Bernie Ecclestone: Lies, Bribes and Formula One Panorama

He is the all-powerful ruler of Formula One. Formula One is Bernie

Ecclestone. And Bernie Ecclestone is Formula One. Bernie Ecclestone's

four decades at the top of the sport have made him super-rich. I think he

couldn't have squeezed any more money out of it than he has done.

He's pulled off what may be the UK's biggest personal tax dodge of all

time. Two billion is a pretty substantial loss of tax. He can't

receive payments from his family's offshore trusts but we show how he's

got hundreds of millions. He is not someone who should be relied on to

tell the truth. It should be investigated. He's been branded a

liar and now he is on trial in Germany accused of paying a massive

bribe. Corruption, unlawful payments, totally irregular.

Absolutely unacceptable. Is this the end of the road for the King of

Formula One? Did you avoid two billion in taxes?

It's one of the greatest shows on earth. Formula One's mix of speed

and danger is loved by millions of people around the world. It's a

hugely lucrative business, generating hundreds of millions of

pounds year after year. One man more than any other has

driven the sport's phenomenal success. There's Bernie Ecclestone,

the sdoor of -- the Tsar of Formula One. He's dominated the sport for

almost 40 years. It's one of the world's top sports, fast-moving,

dangerous, worldwide, global. That's down to Bernie Ecclestone.

It's made him into one of the most powerful figures in world sport.

Coverage of Formula One shows him with an entourage of the rich and

famous. But last week he went on trial in

Germany in a case that threatens to end his reign over Formula One.

Bernie Ecclestone has staged races in just about every corner of the

globe. But he can't have imagined that the most important contest of

his life would happen here, at a Munich courthouse.

He's accused of corruption, charged with paying a multi-million dollar

bribe. He says he's innocent but if convicted, he could face years in

jail. I'm convinced it's the biggest drama, the biggest fight for

Ecclestone in his business life. That's pretty much all the Formula

One footage we can show you. Bernie Ecclestone has long guarded all

rights to the sport and his company doesn't want us to use any pictures.

We asked to film at a Grand Prix, but were turned down. So, to give

you the glamour and style you're probably expecting, we've got our

very own racing car. To understand Bernie Ecclestone, you

need to go back to his beginnings. A brilliant deal-maker, he made his

first fortune selling second-hand cars. But he ran into legal trouble

on the way. In 1971, he was taken to court for pocketing cash that should

have gone to the taxman. The judge described his behaviour as

altogether extraordinary. It wasn't the last time he would be criticised

in court. Motor-racing was his passion. After

he stopped driving himself, he bought his own Formula One team and

he soon began to take control of the sport. Bernie's key vision was

seeing that broadcasting was the future and that was where the money

would come from. If he could control all the broadcasting rights around

the world then that would give him an enormous amount of money. He

drove hard bargains with TV companies and the cash started

rolling in for the owners and drivers. We want to speak to the

teams but all that money brings loyalty. Darragh McIntyre from BBC

Panorama here looking to speak to Williams. Is that Ferrari? An update

on the response from Red Bull. Everyone in the sport is dependent

on Ecclestone and no one wants to talk to us.

I am just wondering whether Force India will be able to put up someone

to speak? In fact, we had to travel halfway

around the world to find an insider to talk on the record.

Eddie Irvine raced for Ferrari in the 1990s. You have no idea how

difficult it's been to get someone to speak to us. He now owns an

island in the Bahamas and this is his yacht club.

Did Bernie Ecclestone help make you rich? For sure he did. Back in the

early days it definitely needed someone to pull it together. It did

need a ringmaster and it did need an owner. Bernie spotted an opportunity

to wiggle his way in and basically in a way he stole the sport. He

gradually put all the pieces together, you know, was the promoter

of this race, owned the TV rights of that race and it just picked up

crucial little jewels in the crown. Then the only person the crown would

fit was him. In 1995, Irvine saw Ecclestone pull

off his most significant deal yet when he got control of the lucrative

TV rights to Formula One. The teams had previously held the rights.

Ecclestone was their representative and they thought he was negotiating

a new deal on their behalf. But Ecclestone cut a deal that meant

the rights went to a company he owned instead.

The teams really screwed themselves in 95. The teams were asleep and

Bernie's seen the big prize and went for it and got it. Having taken the

TV rights from the teams, Ecclestone then gave them to his wife Slavica

through her off offshore company Petara. A generous act but one which

also paved the way for a massive tax dodge. Slavica then transferred

ownership to a family trust in Liechtenstein. A country well-known

as a secretive tax haven. There's no question that the

arrangement has been put together to create tax-planning opportunities

which otherwise wouldn't be available.

A few years later, one of of the family trusts called Bambino sold

off a big slice of the TV rights bringing in profits of almost 2. .5

billion. If Ecclestone had still owned them, he would have paid

capital gains tax of up to 40%. But because they were offshore, there

was no UK tax to pay, allowing his family to enjoy all that cash.

Slavica's already taken out more than a billion dollars. His

daughters have had millions too. Tamara Ecclestone starred in her own

reality TV series. Meet Tamara Ecclestone... Modestly called

Billion Dollar Girl. She's driven... Follow one of the richest women in

the world. And when her sister Petra got

married the bill was a staggering $12 million. Bernie Ecclestone

declined to be interviewed but said the transfer of assets to his wife

was lawful and not contrived or artificial. He said they were

transferred to avoid inheritance tax rules which at that time acted in a

way he and his wife considered to be very unfair.

The family's Bambino trust still owned a minority stake in the TV

rights in Formula One. But the company that owned the largest stake

went bust and by 2005 the sport ended up in the hands of a German

bank, BLB. Ecclestone was desperate to maintain his role at the top of

the sport to stay in control, but the new owners had other ideas. The

German bank wanted him gone. The bank called it the end of the Bernie

Ecclestone era. Senior bank banker Gerhard

Gribkowsky was in charge. Coverage of Formula One showed him and

Ecclestone together at a race shortly after. Their struggle for

the control of the sport would result in Gribkowsky going to jail

and Ecclestone on trial for bribery. We have pieced together the story

from transcripts we have obtained of interviews carried out by the German

public prosecutor. Gribkowsky told him that own even though the bank

held the TV rights, Ecclestone was still in the driving seat. He made

it clear to me that he had full control over Formula One's assets.

MrEcclestone said, I'll tell you what you really control, nothing.

Ecclestone was effectively holding the bank to ransom. He held the keys

to the network of complex deals that tied the sport together and he would

only share them if he got his own way. He then made it clear that

given this situation, there were two possibilities: Either he presented

me with a buyer and I helped him get the sale through, or he would kick

us out. If Gribkowsky played ball,

Ecclestone promised to look after him. What MrEcclestone said to me in

this meeting was that if I helped him, then literally, I will take

care of you. Gribkowsky took up Ecclestone's offer. He chose a

bidder, CVC Capital Partners, that had agreed to keep Ecclestone in

charge. As for Ecclestone himself, well, he got paid a commission of

$63 million for helping to do the deal.

Why do you think Bernie Ecclestone wanted to ensure that CVC bought

BLB's shares? Control. Simple as that? His fundamental aim was to

ensure that the sale was to a company that was acceptable to him,

a company that would enable him to run the Formula One business as he

always had, with him in control. A few months later, Gribkowsky got

together with Ecclestone to discuss his reward. They met at this London

restaurant where it was agreed that Gribkowsky would be paid $45

million. Half of the money would come from Ecclestone and half from

the family's Bambino trust. He told his lawyer that he didn't want his

name to appear on the transactions in any circumstances.

The deal remained secret for four years until a journalist here in

Munich discovered an obscure Austrian foundation owned by

Gribkowsky. His hidden wealth was revealed. The foundation owned

assets worth around about 25 million euro. It looked very dirty because

Gribkowsky couldn't have made this money with his job. Gribkowsky

eventually confessed to taking a bribe from Ecclestone. He was

sentenced to eight-and-a-half years in jail. The judge said that he

assumed Ecclestone was the driving force behind the crime. Earlier this

year, another judge, this time in London, also examined the payments.

A media company, Constantin, was suing Ecclestone in the civil

courts. The lawfailed -- the lawsuit failed but the judge still concluded

that Bernie Ecclestone had paid a bribe. How would you describe the 44

million paid to Gribkowsky? Bribe. Corruption. Unlawful payments.

Totally irregular. Absolutely unacceptable. What did the judge

find about MrEcclestone's evidence? I find it impossible to regard him

as a reliable or truthful witness. In other words, Mr Ecclestone lied

to the court. Bernie Ecclestone said he was unable to respond to our

questions because of the bribery trial, but would answer once he had

put all the relevant facts before the German court. Which is strange,

because he has talked to other journalists about the case. You

emphatically maintain your innocence, don't you? Absolutely. No

corrupt agreement, no corrupt bargain? No, no. In fact

Ecclestone's story has changed over time. When he was first asked about

the payments he denied all knowledge of them. When he was interviewed by

the German prosecutor, Ecclestone had another explanation. Blackmail.

This time he admitted he had paid the money, but only because he was

worried Gribkowsky might tell the taxman he was evading tax through

the family's Bambino trust. Ecclestone had put his fortune

beyond the reach of the taxman by giving it away. But if the reenough

thought he secretly con-- revenue thought he secretly controlled the

family trusts, then all that money could be taxed. Ecclestone feared

Gribkowsky would tell the taxman that he controlled Bambino, that he

was the person who would set it up -- who had set it up, the settler.

Ecclestone says he has never been connected with Bambino, but he

feared a false claim from Gribkowsky could lead to a huge tax bill, which

is why he paid Gribkowsky millions of dollars to keep him quiet. I was

worried that Mr Gribkowsky could inform the revenue office that I

could be the settler of the trust that. Would have cost me more than 2

billion... Yes, you heard that right. That would have cost me more

than 2 billion... By his own admission, Ecclestone would owe an

incredible $2 billion if the taxman decided he was the settler. The

German judge didn't believe Ecclestone's blackmail claim and

neither did the judge in England. The judge concluded that Mr

Ecclestone had lied to him in relation to that and that the story

of a shake down was thoroughly implausible. I think Bernie

Ecclestone went into court thinking that it didn't really matter what he

said because he's above the law. He just thought that all he had to do

was to go in and make some sort of frankly ludicrous claim and people

would go, ha-ha, and pat him on the head and let him get away with it.

He should be held to account. What's beyond any doubt is that if

Ecclestone did set up the trusts, then he would face a massive tax

bill. And evidence we've uncovered suggests he may be closer to them

than he claims. This is Luc Argand. He told the German prosecutor he was

one of Ecclestone's lawyers and not only helped set up the trusts, but

also-ran them for a time. To some, that seems an unhealthy connection.

Trustees need to be independent and to be able to exercise real trustee

control. The danger of using your own professional to do that may be

that the element of independence may be in question. Argand admitted to

the German prosecutor there was a risk to him being involved. I was

known as the advisor of Mr Ecclestone, who is a prominent

figure. From a tax perspective, it was a risk if I became too close to

the trust that. Trust. To avoid suspicion, Argand took action. He

stepped back and his wife took his place instead. We found other

possible links between Ecclestone and the trust's affairs.

This is Kensington Palace Gardens, where you'll find some of the most

expensive homes in the world. In 2001, the Ecclestone family paid ?50

million for a home here, billed as the most opulent private residence

in the country. The house was bought by one of the family trusts, but

according to court papers obtained by Panorama, it was Bernie

Ecclestone who negotiated the price the trust paid. It's unclear why the

trust bought the home because his then wife, Slavica, didn't want to

move in. So, three years later, the trust put the house up for sale.

Court papers say that once again Bernie Ecclestone was involved. He

showed an agent for a prospective buyer around and discussed a price

for the house. If Ecclestone has no financial interest in the trust, why

did he involve himself in buying and selling its ?50 million mansion? On

what basis are the trustees interested in your views as to the

price at which it should sell a house, if you're not a beneficiary

of those assets? That's certainly something surprising. So one of

Ecclestone's lawyers set up the trusts and he himself seems to have

acted for one of them. But has he ever benefitted from the trusts and

all that wealth he gave away? We've uncovered evidence that Ecclestone

may have ended up with hundreds of millions of dollars from the family

trusts. The payments started after Slavica and Bernie Ecclestone

divorced in 2009. According to the transcripts we've obtained,

Ecclestone's lawyer told the German prosecutor that Ecclestone began to

get cash from his ex-wife as part of the settlement. After the divorce

settlement there were such payments, with regards to the amount, I'd

rather not answer due to my lawyer's confidentiality obligation. Another

lawyer, who hens run the -- who helps run the trusts was willing to

reveal the figure. Since his divorce, Mr Ecclestone has been

receiving payments from his wife. I don't know the exact figure, however

it must be about $100 million a year. Yes, you heard that right.

Must be about $100 million a year. $100 million a year is one of

Britain's biggest ever divorce settlements. The money comes from

the family trusts that include Bambino. They hold the wealth

Ecclestone gave away, but some of the cash has come back to him as

part of his divorce settlement. There have been a number of very

obvious pieces of evidence about Bernie Ecclestone's relationship

with Bambino and it should be investigated. The German prosecutor

appears to believe there's little separation between Ecclestone and

the Bambino family trust. Ecclestone is accused of being behind the whole

$44 million bribe to Gribkowsky, even though half was handed over by

the trust. He paid money to the German banker, at the same time as

the trust paid money to the German banker. I'm sorry, there are obvious

questions that arise out of this. Ecclestone has pulled off one of the

biggest personal tax dodges in British history, managing to shield

potentially $2 billion from the taxman. 2 billion is a pretty

substantial loss of tax. I'm not aware of anything else remotely

approaching that sort of magnitude in my fairly extensive experience.

Bernie Ecclestone told us he personally paid 51. 51.75 million in

tax last year. He said, "I'm proud to be British. Proud to live in

Britain and proud to make my contribution by paying my taxes

here. My divorce is a private matter."

What does the British taxman make of this? Her Majesty's Revenue

Customs doesn't comment on individual cases but our transcripts

show the revenue spent knife years investigating the -- nine years

investigating the trusts before offering them a secret deal. Nrchlts

summer 2008, the inland reenough offered to conclude the matter if we

paid ?10 million. We decided to pay up. N so an arrangement that

Ecclestone admits has saved $2 billion in tax was secretly signed

off by the taxman in return for a ?10 million payment from the trusts.

That may be a reflection of the evidence, but the trusts make that

kind of money in interest payments alone every six weeks.

10 million may sound like a lot to some people, but you have to look at

it in the round. If we're talking about a trust fund in which they are

making huge amounts of money like, this then it is very much, is it? A

lawyer for the Ecclestone family trusts in lick stone htenstein said:

Slavica Ecclestone's lawyer said her state planning was based on legal

advice and that the family trusts were managed by appointed trustees

and do not include Bernie Ecclestone. Mrs Ecclestone is

entitled to privacy and confidentiality in her tax and

personal affairs. The German court case is scheduled

to last six months. Ecclestone is facing the same judge who previously

jailed Gribkowsky and who said Ecclestone was the driving force

behind the crime. Even if he is convicted, the great deal maker may

have one last card to play, under the German legal system, he may be

able to avoid going to jail by paying a multimillion euro fine. In

any other business, Ecclestone would surely have been fired already. He's

been told by CVC, the sport's owner, he will be sack today found guilty.

What do people in Formula One really think about Bernie Ecclestone? They

will be jealous of the money he's made, for sure. He's richer than all

of them put together. Probably five, ten times over! Do you have any

sympathy for him right now? Not really. Bernie knows what he's

doing. Some of those close to Formula One

think that the Bernie Ecclestone era may be far from over. He's been in

scrapes of one kind and another all of his life. Berne yip always comes

out on top. I'd be amazed if this turns out to be the one situation

that Bernie can't deal himself out of. It will probably involve his

continuing to be involved in Formula One. Bernie Ecclestone has

repeatedly avoided our questions about his tax affairs. We caught up

with him outside court. Mr Ecclestone, BBC Panorama, Mr

Ecclestone, did you avoid $2 billion in taxes? Mr Ecclestone? Mr

Ecclestone, why won't you answer our questions?

He won't answer our questions, but the taxman is again investigating

his relationship with the family trusts. Many people have come to the

conclusion that he is not someone who should be relied on to tell the

truth. It seems to me, there is something wrong and it should be

investigated. One of the world's biggest sports is run by a serial

liar, who two judges said paid a multimillion dollar bribe, so what

will it take for Bernie Ecclestone to be removed from Formula One?

Wednesday, 9pm, a Panorama special: Undercover filming exposes the

distress of poor care. Oh, no. In different care homes what relatives

don't see, behind closed doors, elderly care exposed.

to explore the stories that matter to you.

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