West Germany star and club president could face 10 years in jail after admitting tax evasion to the tune of €3m
This year could see both the crowning glory and the low point of Uli Hoeness's career. Bayern Munich, the football club that has employed him since 1970 – first as player, then as general manager, and now as president – is enjoying its most successful spell in decades.
Bayern lead the Bundesliga by a street and could be crowned the champions of Europe for a second successive season – all with no small thanks to one of the last old-fashioned patriarchs in European football, who insists on running one of the most professional outfits in world sport with the atmosphere of a family business.
But there is a real possibility that Hoeness may have to watch his team lift their next trophy from prison. In January last year, the 62-year-old admitted evading taxes to the tune of €3.2m (£2.6m). For years, he had made large profits in stock market speculations and squirrelled away his profits in a secret Swiss bank account.
By choosing to go public, he has opted for what German law calls "voluntary disclosure": evaders can avoid trial by correctly detailing the taxes they have skipped and paying them back with 6% interest. There would be shame and schadenfreude, yet Hoeness felt safe from ending up behind bars.
However, last November the court summons arrived after all – the Bayern president admitted he was surprised. Hoeness will now have to justify himself over four days this week in front of a court in Munich. The maximum prison sentence for serious tax fraud is 10 years.
The signs are not promising for the former West German international striker. Rupert Heindl, who will preside over the trial, has been dubbed Judge Merciless for his reputed aversion to the kind of deals often reached in trials involving big business. Recently Heindl handed a three-year jail sentence to a 75-year-old pensioner.
Bayern's fans seem to have already pardoned their president. When Hoeness tendered his resignation at the club's annual meeting, they chanted his name until he wept. But on Monday the titles and trophies that Bayern have amassed on Hoeness's watch are likely to count for little – not least because the trial against him has already attained symbolic character.
Since Hoeness disclosed his affairs last January, a string of celebrities from all fields of German public life have followed suit. Last month Alice Schwarzer, a high-profile feminist, disclosed that she had for years wired money to an account in Switzerland without paying any tax. Shortly after, Berlin's culture secretary, André Schmitz, a Social Democrat, had to resign because of another Swiss account, about the same time, the treasurer of Angela Merkel's Christian Democrats, Helmut Linssen, was found to have hidden money via a shell company in the Bahamas. Theo Sommer, a former editor of influential weekly Die Zeit, was sentenced for tax evasion in January.
More than 26,000 German tax evaders opted for voluntary disclosure in 2013. In Bavaria alone, the figure has quadrupled since 2012. As recently as 2010, the Organisation for Economic Cooperation and Development criticised Germany for being too lax in its pursuit of tax dodgers. So how has the country managed to raise its game?
Alpine tax havens first came under the spotlight in 2009, when the former boss of Deutsche Post, Klaus Zumwinkel, got a suspended jail sentence and a €1m fine after the authorities had bought CDs from whistleblowers that contained names of those suspected of evading tax via investments in Liechtenstein.
The very fear that tax authorities could get their hands on further CDs has worked wonders since, said economist Markus Henn of the Tax Justice Network. "Voluntary disclosure is a nice idea in principle, but it only really works if there is some threat that the evasion may be uncovered in another way. And the CDs just did the job."
A key factor was the collapse of a deal between Germany and Switzerland in November 2012, after much opposition from the German Social Democrats, the Green party and the leftwing Die Linke. The deal would have given high-profile tax evaders a chance to disclose their crimes anonymously; Hoeness has hinted that he only chose to go public after the Swiss deal collapsed.
Further factors have made life harder for tax dodgers: Swiss banks such as Crédit Suisse and UBS now put pressure on their clients to make sure they pay the appropriate tax on their deposits. The German government has closed a number of loopholes.
In the past, tax dodgers often waited to declare their guilt until they had received a warning of a pending investigation, but since the law was changed in 2011 an official warning means that it's already too late to own up. Tax evaders now also have to make available information on their entire assets, rather than just specific accounts.
The courts have refused to reveal details of the charges against Hoeness, but there is speculation he had failed to keep up with changes in the law. In February, the Munich-based Süddeutsche Zeitung claimed that the sums Hoeness had failed to pay were higher than previously reported: €3.5m rather than €3.2m.
By the time his tax affairs became public last February, Hoeness was already more than just a football president – he was a public authority respected for his success and straightforward style. He was seen as close to chancellor Angela Merkel, and there was speculation he would make the leap into politics.
"Can our country learn from Uli Hoeness?" asked Der Spiegel only a week before his arrest. "What he has achieved with FC Bayern, Merkel needs to achieve with the federal republic and then with the whole of Europe." After the scandal broke, the chancellor was one of the first to distance herself.
Whatever the outcome of this week's trial, Hoeness's career as the shining model for German success is well and truly over. Reported by guardian.co.uk 6 hours ago.
This year could see both the crowning glory and the low point of Uli Hoeness's career. Bayern Munich, the football club that has employed him since 1970 – first as player, then as general manager, and now as president – is enjoying its most successful spell in decades.
Bayern lead the Bundesliga by a street and could be crowned the champions of Europe for a second successive season – all with no small thanks to one of the last old-fashioned patriarchs in European football, who insists on running one of the most professional outfits in world sport with the atmosphere of a family business.
But there is a real possibility that Hoeness may have to watch his team lift their next trophy from prison. In January last year, the 62-year-old admitted evading taxes to the tune of €3.2m (£2.6m). For years, he had made large profits in stock market speculations and squirrelled away his profits in a secret Swiss bank account.
By choosing to go public, he has opted for what German law calls "voluntary disclosure": evaders can avoid trial by correctly detailing the taxes they have skipped and paying them back with 6% interest. There would be shame and schadenfreude, yet Hoeness felt safe from ending up behind bars.
However, last November the court summons arrived after all – the Bayern president admitted he was surprised. Hoeness will now have to justify himself over four days this week in front of a court in Munich. The maximum prison sentence for serious tax fraud is 10 years.
The signs are not promising for the former West German international striker. Rupert Heindl, who will preside over the trial, has been dubbed Judge Merciless for his reputed aversion to the kind of deals often reached in trials involving big business. Recently Heindl handed a three-year jail sentence to a 75-year-old pensioner.
Bayern's fans seem to have already pardoned their president. When Hoeness tendered his resignation at the club's annual meeting, they chanted his name until he wept. But on Monday the titles and trophies that Bayern have amassed on Hoeness's watch are likely to count for little – not least because the trial against him has already attained symbolic character.
Since Hoeness disclosed his affairs last January, a string of celebrities from all fields of German public life have followed suit. Last month Alice Schwarzer, a high-profile feminist, disclosed that she had for years wired money to an account in Switzerland without paying any tax. Shortly after, Berlin's culture secretary, André Schmitz, a Social Democrat, had to resign because of another Swiss account, about the same time, the treasurer of Angela Merkel's Christian Democrats, Helmut Linssen, was found to have hidden money via a shell company in the Bahamas. Theo Sommer, a former editor of influential weekly Die Zeit, was sentenced for tax evasion in January.
More than 26,000 German tax evaders opted for voluntary disclosure in 2013. In Bavaria alone, the figure has quadrupled since 2012. As recently as 2010, the Organisation for Economic Cooperation and Development criticised Germany for being too lax in its pursuit of tax dodgers. So how has the country managed to raise its game?
Alpine tax havens first came under the spotlight in 2009, when the former boss of Deutsche Post, Klaus Zumwinkel, got a suspended jail sentence and a €1m fine after the authorities had bought CDs from whistleblowers that contained names of those suspected of evading tax via investments in Liechtenstein.
The very fear that tax authorities could get their hands on further CDs has worked wonders since, said economist Markus Henn of the Tax Justice Network. "Voluntary disclosure is a nice idea in principle, but it only really works if there is some threat that the evasion may be uncovered in another way. And the CDs just did the job."
A key factor was the collapse of a deal between Germany and Switzerland in November 2012, after much opposition from the German Social Democrats, the Green party and the leftwing Die Linke. The deal would have given high-profile tax evaders a chance to disclose their crimes anonymously; Hoeness has hinted that he only chose to go public after the Swiss deal collapsed.
Further factors have made life harder for tax dodgers: Swiss banks such as Crédit Suisse and UBS now put pressure on their clients to make sure they pay the appropriate tax on their deposits. The German government has closed a number of loopholes.
In the past, tax dodgers often waited to declare their guilt until they had received a warning of a pending investigation, but since the law was changed in 2011 an official warning means that it's already too late to own up. Tax evaders now also have to make available information on their entire assets, rather than just specific accounts.
The courts have refused to reveal details of the charges against Hoeness, but there is speculation he had failed to keep up with changes in the law. In February, the Munich-based Süddeutsche Zeitung claimed that the sums Hoeness had failed to pay were higher than previously reported: €3.5m rather than €3.2m.
By the time his tax affairs became public last February, Hoeness was already more than just a football president – he was a public authority respected for his success and straightforward style. He was seen as close to chancellor Angela Merkel, and there was speculation he would make the leap into politics.
"Can our country learn from Uli Hoeness?" asked Der Spiegel only a week before his arrest. "What he has achieved with FC Bayern, Merkel needs to achieve with the federal republic and then with the whole of Europe." After the scandal broke, the chancellor was one of the first to distance herself.
Whatever the outcome of this week's trial, Hoeness's career as the shining model for German success is well and truly over. Reported by guardian.co.uk 6 hours ago.