F1 boss Ecclestone pays to end bribery trial

[Crazedwraith]

F1 boss Ecclestone pays to end bribery trial

A German court has agreed to end the bribery trial of Formula 1 boss Bernie Ecclestone in exchange for a $100m (£60m) payment from him.

Mr Ecclestone's offer was based on an existing provision in German law.

Earlier on Tuesday German prosecutors accepted the offer from the 83-year-old billionaire who dominates motor racing.

He went on trial in April, accused of paying a German banker 33m euros (£26m; $44m) to ensure that a company he favoured could buy a stake in F1.

He denies wrongdoing.

The ruling means he walks free from the district court in Munich and can continue running the sport. It also means Mr Ecclestone is found neither guilty nor innocent.

His personal wealth is put at $4.2bn by Forbes, which ranks him as the 12th richest UK billionaire.

If found guilty, he could have faced a 10-year jail term and the end of his decades-long dominance of motor racing.

A BayernLB banker, Gerhard Gribkowsky, was allegedly paid by Mr Ecclestone to ensure the F1 stake was bought by a company that he favoured, so that he would remain in charge of the sport.

Gribkowsky was sentenced to eight and a half years in prison in 2012 for accepting bribes.

Mr Ecclestone says the payment was given to Gribkowsky after the banker threatened to make false claims about the F1 boss's tax status.

Prosecutors said Mr Ecclestone's advanced age and other mitigating circumstances gave grounds to accept the $100m offer.
'That's do-able'

Mr Ecclestone has attended most of the hearings in person and arrived at the courthouse on Tuesday in a limousine, looking relaxed and accompanied by his wife, Fabiana Flosi.

Asked by Judge Peter Noll if he could raise the $100m, Mr Ecclestone replied "yes". When asked if the payment could be made within a week, his defence lawyer, Sven Thomas, said: "That's do-able."

Judge Noll ruled that $99m would go to the Bavarian state coffers while $1m would be donated to a children's hospital. The sum is believed to be a record for such a payment.

Court spokesperson Andrea Titz said Mr Ecclestone: "The court did not consider a conviction overwhelmingly likely from the present point of view.

"With this type of ending... there is no ruling on guilt or innocence of the defendant."

'Really insolent'

Under German law defendants can in certain circumstances "buy" termination of a trial.

The legal proviso exists in order to ease the burden on the courts and to deal with cases where reaching a judgment could prove difficult.

However a lawyer quoted by the Spiegelonline website, Franz Bielefeld, said it was unusual for the clause to be invoked in mid-trial - more often it is done before a trial starts.

Former Justice Minister Sabine Leutheusser-Schnarrenberger, of the Liberal FDP party, criticised use of the loophole in the Ecclestone case, saying it was "not just bad taste - it's really insolent".

She said it allowed rich people to go free, whereas the less well-heeled could face prison.

This headline struck me just for the sheer irony. Any F1 fans want to sound in on this?

[Grumman]

He went on trial in April, accused of paying a German banker 33m euros (£26m; $44m) to ensure that a company he favoured could buy a stake in F1.

Is there more to this, because this doesn't really indicate why this is supposed to be a crime. If he was bribing government officials, sure, but isn't paying a banker to enable a business deal how banks work?

[Venator]

He went on trial in April, accused of paying a German banker 33m euros (£26m; $44m) to ensure that a company he favoured could buy a stake in F1.

Is there more to this, because this doesn't really indicate why this is supposed to be a crime. If he was bribing government officials, sure, but isn't paying a banker to enable a business deal how banks work?

Not sure if this helps answer the question fully, but: http://www.f1fanatic.co.uk/2014/01/20/b ... explained/

Snippet:

Among the most effective of Ecclestone’s tactics, which have helped him amass a personal fortune estimated to be over £2.3bn, has been the art of selling ownership of F1 without yielding control over it.

But Gribkowsky thwarted Ecclestone’s attempt to recoup the 75% stake for the bargain price of $600 million. According to a 2011 biography Gribkowsky challenged Ecclestone’s control of the sport, telling him “you are just the CEO working on the shareholders’ behalf”. This began a struggle between their pair for control over the sport.

[Grumman]

Not sure if this helps answer the question fully, but: http://www.f1fanatic.co.uk/2014/01/20/b ... explained/

Not really, but one of its sources does:

Mr Ecclestone and his offshore Bambino family trust are accused of paying a $44m bribe in 2006 to Gerhard Gribkowsky, the former chief risk officer of German bank BayernLB, which owned a 47.2pc stake in F1.

So the issue was that he was paying an employee of the seller to go against his employer's best interests. That makes more sense now.

[Sir Sirius]

So when charged with bribery in Germany you can just bribe the state in to dropping the case and this is perfectly legal?

Why is it that every time I learn more about the law of any nation the more I'm disgusted by it?

[Borgholio]

So when charged with bribery in Germany you can just bribe the state in to dropping the case and this is perfectly legal?

Why is it that every time I learn more about the law of any nation the more I'm disgusted by it?

Sounds more to me like the American version of a settlement - where rather than going through a trial with a potentially doubtful outcome, the State will accept a large fine or settlement with the implied warning of "Don't do that again or this time we WILL go through with a trial".

[Thanas]

So when charged with bribery in Germany you can just bribe the state in to dropping the case and this is perfectly legal?

Nope, you can't and I can't see how you can view it as such.

Prosecution goes and says "this is our evidence we think it caused damges of X amount and with punitive action on top of it we'd like about XY Euros". Defence, rather than go to a trial, decides to accept that offer. Such offers are regularly made in the German criminal system to save time and money for trials that would most likely result in a similar outcome.

Is it pefect? Nope. But it is not like Ecclestone dropped a huge sack of money on the desk of the judge and asked him to dig in.

[Elheru Aran]

Yeah, about the main outcome that would have happened if the trial had continued and he had been found guilty would be... he pays a large fine. Possibly he might serve some jail time or be paroled. Either way, it's really not that much different. Mind you, it does kind of smell a little. If the court itself had offered the settlement, that might be another thing.

[Thanas]

Yeah, about the main outcome that would have happened if the trial had continued and he had been found guilty would be... he pays a large fine. Possibly he might serve some jail time or be paroled. Either way, it's really not that much different. Mind you, it does kind of smell a little. If the court itself had offered the settlement, that might be another thing.

Well, usually it is the prosecutors that offer such things and while this did not happen here it is not like the court couldn't have refused him if they thought they had better evidence. Now, given that this is Bavaria, it might very well be Ecclestone paid somebody off. But that is more of a Bavarian problem instead of a problem with the law.

[Elheru Aran]

Yeah, about the main outcome that would have happened if the trial had continued and he had been found guilty would be... he pays a large fine. Possibly he might serve some jail time or be paroled. Either way, it's really not that much different. Mind you, it does kind of smell a little. If the court itself had offered the settlement, that might be another thing.

Well, usually it is the prosecutors that offer such things and while this did not happen here it is not like the court couldn't have refused him if they thought they had better evidence. Now, given that this is Bavaria, it might very well be Ecclestone paid somebody off. But that is more of a Bavarian problem instead of a problem with the law.

OK... now that is reasonable. Is Bavaria noted for corruption or something?

[K. A. Pital]

Well, usually it is the prosecutors that offer such things and while this did not happen here it is not like the court couldn't have refused him if they thought they had better evidence. Now, given that this is Bavaria, it might very well be Ecclestone paid somebody off. But that is more of a Bavarian problem instead of a problem with the law.

Bavaria is corrupt in a special way by German standards?

[Thanas]

Bavaria has a special kind of corruption, in the sense that there is a protected class of rich and powerful elites who get punished far less than others. Yes, also prevalent in other parts of the country, but Bavaria is legendary for it. Usual byproduct of having one party in control of the country for close to 70 years now.

[Simon_Jester]

The main danger of letting people settle this kind of case with a cash payment is that it can be used to avoid having real consequences for the individuals responsible. If a huge bank pays a billion dollar settlement, that costs them, but it's only equal to a short-term chunk of their profits. As long as the money's not coming out of the pockets of the actual executives of the bank, but out of the coffers of the bank itself, no actual person suffers in such a settlement, and no one goes to jail (which has considerable deterrent effect).

We have observed this in the US, where all manner of corporate crimes are committed by the financial sector, and yet nobody goes to jail from the largest banks and financial firms. Therefore, they continue to commit such crimes, whenever they can sit down on their balance sheet and judge it profitable to commit the crime when weighed against the risk of having to pay the settlement.

[Irbis]

Any F1 fans want to sound in on this?

Ecclestone earned billions on the deal. This penalty is nothing.

Though, if we were perfectly fair, unlike banksters and other such scum, quite a lot of the profit actually was his hard work, so you can't say he stole all of it. Still, even if fine was 5x higher he would be handily ahead nevertheless. His ability to raise it on short notice says everything.

Is Bavaria noted for corruption or something?

To put things in perspective, all of Germany loses 60 mln Euro on unemployment payments cheating yearly. Bayern Munich football club boss alone cheated Germany on 30 million euro due taxes, will spend just 3 years on prison, and even the fact he went to prison is an exception. A few years ago he would have walked.

And the fun fact is, not only the verdict doesn't seem to include money loss, he can actually work in prison in light administrative position earning tax free wage instead of sitting behind bars if he is bored. I wonder how many people would gladly swapped with him?

[Sir Sirius]

So when charged with bribery in Germany you can just bribe the state in to dropping the case and this is perfectly legal?

Nope, you can't and I can't see how you can view it as such.

Prosecution goes and says "this is our evidence we think it caused damges of X amount and with punitive action on top of it we'd like about XY Euros". Defence, rather than go to a trial, decides to accept that offer. Such offers are regularly made in the German criminal system to save time and money for trials that would most likely result in a similar outcome.

But the outcome isn't similar. By paying 100 million to the state Ecclestone avoids all risk of being found guilty in a criminal trial, getting a criminal record or going to prison and he gets do all of this by parting with less then 1/40th of his net worth. I honestly don't see how you can view this as anything other then legalized bribery that allows the super rich to simply buy their way out of criminal charges.

As to this is being done regularly in Germany... well that really is all one needs to say about the German criminal "justice" system.

Is it pefect? Nope. But it is not like Ecclestone dropped a huge sack of money on the desk of the judge and asked him to dig in.

Literally, of course not. However figuratively, that really is what he did to the nation of Germany.

[Thanas]

But the outcome isn't similar. By paying 100 million to the state Ecclestone avoids all risk of being found guilty in a criminal trial, getting a criminal record or going to prison and he gets do all of this by parting with less then 1/40th of his net worth. I honestly don't see how you can view this as anything other then legalized bribery that allows the super rich to simply buy their way out of criminal charges.

As to this is being done regularly in Germany... well that really is all one needs to say about the German criminal "justice" system.

No, not at all. First of all, this is only applicable when the court and prosecutors both agree that there is little guilt involved here, meaning that they probably could not prove the case to the full extent of the law.

And no, this is not only applicable to the super rich. You pay a percentage of your wealth. With Ecclestone, that percentage comes down to the money he paid. If a poor guy would be able to take advantage of the law then he would pay much much less than Ecclestone. And considering that the prosecution offered to do the deal here that means they themselves had no faith in the case.

[Beowulf]

No, not at all. First of all, this is only applicable when the court and prosecutors both agree that there is little guilt involved here, meaning that they probably could not prove the case to the full extent of the law.

And no, this is not only applicable to the super rich. You pay a percentage of your wealth. With Ecclestone, that percentage comes down to the money he paid. If a poor guy would be able to take advantage of the law then he would pay much much less than Ecclestone. And considering that the prosecution offered to do the deal here that means they themselves had no faith in the case.

If this is only done when the prosecution has no faith in the case, why does anyone agree to the settlement?

[Borgholio]

If this is only done when the prosecution has no faith in the case, why does anyone agree to the settlement?

Trials can be lengthy and expensive, and there's always the possibility of a screwy verdict (see the recent case where a jury in Florida awarded the widow of a smoker 24 BILLION dollars for his death...)

It's usually easier for all involved to just pay up and shut up.

[Thanas]

No, not at all. First of all, this is only applicable when the court and prosecutors both agree that there is little guilt involved here, meaning that they probably could not prove the case to the full extent of the law.

And no, this is not only applicable to the super rich. You pay a percentage of your wealth. With Ecclestone, that percentage comes down to the money he paid. If a poor guy would be able to take advantage of the law then he would pay much much less than Ecclestone. And considering that the prosecution offered to do the deal here that means they themselves had no faith in the case.

If this is only done when the prosecution has no faith in the case, why does anyone agree to the settlement?

Because they eliminate all risk and are not declared a criminal. Which matters a lot in the German legal system.

Take the scenarios.
Scenario 1: You pay the fine. You walk free and can claim that you did not get punished by a court.
Scenario 2: You go to court. You get proclaimed an innocent because the state did not make its case.
Scenario 3: You go to court. You get found guilty, you pay the fine and you are now vorbestraft (criminal history, which bars you from certain positions in society).
Scenario 4: You go to court. You get found guilty. You get a hardass judge who not only fines you, but sentences you to prison.

So many people just chose 1 instead of having the case go to trial.

[Elheru Aran]

So, essentially, if the case is not conclusive one way or another a guilty person with sufficient funds can buy their way to freedom? Because that's what it adds up to.

I presume an appeals system exists in German legal codes for people who feel the court's original conclusion was injust? Why not simply try them and ascertain whether they are guilty or innocent? If they are innocent, no harm was done except wasting time; if they are guilty, punish them. If they are innocent but found guilty, they can appeal; if they are guilty but found innocent... well, obviously the prosecution did not do its job. Either way, the case is resolved.

Even if the court can reject a settlement such as this and bring the case to conclusion, that still doesn't really resolve the fact that this means that people with enough money can pay their way out of trouble if the court accepts their offer. People without enough money, on the other hand, have to just put up and shut up until the music is over. It's not a very equal system and it allows the wealthy to escape consequences by simply dropping some money which can be made up again in time.

[Beowulf]

Because they eliminate all risk and are not declared a criminal. Which matters a lot in the German legal system.

Take the scenarios.
Scenario 1: You pay the fine. You walk free and can claim that you did not get punished by a court.
Scenario 2: You go to court. You get proclaimed an innocent because the state did not make its case.
Scenario 3: You go to court. You get found guilty, you pay the fine and you are now vorbestraft (criminal history, which bars you from certain positions in society).
Scenario 4: You go to court. You get found guilty. You get a hardass judge who not only fines you, but sentences you to prison.

So many people just chose 1 instead of having the case go to trial.

Sure... Except the state has no faith in its case. Or it wouldn't be offering the fine in lieu of prosecution. So it's likely you'll end up with scenario 2 if it goes to court. And you say that the court has to go along with it for it to work, which means the court also has no faith in the prosecution's case.

This is distinct from the American process of plea-bargaining, in which you plead guilty to a lesser offense or with a certain sentence recommendation, because the state believes it can prove it's case, and wants to save the cost of a trial.

[Thanas]

It serves to end those cases that could go either way, where the prosecution is not sure they can get a conviction but sure enough to try for one. (Maybe no faith is a bit too strong of a term, "no faith in the certainty of a conviction" would be a better clarification). As such, it only exists for a very narrow subset of cases. I can say that this has worked for close to forty years so I see no reason to change it. This system saves time and money.

[Elheru Aran]

Nonetheless, can you see how it might disproportionately benefit the wealthy? People who can hire hotshot shark lawyers, pay people to cover traces of wrongdoing, and if it comes to it, give the courts a wad of money? Versus the normal everyday citizen who can maybe afford a regular lawyer who might or might not get them off, and doesn't have the time or money to try and uphold themselves as paragons of virtue? Who certainly can't afford to drop a hundred million dollars on the state even if the state's not sure they can convict?

Of course, if there are cases where the state has done similar for, say, a $500 settlement, that would help even things out. Do you have any examples to offer?

[Thanas]

Nonetheless, can you see how it might disproportionately benefit the wealthy? People who can hire hotshot shark lawyers, pay people to cover traces of wrongdoing, and if it comes to it, give the courts a wad of money? Versus the normal everyday citizen who can maybe afford a regular lawyer who might or might not get them off, and doesn't have the time or money to try and uphold themselves as paragons of virtue? Who certainly can't afford to drop a hundred million dollars on the state even if the state's not sure they can convict?

As I said above, it is not a fixed fine, rather a percentage of the wealth of the person (with a minimum limit of course). Did you miss that?

As to the lawyers, of course a good lawyer always helps but I fail to see how that is supposed to invalidate the system when it applies to everything in law.

Of course, if there are cases where the state has done similar for, say, a $500 settlement, that would help even things out. Do you have any examples to offer?

None that are online but they do exist. I know because we covered this in German Law School.

[Fingolfin_Noldor]

Well, as with taxes, some people are more willing to lose a % of their wealth compared to a poorer guy.