Sports Integrity Initiative: FIFA “happy” about US and Swiss embezzlement actions

FIFA said that it is “very happy” that both US and Swiss authorities today took separate actions over alleged embezzlement ahead of the 65th FIFA Congress, 28-29 May 2015. The US Department of Justice (DoJ) charged nine FIFA officials and five corporate executives with ‘racketeering, wire fraud and money laundering conspiracies, among other offenses, in connection with the defendants’ participation in a 24-year scheme to enrich themselves through the corruption of international soccer’ in a 47-count indictment released this morning. This statement also included the unsealing of the identities of four individuals and two corporations, which had previously pleaded guilty to DoJ charges under seal. Hours earlier, the Swiss Federal Office of Justice (FOJ) had confirmed that six ‘soccer’ officials had been detained as part of the US investigation.

Separately, the Swiss Office of the Attorney General (OAG) opened criminal proceedings against ‘persons unknown on suspicion of criminal mismanagement and of money laundering in connection with the allocation of the 2018 and 2022 Football World Cups’. An OAG statement said that ‘data and documents’ had been seized from FIFA as part of a ‘collection of evidence on a cooperative basis’, which involves FIFA delivering the requested data to law enforcement authorities. It is understood that these Swiss criminal proceedings, opened on 10 March 2015, follow FIFA’s lodging of a criminal complaint with the OAG on 18 November 2014. The OAG said that they would examine suspected irregularities occurring in the allocation of the 2018 and 2022 FIFA World Cups. Investigations are being carried out due to suspicion of criminal mismanagement and money laundering through Swiss bank accounts.

In a FIFA press conference held at 10:00 BST this morning, FIFA welcomed both developments as evidence that it was moving in the right direction. FIFA’s Director of Communications and Public Affairs, Walter De Gregorio, said it was “very happy about what is happening right now. It is once again unfortunately FIFA suffering under these circumstances. It is certainly a difficult moment for us.” In the press conference and in a following statement, FIFA reiterated that it is the ‘injured party’. De Gregorio dismissed suggestions that the FIFA Congress would be postponed, stating that “one thing has nothing whatsoever to do with the other”. He also confirmed that the FIFA Presidential elections, due to take place on the last day of the FIFA Congress on 29 May, would take place as planned. De Gregorio emphasised that it was convenient for the authorities to take action now, as all officials are in one place preparing for the FIFA Congress.

He also repeatedly emphasised that FIFA President, Joseph S. Blatter, was not involved and would not be stepping down, despite six current FIFA officials being named in the DoJ charges, as well as three former officials that operated under Blatter’s tenure. De Gregorio said that although Blatter wasn’t “dancing in his office”, was “calm and fully cooperative” with the authorities. He would also be flying out to the Women’s U20 World Cup in Canada in August as planned, despite the US investigation.

The DOJ named nine current and former FIFA officials:

• Jeffrey Webb: Current FIFA Vice President and executive committee member, CONCACAF president, Caribbean Football Union (CFU) executive committee member and Cayman Islands Football Association (CIFA) president.
• Eduardo Li: Current FIFA Executive Committee member-elect, CONCACAF Executive Committee member and Costa Rican soccer federation (FEDEFUT) president.
• Julio Rocha: Current FIFA Development Officer.  Former Central American Football Union (UNCAF) President and Nicaraguan soccer federation (FENIFUT) President.
• Costas Takkas: Current attaché to the CONCACAF President.  Former CIFA General Secretary.
• Jack Warner: Former FIFA Vice President and Executive Committee member, CONCACAF president, CFU president and Trinidad and Tobago Football Federation (TTFF) special adviser.
• Eugenio Figueredo: Current FIFA Vice President and Executive Committee member.  Former CONMEBOL president and Uruguayan soccer federation (AUF) President.
• Rafael Esquivel: Current CONMEBOL Executive Committee member and Venezuelan soccer federation (FVF) President.
• José Maria Marin: Current member of the FIFA organizing committee for the Olympic football tournaments. Former CBF President.
• Nicolás Leoz: Former FIFA Executive Committee member and CONMEBOL President.

FIFA spokesperson De Gregorio said that none of those named would be suspended by FIFA, and they would not be prevented from attending the FIFA Congress. The DoJ statement also named the following US and South American sports marketing executives:
• Alejandro Burzaco: Controlling principal of Torneos y Competencias S.A., a sports marketing business based in Argentina, and its affiliates.
• Aaron Davidson: President of Traffic Sports USA Inc. (Traffic USA).
• Hugo and Mariano Jinkis: Controlling principals of Full Play Group S.A., a sports marketing business based in Argentina, and its affiliates.

Another of the defendants named by the DoJ was José Margulies, the Controlling Principal of Valente Corp. and Somerton Ltd, who allegedly served as an intermediary to facilitate illicit payments between sports marketing executives and soccer officials.

‘The indictment alleges that, between 1991 and the present, the defendants and their co-conspirators corrupted the enterprise by engaging in various criminal activities, including fraud, bribery and money laundering’, read the DoJ statement. ‘Two generations of soccer officials abused their positions of trust for personal gain, frequently through an alliance with unscrupulous sports marketing executives who shut out competitors and kept highly lucrative contracts for themselves through the systematic payment of bribes and kickbacks. All told, the soccer officials are charged with conspiring to solicit and receive well over $150 million in bribes and kickbacks in exchange for their official support of the sports marketing executives who agreed to make the unlawful payments.’

‘Most of the schemes alleged in the indictment relate to the solicitation and receipt of bribes and kickbacks by soccer officials from sports marketing executives in connection with the commercialization of the media and marketing rights associated with various soccer matches and tournaments, including FIFA World Cup qualifiers in the CONCACAF region, the CONCACAF Gold Cup, the CONCACAF Champions League, the jointly organized CONMEBOL/CONCACAF Copa América Centenario, the CONMEBOL Copa América, the CONMEBOL Copa Libertadores and the Copa do Brasil, which is organized by the Brazilian national soccer federation (CBF)’, continued the statement. ‘Other alleged schemes relate to the payment and receipt of bribes and kickbacks in connection with the sponsorship of CBF by a major U.S. sportswear company, the selection of the host country for the 2010 World Cup and the 2011 FIFA presidential election.’ FIFA’s media release said that the arrests had been carried out ‘in relation with CONCACAF and CONMEBOL business’.

The DoJ said that the four convicted individual defendants and two corporate defendants included the guilty pleas of ‘Charles [Chuck] Blazer, the former general secretary of CONCACAF and former US representative on the FIFA executive committee; José Hawilla, the owner and founder of the Traffic Group, a multinational sports marketing conglomerate headquartered in Brazil; and two of Hawilla’s companies, Traffic Sports International Inc. and Traffic Sports USA Inc., which is based in Florida.’

The US Attorney General Loretta Lynch said that, ‘The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States.’ Acting US Attorney Kelly Currie added that the indictment alleges ‘brazen corruption’, warning that the indictment was ‘not the final chapter in our investigation’. The DoJ added that the ‘charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty’.

• This article was originally published in the Sports Integrity Initiative internet journal on 27 May 2015. To access the original, please click here.

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