Bernie Ecclestone, 2013

Ecclestone pays £59m to end bribery trial

2014 F1 seasonPosted on Author Keith Collantine

Bernie Ecclestone, 2013Bernie Ecclestone’s trial on charges of bribery has come to an end after he offered to pay £59m ($100m) as a settlement.

German law permits defendants to settle trials by payment in some situations, without being judged guilty or innocent.

It brings an end to a trial which lasted four months and threatened to leave Ecclestone with a prison sentence of up to ten years had he been found guilty.

Bayerische Landesbank claimed Ecclestone had bribed their employee Gerhard Gribkowsky with £27m ($44m) in 2006 to ensure Formula One was sold to its current owners CVC Capital Partners. They alleged he preferred CVC as a buyer because they would keep him in charge of the sport.

Gribkowsky was sentenced to eight-and-a-half years in prison for his role in the affair in June 2012.

Ecclestone stood down from his role as director of Formula One in January due to the imminent legal proceedings in Germany and a related case in Britain, which he won the following month.

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128 comments on “Ecclestone pays £59m to end bribery trial”

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  1. Doesn’t even USA allow settlements to be made in matters of civil litigation?

    Just like we have the plea bargain in criminal cases?

    1. Not a civil case. It’s a criminal case. Paying your way out of a criminal case has no place in the modern world.

      1. Why? It is an financial crime, so why not deal with it financially? I don’t see what good locking up an eighty something year old does when the crime is practically victimless.

        1. I think the real issue is that a $100 million fine is such a small percentage of Bernie’s net worth that it doesn’t even affect him. He is reported to be worth over $2 billion, so the fine is about 5% of his worth, about the interest income he will ‘earn’ this year. But I guess the rich are different than us.

        2. @repete86 I agree with the point about locking up an 80+ year old, especially one who hasn’t committed any kind of physical assault on anyone.

          However he should still be judged criminal or not and he is able to buy his way out of this.

          Justice should be applied equally. Be it a £50 or £50m fraud. You can bet your own £50 that the £50 offence will be lumbered with a criminal charge which they cannot buy their way out of.

          1. he is over 80, but likely to live to 100.

          2. Long past 100 I fear: We all know blood-sucking vampires are immortal.

          3. You can bet your own £50 that the £50 offence will be lumbered with a criminal charge which they cannot buy their way out of.

            Except they could. This is a clause of German law commonly used. Odds are, a lot more £50 frauds have “paid their way out” than £50m frauds.

        3. I keep reading this as ‘a good looking 80 year old’.

        4. Why because its uncivilized.He is a criminal and should be in jail,that is all.There are No mitigating circumstances.

          1. And who exactly is getting payed here. There must be some sort of breakdown where that money is going?

          2. I agree ,80 yrs old or not the guy is a criminal and paying the money makes me think the guy is guilty of fraud.Bernie has committed fraud by paying the fine to stay out of prison.

        5. It isn’t a financial crime. It’s a trust crime. He has undermined one the basic principles of civilisation – the ability to trust officials of the institutions the govern us.

          If he had been found guilty, but given a suspended sentence – while I’m sure some would have been upset – at least the courts would have made a statement that this was not acceptable behaviour. He would have a criminal record, a modern day brand, that clearly says “be wary dealing with Bernie Ecclestone – he is not to be trusted”.

          If he had been found innocent, the courts would be saying “this man has done no (legal) wrong”. And the world would know that whatever reputation Bernie has was unchanged. (Yes, I know – a bit far fetched, but you get the idea).

          Instead, we have the message that if your wallet is large enough, then we don’t care what you get up to. There’s a rule for the rich, and a rule for the rest of us and they don’t even have the shame to attempt to hide it.

          In the absence of a innocent verdict, in my opinion Bernie is a lying, cheating, criminal, who should have nothing further to do with the sport that I love. And that the German justice system is not deserving of the name.

        6. I would not say that it’s “victimless,” nor would the gentleman who’s spending 8 years in jail because he couldn’t afford to buy off the court.

          1. +100

        7. The victim is a state in bribe cases, so it isn’t victimless, there is always a victim in criminal case.

        8. F1 is the victim.

        9. @repete86 Why? It is an financial crime, so why not deal with it financially? I don’t see what good locking up an eighty something year old does when the crime is practically victimless.

          Deterrence. The whole point of anti-bribery laws is that they are aimed at stopping those with lots of money from acting unethically and using those resources to secure an outcome they could not otherwise have achieved.

          Allowing the perpetrator of bribery to then use his resources once again to achieve an outcome they could not otherwise have achieved (this time to avoid criminal liability) seems to be completely against this purpose.

        10. It is an financial crime, so why not deal with it financially?

          Paying a bribe to get away with paying a bribe isn’t exactly my idea of justice, but hey, maybe it’s just me.

      2. From what i understand he did not pay his way out exactly and it’s not a deal in the common sense.

        It’s all about “Paragraph 153a Strafprozessordnung”: There is a suspicion you are guilty but this probably cannot be proved, furthermore you are not accused of a capital crime. Then – if the interest of the people is preserved (read in this case: money) – the case will be closed. The amount of money to be paid relates to your wealth.

        The law is meant to speed up cases with first time offenders of small to medium crimes which are likely to result in a “not guilty” >> more time for capital crime cases. It is invoked more than a hundred thousand times per year in Germany.

        The judge found it hard to establish that Ecclestone was guilty of bribery.
        Not the least because Gribkowsky was a truly miserable witness.

        Additionally it appeared hard to prove that Ecclestone knew that Gribkowsky was a civil servant which was one of the main points that made it a criminal case.

        BE could have gone for the “not guilty” verdict if he was interested in spending a couple more months in court.

        He clearly was not.

        1. Simply more evidence that the justice system in Germany does not deserve to be called as such.

          Basically that reads if we don’t have enough evidence to convict you, then we’ll pressure you into giving us money.

          A disgusting rule, that has been exploited by a disgusting weasel.

          $100m to save a couple of months? He must have been DESPERATE not to wait around and hear that “not guilty”.

          1. Sennas sandshoe
            5th August 2014, 19:42

            I find the way you’re talking about an 80 year old man quite disgusting.

            Bloke’s a legend. You know who Bernie’s detractors within F1 are? The one’s he didn’t make millionaires…..Which is very few.

            You say what you just said to Frank Williams or Ron Dennis, or pretty much anyone involved down to the VERY well paid pit crews and mechanics……The response wouldn’t be pretty.

        2. I agree it looks very fishy. But in fact it is rather rational—vernunftig—a prized quality of German public administration. Indeed, in the U.S. one often hears public outcry about the prosecution spending millions in attorney time and costs in a supposed “show trial” of some white collar criminal, “to make an example”….at least when the government loses or is losing the case.

        3. The judge found it hard to establish that Ecclestone was guilty of bribery.

          Despite the court admitting that all the evidence had not been heard yet!
          It reveals a corruptable legal system and has Ecclestone bought his way out of being properly tried because he has the money. Shame on him, even bigger shame on Germany.

    2. Yes. But such pleas are normally organized before a trial, and may result in the prosecution putting lesser charges to the court or grand jury. They do not occur after a trial has begun—that is, a defendant is not given an opportunity review the work of the prosecutor and then name his price. He has to decide on a plea while the full possible weight of the law is over his head, and before he might see whether a lousy witness or somnescent jury has improved his chances.

  2. The question is: Where does Bernie go from here?

    1. devil's advocate
      5th August 2014, 13:11

      Oblivion and mortality I would think?

    2. Probably straight back to normal, but it’ll hopefully force CVC to push for a) a succession plan and b) more transparent dealings on their behalf.

      They know this whole business has made F1 too much of a hot potato and they know they need to sell fairly soon – they’ll be looking to drive value back into the business (without costing them much, if any, money).

    3. Where does Bernie go from here? Straight toward a plan to claw back the 100 mill. Oh wait…he probably already had that in place before he offered to cut the cheque.

    4. He just essentially paid $150m or so to make billions. He goes to the bank, laughing all the way.

  3. Bernie Ecclestone’s Guide to Ending a Bribery Case:

    Bribe your way out.

      1. I thought the same thing. Pay us a bribe or we will send you to jail for bribery. struggling to get my head around this one.

    1. You can’t even script this sort of stuff…

  4. A total mockery of a justice system.

    Buy yourself out of criminal charges? Utterly absurd.

    1. I don’t think they were explicitly criminal charges. If they were, he wouldn’t have the settlement option.

      1. So what’s he paying for.

        No crime, no pay.

        1. He paid to make the whole case go away. They key point is he’s not actually been found innocent (just like he hasn’t been found guilty) of the crime, which may still leave huge question marks hanging over him from the POV of (for example) Daimler.

          Big multi-nationals don’t like being associated with crooks and Bernie hasn’t been found innocent of the crime.

        2. Don’t get me wrong. The person in question is irrelevant here. The principle of having a third option to Guilty, Not Guilty i.e. Can pay vast bribe. is the antithesis of all which I thought our so called justice systems were built on (Western Democratic type.)

      2. In the UK bribery comes under criminal law, not sure about Germany.

      3. The were criminal charges. Hence jail time being a possible outcome.

        1. Just what I was thinking, you don’t go to jail for civil offences.

      4. They were criminal charges. Germany just has an option for people to bribe their way out of pay a settlement to end the prosecution. Unlike a plea bargain, this does not entail him admitting guilt. He just pays and the matter goes away.

    2. Meh. What good does locking an eighty something year old businessman for an economic crime that’s nearly victimless do? It seems to me that in such situations, reparations are the best form of punishment since it doesn’t cost the taxpayers anything.

      1. It seems to me that in such situations, reparations are the best form of punishment since it doesn’t cost the taxpayers anything.

        But it’s not reparations. He is not convicted, does not plead guilty, gets no criminal record. He just pays them to drop the matter.

        1. No, he doesn’t get a criminal record, but he’s also not been found innocent. This is a key issue for a business man.

          If questioned, all legal records show is that he paid money to stop himself being found guilty.

          1. The stench coming from F1’s financial cess pit is disgusting.
            Even Arthur Daley would find it revolting.

      2. It’s about deterrence and an honest culture. In an honest culture, dishonesty is supposed not to pay off.

        In my dreams this was supposed to be the honest West-European culture helping to clean up Bernie’s shady, corrupt F1.

        But the bad guys have won :(

        1. He has too much money hehe. He could easily double or triple the amount and never feel the sting of it. It’s disgusting this can happen anywhere but western europe…

      3. “Nearly victimless.” I doubt the man spending 8 years in jain for receiving his bribe will agree with that statement.

      4. @repete86

        hat good does locking an eighty something year old businessman for an economic crime that’s nearly victimless do?

        But there was a victim. Our beloved Formula 1. The silly gimmicks, the huge costs, ticket prices, circuits going broke, teams going broke…. Ecclestone caused these to happen. He single handedly bought a sport almost to a complete collapse.

  5. Ecclestone pays bribe to end bribery trial

  6. Disgusting.

    As I understand it he hasn’t been found either guilty or innocent. As I’m sure he considers himself innocent, I’m going to balance it out and assume that he’s a lying, cheating crook.

    1. Yep, he is paying to make it ‘go away’.

  7. I do not believe that this is a fair outcome because a billionaire should lose a substantial part of his wealth if the alternative is spending several years in prison and losing $100m only makes Ecclestone slightly less rich. I think this case will only strengthen the people’s belief that “the rich guys get away”.

    Technically speaking, Ecclestone is innocent but it is clear that no one pays $100m just to be left in peace if he knows that he is innocent. So what will CVC Capital Partners do next?

    1. the rich guys get away

      Could not agree more…

    2. @girts Great point that nobody who is innocent would cut that cheque, which is why BE will continue to claim, when asked from the angle you bring up…why cut the cheque if you are innocent?… that he was in fact shaken down by Gribkowsky but just couldn’t prove it, nor could the court prove he wasn’t.

      1. @robbie: I suspect that Bernie’s explanation is that although he’s innocent, it’s worth $100M to him to avoid the stress of proving it. A cynical person might suggest that he’s let the trial go on this long (instead of making the offer when it started, if not before) to back up this story: he wanted to prove his innocence, but couldn’t handle the stress. So he’ll cough up his petty cash and get back to the relaxing shark tank that is F1 politics….

        But buying your way out of bribery charges… I’m going to file this one under “if you made it up nobody would believe you”!

    3. Technically speaking, Ecclestone is innocent…

      No, he isn’t.

      1. @optimaximal I think it is a matter of interpretation. Ecclestone’s lawyers are saying that “the presumption of innocence in favour of Mr. Ecclestone remains intact”, while the court says that “there is no ruling on guilt or innocence of the defendant”. Anyway, I believe that Ecclestone will keep saying that he did nothing wrong and point out that the court could not prove anything either.

        1. @girts Of course, any attempt by him to flippantly say ‘the court could not prove anything’ will just be met with ‘well, you paid them not to prove anything’. Infact, the whole concept of ‘innocent until proven guilty’ only works on the premise of a black or white judgement – Bernie has paid out to avoid either.

          This is the nuance of the whole thing that we won’t really be able to get until it plays out – will it be enough to keep Bernie safe as an employable entity by CVC or someone to deal with by any corporate body as, whilst he’s not been found guilty, he hasn’t been found innocent either. Of course, the oligarchs and middle eastern rich folk won’t care about it, but what about the publicly-floated US/EU companies with anti-corruption statutes?

        2. Count me in with @optimaximal here @girts. Bernie is not innocent. He just put an end to the trial that would establish that by paying up to “make up for it”. As the criminal case was about losing the state some 41 million (his commision), at least officially, he paid more than double that.

          Sure, Bernie will keep upholding that he was never found guilty, but it won’t matter too much for his reputation, it will just make it a bit less messy.

          1. Well a key question here is whether German law bars “double jeopardy.” Perhaps there is a Rechtsanwalt in the house who can say whether he can be tried based on the same “transaction” as we say in U.S. law or by application of evidence adduced in this trial. If he is subject to the prosecution having a go for a slightly different case, then that would put a different light on things.

        3. @girts

          Ecclestone’s lawyers are saying that “the presumption of innocence in favour of Mr. Ecclestone remains intact”

          What do you expect them to say my friend ? That’s what they are paid for.

          1. What throws me a complete wobbly one is Grubowski is behind bars for taking a mega million $$$ bribe – incentive- whatever from Bernie to ensure-encourage the sale to CVC, The courts could prove well enough that Gruboswki took the bribe, but evidence is lacking to prove that Ecclestone paid it ?

            Wot tha?

          2. @greg-c
            Bernie is just proving the theory of “Money and Power could do wonders”. You can call me a conspiracy theorist but with a such legal system maybe he told the germans that apart from the money he is going to pay he can also tolerate the empty grandstands in the German GP.

  8. Money Talks.

  9. Very, very poor. The other guy gets 8 years, the instigator gets nothing. I really expected the Germany judiciary to be better than this.

  10. Wow that’s embarassing… So one guy gets 8 and a half years in the slammer and the other pays an amount that they won’t even notice missing. In 6 months, he’ll have made that money back anyway!

    I’m shocked that he’s allowed to do that.

    1. As I understand it, Gribowsky was sentenced under the pretext of taking a bribe as a public official (as the bank is state owned). The fact that it was from Bernie or for any amount is irrelevant.

  11. What a sham. Where’s the justice system’s backbone?

  12. There was a bit in the BBC report earlier this morning (can’t find it now, hopefully someone else can) that said it had been suggested by Ecclestone and/or his lawyer that the state of Bavaria used this “settlement” money to build a new Formula 1 track.

    It’s almost comically corrupt and proves the state of F1’s commmercial management is just as disgraceful as FIFA.

    1. Lol, maybe he can get the money back in hosting fees…

    2. I saw that too, but also can’t find it now. It was the cherry on the icing of this story!

  13. Poor Bernie. Maybe if the members on F1Fanatic all contributed a little bit Bernie could be recompensed in some way.

  14. $100 mill wouldn’t even buy the house his daughter is selling in California. Just 2/3rds of it.

  15. So Gribkowski gets convicted of taking a bribe from Bernie, but Bernie isn’t automatically guilty of giving a bribe?
    This is why world should be led by scientists and artists, not lawyers and politicians.

    1. BE’s claim, I believe, is in essence that he was blackmailed or ‘shaken down’ by Gribkowsky therefore didn’t give a bribe but rather had a gun to his head via threats made by Gribkowsky.

      1. @robbie But the course have said that it WAS a bribe – hence Gribkowskys conviction for bribary. It is no longer an alleged bribe, but an actual one. The BE has bribed his way out of.

        1. @fluxsource Not sure since I’m sure we don’t know everything, but it could be that Gribkowsky is doing time because he was proved to have received money from what he alleges was a bribe coming from BE, but BE is claiming he didn’t bribe Gribkowsky but it was Gribkowsky who shook him (BE) down. Ie. they could prove Gribkowsky received money, but couldn’t prove that he didn’t shake BE down for said money, I’m guessing.

        2. State would also have to prove that Bernie knew that Grib was a public official, which he denies. State may also have to prove that he got something of value or expected to. Point is, state would have to prove up this element. There are a lot of reasons the bribee could go down but the briber get off. In any case, I think there were some bidders for CVC, etc., waiting to serve Bernie with a major civil suit. This probably aint over

      2. @robbie Regardless, it is still a bribe, even one made under duress.

        If I make threats against you unless you murder someone for me, and you go ahead and do it, then you are not automatically absolved of your actions simply because I was blackmailing you. At best, you might be considered less responsible for your actions, but you’d still have to shoulder some blame.

        And of course, what were these threats that Gribkowsky was making against Ecclestone? Oh yes, that he would expose the fact that he has a controlling stake in Bambino, making him culpable for hundreds of millions of UK tax. Hrmmmm…

        Anyway, I’d say that this settlement effectively constitutes a de facto admission of guilt. Why would you ever make such a payment and leave the facts unclear if you felt totally confident that you had acted correctly and would be absolved by a fair trial? Maybe if you wanted to avoid the cost of trial, but Ecclestone had already shouldered a lot of that cost anyway. It’s hard to think of a reasonable, logical justification for making such a payment unless he thought there was a significant chance of him being found guilty. And that’s before you even consider what the repercussions could be from a professional standpoint. In terms of him being a credible individual to hold a senior executive position in any company, I would say that his career should, by all rights, now be over. If it isn’t, then it will prove once and for all, beyond any reasonable doubt, that the business of F1 is utterly corrupt and morally bakrupt. We knew it already, but no smoke and mirrors will avoid the potential turdstorm that CVC would have to weather if they kept him in charge of F1.

        1. @mazdachris That’s fair comment. I sure don’t profess to know what exactly went on and am not compelled to defend BE even if I sound like it, but was starting off with assuming the German court is not corrupt nor able to be bribed. That to me would be far more shocking than anything BE would do.

          I would have thought if there was a significant chance of BE being found guilty then the courts would not have accepted a cheque and would rather have preferred to see the case through. But of course you are right that he looks guilty by making this payment. Yet he will now be able to claim emphatically that he is innocent, even though the settlement makes him neither innocent nor guilty. I suspect the courts know he is guilty of something, but can’t prove the exact charges leveled against him, and had he been charged slightly differently perhaps they would have had a stronger case against him.

          And I hear what you are saying about being a credible individual, but I suspect many will rally behind him under the guise that he has not been found guilty and therefore is credible, but as you correctly point out, that may just reveal further the moral bankruptcy of which F1 is capable.

          1. @robbie

            Sorry bit late replying to this.

            Yes, I take your point, and it seems that Ecclestone could be found to be prolonging his life by eating orphan babies and the people in F1 would still support him. However, having the support and trust of people inside F1 is one thing, but I think CVC are a totally different proposition.

            CVC is an investment conglomerate – they take money from investors, invest it into a portfolio of businesses and stocks, and make massive profits on behalf of investors. F1 is just one product on its books, but one thing that has been proposed for a long time is the floatation of F1 on the Singapore stock exchange. Several abortive attempts have been thwarted so far, all of which can be traced to concerns over Ecclestone’s business practices and the fact he was facing a whole raft of legal action relating to corruption. This was effectively the last straw, and the final obstruction to the floatation – if Ecclestone had been found innocent of corruption then they could happily float F1 knowing that it would be buoyant and profitable. However, having F1 headed up on the commercial side who is regarded, frankly, by a great number of people as a massive crook, is not a way to inspire investor confidence. In a floatation, the reputation of individuals, especially high profile ones like senior executives, has a big influence over share prices.

            But Ecclestone hasn’t been able to prove his innocence, and has bailed out of the trial instead, leaving grave doubts over his involvement in this whole shady debacle. If he remains in a senior executive role in F1, on behalf of CVC, then basically the floatation is almost impossible. CVC then would most likely just be looking to offload what has been, by any standards, an extremely profitable going concern, but one which has probably outlived its usefulness and will be having an impact on their other business.

            So basically, as a consequence of Ecclestone not being able to prove his innocence, it’s likely that he will be ousted by CVC, and their share of the commercial rights in F1 will be sold. For someone regarded by many as some kind of genius puppet master, it’s hard to see how that is a desirable outcome for Ecclestone.

            Unless of course he wanted to buy the commercial rights himself…. ;-)

          2. @mazdachris And within the links in Keith’s August 6th round-up when BE was asked if CVC were happy for him to continue, his response…’yes, of course.’ Lol, time will tell.

  16. I’m completely stunned and puzzled by this. Seems like medieval law & order.

    1. One rule for them. Another rule for us.

  17. This will do the image of Formula 1 no end of good!

    1. devil's advocate
      5th August 2014, 15:15

      as Martin Brundle asked him “Bernie, what exactly are you saving up for?”

    2. @keithcollantine
      Thank you another time for enlightening us again with relevant statistics, but don’t you think that according to the same list that Bernie’s net worth is estimated to be £3,740m !!!

  18. Bernie is a disgrace with all that has happened here. here pretty much created F1, but f1 is a shadow of its former self, and so is Bernie.

    1. How is F1 a shadow of its former self though? Double points? Just like dropped scores in the 80’s…

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