Final pleas are expected today in the trial of Formula One's former chairman Gerhard Gribkowsky. It isn't certain whether judgement will also come today or be delayed until next week but what seems to be widely accepted is that Gribkowsky will be found guilty of receiving a bribe. In his testimony on Wednesday last week he said "I allowed myself to be bribed," by receiving £27.5m from F1's boss Bernie Ecclestone and his Bambino family trust. However, he added "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 seems some very important people still aren't sure.
Gribkowsky received the money following the sale in 2006 of a 47.2% stake in F1 owned by his employer, state-owned German bank BayernLB, to current owner, private equity firm CVC for £527m ($839m). F1 is now worth five times as much because when BayernLB sold its shares the teams were planning a rival series due a dispute over prize money and the Concorde Agreement, the contract which commits them to race, had not been extended. Gribkowsky claimed he was paid so he would wave through the sale to CVC whereas Ecclestone said the banker was paid because he threatened to make the false allegation that the F1 boss controlled Bambino, which has to remain independent from him for tax reasons.
As Pitpass has reported, there seems to be a significant flaw with Gribkowsky's testimony and even he has alluded to this. In a nutshell, Gribkowsky was legally obliged to sell to CVC, because it was the highest bidder for BayernLB's F1 shares, so he did not need to receive a bribe to wave through the deal.
According to the German media, Gribkowsky admitted in his testimony that the bribe did not need to be paid because CVC offered to pay so much. It has been suggested by Ecclestone and his lawyer that Gribkowsky gave his supposed confession because he reduced his sentence by admitting guilt. That may be true but how will it be possible for the judge to rule that Gribkowsky was paid a bribe to sell to CVC when he was legally obliged to do so anyway?
The Oxford dictionary defines bribery as to "persuade (someone) to act in one's favour, typically illegally or dishonestly, by a gift of money or other inducement." This clearly can not apply in Gribkowsky's case since he was certainly not acting illegally by selling to CVC. In fact, he was precisely following his legal duty. So how can he be found guilty of receiving a bribe? It is a question which it seems is even bugging BayernLB.
"I don't know if the court will say it is a bribe or breach of trust. I think there is a difference," says a spokesman for BayernLB adding "it is a little bit hard to understand but perhaps it is connected to the finder's fee." He is referring to a £25.9m ($41.4m) commission fee paid to Ecclestone by BayernLB. Gribkowsky said in court that Ecclestone presented CVC to Gribkowsky and initially demanded a £62.6m ($100m) fee from BayernLB for doing so. Gribkowsky says he managed to reduce this to around 5% of the sale price which is why £25.9m was paid.
The prosecutors claimed that this money was paid to cover the alleged bribe from Ecclestone to Gribkowsky and since the bribe shouldn't have been paid in the first place it was money lost by BayernLB. However, if the money was not a bribe then that would seem to blow a hole in this theory. This then leaves the explanation that Gribkowsky was paid in order to prevent him from alleging that Ecclestone controlled Bambino. The only way this could be connected to the commission Ecclestone received is if the F1 boss wanted somebody else to cover the cost of the payment to Gribkowsky.
There is no doubt that Ecclestone likes to make a profit on a deal and although the prosecutors say he paid Gribkowsky £14.2m of the £27.5m, he got £25.9m from BayernLB. Had he been paid £62.6m, as Gribkowsky claimed he asked for, Ecclestone would have got even more.
However, there is absolutely no doubt that Ecclestone is wealthy enough to have paid Gribkowsky without getting the money from BayernLB and in reality, the two payments are completely separate. The evidence for this is that Ecclestone has said that he was paid in return for giving CVC "an indemnity for an awful lot of money that all the accounts were in good order because the bank would not give it." If he hadn't done the, the deal couldn't have proceeded. You would have thought that this, in conjunction with the fact that Ecclestone's commission came to a percentage of the sale price, would be proof enough that the payment to him was not connected to the money received by Gribkowsky. Indeed, BayernLB's board consented to Ecclestone's commission and consultancy firm Deloitte has verified that the agreement was legitimate.
For the prosecutors to prove that Ecclestone was paid to cover the money he gave Gribkowsky they would have to produce evidence for this. The existence of Ecclestone's agreement with BayernLB, and the fact that he carried out a task to justify getting the £25.9m, stands against the theory that it was simply paid to cover the payment he made to Gribkowsky.
Last week Gribkowsky testified that he had the power to reject the fee paid to Ecclestone and "should have said no to his demands." At first glance this seems to be evidence that the fee should not have been paid but, as pointed out earlier, it was in Gribkowsky's interests to say this as it reduced his sentence. The upshot is that alleging the money was paid to cover a bribe would most probably boil down to Ecclestone's word against Gribkowsky's and since the banker benefited from saying his version of events it isn't likely to be treated seriously. It is no coincidence that following Gribkowsky's testimony Ecclestone's lawyer released a statement, which was exclusively reported by Pitpass, saying that "in various cases in recent years third parties have been incriminated in 'confessions' which later - in subsequent proceedings - prove to be groundless."
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