Uli Hoeness

Soccer Fraudster Deserves Second Chance

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Uli Hoeness has been associated with Bayern Munich for decades.
  • Why it matters

    Why it matters

    Convicted tax fraud Mr. Hoeness is set to stand unchallenged for the presidency of Bayern Munich, Germany’s biggest and richest soccer club.

  • Facts

    Facts

    • Mr. Hoeness has been a member of Bayern Munich for more than 40 years as a player, manager, president and supervisory board chairman.
    • In 2014, he was  convicted of evading €28.5 million in taxes and sentenced to 3.5 years in jail.
    • He was released on probation in February and now plans to put himself forward as a candidate for club president in November.
  • Audio

    Audio

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FC Bayern Munich plays by its own rules, something that has become clear with the planned return of Uli Hoeness to the presidency of Germany’s top soccer club.

Mr. Hoeness, a former Bayern player and coach who was sentenced to three and a half years in prison for tax evasion in 2014, plans to campaign for the post in November.

Since the incumbent, Karl Hopfner, no longer wants to run, the election’s outcome is already determined. What remains to be seen is whether Bayern Munich will stick to its existing rule that the club president automatically becomes a member of the non-executive supervisory board.

It would be a surprise if the club was to change this rule. Bayern Munich’s motto is “Mia san mia,” which roughly translates to “We are who we are.” With this mindset, club officials are highly likely to conclude the issue in a way favorable to Mr. Hoeness.

Mr. Hoeness has publicly apologized for his transgression, paid a sum in the double-digit millions and served his time in prison.

Is his return to his old stomping grounds after 637 days in prison a scandal or an example of a successful rehabilitation? It’s both.

At any rate, it’s thought-provoking how smooth the return of the Bayern Munich idol is expected to be. It’s plain to see Mr. Hoeness has a command of the mechanisms of power. Hardly anyone can teach him anything about club politics in Germany. Today it’s clear what he meant with his bold pronouncement after the trial verdict was announced: “This is not the end.”

Also playing an important role in his return are three German, blue-chip, DAX-listed companies: Audi, Adidas, and Allianz. Together the firms hold a quarter of all FC Bayern AG shares. The three corporations had only words of praise about the swift return of the club’s veteran boss. It was as if his fraud conviction never existed.

On the other hand, it would be unthinkable for the firms to fill a prominent position in their own companies with a convicted executive: It would violate the rules of good corporate governance.

Audi, Adidas and Allianz ought to at least ask themselves whether they are applying a double standard.

The companies could justifiably point to the outstanding achievements of Mr. Hoeness as manager of Bayern Munich. But the supervisory board of a global enterprise such as Bayern should at least be a moral yardstick. This is a role that Mr. Hoeness can no longer credibly fill, however great the respect for his previous accomplishments.

This problem notwithstanding, the rehabilitation of a manager who was previously convicted of a crime is a sensitive issue. Some executives – such as the former head of Volkswagen, Martin Winterkorn; the former chief of Deutsche Post, Klaus Zumwinkel; and the man once at the helm of Porsche, Wendelin Wiedeking – will certainly have read the news out of Munich with interest. Although each one of these scandal-tainted corporate leaders can boast of respectable successes, not one of them has a chance at the type of rehabilitation Mr. Hoeness is anticipating.

In contrast to the United States, failure as a business leader in Germany is considered by the German public not as an important lesson in life but as conclusive proof of incompetence. Anyone who has been proven to have broken the law, or comes under suspicion of having possibly acted illegally, definitely has no chance of rehabilitation. The stigma typically lasts a lifetime.

Such reactions are understandable. After all, top managers also serve as good role models, but only if the executives exhibit impeccable behavior.

Nonetheless, we should ask ourselves more often whether judgments – or prejudgments – against executives are being made too quickly and thoughtlessly. For not all cases are to be judged the same.

For example, if public opinion had had its way, the former head of Deutsche Bank, Jürgen Fitschen, would have had to step down from his post right after having been indicted over the downfall of the Kirch empire, a client of the bank. As it turned out, the court had to acquit Mr. Fitschen. Although the acquittal didn’t help Deutsche Bank directly, it helped Mr. Fitschen’s reputation. If he so desired, he could continue working as a banker.

Seen in this light, Mr. Hoeness’ return to Bayern Munich is an important sign. The club could have made an example of Mr. Hoeness and broken off all contact with him permanently. That didn’t happen, something due not only to the club’s idiosyncratic nature: Mr. Hoeness has publicly apologized for his transgression, paid a sum in the double-digit millions and served his time in prison. Although, on top of that, he had done harm to governmental authorities with his gambling addiction, he didn’t harm the company he headed as president.

All in all, this speaks for giving Mr. Hoeness a second chance.

 

To contact the author: afhueppe@handelsblatt.com

 

 

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