A new type of corporate event: sex junkets?

Wooing labor got taken a little too literally, resulting in so-called "sex junkets" where corporate executives sent labor leaders to Rio to tour facilities, meet with local labor officials, and frolic with prostitutes, alleges a former Volkswagen manager in this article in the Detriot news.

    Last July, a few weeks after he was fired by Volkswagen AG for alleged embezzlement, Klaus-Joachim Gebauer, a former midlevel manager in the company's personnel department, began telling stories about the auto giant that many Germans found hard to believe. Now, as the company and German prosecutors buttress key elements of his account, Gebauer's tale is rocking the world's third-largest economy.

    In January 1996, Gebauer says, VW sent a dozen of its top German labor leaders to Brazil for a tour of the company's Sao Paulo facilities and meetings with local Brazilian union officials.

    After finishing the official portion of the trip, Gebauer says he and the other men took a bus to Rio de Janeiro and checked into the Othon Palace, a high-rise hotel on the city's famous Copacabana beach. They explored the shops, the nightlife and, Gebauer says, picked up prostitutes for trysts on the beach and back in their hotel rooms. In the morning, he says in an interview, Gebauer paid the women -- and, using some phony receipts and some real ones, got his employer to reimburse him for the group's expenses for the entire trip.

    The Rio excursion was the first of what Gebauer says were dozens of "Lustreisen," or pleasure trips, to exotic locations undertaken by VW worker representatives and paid for by the automaker over the following nine years.

You have to consider the source, of course—the guy is under investigation for embezzlement, after all—but it sounds like the German authorities are taking the allegations seriously.

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