Germany fined over 2006 World Cup tax evasion

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    BERLIN — In a notable development regarding Germany’s 2006 World Cup bid, the German soccer federation, known as DFB, has been found guilty of tax evasion. This verdict concludes a drawn-out saga stretching over a decade, originating from allegations that Germany engaged in underhanded tactics to secure votes from FIFA’s executive members to host the tournament.

    In a ruling delivered by a regional court in Frankfurt, the federation has been fined 110,000 euros, around $128,000, concluding a nearly 16-month trial that served as the final step in the lengthy investigation process. Prosecutors initially sought a heftier penalty, contending that the DFB concealed 2.7 million euros (approximately $3.1 million) in tax payments. This related to a 6.7 million euro ($7.8 million) payment made to FIFA in April 2005.

    This payment was originally to settle a loan taken by Franz Beckenbauer, a prominent figure in German soccer and the head of the 2006 World Cup organizing committee. The loan was received from Robert Louis-Dreyfus, a former Adidas executive and part-owner of the Infront marketing agency. The funds were funneled through a Swiss law firm to a Qatari company linked to Mohammed Bin Hammam, who was a member of FIFA’s Executive Committee at the time. However, the actual purpose of these funds remains unclear.

    Former DFB president Theo Zwanziger, in a 2015 interview with Spiegel magazine, acknowledged that a slush fund indeed existed to facilitate Germany’s bid for the Cup. He accused his successor, Wolfgang Niersbach, of being deceitful about the matter. Both Zwanziger and Niersbach were integral to the World Cup organizing committee. The DFB had inaccurately recorded the repayment of the loan as an expenditure for an opening gala, which was subsequently canceled, and later misrepresented it as a business expense.

    Former officials Zwanziger, Niersbach, and Horst R. Schmidt, the then-general secretary of the DFB, faced charges during the trial. Yet, the charges against them were dropped after they paid fines, and all three have persistently rejected accusations of tax evasion.

    Judge Eva-Marie Distler, delivering the verdict, stated that the court was convinced of the DFB’s tax evasion acts and noted those involved tolerated it. Initially, the fine imposed was 130,000 euros ($151,000) but was reduced by 20,000 euros due to delays in the legal process.

    Judge Distler criticized the DFB for its inadequate handling of the investigation, highlighting that the federation painted a “catastrophic image” and is accountable for trial costs. She further criticized the lack of accountability within the DFB, pointing out that no one faced personal repercussions, and no DFB representative participated in the trial. She questioned whether the DFB approached the justice system with the seriousness it demands.

    The ruling is open to challenge, and the DFB has stated that it will determine its future course of action after reviewing the detailed written judgment. They are expected to assess the decision before opting for an appeal.