Ecclestone Held Out ‘Carrots,’ Bribery Trial Witness Says

Gerhard Gribkowsky, the key witness in a German bribery trial against Formula One Chief Executive Officer Bernie Ecclestone, changed the tone of his testimony and more clearly backed prosecutors’ claims in court today.

Gribkowsky, who last week told the Munich court hearing the case that he didn’t think a 2005 promise by Ecclestone to “take care of him” was important, today said that it was clear it meant he would get a reward for not opposing the sale of a stake in the racing series. Ecclestone liked to hold out carrots to his negotiation partners, said the ex-manager of Bayerische Landesbank, known as BayernLB.

“Of course I was aware at that moment that I mentally moved to a certain extent to the side of Mr. Ecclestone,” Gribkowsky said. “I grabbed the carrot. Afterwards, I didn’t negotiate with the same toughness I had until then.”

Ecclestone is on trial on charges he bribed Gribkowsky with $44 million to steer the sale of BayernLB’s 47 percent stake to CVC Capital Partners Ltd., a U.K.-based buyout firm. Prosecutors claim that Ecclestone in a meeting in April or May 2005 made the decisive offer by promising to “take care of” the bank manager to ensure he wouldn’t oppose the deal.

Presiding Judge Peter Noll said that while this 2005 conversation was the decisive point of the case, Gribkowsky didn’t make clear how Ecclestone actually made the connection to the deal.

“Why did he have to bribe you when you wanted to sell anyway?” the judge asked. “Why did he have to make you inclined to sell when you were already inclined?”

‘Unpleasant’ Partner

Gribkowsky answered that he inferred from the circumstances that this was Ecclestone’s plan. Since he managed BayernLB’s Formula One stake and was an “unpleasant” business partner, Ecclestone could have feared that he may have liked to remain an investor in the racing circuit’s holding company, Gribkowsky said.

The meeting most likely took place on May 17, 2005, the ex-banker said after reviewing his paper calendar from that year in court which had been seized as part of the investigation.

“We’re a bit surprised by the turn this morning,” Norbert Scharf, a lawyer for Ecclestone, told the court. “We have to wait how many versions will still emerge and what we make of them,” he told reporters during a break in the hearing.

Family Trust

Ecclestone, 83, denied the allegations at the beginning of the trial in April, saying he paid the money to avoid having to pay additional taxes after British authorities investigated. He said Gribkowsky threatened to misinform U.K. tax officials about an Ecclestone family trust.

Gribkowsky told the court that Ecclestone had tried to bribe him earlier. At a Formula One race in France, Gribkowsky said Ecclestone offered $10 million, and at a meeting in Singapore another “carrot” of $80 million was presented. Gribkowsky said today that he wasn’t ready to accept the latter without some kind of contractual agreement.

“The $10 million offer was very precise and had a precise fulfillment obligation, but I rejected it,” said Gribkowsky. “The $80 million offer I understood more as a kind of testing the waters, whether I was ready to accept these deals at all.”

Gribkowsky also confirmed that he arrange a $41 million kickback that Ecclestone received when the sale was closed. The money was paid by BayernLB and Ecclestone is charged with aiding a breach of trust over that payment.

‘Civil Servant’

CVC and BayernLB signed the deal in December 2005. Gribkowsky in 2012 was convicted for taking the bribe and sentenced to 8 1/2 years in prison by the same panel of judges now hearing Ecclestone’s case.

Gribkowsky said that during the negotiations Ecclestone started to use the nickname “civil servant” for him. This was because he had needed to explain several times that approval was required from the board of directors, which was composed by politicians of the state of Bavaria, the owner of BayernLB.

For a bribery conviction, prosecutors must show that Ecclestone knew BayernLB was a state bank, making Gribkowsky a public official. The F1 boss has denied knowing that.

The trial continues tomorrow when the defense is scheduled to question Gribkowsky.

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