German snoopers 'tracked thousands of phone calls'

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Deutsche Telekom is immersed in a deepening espionage scandal following allegations that senior executives ordered the covert monitoring of thousands of phone calls by customers, staff and journalists in an attempt to plug an information leak.

The claims, published in Der Spiegel magazine, allege that the company, part-owned by the government, conducted its spying operations for 18 months in 2005 and 2006. "Hundreds of thousands of calls" were said to have been secretly subjected to surveillance.

Rene Obermann, Deutsche Telekom's director, who was not in charge at the time, said yesterday he had sent details of the case to state prosecutors, adding that he found the allegations "shattering". "If they are confirmed, the accusations run contrary to our understanding of data protection," he said. "The consequences will be tough if misconduct is established."

The company denied using bugging devices but admitted that it had tracked calls. The evidence appears to have been leaked to the press by a data company based in Berlin which was contracted to conduct the surveillance because Telekom managers were concerned about leaks of sensitive information to business journalists. The data firm complained to Telekom that it had completed most of its monitoring activities but had not been paid its fee, of several hundred thousand euros.

The order to launch the spying operation was said to have been given by Klaus Zumwinkel, the former chairman of the supervisory board of Deutsche Telekom and Deutsche Post. Earlier this year, he was found to have illegally channelled millions of euros in unpaid taxes to a Liechtenstein bank account.

Deutsche Telekom's phone monitoring scandal comes only months after the German budget supermarket, Lidl, was exposed for employing private detectives to install miniature cameras at its shops to spy on staff. Workers' conversations, love lives and the frequency of their visits to the toilet were recorded in detail. Lidl, which insisted it installed the cameras merely to catch shoplifters, subsequently apologised.

The German government, which owns 32 per cent of the telecoms company, said it welcomed the decision to refer the allegations to prosecutors. It admitted the case would seriously undermine public confidence in the business.

Opposition politicians said the Telekom and Lidl affairs showed the need for a review of Germany's data protection laws.