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Famed German sports manager regrets 'foolish' tax evasion scandal

Bayern Munich's President Uli Hoeness arrives at Munich's international airport before the team's flight to Barcelona on April 30, 2013. REU
Bayern Munich's President Uli Hoeness arrives at Munich's international airport before the team's flight to Barcelona on April 30, 2013. REU

By Erik Kirschbaum

BERLIN (Reuters) - German soccer great Uli Hoeness said on Wednesday he made "a foolish mistake" by evading taxes, a scandal that has hurt his friend Chancellor Angela Merkel in her re-election bid, but hoped his decision to come clean would help repair the damage.

In an interview with the online edition of the Die Zeit weekly, Hoeness said he felt suddenly ostracized by a German society that until recently admired him for building Bayern Munich into a soccer dynasty.

The Bayern president shocked Germany last week when said he had voluntarily alerted tax authorities in January to a Swiss bank account he held. He is now under investigation for suspected tax evasion. If convicted could be sentenced to jail.

He told Die Zeit that he earned but also lost large sums of money in financial trades from his private Swiss account.

Hoeness had close ties to Merkel and her Christian Democratic party and the scandal has hurt both in an election year. The conservatives dropped three points to 39 percent in a poll on Wednesday, their lowest point this year and just five months before a federal election.

"I made a foolish mistake, a giant blunder that I'm trying to correct as best as I possibly can," Hoeness said. "I'm lashing myself over this. I messed up big time but I'm not an evil person."

Hoeness, 61, had been an eminent figure in Germany, both for his managerial prowess building Bayern Munich into one of the world's most successful football clubs on and off the pitch and his straight-talking views on politics and business that made him a popular guest on talk shows and in the chancellery.

"I now feel like I've been catapulted to the other side of society in just a few days - it's like I don't belong anymore," he told Die Zeit after 10 days of silence on the affair.

"You can't imagine what I'm going through. It's an almost unbearable situation. I hardly sleep at night, I sweat a lot at night, something that never happened before. I toss and turn and toss again. I think about it all and have such doubts. An hour after waking up in the morning, I'm exhausted again."

MERKEL DISTANCES HERSELF FROM HOENESS

Hoeness's revelation has stunned Germans and dominated the media in the run-up to the national election on September 22, and a crucial regional election in the soccer club's home state of Bavaria on September 15. Previously, he had publicly railed against tax evasion, winning applause from soccer fans and taxpayers.

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

Hoeness said police raided his house on March 20. "My life changed at 7 a.m. on March 20," Hoeness said. "The doorbell rang and I was still in my bathrobe. It was the state prosecutor standing there. That's when my living hell began."

Merkel has distanced herself from Hoeness. Her spokesman said the chancellor was disappointed in him.

"I would hope I'd get the chance to talk to her at some point in a private conversation and explain to her how it all happened, the whole screw-up," Hoeness said.

The Hoeness affair has exposed Merkel's government to criticism from the opposition Social Democrats (SPD) and Greens that it has been too lenient on tax cheats.

She is seeking a third term and running against her is SPD candidate Peer Steinbrueck who led a crackdown on tax havens when he was German finance minister. The SPD and Greens argued the affair showed that they were right to block a tax amnesty deal with Switzerland in December that was backed by Merkel.

(Editing by Mark Heinrich)

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