Tax Evasion Trial

One of Germany's leading financial newspapers, Handelsblatt, reported the deal late on Monday evening, Jan. 12. The paper cited an unnamed court official as its source.

Zumwinkel was scheduled to go on trial next week for allegedly using the LGT Bank in Liechtenstein to hide nearly one million euros ($1.32 million) in income from German tax authorities.

The former CEO of Germany's postal company, Deutsche Post, was one of the most prominent figures involved in a scandal that broke last year, when it emerged that hundreds of wealthy Germans were purportedly using foreign accounts to conceal money from the government.

The news led to many European governments to step up the pressure on so-called tax havens like Liechtenstein to change their banking secrecy laws. Zumwinkel subsequently resigned his position at the Deutsche Post.

Under the terms of the reported plea bargain, Zumwinkel would admit to wrongdoing in return for receiving a two-year suspended sentence. When asked by the AFP news agency, a spokesperson for the court in Bochum, where the trial is scheduled to take place, refused to confirm or deny the deal.

New legislation needed?

According to Handelsblatt, the plea bargain was only possible because the court had ruled that Zumwinkel would only have to answer on charges of evading 970,000 euros in taxes from 2002-6.

Further evasion accusations from 2001 were deemed inadmissible because of Germany's statute of limitations -- German law prohibits suspended sentences in cases involving more than million euros.

Germany's Federal Prosecutor Monika Harms has called in the past for legislation against so-called "back-room deals" in cases of serious economic crimes.

And Germany's bloggers are, not surprisingly, outraged by the news of the Zumwinkel arrangement.

"It's very bitter indeed for an 'average citizen' to see the state differentiate between classes in applying its laws," wrote one user of the Bild newspaper's online edition. "It's simply disgusting."

Few Germans believe that Zumwinkel would be able to reach such a deal, if he were not a former top executive.

"Here in Germany, tax evasion is sometimes prosecuted more vigorously than cases of rape," wrote a commentator on the blog Virtual Nights. "Only if you're the former boss of the post office, you can emerge from the affair with merely a black eye."

But one user -- presumably a former postal employee -- took the news with a measure of humor.

"Great," he wrote. "My ex-boss really knows what he's doing."

A number of prominent German executives -- including former VW personnel boss and government advisor Peter Hartz -- have received light sentences in criminal cases in recent years, prompting growing public anger and dismay.