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Ecclestone: Gribkowsky worked for family trust

NEWS STORY
19/11/2011

In July Pitpass revealed Bernie Ecclestone's admission that he and his family trust paid Gerhard Gribkowsky £27.5m after he threatened to report false allegations about his tax affairs to the UK's Inland Revenue.

At the time many reporters could hardly believe the news and even the Times' motor racing correspondent wrote; "it seems that Ecclestone volunteered the story about Gribkowsky threatening to drag him into a tax case with the Inland Revenue to a tame website journalist. It all seems a little odd." He couldn't have been much further from the truth and has egg on his face as Ecclestone's testimony under oath last week confirmed Pitpass' revelation.

Fresh from another interview with Ecclestone business editor Christian Sylt has more exclusive revelations. It is not only as significant as the story from July but it will also be reported by all the other news outlets in the weeks to come when it finally comes out in court. Pitpass readers don't have to wait until then.

Until now, the only reason given by Ecclestone for the payment of the alleged bribe was that Gribkowsky insinuated he would contact the Inland Revenue and make the false claim that the F1 boss runs his independent family trust. It is a claim which could have made Ecclestone liable to pay the tax on the estimated £2.5bn the trust has received from F1. To avoid this happening Ecclestone says he paid £8m to Gribkowsky with the remainder coming from his family trust.

Last week Ecclestone took to the stand in Munich as a witness in the trial and said that if Gribkowsky had contacted the tax authority "he would have landed me with a lengthy investigation, massive legal costs and I didn't need it and so I paid to get rid of the problem."

Writing in the Independent, Sylt says that Ecclestone reiterated this reason to him but added that the trust paid its portion of the money because "the trust had a deal with Gribkowsky to advise on property deals and did some property deals that he proposed."

To recap, Gribkowsky worked for German bank BayernLB and was responsible for selling its 47.2% stake in F1 which was bought by the sport's current owner, private equity firm CVC, in 2006. German prosecutors believe that Gribkowsky demanded money from Ecclestone in return for his agreement to sell to CVC which wanted to keep him as F1's chief executive.

The reason it is incredibly significant news that Gribkowsky worked for the trust is that in their investigations, the prosecutors have uncovered consultancy contracts between the trust and the banker but they believe they were used to disguise the payment demanded by him. Ecclestone's explanation sheds light on why the contracts with Gribkowsky may have been in place and is further evidence that they were not used to disguise a bribe at all.

Ecclestone says that if Gribkowsky had contacted the Inland Revenue it would have been just as damaging for the trust as it would have been for him. He stresses that Gribkowsky was not paid £19.5m directly for the property consultancy since it was his threatening insinuations which were the driving force behind the payment. "Would they have [engaged him as a consultant] if he wasn't intimidating or something like that? I don't know whether they would have done that. They would have been in the same problem as me." Ecclestone adds that Gribkowsky "also suggested five or six deals to me but I didn't do any of them."

Ecclestone says that Gribkowsky came into contact with representatives of the trust through attending F1 races. "He used to come to all the races. He met everybody. He had a high life. He travelled the world, ate in the best restaurants, drank the best wine and enjoyed everything about what he did."

According to Ecclestone's testimony, Gribkowsky's insinuations were made before the trust had been given clearance by the Inland Revenue and the banker seized on the fact that the F1 boss was unaware of whether it had been set up correctly. Ecclestone says he "had no idea how the trust was set up. I don't even know today. I had nothing to do with it. Presumably it was set up properly because they got clearance. In those days I didn't know."

This would explain why Gribkowsky was paid to keep his threats quiet but Ecclestone is now happy to say that these threats were being made. "At the time everything wasn't sorted and clear but now it is. It is painfully obvious now that I was a little bit stupid perhaps in paying him but hindsight is a great thing."

It is a rare admission of error from Ecclestone but even that wasn't the most surprising news from Sylt's interview with him - that's a story which will come to light very soon. Watch this space.

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