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Yesterday's verdict in the trial of Formula One's former chairman Gerhard Gribkowsky came as little surprise after the German banker testified last week that he had received a £27.5m bribe to wave through the sale of the sport to current owner, private equity firm CVC, in 2006. As Pitpass reported yesterday, there was a question mark over whether Gribkowsky would be found guilty of bribery or breach of trust but after incriminating himself there was no chance of him being found innocent. In the end he was found guilty of bribery, tax evasion and breach of trust and sentenced to eight and a half years. The big question is where this leaves F1's boss Bernie Ecclestone.
No charges have been brought against Ecclestone and he has not been accused of any wrongdoing. He has admitted that he paid Gribkowsky but said he did this after the banker threatened to make false allegations about his tax affairs to the UK's Inland Revenue. The court in Munich rejected this version of events and in his closing statements prosecutor Christoph Rodler said "Ecclestone was not a victim of blackmail, but a fellow participant in bribery." However, the court hasn't done anything about this and it doesn't look like it will.
Ecclestone's lawyer Sven Thomas says that we are "far away" from Ecclestone being charged with paying the bribe and there are several reasons for this. At the top of the list is the lack of a financial need to press charges against Ecclestone.
To recap, Gribkowsky was in charge of selling the 47.2% stake in F1 held by state-owned German bank BayernLB. It was sold to CVC in 2006 and over the following two years Gribkowsky was paid £27.5m by Ecclestone and his Bambino family trust. Ecclestone brought CVC to Gribkowsky and it offered to pay £527m ($839m) - more than any other bidder. Ecclestone says he was given £25.9m by BayernLB in return for brokering the deal and since CVC demanded an indemnity "that all the accounts were in good order because the bank would not give it."
The court believes that, in fact, this money was paid to Ecclestone to cover the bribe he paid to Gribkowsky and the reason he wanted F1 to be sold to CVC was that it would retain him as the sport's boss. The court argues that since the alleged bribe should not have been paid, the commission BayernLB paid to Ecclestone to cover it should also not have been paid and therefore the bank lost out to the tune of at least £25.9m.
When Gribkowsky was arrested in January last year all of his assets, including the £27.5m he received from Ecclestone and Bambino, were frozen by the German authorities pending the result of the trial. Now that Gribkowsky has been found guilty, the authorities are free to distribute the £27.5m which he was given. As the court ruled that Gribkowsky received a bribe and Ecclestone covered it through the commission he was paid by BayernLB, this makes it highly likely that the money will be transferred to the bank since it allegedly lost out. In contrast, if the court had ruled that Gribkowsky had been paid because he threatened Ecclestone, it may have returned the money to the F1 boss.
Paying the money to BayernLB covers the damage which the court believes was done to the bank by the commission being paid to Ecclestone. Accordingly, there seems to be no financial need to press charges against Ecclestone. If Ecclestone was charged and found guilty of paying a bribe and covering it with the commission then his money would have to be returned to BayernLB. However, as it seems likely that BayernLB will get the £27.5m from Gribkowsky then getting back the £25.9m from Ecclestone as well would give the bank around double its money back which does not seem to be necessary.
So, there seems to be no financial need to press charges against Ecclestone and, in fact, it could carry significant risk. As Pitpass recently revealed, the result and evidence from the Gribkowsky trial could not simply be carried over to a case against Ecclestone - it would have to be tested from scratch.
Naturally Ecclestone is in possession of a great deal of evidence connected to the case since he made the payment to Gribkowsky and he demanded and received the payment from BayernLB. His commission was agreed by the BayernLB board and has been given a seal of approval from the accountancy firm Deloitte. By proving that his work on the deal justified his commission the case against Ecclestone falls to pieces. If he can also prove that Gribkowsky threatened him, then the banker could demand a re-trial of his case. If that succeeded then BayernLB could be forced to repay the £27.5m to Gribkowsky and the court would end up with egg on its face so there a lot is at stake by pressing charges against Ecclestone.
In contrast, to Gribkowsky Ecclestone has extremely deep pockets and if charges are brought against him, the ensuing case could be extremely expensive for the court. This is a further reason why it seems unlikely to proceed in addition to the lack of a financial need and the risk that the case would not succeed.
You may be wondering how on earth the German courts could reconcile not pressing charges against Ecclestone for paying a bribe after they have found someone guilty of receiving it. Surprisingly, this isn't as unusual as it may seem.
As a director of a state-owned bank Gribkowsky had the status in Germany of a public official and during their employment they are forbidden from receiving payments which are not connected to their work. So even if Gribkowsky had not been influenced by Ecclestone, the court could still say that he had received a bribe.
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