He may have sported impressive numbers on the field but Bayern Munich football president Uli Hoeness will be wearing a different sort of number in the near future. A German court has sentenced Hoeness to three years and six months in jail for tax evasion.
The sentencing followed a remarkably speedy fall from grace for Hoeness, once a close ally of German Chancellor Angela Merkel. For years, Merkel has been vocal about the need for increased financial transparency across the European Union. She has specifically spoken out against noted tax havens and has pressured Swiss banks to be more cooperative with respect to turning over information. Hoeness stood by her side in these efforts, even remarking:
It doesn’t make any sense to end up in prison over a few deutsche marks in taxes.
Ironically, hiding a “few” Deutsche marks in a Swiss account is exactly what lead to Hoeness’ downfall. He allegedly concealed millions over a period of years and did not pay taxes on the earnings from the account. The money was supposedly the result of his associations with those with influence in European soccer clubs, like Robert Louis-Dreyfus, the former CEO of Adidas: Adidas is a current sponsor for Bayern, supplying their kit.
Hoeness had hoped to avoid the spectacle of a trial by turning himself in to taxing authorities and paying the tax. It wasn’t enough to keep the former darling of German football from trial or out of jail. German courts could not look the other way as the amounts Hoeness was alleged to have evaded kept growing: the amount originally due escalated, after investigation, from 3.5m euros ($4.88 million US) to 27.2m euros ($37.94 million US). Hoeness shocked some when he admitted the latter at trial.
One of the obstacles that Hoeness could not overcome was offering proof that he had complied with the German law version of “voluntary disclosure.” Under the program, as with similar programs in the US, taxpayers who have not been in compliance can avoid criminal prosecution if they come forward and pay the tax with interest. As information was revealed, it appeared that Hoeness might not have been as forthcoming as he claimed.
Hoeness’s name was reportedly on a CD of Swiss account holders obtained by the German government prior to his own admissions and there were whispers that he might have made the disclosure because he was tipped in advance. How willing Hoeness was to come forward and how much information he was willing to share initially was a clear source of contention. Ultimately, Hoeness wasn’t able to win over the courts: Hoeness was found guilty of seven counts of tax evasion.
Hoeness will remain free on appeal. Bayern Munich has refused to comment pending the appeal. However, statements from the team’s sponsors, including Adidas, Audi, and Volkswagen, are expected today. The team is very lucrative, named #5 in the Forbes Soccer Teams Valuation list nestled between Arsenal and AC Milan with an estimated current worth of $1.309 billion.
Bayern Munich fans have remained supportive of the team’s president – showing their support with banners and on social media (there’s even a Facebook page). The scandal has, however, rocked the country. The Hoeness charges have triggered a number of Germans to come forward: more than 26,000 German tax evaders have made a disclosure since the charges were triggered in 2013. Those numbers have been most dramatic in Bavaria, where Bayern Munich is located.
The footballer, who once represented Germany at the World Cup and in two European Championships, had been one of the most popular figures in German sport. He topped off a spectacular career by presiding over the most successful club in German football history. Now, his legacy will be less about what he did do – and more about what he didn’t.
