Top soccer manager's secret Swiss account stuns Germany

BERLIN Mon Apr 22, 2013 10:12pm IST

Bayern Munich's President Uli Hoeness smiles before their German Bundesliga first division soccer match against Eintracht in Frankfurt April 6, 2013. REUTERS/Michael Dalder

Bayern Munich's President Uli Hoeness smiles before their German Bundesliga first division soccer match against Eintracht in Frankfurt April 6, 2013.

Credit: Reuters/Michael Dalder

BERLIN (Reuters) - One of Germany's most admired sports managers, Bayern Munich president Uli Hoeness, voluntarily reported himself to authorities in a tax evasion investigation that has exposed the government to criticism it is lenient on tax cheats.

The 61-year-old Hoeness, a former soccer star himself who is at once loved and loathed across Germany for his outspoken opinions on sports and politics, said he had voluntarily alerted tax authorities in January that he held the Swiss account.

Chancellor Angela Merkel, who knows Hoeness personally and has sought his advice on business issues, felt let down by Germany's top soccer manager, her spokesman Steffen Seibert said on Monday.

Merkel is seeking re-election in September and the opposition Social Democrats (SPD) are trying to paint her as soft on white-collar crimes, especially tax evasion.

The topic looms as a major issue in the campaign. Merkel is up against SPD candidate Peer Steinbrueck, who led a crackdown on tax havens when he was German finance minister.

"Tax evasion is without any doubt a serious crime and there can be no justification at all for tax evasion," Seibert told a government news conference. "Uli Hoeness has disappointed many people in Germany, including the chancellor."

Hoeness has in the past railed against tax evasion in political talk show appearances, and won applause from soccer fans and ordinary taxpayers for speaking out in favour of higher tax rates on top incomes.

This straight talk and his modest lifestyle - he lived for 30 years in a semi-detached house in a middle-class Munich suburb - gave him the image of a "Saubermann" ("Mr. Clean").

"I know it's a stupid thing to do but I pay all my tax obligations in full," Hoeness told Bild newspaper in 2005.

Hoeness declined any further comment on Monday about the tax evasion probe after he told magazine Focus: "Through my tax adviser I turned myself in to tax authorities in January 2013. It was in relation to a Swiss bank account of mine."

On Monday the state prosecutor's office in Munich said it was looking into whether Hoeness's voluntary disclosure of the Swiss account was done before tax authorities had started their own investigation.

On Saturday, Munich prosecutor's office confirmed proceedings over Hoeness's step but gave no details of the amount involved.

POLITICAL FALLOUT

The Hoeness case has turned into a major political story ahead of the election on September 22, and a crucial regional election in the soccer club's home state of Bavaria on September 15. Hoeness is close to Merkel's Christian Democrats (CDU) and their Bavarian sister party, the Christian Social Union (CSU).

CSU leaders distanced themselves from Hoeness. The SPD and Greens argued that the affair showed that they were right to block a tax amnesty deal with Switzerland in December that was backed by Merkel and her Finance Minister Wolfgang Schaeuble.

The SPD and Greens vetoed the deal in the upper house of parliament. It would have imposed taxes on assets hidden away by German citizens but would not have revealed their identities. Hoeness turned himself in shortly after the Swiss deal died.

"Now we know what kind of people Schaeuble and Merkel wanted to protect with the Swiss tax deal," said Juergen Trittin, a Greens leader in parliament.

Steinbrueck said: "Tax evasion is a serious crime, not a misdemeanour."

Hoeness was an outstanding midfielder who earned 35 caps for West Germany and scored 86 goals for Bayern Munich in eight seasons before a knee injury cut his career short at age 27.

He then switched to management and became the driving force behind Bayern Munich's success on and off the pitch, turning the team into a dynasty with a Champions League title in 2001 and 18 German Bundesliga championships.

Bayern captain Philipp Lahm would not take questions about Hoeness at a match news conference and journalists were warned the briefing would be terminated if anyone asked about Hoeness.

Hoeness was seen as a role model for business.

He was also admired as moral authority after he suggested in 2000 that designated Germany coach Christoph Daum had a drug problem. Daum took a drug test in an attempt to clear his name. The test was positive and Daum discarded.

"I tell everyone my opinion whenever I feel like it," Hoeness once told Bild. "That goes for everyone - from Franz Beckenbauer to the German chancellor or even the Bavarian state premier. I've earned that right over the last 30 years." (Reporting By Erik Kirschbaum; Editing by Noah Barkin)

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