Spies on Staff

Using the company's own records of millions of numbers dialed, the dates and the durations, the internal-security unit had hunted for possible matches between news reporters and Telekom directors.

Both public prosecutors and a German law firm have been assigned to investigate the suspected breach three years ago of German data-retention laws. Bonn-based Telekom said it had purged the security department last year to ensure it operated within the law.

The scandal was first reported Saturday morning by German newsweekly Der Spiegel in advance of its Monday issue.

Following US practice

Telekom, one of the biggest companies on the German stock market, remains one-third in federal ownership.

Its affairs are closely followed by the German news media, which have often reported leaks from authoritative sources. Der Spiegel said the corporate security division had suspected senior executives or supervisory board members might be to blame.

Telekom said calls were not actually tapped, but the billing data had been illegally accessed in 2005 and "according to new claims" in 2006, too.

"We're taking this very seriously. We have reported it to the public prosecutor," chief executive Rene Obermann said.

In recent years German companies whose shares are traded in the United States have adopted the US practice of investigating and publicizing criminal actions within their own bureaucracies.