Will Blatter wriggle out again (and other questions about the FIFA corruption investigation)?(Read article summary)
The nine current and former FIFA officials arrested today could be the tip of the iceberg.
Sepp Blatter and his FIFA cronies, who have run world football as a personal cash machine since the 1970s, appear to be betting they'll wriggle off the hook this time, just as they have every other time in the past.
This afternoon Mr. Blatter dispatched the chief FIFA spokesman to tell reporters he wasn't being investigated for corruption and that the election for president, scheduled for Friday, would go forward. (Yet it remains to be seen how many delegates will fly in for the party, now that Swiss authorities have shown a willingness to drag FIFA officials from their luxury hotel suites.) "Of course congress will take place," FIFA's Walter de Gregorio told reporters. "One thing has nothing to do with the other."
Perhaps. For now. But while the story is still unfolding, it's clear that the charges are just a starting point. “This is the beginning of our effort, not the end,” said Kelly Currie, the acting US attorney for the Eastern District of New York, where charges against nine current and former FIFA officials were filed. "We are looking into individuals and entities in a variety of countries." Four men who ran companies that paid bribes and kickbacks for FIFA marketing rights have also been indicted.
In a sign of the firepower behind the US effort, Mr. Currie's presser was headed off by US Attorney General Loretta Lynch, who conducted much of what prosecutors are calling a racketeering investigation before being confirmed in her new post earlier this year.
Many football fans – and the leaders of many football confederations – will be praying that the current investigations go further up the chain. Although Blatter has lavished a favored few with riches and influence, by and large he's an autocrat the world's professional clubs and sponsors like Nike and Coca Cola tolerate rather than love. FIFA's growing reputation for corruption, not to mention the thousands of migrant workers who've died so far building the World Cup venues for Qatar, has made toleration harder for everyone. That could ultimately threaten FIFA's revenue, which was $2 billion in 2014.
They'll be hoping the prosecutions will lead to change. How might that happen and how did FIFA, the supposed guardian of the "beautiful game," get so ugly?
State of play
US and Swiss authorities are carrying out parallel investigations. Since FIFA is headquartered in Zurich, the Swiss role is obvious. On the US side, it largely comes down to the fact that FIFA federation member CONCACAF – spectacularly corrupt even within the FIFA firmament – is based in Miami. US investigators have had key conspirators and witnesses in their hands for quite some time, most importantly Chuck Blazer, the American who helped run CONCACAF as its general secretary for 17 years and more than earned his nickname: "Mr. 10 percent."
Details are still scant about the specific crimes the Swiss are looking into, though bribery for the awarding of the 2018 World Cup to Russia and the 2022 World Cup to Qatar is clearly at its heart. The Swiss prosecutor's office said in a statement that "unjust enrichment is suspected to have taken place at least partly in Switzerland" and that 10 members of FIFA's executive committee "who took part in the voting on the allocation of the 2018 and 2022 World Cups" would be questioned.
The US prosecution is far more advanced. It focuses on kickbacks demanded by regional officials in exchange for awarding television and marketing rights to middlemen, who typically sell the rights on to legitimate businesses at a markup. Over $150 million appears to have been stolen by the indicted group in a period of nearly 25 years, according to the US:
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. 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.
The US alleges the conspirators corruptly sold rights to broadcast World Cup qualifiers for CONCACAF, professional club matches in both North and South Ameria's version of the Champions League, and national team competitions in South America. The indictment also alleges "bribes and kickbacks" involving the sponsorship of Brazil's national team by a "major US sportswear company" and in "the selection of the host country for the 2010 World Cup and the 2011 FIFA presidential election."
The 2010 World Cup was in South Africa. Nike has sponsored Brazil's national team since 1997.
Most of the indicted officials are from CONCACAF, the regional body for soccer in North and Central America and the Caribbean, while a few are from the South American federation, CONMEBOL.
Among them are current CONCACAF president and FIFA executive committee (exco) member Jeff Webb, who's from the Cayman Islands, the Costa Rican federation head and FIFA exco member Eduardo Li, FIFA Vice President from Uruguay Eugenio Figueredo, and the Venezuelan Rafael Esquivel, who's the current head of the South American federation. Disgraced former CONCACAF boss Jack Warner, from Trinidad, was also indicted.
Four businessmen were also indicted: three Argentines and an American. All ran "marketing" companies that typically "won" rights to events thanks to kickbacks, and then sold them on.
The US revealed today that two of Mr. Warner's sons pleaded guilty to corruption under seal in 2013, as did Chuck Blazer. In 2014 José Hawilla, owner of the Brazilian sports marketing company Traffic Group, also pleaded guilty and forfeited $151 million to the US.
There's something Shakespearean about Warner being taken down by his own sons. Even inside the seething money-sucking mass that is FIFA, Warner stood out as cartoonishly corrupt. In 1989, he printed double the number of tickets for a World Cup qualifier in Trinidad, and pocketed all the extra cash while 10,000 of his ripped off countrymen seethed outside the gates. In 2009, he threw the thinnest of veils over his MO in a speech in the UK. At the time, England was vying to host the 2018 World Cup and Warner had been given a bag filled with fancy swag by Australia, also bidding. The UK had given him nothing.
"Why isn't there a bag for England? People are looking at these things and asking themselves questions," Warner said then. "My colleagues are saying very quietly that the guys who are coming to them are lightweight. This is the type of thing that loses you a bid. You have to look at what others are doing and also be creative." A few years later he stole hundreds of thousands of dollars intended for Haitian earthquake victims. He's also been accused of selling his executive committee World Cup 2022 vote to Qatar for $2 million.
Mr. Blazer went from being almost bankrupt to living a life of fabulous excess thanks to his years at CONCACAF and FIFA. In addition to the contract that gave him 10 percent of all CONCACAF business, in 2010 Blatter named him head of FIFA's marketing and TV committee, in recognition of his wheeling and dealing in his home region. Kickbacks were his stock in trade.
Men like Warner and Blazer were at the center of FIFA corruption for decades. They know where the bodies are buried. Who knows what they'll have to say?