Tax authorities launch raids on German football association

The story was first reported by the mass-circulation newspaper "Bild" as Germans were arriving for work on Tuesday. This has since been confirmed by the public prosecutor's office in Frankfurt.

Early on Tuesday, the tax authorities began searching not only the premises of the DFB's (German FA) Frankfurt headquarters, but also the residences of some of the key figures in a scandal over an alleged payment to FIFA in connection with Germany's successful bid to host the 2006 World Cup.

According to "Bild" the residences of DFB President Wolfgang Niersbach and his predecessor, Theo Zwanziger, were among those being searched.

"We are searching for incriminating material that backs up tax evasion suspicions," one of the investigators said.

Prosecutors said more than 50 investigators took part in the raids, seizing files, computers and hard discs.

6.7-million-euro payment

Specifically, the raids relate to an alleged payment of 6.7 million euros ($7.4 million) made to the late former Addidas CEO, Robert Louis-Dreyfus in 2005. All involved in the affair seem to agree that this payment was to reimburse Louis -Dreyfus for a loan made to the committee that first bid for, then organized the 2006 World Cup in Germany.

Where the parties disagree is on when Louis-Dreyfus made the original loan of 10 million Swiss francs - and what the funds were used for.

A story published in the newsmagazine "Spiegel" last month claimed that he had made the payment in 2000 and that the funds were used to buy the votes of four Asian members of FIFA's Executive Committee, helping Germany win the right to host the 2006 tournament.

'No votes bought'

However, DFB President Niersbach has denied this, saying that the original payment from Louis-Dreyfus wasn't made until 2002, long after Germany had been awarded the World Cup. There were "no slush funds, no votes were bought," Niersbach said at a press conference late last month.

Instead, Niersbach said, the 10 million francs were used to unlock FIFA subsidies to help the committee organize the tournament.

The president of the 2006 World Cup organizing committee, Franz Beckenbauer, issued a statement last week in which he also said no votes were bought.

"In order to receive a financial subsidy from FIFA, it was agreed to accept a recommendation from FIFA's Finance Committee, which from today's perspective, should have been rejected," Beckenbauer said.

"As the president of the organizing committee, I take responsibility for this error," he added.

Beckenbauer said he had made these statements during questioning by investigators from an outside firm that is looking into allegations of wrongdoing at the DFB in connection with the bidding process.