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When Does A Bribe Become a Bribe?

27th August, 2014

The internet has been full of claims that Bernie Ecclestone, Formula One’s Chief Executive, has had bribery charges against him dropped and his trial ended by a German Court after he allegedly bribed the parties by agreeing that he would make a payment of $100 million (£60 million).

Ecclestone went on trial in April on charges of bribery and incitement to breach of trust which carried a prison sentence of up to 10 years. He was accused of making a £27 million payment to Gerhard Gribkowsky, a former senior executive at German bank BayernLB in order to try and encourage the sale of BayernLB’s majority stake in Formula One in 2006 to its current owner, investment fund CVC.

Under German law, defendants can in some circumstances pay to end their trial. In a somewhat ironic twist to the bribery proceedings, Eccleston said himself that what happens in these cases is that if you want to get rid of them there is always a chunk of money you have to pay depending on how much money you have got. If I had proved that I hadn’t got any money I wouldn’t have had to pay. That’s what it’s all about”.Ecclestone’s lawyer Sven Thomas commented “it is a settlement without any conviction, the presumption of innocence is still valid. That was a condition under which I negotiated”.

The Judge is said to have taken into account Ecclestone’s assets and wealth when accepting the payment. Forbes has recognised Ecclestone as having a net worth of $4.2 billion. The payment, which is said to be the largest in German legal history, is expected to go to the German treasury, with $1 million of it going to a children’s hospital.

It was clear from Judge Noll’s closing statement that Eccleston was effectively allowed to buy his freedom due to the prosecution’s poor case. The Judge said “the charges could not, in important areas, be substantiated”. Nevertheless, Ecclestone’s preferred option was to provide substantial cash to the German legal system, as opposed to attending the trial twice-weekly for several more months, when he could potentially have been acquitted. So, to clarify, this settlement payment to the German treasury was not a “bribe”.

Whilst Ecclestone’s wealth has, in this case, bought him an all access pass to remain at the top of Formula One, bribery and corruption are criminal offences under current UK legislation. The Bribery Act 2010 provides that it is illegal to offer, promise, give, request or accept bribes. A bribe is an inducement or reward offered, promised or provided in order to gain any commercial, contractual, regulatory or personal advantage.

Commercial organisations should have policies and processes in place aimed at preventing corruption and bribery; such as maintaining an anti-bribery and corruption policy and also carrying out regular training on the requirements under the legislation.

Risks in the employment arena relate to: recruitment of individuals, having clear expenses policies in place and ensuring that employees understand the gifts and/or hospitality they may or may not receive or give. It is important to ensure that bonus and commission schemes don’t inadvertently encourage bribery and corrupt practices. Risk assessments should be undertaken to identify and minimise your exposure to unforeseen breaches. Disciplinary policies and whistleblowing procedures should be updated to ensure that they also tie in with the anti-bribery and corruption policy. In the event of an alleged breach of your policy, any concerns raised should be investigated sensitively, thoroughly, and confidentially.

For further information and advice in relation to implementing an anti-bribery and corruption policy in your business please contact Helen Watson on 01244 405565 or send an email to [email protected].

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