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Gribkowsky testimony calls into question bribery charges against Ecclestone

NEWS STORY
10/05/2014

Former banker Gerhard Gribkowsky gave testimony to a German court on Friday which calls into question the bribery charges against Bernie Ecclestone.

Formula One's boss has been accused of paying part of a £26m ($44m) bribe to Gribkowsky in return for him agreeing to steer the sale of a 47.2% stake in the sport to its current owner the private equity firm CVC. Gribkowsky was in charge of selling the stake which was owned by German bank BayernLB and was sold to CVC in 2006.

Over the following two years Gribkowsky received the £26m payment from Ecclestone and his Bambino family trust but the banker did not disclose it to BayernLB. German prosecutors believe that Ecclestone wanted Gribkowsky to sell to CVC as it had agreed to retain him as F1's boss. In 2012 the prosecutors convicted Gribkowsky after ruling that the payment he received was a bribe. This spurred them to come after Ecclestone for paying it and the trial against him began at the end of last month.

Ecclestone denies paying a bribe and says that Gribkowsky threatened to tell the UK's tax authority, the Inland Revenue, that he controlled Bambino if the £26m was not paid.

Bambino has raised £2.4bn from selling stakes in F1 but no tax has been paid on the money as the trust is located offshore. In contrast, Ecclestone is a UK taxpayer so if he was found to be connected to the trust he would have to pay 40% tax on its assets. He strongly denies that he has ever controlled the trust and says he paid Gribkowsky even though his allegations were unfounded because if they had been reported to the Inland Revenue it would have triggered a lengthy and costly investigation.

So far, no conclusive evidence has come to light proving that Ecclestone did in fact pay a bribe. The prosecutors' case hinges on Gribkowsky himself who confessed to receiving a bribe when he was on trial in 2012. To be specific, on 20 June 2012 Gribkowsky said "it took me a long time to come to terms with what I have done and to admit even to myself: Yes, it was bribery."

It was a very blunt admission which was difficult to misconstrue and this is why Gribkowsky was convicted. Ecclestone claims that Gribkowsky fabricated the confession in order to reduce his sentence and there is evidence in favour of this.

Before Gribkowsky made the confession the judge told him that "on the basis of past evidence... a fully comprehensive confession encompassing all the allegations, would impose a cumulative custodial sentence of between 7 years and 10 months and 9 years." In other words, Gribkowsky was told the range of how long his prison sentence would be if he confessed. He ended up getting eight and a half years which was in the middle of the range.

All the prosecutors needed Gribkowsky to do was to reiterate his confession when he gave evidence in the trial against Ecclestone. This would have given the prosecutors the fuel they needed to support the claim that Ecclestone bribed him. The prosecutors couldn't simply use the confession from the trial against Gribkowsky because the case against Ecclestone needs to be proven from first principles.

However, when Gribkowsky took to the witness stand on Friday he did the opposite of repeating his confession. In fact, according to Reuters' European Sports Business Correspondent Jorn Poltz, Gribkowsky struggled to give precise details on what had gone on. When asked why he received the £26m Gribkowsky said "I never asked myself that question. I'm still annoyed with myself for that today."

Poltz says that it clearly surprised the judge Peter Noll, who was presumably expecting Gribkowsky to repeat his confession that "it was bribery." Noll was the judge who convicted Gribkowsky so it is no wonder that the former banker's testimony will have surprised him. "It's hard for me to comprehend (what went on) if you are unable to say more precisely how it came about," Noll told Gribkowsky. But that was just the start of the prosecutors' problems.

Earlier this week it came to light that the prosecutors have actually admitted the key facts at the heart of Ecclestone's defence. Although the prosecutors believe the reason for the £26m payment was bribery they also claim that the money changed hands because Gribkowsky blackmailed Ecclestone about his connection to Bambino. Surprisingly, in court on Friday Gribkowsky confirmed that he had indeed put pressure on Ecclestone.

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READERS COMMENTS

 

1. Posted by Hardliner, 11/05/2014 22:04

"Sorry, I got my currencies wrong, £ not $"

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2. Posted by Hardliner, 11/05/2014 22:03

"It always surprised me that Ecclestone seemed to pay as much as $26m to Gribkowsky. How did they figure out this number between them? Its not as if Gribkowsky was the only person who could spill the beans to HMRC with a degree of inside knowledge. Maybe in fact BE paid him $50m - knowing that the first $26m would be found out, Gribkowsky would serve time and hand back the $26m, and he would keep the other $24m [or lesser amount]. I probably don't make sense, but not much about this trial does..."

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