The process of shedding millions around the 2006 World Cup is now being continued. The Frankfurt Higher Regional Court announced on Monday that it had overturned a decision by the regional court to stop the case. The proceedings against three former officials of the German Football Association (DFB) on suspicion of serious tax evasion are thus continuing. The two former presidents Wolfgang Niersbach, 72, and Theo Zwanziger, 77, as well as the former Secretary General Horst R. Schmidt, 81, are accused. They all reject the allegations.
The background to the decision is a complicated legal disagreement about the definition of the term “deed”. The ex-DFB trio is accused of tax evasion because a payment of 6.7 million euros from April 2005 was wrongly recognized as an operating expense. The money went from the DFB to the world association Fifa, officially declared as a subsidy for a World Cup gala that was later canceled. In fact, on the same day, the sum flowed from Fifa to the former Adidas boss Robert Louis-Dreyfus, thus repaying a loan of ten million francs that the French businessman had granted the German World Cup boss Franz Beckenbauer three years earlier.
In addition to the German judiciary, the Swiss judiciary also dealt with this ominous 6.7 million payment. She accused the DFB representatives and a former Fifa official of fraud against the DFB – the proceedings ended in April 2020 in the middle of the main hearing before the Swiss Federal Criminal Court due to the statute of limitations. The Frankfurt district court then argued in its October 2022 decision that the facts of the case indicted in Germany were “the same crime” as in Switzerland – and according to an old principle, a defendant may only be tried once for a given fact. This also applies across borders.
The OLG Frankfurt did not follow this interpretation. Contrary to the district court, it stated that there were two different acts: one in April 2005, when the transfer of 6.7 million euros (which Swiss investigators allegedly was fraudulent) was made. And one in 2007, when the payment was recognized as an operating expense in the association’s tax return in the final accounts of the World Cup. It is not a complex of “inextricably linked facts”.
The reason for the million-dollar transaction that started it all has not been clarified to this day
This is the second time in the years of legal wrangling that the OLG overruled the district court. The district court had already discontinued the proceedings in 2018. At the time, it argued that the 6.7 million payment was a thank you for World Cup boss Beckenbauer – and thus an operating expense, even if not the one specified. After the recent veto of the Higher Regional Court, it is now possible again for a main hearing to take place – and thus more light on this dark secret of German football history.
To this day, the core question of the World Cup affair has not been clarified: why ex-Adidas owner Louis-Dreyfus had granted Franz Beckenbauer the ten million franc loan in the first place in 2002. It is known that the money ended up with the Qatari Fifa official and businessman Mohammed bin Hammam. The reason for the transaction, however, is unclear. The documents suggest a lucrative deal with television rights.
Beckenbauer is only a witness in the Frankfurt proceedings because he was not responsible for the tax return. However, despite the Higher Regional Court decision, it is not mandatory for an oral hearing to take place now. From the ranks of the accused, the allegation of tax evasion is not only rejected in terms of content, but also with a technical argument. If at all, this is roughly summarized, the 6.7 million euros were not an evasion for the year 2006, but one for the year 2005 due to the DFB’s internal booking technology at the time. Any tax evasion in 2005 would have been time-barred, when the million dollar scam was exposed in autumn 2015 and the public prosecutor’s office began their investigation.
