Double fault in the Graf empire
Steffi Graf, the model sportswoman, has been sucked into a tax investigation that has already engulfed her father. Could the unthinkable be true? By Steve Crawshaw
Wednesday 11 October 1995
As with her demurely curved compatriot, you cannot imagine Steffi Graf subscribing to the "Good girls go to heaven, bad girls go everywhere" subversive philosophy of life. Instead, once upon a time - until a few months ago - she was the respectable advertiser's dream. She was, in Der Spiegel's phrase, "the model sportswoman - clean, decent, wonderfully German". Her endorsements brought her millions every year, and presumably brought the advertisers (of pasta, cars and fruit juice, as well as the predictable sports products) even more.
Now the television advertising, showing the intelligent, independent Steffi beloved by all, has vanished from the screens. Her father, Peter, the power behind the throne, has been in custody for two months, accused of tax fraud on a grand scale. Steffi herself was questioned last week.
Peter Graf, variously described as "abrupt" and "megalomaniac", is no stranger to controversy. Five years ago, the flood of negative publicity over his affair with a nude model (an affair which resulted in his being blackmailed to the tune of DM800,000) severely strained relations with his daughter. But he remained the most important person in her professional life. He dominated Steffi the tennis player from the start: when she was four, he bribed her with strawberry ice-cream to hit the ball 100 times over the net. When she became a star, he was responsible for her business dealings.
Disastrously so, it now seems. The Graf clan is accused of tax evasion on a stunning scale. Tens of millions of marks-worth of prize and sponsorship money were funnelled out of sight of the German authorities. The crucial link in the chain, it is alleged, was a company in the Netherlands, Sunpark Sports BV. Sunpark consisted of little more than a posh address in Amsterdam, and a name plate. From here, the Graf money was said to have been siphoned off to a clutch of Grishamesque destinations, from Liechtenstein to the Dutch Antilles.
In order to help the money stay invisible, Mr Graf is reported to have been an enthusiast of business practices that can at best be described as unusual. The former used-car salesman - for whom, Der Spiegel suggested, "deception and disguise seemed to be the elixir of life" - regularly demanded huge payments in cash. Tournament organisers who failed to comply with Mr Graf's demands were liable to receive an earful of abuse. He ferried around hundreds of thousands of marks in cash "like a drug courier", as one irritable tournament organiser put it. Those who failed to co-operate were told that Steffi would pack her bags right now, or would "never again play for Germany".
Even now, few Germans are inclined to believe that Steffi Graf was at the heart of the deals that were struck on her behalf. Equally, though, many find it difficult to accept that there can have been an entirely blue-eyed innocence.
The cast of the drama is growing all the time. Already behind bars are not only Mr Graf, but also the family's main tax adviser, Joachim Eckardt, who was arrested this month. Another leading adviser now in the limelight is Philip de Picciotto, managing director of Advantage International, the American agency that handles Graf's worldwide sponsorship. Focus magazine this week chose to emphasise (in a separate panel) the fact that the American Mr de Picciotto is Lebanese-born; his family is said to have been "the most important Jewish family in the Syrian town of Aleppo". In short: Seriously Foreign.
Not encouraging for those who seek to believe that German virtue is intact is the fact that some of the tax dodges appear to have taken place with the complicity of the authorities themselves.
Steffi Graf has always been proud to describe herself as coming from Bruhl, near the historic university town of Heidelberg, in south-west Germany. And Bruhl has always been proud of its most illustrious daughter. There was a civic reception for Steffi Graf after this year's Wimbledon triumph - a triumph which had become almost routine. Graf has been the Wimbledon singles champion in all but two of the past eight years.
Nobody had ever doubted that Steffi is very rich. Multi-million properties are scattered about Florida, New York, and Germany, as part of what became known as "the Steffi Empire". She recently bought a penthouse apartment in Heidelberg, for herself and her boyfriend, Michael Barthels, in addition to her properties in nearby Bruhl. She also owns supermarkets across Germany. But she was seen, too, as a decent and unpretentious kind of millionaire.
The patriotic decency extended, at least in theory, to Graf's tax return. Other successful sportsmen and assorted members of the super-rich classes often settled in Monaco or elsewhere. But Steffi seemed determined to pay her taxes at home, like the conscientious, upright citizen that her public persona proclaimed her to be. Asked if Steffi might not follow in the footsteps of Boris Becker and others to Monte Carlo, Mr Graf said: "Quite clearly, the answer is no."
Which did not, it now becomes clear, mean that the Grafs intended to pay the whole whack. In Germany, it is the regional governments that levy taxes. Peter Graf and the family advisers concluded some remarkable deals with the authorities in the south-western state of Baden-Wurttemberg. Baden-Wurttemberg is known in Germany as the Musterlandle, the "little model state", because everything allegedly works so perfectly there. Including, it seems, tax evasion.
In Stuttgart, capital of Baden-Wurttemberg and home city of Mercedes- Benz, the Grafs' representatives held high-level meetings with finance ministry officials. A discreet bargain was struck in December 1993, which enabled Steffi to avoid paying tax on much of her multi-million income for the years 1989 to 1992. It seems certain that this agreement will play a key role in the Graf defence, if or when the case finally comes to court. In effect, the tax dodges may originally have been blessed from on high - "legalised tax fraud", in the words of one headline.
Baden-Wurttemberg's finance minister (and former sports minister), Gerhard Mayer-Vorfelder, has been desperate to reject allegations that he helped to make it possible for the Grafs to wipe large chunks of their income off the record. But, on the face of it, that is just what the 1993 agreement allows.
In the words of the weekly Die Woche, "It sounds absolutely unbelievable. Clearly, there are taxpayers who are spared the problem [of proving their income and expenses]. For several years, these people simply fail to make a tax declaration, and then they reach an agreement with their tax office - which takes no account of how large their expenses really are, and whether they can be proved."
Mr Graf, reportedly, had always boasted that he would never have a problem with his taxes, because he had protection "from the very top". Der Spiegel this week published a remarkable internal memo, written in 1988 by an executive at Adidas, one of Graf's sponsors. The memo describes how Horst Dassler, the then Adidas boss, had offered to help Graf become a Swiss resident, for tax purposes. "Peter Graf refused this offer, because Steffi wanted to stay in Germany - and Lothar Spath had in any case offered a political solution."
Mr Spath, the former prime minister of Baden-Wurttemberg, denies that any deal was done. Already, however, the issue threatens to be political dynamite, in advance of regional elections in Baden-Wurttemberg next year. According to Stern magazine, one of Graf's tax lawyers dropped broad hints that Graf would leave Germany if a suitable accommodation could not be reached. The implication was clear. That a defection abroad could look bad politically and would be bad for the taxman's coffers too. A parliamentary committee may be formed to investigate.
Meanwhile, Mr Mayer-Vorfelder even issued a mini-questionnaire, from his office in the finance ministry, on the Graf affair. He asked his officials whether they had ever felt under pressure to be "obedient", or if they had felt influenced by himself or his predecessor, on giving a lenient assessment. Absolutely not, came back the replies. Perish the thought. In the words of Der Spiegel, the replies provided "40 Persil certificates for the minister" - a reference to the colloquial name for the priceless scraps of paper that were issued in 1945 to those who could show ("Persil washes whiter") that they had not been involved with the Nazis.
But it is still the tennis champion herself who is most obviously in the spotlight. Steffi's grilling last week lasted seven hours (with a long lunchbreak). Until now, she has denied all knowledge of the to-ings and fro-ings of her own funds. And yet the idea that the 26-year-old Graf never understood what she was signing her name to strains the credulity of some of the investigators. Officials suggest that she is "not yet" under threat of arrest. That could still change.
Even now, it still seems improbable that Steffi Graf will go behind bars. But she will never be the same Steffi again. Nor, presumably, will the advertising contracts flood in, as they used to. "Made in Germany" - the upbeat Opel slogan, which was also used in connection with Steffi Graf - sounds more ambiguous than it used to. The all-purpose nice-girl heroine will never be quite so nice-girl heroic again.
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