German ex-football officials on trial over suspicious 2006 World Cup payments

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German football officials improperly claimed tax relief on suspicious payments involving Franz Beckenbauer and a Qatari who helped decide the 2006 World Cup host nation, prosecutors told a Frankfurt court on Monday.

The tax case against three former senior football officials has reopened controversy over how Germany, more than two decades ago, secured Fifa support to host a tournament known as the Sommermärchen, or summer fairy tale.

The trial, which is the culmination of years of investigations, turns on payments involving the late football star Beckenbauer, late former Adidas boss Robert Louis-Dreyfus, a Qatari former Fifa official Mohammed bin Hammam and the German football association.

Rather than focus on potential corruption, prosecutors laid more narrow charges of aggravated tax evasion against former German football association [DFB] presidents Theo Zwanziger and Wolfgang Niersbach as well as former treasurer Horst Schmidt. If found guilty, they could face up to 10 years in jail.

Lawyers for the three argued that the charges were baseless. “The World Cup was not bought and there were no slush funds,” said Tilman Reichling, a lawyer for Schmidt.

Hans-Jörg Metz, a lawyer for Zwanziger, accused prosecutors of conducting a biased investigation, where “the persecution of celebrities appears to have been more important than uncovering the truth”.

Prosecutors on Monday outlined that Beckenbauer, a celebrated defender who won the World Cup for Germany both as a player and coach, in 2002 took a private loan of 10mn Swiss francs from French businessman Louis-Dreyfus.

The money was then wired to a Qatar-based company that was owned by a Fifa official who cast a vote in the selection of the 2006 World Cup host nation, which Germany won in 2000 with a majority of one.

Three years later, the DFB repaid the loan to Dreyfus on Beckenbauer’s behalf, channelling the €6.7mn through Fifa to mask the real nature of the transaction, prosecutors told the court.

The suspicious payments, which had been uncovered almost a decade later, triggered corruption investigations at the DFB, Fifa and a Swiss criminal court, which all ended inconclusively. Beckenbauer, who died in January aged 78, always denied any wrongdoing.

In their investigation, Frankfurt prosecutors narrowed their focus on the tax implications of the DFB payment to Dreyfus, arguing that the football association wrongly treated the payment as a business expense and hence illicitly claimed tax relief on it.

They allege that the DFB conspired with a Fifa official to conceal that the football association was covering Beckenbauer’s private debt, wiring the money through Fifa, which transferred it to Dreyfus.

The DFB payment to Fifa was officially linked to a gala night, which was to be held during the World Cup in Germany. However, that event was never held, and Fifa wired the €6.7mn to Dreyfus within a day, the prosecution argued on Monday.

Fifa closed an investigation into the matter in 2021 because the statute of limitation for initiating legal proceedings had expired.

An investigation by Freshfields Bruckhaus Deringer in 2016 on behalf of DFB concluded that the DFB deliberately masked that it was repaying a private loan from Beckenbauer. But it found no evidence that the money was used to buy support for Germany’s World Cup bid.

The trial in Frankfurt continues.