Jail term in F1 corruption case

The Bavarian state court sentenced Gerhard Gribkowsky to eight years and six months behind bars for taking a bribe from Formula One's commercial string-puller Bernie Ecclestone and failing to pay taxes on it.

Gribkowsky, formerly a board member and the chief risk assessment officer at the BayernLB bank, admitted to taking the money one week ago, towards the end of the lengthy case against him.

Gribkowsky deposited the $44 million (currently 35.2 million euros) in Austria, where he did pay taxes on it, but funds were due in Germany owing to the nature of the payment and its apparent connection to his work at the Bavarian state bank.

Presiding judge Peter Noll accepted the late confession, saying he did not believe it was a tactical move against Ecclestone designed to alleviate the jail term. Noll said "the confession fits into the picture."

Ecclestone had told British reporters that he had expected Gribkowsky's confession.

"I suppose he would say that, so maybe he gets seven years instead of 14 years. The poor guy has been banged up for 18 months. He would have said anything to save himself. He was going to be locked up whatever happens," Ecclestone said.

Ecclestone contests payment's purpose

The banker helped broker the sale of F1's commercial rights from BayernLB to the British-based CVC Capital Partners in 2006.

The prosecution alleges that the money was a bribe to facilitate this sale at an undervalued price to Ecclestone's investor of choice. Gribkowsky merely described the charges against him as "essentially true" last week.

Ecclestone, meanwhile, said he paid the money after a "subtle shake-down" from the German banker. He has said the payment was designed to "keep him quiet" after Gribkowsky had subtly threatened to trigger an investigation into Eccelstone's tax affairs. The long-standing commercial face of F1 also said that he owed no taxes, but claimed that the investigation alone would have cost him far more than the bribe.

Ecclestone was speaking via a translator to the Munich court last November. He was granted immunity from prosecution based on the testimony he provided, but could yet face a court case for facts proven elsewhere in the trial. Munich prosecutors launched an investigation into the 81-year-old last year, but have not yet said whether they intend to press charges. Gribkowsky's legal team called on them to do so as the trial concluded.

Gribkowsky had told the court that Ecclestone said to him in one of their earliest meetings in May 2005 that "the practice in Formula One is that you scratch my back and I scratch yours."

BayernLB had become the unwilling inheritors of F1's commercial rights following the bankruptcy of now-deceased German media mogul Leo Kirch in 2002. After arranging the 2006 deal, the relatively quiet "owners" CVC paid Ecclestone a retainer to stay on as the sport's leading commercial light, a position he has effectively occupied since the 1980s.

CVC retain a 32% stake - the largest of any single investor - in their 2006 purchase; though they have started selling portions of their F1 assets to a trio of banks and investment funds over the past two months. They were also considering floating the sport's commercial rights on the Singapore stock market, but recently said this plan was to be put on hold due to the difficult investment climate.

msh/sej (AFP, dpa, Reuters, SID)