There are various reports in the media today about the court cases relating to Bernie Ecclestone. The Guardian in London makes a big fuss about a remark by Justice Newey in the Constantin Median case, saying that: “I have to say I find the idea of a bribe being paid to get rid of the banks more plausible than the idea of a bribe being paid to undertake an arrangement under which shares were sold at an undervalue.” This was deemed by the author to be a good sign that Ecclestone may not have to pay vast damages in the Constantin case. Perhaps that is so. The case was always rather a tenuous one given the difficulty one has in deciding the fair value of an asset at a given moment in time.
However I cannot help feeling that the article missed the point about what the judge actually said, which was anything but positive. There was an underlying assumption in Justice Newey’s remark that a bribe had been paid, one way or the other. If a British judge feels that this is what the evidence suggests, is there any reason to assume that a German judge will think differently? Admittedly, Justice Newey did not specifically look at whether the payments made were bribery or the reaction to an alleged attempted blackmail.
The problem with the blackmail defence is that it is quite difficult to believe that anyone, no matter how rich, would pay a blackmailer when there was nothing at all to be afraid of. Thus the assumption has to be that if the money was paid (which clearly it was) then there WAS something to hide. The Munich court has previously jailed Gerhard Gribkowsky for bribery rather than blackmail. The blackmail story was put forward in that case, but clearly it had little effect on the judges’ view that Gribkowsky was bribed.
“I paid,” Bernie said at the time, “because he [Gribkowsky] threatened to go to the Inland Revenue.” Ecclestone said that he had had nothing to hide, but the blackmail defence certainly caught the attention of Her Majesty’s Revenue and Customs (HMRC) which was curious to know why someone would pay an alleged blackmailer when there was nothing to hide.
An HMRC official told The Daily Mail at the time that it had put “a team of investigators on Bernie Ecclestone to look into his involvement in the trust and exactly how much he has to do with it”. The newspaper reported that such an investigation could take several years to complete. The interest in Ecclestone from HMRC is not about allegations of either bribery or blackmail but rather because it was revealed that both Ecclestone and the family trust fund paid money to Gribkowsky. HMRC would like to know why. They obviously wonder if Ecclestone had undue control over the trust and if they were able to prove that, there could be an eye-watering tax demand, running into billions, on the basis that the trust was not operating as it should have been. Ecclestone denies ever being in control of the trust, the beneficiaries of which are his daughters Tamara and Petra.
Elsewhere there are reports that BayernLB, Gribkowsky’s employer, plans to bring a $400 million damages claim against Ecclestone, arguing that this is what it lost out on as a result of the sale. If the Constantin case fails, it is hard to imagine that the BayernLB one will be successful.
What is very clear is that the 83-year-old Mr E is going to spend an awful lot of time with lawyers in the years ahead, whether he wants to or not.