Volkswagen AG spied on Brazilian union activists in the 1980s and passed sensitive information about wage demands and other private discussions to the country's military dictatorship, according to newly uncovered documents seen by Reuters.

The company covertly monitored its own workers as well as prominent union leaders of the era. One of VW's targets was Luiz Inacio Lula da Silva, who went on to become Brazil's president from 2003 to 2010 and remains one of its most influential politicians.

The documents were recently discovered in government archives by a special "truth commission" that, at the request of Brazil's current president, Dilma Rousseff, is investigating abuses that occurred during the 1964-1985 regime.

Reuters reported last month that the commission found signs that dozens of companies, including Volkswagen (VOWG_p.DE) and other foreign automakers, helped the military identify union activists in the 1980s to suppress labor unrest.

Now, according to the commission's leaders, 20 pages of documents marked "confidential" that Volkswagen gave to the military in 1983 and 1984 provide the clearest proof yet that some companies went further - gathering their own intelligence on union activities and sharing it with authorities.

In the documents, Volkswagen provided extensive accounts of more than a dozen union meetings in Greater São Paulo. The company relayed workers' plans for strikes as well as their demands for better salaries and working conditions.

The company reported the names of Volkswagen workers who attended union events and, in at least two cases, noted the make and license plate numbers of vehicles present.

Volkswagen also reported the showing of a socialist-themed film at a union headquarters; the contents of flyers distributed outside its factory doors and the names of those distributing them; and an incident in which "several addicted workers were caught smoking marijuana."

Such information was typically used by police to monitor, harass and detain union activists in the hope of discouraging future unrest, said Sebastião Neto, a member of the National Truth Commission. He cited testimony the group has gathered from workers who met with such treatment.

"These documents show with exceptional clarity how companies expected the government to help them solve their problems with their workers," said Neto, who is overseeing the commission's research of links between companies and the military.

Companies could face civil lawsuits or demands for reparations if they are found to have contributed to human rights violations of their workers during the dictatorship, some Brazilian prosecutors have said.

Others doubt that the evidence uncovered so far would be sufficient to mount a court case. They say the investigation's true value lies in building a fuller account of past abuses so that Brazil, now a stable democracy and economic power, never repeats the mistakes of the dark period.

The documents were found in Brazil's national archive by professional historians who were hired by a local union to work in coordination with the National Truth Commission. Neto said they would be included in the group's final report, due in December.

VW VOWS INVESTIGATION

In response to questions from Reuters about the new documents, Volkswagen repeated a vow it first made last month to "investigate all indications" that employees provided information to the military.

No other large company with operations in Brazil has yet publicly committed to such an investigation.

"Volkswagen is acknowledged to be a model for coming to terms with its corporate history," the company said in a statement. "The company will handle this topic in the same way."

Volkswagen has repeatedly surfaced in the truth commission's probe as a prolific supplier of information. It wasn't the only company that helped the military track union activities, however, researchers and academics say. The dictatorship suppressed workers' wages as a central part of its economic growth model and saw strikes as a communist threat to stability. Countless companies faced pressure to collaborate.

Volkswagen was one of 19 Brazilian and foreign companies that attended regular meetings with military and police officials in the Paraiba River Valley, an industrial area some 55 miles (90 km) east of São Paulo. The meetings began in July 1983 at a time of growing labor unrest in the area.

At the meetings, the companies exchanged information about coming strikes and mass layoffs, according to notes of the meetings made by Brazil's Air Force.

In the Air Force minutes, which were provided to Reuters by Truth Commission researchers, Volkswagen was the only company recorded to have submitted its own extended written accounts of union activities. It did so on at least three occasions.

The documents were attached as an annex to the minutes. They don't state how Volkswagen obtained the information. But the intimate level of detail suggests the company may have sent security personnel to monitor union events or received information from sympathetic workers, researchers say.

For example, Volkswagen reported on the showing of a film about the Russian Revolution at a union headquarters. In a memo, VW described how workers blocked the doors to the projection room and deactivated the building's elevator "to avoid a possible seizure of the film by the Censorship Department of the Federal Police."

The memo noted that "warm wine, popcorn and chocolate" were available at the screening, and it recorded the name of the worker who sold them.

Volkswagen also extensively documented a union rally of June 19, 1983, that featured Lula. He was not a company employee but was a rising star in the regional labor movement at the time. Volkswagen quoted Lula as criticizing the "lack of shame of the government" and encouraging workers to stop paying into a government housing fund as a gesture of protest.

The company recorded the license plate number of a bus that carried workers to Brasilia after the rally, and the name of the company that operated it.

A spokesman for Lula declined to comment on the documents.

Geovaldo Gomes dos Santos, a former quality control official who retired from Volkswagen in 2003, was named in the documents as having organized a meeting on June 21, 1983, to discuss a coming regional conference of metalworkers.

Dos Santos's name also appeared in a separate "black list" of union activists in Greater São Paulo that police assembled in the early 1980s, the existence of which Reuters revealed last month.

Told that he also appears in the new set of documents, Dos Santos said: "That's absurd."

He said that in light of the information, he may try to sue Volkswagen or its former executives for "moral damage" - a broad offense under Brazilian law roughly akin to harassment.

"I don't want any money," he said. "It's just so disgusting, what they did. We weren't doing anything abnormal. Why were they spying on us? Unions should just be a normal part of capitalism."

(Editing by Todd Benson and Michael Williams)