COLUMN ONE : Steffi Graf Flap Rivets Germany : The tennis idol’s father is under arrest because she has paid so little in taxes. Tales of his obsessive influence on her fill tabloids. And politicians are calling for a wider probe of the scandal.

BERLIN —  It started as a simple family scandal, albeit a big one: a volatile Svengali of a father allegedly scheming to evade the taxes on his daughter’s hard-won millions; a clean-cut tennis idol struggling tearfully to keep her game intact, even as her creator is carted off to jail.

Now, though, the Steffi Graf Affair seems to be blossoming into something more: “the biggest tax scandal ever in Germany involving a private individual,” says state legislator Dieter Puchta, one of a growing number of politicians calling for a wide-ranging public investigation.

Not only are the names of the U.S. Open’s recent victor and her father being splashed across the front pages of tabloids and the serious German press these days. So too are the normally invisible denizens of the German tax bureaucracy, a state minister or two, the German Tennis Federation and such leading lights of the international private sector as Adidas, the German subsidiaries of General Motors and Citibank, the Italian pasta-maker Barilla and a large Stuttgart dairy, Suedmilch, whose yogurt Steffi Graf promoted.

The Graf Affair exploded in May, when 15 investigators from the public prosecutor’s office raided the family’s southern German estate, seizing documents and keys. Although tax investigations in Germany are normally kept secret, word leaked out that the officials believed Peter Graf had set up illegal tax shelters for his daughter’s earnings, enabling him to conceal millions of dollars.

By August, Peter Graf was arrested and placed in a hospital-prison, where he continues to be held in “investigative custody” while prosecutors prepare their case against him. A problem drinker, he is said to be receiving liver and circulatory-system treatments.

He offered to post a $10-million bond, but court officials refused, saying they believe he would flee Germany or destroy evidence if freed. In late September, authorities took the Graf family’s tax adviser into custody, saying he was also at risk of running away or tampering with evidence.

Through it all, Steffi Graf, 26, has kept to her tennis. She won the U.S. Open in New York last month and ended the winning streak of Monica Seles--her comeback-making rival, wounded by a knife-wielding Graf zealot who received a much-decried light punishment for his crime.

Graf played impeccable tennis but then broke down in tears during a post-match news conference, explaining that she was unable to visit her father in prison because she is considered a possible accomplice. (Graf, who last week was questioned by authorities in connection with the case, has since returned to Germany and been granted permission to see her father.)

Now, with calls mounting here for open hearings, proper pay-ups and sanctions for the civil servants who may have led the Graf family astray--and with the grotesque relationship between a dominating father and an approval-starved daughter laid bare for all to see--many fear that the pressure will prove too much and that the woman whom Germans routinely call “our Steffi” will retire.

“People don’t blame Steffi Graf,” says Puchta, chairman of the legislative finance committee for the state of Baden-Wurttemberg. Even though Graf’s lifetime professional earnings are estimated at $125 million, and the missing 50% or so that should have gone to the tax collector under German law is her money, he says, “People say her father did it all for her.”

And for the father, there is little in Germany these days but contempt.

Steffi Graf’s career “is an example of how the personality of a child can be destroyed, if an ambitious and unscrupulous father decides to make a world star out of his daughter,” wrote the respected newsmagazine Der Spiegel.

Indeed, in prosperous, proper Germany, the elder Graf is far too much of a scrambler to fit in. In a land where people like to buy gleaming cars in immaculate showrooms, Peter Graf, in his earlier days, eked out a living buying used cars from the newspaper and reselling them at a markup to American GIs, who couldn’t read the German want ads themselves.

Even when the millions started to roll in, his rough edges didn’t smooth. He hauled his daughter’s cash prizes away from tournaments in bulging grocery bags, much to the amusement of his social betters in the stands, and apparently insisted on keeping the vast sums in simple, low-earning certificates of deposit--safe from “enemies” he saw as prowling the stock and real estate markets.

As the legend has it, Peter Graf gave his daughter her first sawed-off racket when she was 3 and then groomed her for stardom in the family living room, using the sofa as a net. When she could hit 25 balls over the couch without missing, he rewarded her with a pretzel. If she made it all the way to 50, she got ice cream. She won her first final when she was 6.

Later, as her career began to take off, Peter Graf’s influence began to overshadow not only her game but her entire off-the-court life. Steffi Graf “graduated” from secondary school at 14--Germans normally finish at 16--so she could concentrate on her sport. When she competed at the Olympics in Seoul in 1988 and Barcelona in 1992, her father wouldn’t let her live in the Olympic villages, where she might have met young people--she was made to stay with him at an off-site hotel.

When at last Steffi Graf began to be seen with a male friend, the auto racer Michael Bartels, her father reportedly told a journalist: “This guy doesn’t mean anything. I pay him, so that people won’t think Steffi is a lesbian.”

Asked today about this bizarre father-daughter relationship, the tennis star appears at a loss. “He is my father, and I will stand by him and always look at him as my father,” she recently told the German newsmagazine Focus in a rare, long interview.

This is, in fact, the second time Graf has had to live down humiliating publicity surrounding her father. In 1990, a nude model popped up in Germany noisily claiming--despite a huge payoff to silence her--to have borne his baby. The model filed a paternity suit, but tests eventually showed that the child was someone else’s.

Amid that embarrassment, Graf trained so vigorously--to take her mind off her father, it is now suggested--that she developed chronic back problems.

“In the future, I’ll bear more responsibility and have to make more [financial] decisions,” Graf said in the Focus interview, asserting that until recently, she gave her father complete control over her multimillion-dollar earnings and had no clear idea where the money was, or even how much she had made.

“What else was I supposed to do when I was 15, 16 or 17 years old, besides trust my father and his advisers?” she asked. “And later, why should I do anything differently, when everything appeared to be running well? There was no sign for me that everything wasn’t in order.”

Germans may be willing to accept her protestations of innocence. But there is growing disgust here that there were, apparently, well-placed people who knew perfectly well what was going on--and they either looked the other way or abetted Peter Graf’s shenanigans.

Records available so far suggest that as early as 1985, Peter Graf was increasingly resentful about his daughter’s German tax obligations. The average German wage-earner is estimated to cough up a dispiriting 48% of his or her income to the state in one form or another, which explains why a long list of Germany’s star athletes and other celebrities have established tax residences elsewhere.

In 1985, significantly, tennis star Boris Becker--a Baden-Wurttemberg native--abandoned his home state, moving to low-tax Monte Carlo. (In 1994, he returned to Germany because he wanted to raise his son here.)

Old correspondence shows that a senior Adidas official suggested the following year that Peter Graf solve his tax problems by moving to Switzerland. But Graf, perhaps emboldened by Becker’s departure and the understanding that Baden-Wurttemberg wouldn’t want to lose another top athlete, apparently decided instead to ask his home state officials what they might be willing to do for him.

Just what happened next is murky. Peter Graf boasted to his Adidas friend that the state’s prime minister had worked out a “political solution” for him, but the former prime minister categorically denies it.

The state sports minister at the time appears to have been more helpful. Gerhard Mayer-Vorfelder, now state finance minister, is reported to have arranged a meeting between the unwilling taxpayer and the state’s highest fiscal authorities.

And soon after, Peter Graf opened letter-drop firms, both called Sunpark, in the Netherlands and its former colony the Netherlands Antilles. German authorities now believe Sunpark’s sole business was to secretly collect Steffi Graf’s earnings offshore so that they could be hidden from the German tax office.

It was to Sunpark that Peter Graf wanted companies like Adidas, Barilla, Suedmilch and the General Motors and Citibank subsidiaries to send their payments for his daughter’s product endorsements. Suedmilch staffers who got stuck making the actual deliveries--sometimes in great wads of cash--were so struck with the weirdness of it all that they dubbed the Sunpark scheme “Operation Goldfinger.”

But higher officials of the companies involved say they had no idea that Sunpark might have been an illegal tax shelter. “We could only assume that Steffi Graf was declaring her income,” says German Citibank spokesman Klaus Winker.

Hans-Wilhelm Gaeb, GM European vice president, explaining why the auto maker’s German subsidiary saw “nothing special” in a request to make payments offshore, observed that “Steffi Graf is internationally active [and] we are an international concern.”

Meanwhile, in Baden-Wurttemberg, Peter Graf seems to have gotten the idea that his daughter no longer had to file tax returns. None were handed in from 1989 to 1992; instead, the Grafs just paid an annual lump sum, take it or leave it, with no detailed explanation of how they had arrived at the amount. When federal and local tax officials started to grumble, the family made another lump-sum payment of $2.5 million--with no supporting documents to show how it was calculated.

Large though the amount may have been, it was but a fraction of the amount Steffi Graf owed.

“It appears that they’ve paid only 5% to 10% of their income,” says Puchta, the state legislator, noting that a correct payment at Steffi Graf’s earnings bracket would have been 50%. The voters in his district, he adds, “feel cheated, because they can see that some people can get special deals.”

None of these goings-on might have come to light had it not been for the stubbornness of some sports promoters in the western German city of Essen, who paid Steffi Graf a “starter’s fee” to appear in a tennis match. Graf was sick on the appointed day, but her father refused to send back the money. The Essen organizers sued.

The lawsuit itself was small potatoes. But the panel of judges hearing it noticed the irregular ways in which the Graf family was receiving its money and brought the matter to the public prosecutor’s office. After years of neglect, someone finally decided to take on the Grafs.

Today, Puchta and other members of Baden-Wurttemberg’s coalition government are eager to hold a formal investigation of the Graf affair, one that would find out which public servants gave Peter Graf the impression he could evade taxes and not be punished. (As yet, the public prosecutor is known to be investigating only the Grafs and their advisers, not any of Baden-Wurttemberg’s fiscal authorities.)

Puchta fears that he may be denied access to the necessary documents. But if the investigation does go forward, it could do much to rebuild public trust.

Steffi Graf too seems eager to do what she can to distance herself from her father and restore her image as a law-abiding citizen of the land that so adores her. “I can’t imagine leaving Germany,” she told Focus.

“I’d like to go on living in Germany in the future, as I have until now. And I will pay my taxes where I live.”