Ecclestone Says Formula One Bribery Case Is Based on Lies

Formula One Chief Executive Officer Bernie Ecclestone attacked prosecutors’ case on the first day of his Munich bribery trial as the 83-year-old fights to keep control of the motor-racing series.

Ecclestone’s lawyers read a statement that refuted allegations that he paid a $44 million bribe to ensure that he kept his role as head of the racing series before a sale of a stake. Gerhard Gribkowsky, the man who received the alleged bribe and prosecutors’ main witness, lied repeatedly about the events, Ecclestone said in the document, which took about three hours to read out in court.

“The accusations are based on statements by Dr. Gribkowsky that are incorrect, misleading and incoherent,” his lawyers said in a written statement to the press. “They do not take account of the real course of events in 2005 and 2006 regarding Formula One and the life of Mr. Ecclestone.”

The corruption scandal has plagued Ecclestone since Gribkowsky was first arrested three years ago. The former chief risk officer of Bayerisches Landesbank was convicted in 2012 of accepting bribes and sentenced to 8 1/2 years in prison.

Gribkowsky, who managed the lender’s interest in Formula One, said in his own court case in 2012 he was paid $44 million to steer the sale of the bank’s 47 percent stake in the racing circuit to CVC Capital Partners Ltd., a U.K.-based buyout firm, and agreed to a sham contract under which Ecclestone received a kickback of $41 million from the bank.

Gribkowsky Judges

The same panel of judges that heard the Gribkowsky case will decide Ecclestone’s fate at the trial, which is scheduled for non-consecutive 26 days through September. Ecclestone will answer questions from judges after the court hears from Gribkowsky, his lawyers said.

“I’m confident,” Ecclestone told reporters before the trial started. “The sun is shining.”

Ecclestone, who has run Formula One’s commercial unit since 1995, today repeated his contention that he was the victim of a shakedown by Gribkowsky, who he said threatened to tell U.K. tax officials about an Ecclestone family trust.

“Many people have asked: ’How can you put someone like Bernie under pressure?’” Ecclestone said in the statement read by his lawyers. “You can, if you find the right lever. Dr. Gribkowsky succeeded in finding it.”

Heart Surgery

Before he underwent heart surgery in the 1990s, Ecclestone put some assets, including a stake in Formula One, into a company so his former wife wouldn’t have to pay inheritance tax if he didn’t survive. She decided to move the assets to a trust called “Bambino,” over which he had no control, he said.

Gribkowsky threatened to provide tax authorities with material that showed that Ecclestone was actually in control of Bambino, the F-1 chief said. At the time, Ecclestone was facing a multi-year review that could have resulted in payments he couldn’t have shouldered and that could have destroyed his life achievements, he said.

Prosecutors told the court a different story, saying Ecclestone wanted to get rid of Gribkowsky who clashed with him over his powers at Formula One. Gribkowsky managed a majority stake in Formula One that BayernLB and two other banks acquired after Leo Kirch’s media group went bankrupt in 2002.

The Formula One CEO decided to bribe Gribkowsky to get his approval to sell the stake to CVC, prosecutors said.

Ecclestone told the court that Gribkowsky tried to get some money out of the sale to CVC. He continued to threaten him and even hired a public relations company to gather material to prove he had influence over Bambino, Ecclestone said.

Dangerous Man

“It was clear to me he wanted money in any case under whatever headline,” Ecclestone said. “From today’s perspective, this may not have been a rational decision. But at the time, I thought, ‘this man is dangerous.’”

To avoid any risk in the tax proceedings, he finally agreed in 2006 to the payments together with the Bambino trust’s director Stephen Mullens. The money was paid through foreign lawyers because Gribkowsky didn’t want to receive money in the U.K., Ecclestone said.

If Ecclestone is convicted in Germany, CVC will have little choice but to ask Ecclestone to resign, even if he is able to avoid the jail term given to Gribkowsky, lawyers have said.

But the three-year-old proceedings have slowly loosened his grip on the series that has 19 events from Austin to Abu Dhabi. In January, after the German court ordered Ecclestone to stand trial, he agreed to step down from the Formula One board and gave up the authority to approve “significant” contracts.

Before it's here, it's on the Bloomberg Terminal.