compared personal data of its employees, and at times their family members, with those of suppliers, in a bid to uncover possible corruption. In addition, the company's security personnel had routinely checked the recipients and contents of employees' e-mails. Hard disks and network drives were searched, with personal data also being checked. The company also used private detectives to obtain bank statements and data about bank transfers and taxes. The practices violated German laws regarding privacy and employee rights, as well as internal Deutsche Bahn guidelines.

That much was already public knowledge. What is new, however, is the behavior of the company. Unlike recently resigned chief executive Hartmut Mehdorn, new rail boss Rüdiger Grube, who took office on May 1, is not trying to play down the illegal practices. The investigation of the data scandal at the company had clearly shown that "the creation of a new, trusting atmosphere of cooperation" at the company was "long overdue," he said. Now a "reboot" and "a new corporate culture" was required. He apologized to his staff and announced the company would cooperate with prosecutors and data privacy authorities.

But that's not all. Grube is making clear that he is planning a radical new beginning through personnel decisions which mark a conclusive break with the Mehdorn system. Four members of the board are leaving the company, even though -- as Müller and Grube stressed -- they bear no "personal responsibility" for the misdeeds. Nevertheless, Mehdorn confidantes Margret Suckale, Norbert Bensel, Norbert Hansen and Otto Wiesheu are going and will already be clearing their desks on May 31. In addition, the company is getting rid of Josef Bähr, head of internal auditing, as well as security boss Jens Puls and Wolfgang Schaupensteiner, who was in charge of fighting corruption.

It is clear that Grube is not only talking about a "new beginning" -- he really means it. He wants it mainly so that things will finally calm down politically at the company, which has been suffering from negative headlines for weeks and months. Grube, a former manager at the automobile company Daimler, is not stopping with personnel changes -- he also wants to change structures at the company. He announced on Wednesday that in the future the compliance, data privacy and legal departments will be put together into a new division to be headed by a member of the board. The IT and IT audit departments will also be reviewed and reorganized, as will the corporate security department.

For Grube, it's not just about a reconciliation between, on the one hand, the state-owned company and, on the other, politicians and the general public. He also wants to fundamentally modernize Deutsche Bahn. "The area of corporate governance is already established in many industrial sectors," says Heino Ruland, an analyst at the company Frankfurt Finanzpartner. "Deutsche Bahn has so far been lagging behind in terms of ethical business principles." The old structure did not comply with the current capital market regulations, Ruland says, explaining that the company is making itself more compatible with the capital markets through the new structures -- something that would be helpful should the controversial privatization of the company come about.

Deutsche Bahn's headquarters at Berlin's Potsdamer Platz: The company has been plagued by a spying scandal.

Deutsche Bahn's headquarters at Berlin's Potsdamer Platz: The company has been plagued by a spying scandal.

However the restructuring will have little influence on existing business processes in the short term. "The heart of a company is the chief financial officer -- and he is staying," says Ruland. Indeed, it looks as if CFO Diethelm Sack intends to stay faithful to the company. Supervisory board head Müller joked at the press conference Wednesday that Sack was "practically married" to Mehdorn and had always stressed that if Mehdorn went, then he would also leave the company: "They were like birds of a feather."

However, Müller said that Sack had told him that his first days working together with Grube had been very productive. "And Mr. Grube has assured me that he will always treat him very lovingly," Müller said.

The joking comments have a serious background: Sack is considered by experts to be the man at Deutsche Bahn whom investors trust most. Mehdorn never had that confidence, meaning that Sack's departure would be all the more serious for the group, they say.

However, with Grube, a manager has taken over the top job at Deutsche Bahn who could quickly gain that trust. "Grube left behind at Daimler an impression that, although unremarkable, he was by no means bad," says Ruland. As head of strategy he had, for example, been responsible for ending Daimler's troubled relationship to Chrysler and in the process correcting past mistakes.

That is exactly what his new role at Deutsche Bahn will entail. "Changing the company structure is the only sensible response to the entire data privacy scandal," says Kay Mitusch of Karlsruhe University's Institute for Economic Policy Research (IWW). However, despite the departure of the four board members, the key figures at the company have not been dismissed. "It will be interesting to see whether Grube also replaces the board members at Deutsche Bahn's various subsidiaries -- and with whom," Mitusch says.

Müller and Grube did not want to make any comment in that respect on Wednesday. All they would say is that they have their eye on some "fantastic people," who are expected to be appointed to their new positions by the end of May.

Even the new Deutsche Bahn management reserves its right to secrecy on some points, it seems.


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