Germany soccer federation fined for tax evasion related to pre-2006 World Cup payment to FIFA

BERLIN (AP) — The German soccer federation has been convicted of tax evasion related to its successful 2006 World Cup bid.

It brought an end of sorts on Wednesday to a 10-year process prompted by allegations that Germany used a slush fund to buy votes from FIFA executive committee members to be certain of hosting the tournament.

A regional court in Frankfurt fined the federation, known by its German acronym DFB, 110,000 euros ($128,000) at the culmination of a nearly 16-month trial at the end of the investigation process.

Prosecutors had been pushing for a larger fine after accusing the DFB of failing to pay approximately 2.7 million euros (now $3.1 million) in taxes related to its payment of 6.7 million euros ($7.8 million) to FIFA, world soccer’s governing body, in April 2005.

That payment settled a loan that Germany great Franz Beckenbauer, the head of the World Cup organizing committee, had accepted three years earlier from Robert Louis-Dreyfus, a former Adidas executive and then part-owner of the Infront marketing agency.

The money was channeled through a Swiss law firm to a Qatari company belonging to Mohammed Bin Hammam, then a member of FIFA’s Executive Committee. The exact purpose of the money was never determined.

Theo Zwanziger, who was DFB president at the time, told Spiegel magazine in 2015, “there was definitely a slush fund in the German World Cup bid.” He accused his successor, Wolfgang Niersbach, of lying about it. Both were on the World Cup organizing committee.

The DFB concealed the repayment of the loan as a contribution toward a planned World Cup opening gala, which was later canceled, and falsely declared it a business expense a year later.

Zwanziger, Niersbach, and DFB general secretary Horst R. Schmidt were originally charged in the trial. The proceedings against all three, who consistently denied the allegations of tax evasion, were eventually dropped upon payment of fines.

“The court is certain without a doubt that the DFB evaded taxes and that those involved put up with it,” presiding judge Eva-Marie Distler said Wednesday in comments reported by news agency dpa.

The DFB was initially fined 130,000 euros ($151,000), but 20,000 euros was waived because of the “procedural delays” in the case.

Distler was scathing in her criticism of the DFB, saying it presented a “catastrophic image” in its investigation of the affair and must bear the costs for the proceedings.

“The clock ticks differently at the DFB. It generates astronomical legal fees. The responsible people externalize responsibility. No one has to face personal consequences,” Distler said. “No DFB representative participated in either the investigation or the trial. You have to ask, are they not taking the justice system seriously?"

The DFB can appeal the ruling.

“The DFB will make a final assessment of the next steps after receiving and evaluating the written reasons for the judgment,” it said in a statement.

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