Almost 18 years after the World Cup in Germany, the final act of the “Summer Fairy Tale” affair is about to begin. Theo Zwanziger, Wolfgang Niersbach and Horst R. Schmidt will be in court again from Monday.
New findings or even an explanation of the dubious millions in payments surrounding the then OC boss Franz Beckenbauer are not to be expected when the former top DFB officials appear before the Frankfurt regional court on Monday (March 4, 2024) on suspicion of tax evasion in a particularly serious case have to take responsibility for the case. But there is a lot at stake for the trio and also the German Football Association (DFB). 16 hearing dates have been scheduled.
Specifically, it concerns a payment of 6.7 million euros that the DFB transferred to FIFA in April 2005. The public prosecutor’s office accuses the defendants of improperly including this sum in the association’s tax return for 2006 as a business expense in determining profits.
Dubious payment: Beckenbauer, Robert Louis-Dreyfus and Mohammed bin Hammam
While the question of whether the 6.7 million euros were correctly accounted for and taxed is now about to be finally clarified, the background to the dubious payment is likely to remain obscure. The money that the recently deceased Franz Beckenbauer received as a personal loan from French entrepreneur Robert Louis-Dreyfus in 2002 ultimately ended up with the then Vice President, Mohammed bin Hammam, in Qatar three years later after the DFB had repaid it to FIFA. The emperor always kept quiet about it – and now took the secret with him to the grave.
Zwanziger: “Then the truth finally comes to the table”
The three defendants have always denied the accusation of tax evasion. “I’m pleased that this case will be clarified in a public main hearing for everyone to see. Then the truth will finally come to the table, and I don’t have to fear it.”said former DFB President Zwanziger before the eagerly awaited start of the trial.
The lawyers for Niersbach, who lost his position in November 2015 in the wake of the affair that became known at the time, said: “The main hearing will show that the allegations made by the public prosecutor’s office are incorrect and legally unfounded. At the end of this criminal case, which has lasted more than eight years, there can only be an acquittal of our client.”
For the DFB it’s about 22.5 million euros
That would be entirely in the spirit of the DFB, whose non-profit status for 2006 was retroactively revoked by the tax authorities in 2017 as a result of the affair. The result: The DFB had to pay around 22.5 million euros in back taxes. The association’s lawsuit against this decision is suspended at the financial court in Kassel until the end of the summer fairy tale trial – and will only have a chance of success if Zwanziger, Niersbach and the former DFB general secretary Schmidt are acquitted.
The association could really use the windfall because the financial situation is tense. In 2022, the loss was a good four million euros, and the free reserve fell from almost 75 million euros to just under 41.5 million euros. Those responsible at the DFB may have breathed a sigh of relief that all three defendants had to appear in court.
Court cancels deal with the Public prosecutor
Things didn’t look like that for a short time in January, because around the turn of the year the public prosecutor’s office had negotiated with Niersbach and Schmidt to stop the proceedings in exchange for a fine. Niersbach was supposed to pay 58,000 euros, Schmidt even 100,000 euros. “Mr Niersbach gave his consent to such a setting in order to avoid the stress of a public main hearing that would last for months and not because he feared conviction.”Niersbach’s lawyers said.
If that had happened, it would probably have meant the end of the DFB’s hopes of repaying the millions in taxes. Such an agreement would not be viewed as an admission of guilt by the defendant. But only if it is legally clarified that there was no tax evasion in 2006 will the DFB have a good chance.
Because the public prosecutor’s office did not also make its offer to Zwanziger and did not even inform him about it, the court viewed the deal as a violation of the principle of fairness and rejected it because of unequal treatment. This case may even have legal repercussions.
The background probably remains obscure
The regional court originally discontinued the proceedings against the former DFB trio in October 2022 after proceedings in Switzerland against the accused for fraud or aiding and abetting fraud had previously been discontinued due to the statute of limitations. However, the Frankfurt Higher Regional Court overturned the regional court’s decision in May 2023 and restarted the proceedings.