On Thursday, Jann-Peter Janssen had still denied that he had received money from Volkswagen while holding public office even after company officials revealed that he had remained on VW's payroll until the end of 2004.

But on Friday, Janssen announced he would give up his seat in the German federal legislature. Janssen did not comment on his resignation himself and his local party chapter simply stated that he resigned because he did not want to burden his family and his SPD party with speculations about his income any longer.

A backbencher from the Germany's North Sea coast, Janssen (photo) entered parliament in 1994. Before his election, he had worked as a workers' council representative at VW.

Five other Social Democrats were also listed by VW officials as paid employees. Undisclosed payments and perks paid by German industry to members of parliament have outraged the public and prompted a hectic search among MPs for a way to keep all politicians from being tainted by the scandal.

But it has already claimed the careers of two prominent conservative politicians. CDU general secretary Laurenz Meyer (photo) and the party’s labor affairs spokesman, Herman-Josef Arendtz, were forced to step down a month ago after they admitted they had received undeclared payments from the energy giant RWE.

VW wants to halt payments

On Thursday it was the Social Democrats turn to eat humble pie, after German automaker Volkwagen disclosed that two SPD members of parliament, four regional assembly lawmakers and more than 300 minor local politicians were on its payroll.

VW chief executive Bernd Pischetsrieder admitted that the payments had been made in violation of the companies own rules.

"As a matter of fact, our rules allow such payments only if politicians are still actively working for the company and if it helps to facilitate the future re-integration into Volkswagen," he said.

Volkswagen is now planning to halt all payments to politicians and toughen its stipulations. VW workers, however, are outraged by the fact that politicians are handed perks while the company staff will have to endure a two-year freeze on salaries to cut costs at VW.

"I cannot accept that," one VW employee told DW-RADIO. "If I were going to moonlight in other jobs, I would face punishment, but politicians, I assume, will be off the hook."

Another worker agreed and added it was unbelievable that politicians could earn a second salary without doing anything.

RWE comes clean

In an apparent effort to prevent further revelations, Germany’s top energy company RWE has now also come clean on its secret payments to politicians.

On Friday it said that it pays more than €600,000 ($786,500) each year for lobbying activities, but mostly to local politicians. German politicians are allowed to moonlight in other jobs, but they are obliged to declare any outside employment to avoid conflicts of interest.

Looking for safeguards

Wolfgang Thierse, the Social Democratic speaker of parliament and in charge of overseeing the Bundestag's code of conduct, said the cases that have become known so far are all in violation of the rules. He demands stiffer penalties as a more effective deterrent.

"In my view it is important now that Germany eventually adopts the international anti-corruption charter," he said. "A draft bill to this end has long been put before parliament and it provides for sanctions mechanisms that could have prevented exactly those violations we are experiencing now."

Thierse (photo, right) will meet senior members of Germany‘s main parties next week to discuss legislative measures against corruption. But he has rejected the idea of requiring all parliamentarians to publicize all of their income, saying that this would harm self-employed entrepreneurs or lawyers, who might suffer competitive disadvantages.

In the meantime, German shareholders have vowed to put stern questions to company heads at upcoming annual meetings. The two largest stockholder pressure groups said on Friday that utmost transparency about industry perks and payments must become standard operating procedure.