World Cup at center of soccer corruption charges in FIFA raids

Published 6:00 am Thursday, May 28, 2015

NEW YORK — The future of the World Cup has been called into question and soccer’s governing body plunged into crisis as U.S. prosecutors charged nine officials with corruption and Switzerland probes upcoming tournaments awarded to Russia and Qatar.

In perhaps the biggest sporting scandal ever, Swiss police raided the luxury Baur au Lac hotel in Zurich at dawn Wednesday and arrested seven FIFA officials. Two former soccer executives were also charged, as were four sports marketing officials. In New York, the Justice Department vowed more arrests and to widen a probe of racketeering, wire fraud and money laundering.

“They were expected to uphold the rules that keep soccer honest, and protect the integrity of the game,” U.S. Attorney General Loretta Lynch said at a news conference. “Instead, they corrupted the business of worldwide soccer to serve their interests and enrich themselves.”

The probe calls into question the leadership of the world’s most watched sporting event, with more than $1 billion in annual revenue and sponsors ranging from Coca-Cola to Adidas. While the charges stop short of FIFA President Joseph “Sepp” Blatter, his future has also been suddenly thrown into question. Prosecutors are also looking into the role of the banking industry, and its handling of FIFA funds.

Blatter, 79, who has run FIFA since 1998, is seeking a fifth term in a vote scheduled for Friday. As international soccer executives gathered in Zurich, his all-but-certain re- election now looks a lot less sure.

“It would be absolutely the wrong signal if the agenda of the FIFA Congress were to be executed as planned,” said Reinhard Rauball, the president of Germany’s Bundesliga. “They can’t simply continue with business as usual. If these allegations turn out to be true, they would rock FIFA and the entire soccer world to the core.”

U.S. prosecutors unveiled an indictment charging 14 people, as well as guilty pleas by four others that detail “rampant” corruption dating to 1991. Hours earlier, Swiss authorities arrested FIFA executives and searched the organization’s headquarters in a series of dawn raids in Zurich.

Swiss authorities later seized documents at FIFA’s nearby offices, saying they were examining possible crimes related to selecting Russia to host the 2018 World Cup and Qatar for 2022.

The defendants come from 11 nations. They include U.S. and South American executives who are alleged to have paid more than $150 million in bribes and kickbacks to obtain media and marketing rights to soccer tournaments.

The 162-page indictment spells out dozens of instances in which contracts were awarded in exchange for illicit payments. Corrupt payments from around the world sluiced through the U.S. banking system, according to prosecutors. As a result, prosecutors are examining banks as well, acting U.S. Attorney Kelly Currie told reporters in Brooklyn, New York.

“Our investigation is going to look at a broad area of conduct,” Currie said. “A lot of the banking institutions and the ways these moneys were funneled passed through the U.S.”

FIFA generates more than 90 percent of its income from the quadrennial World Cup. The tournament brought in $4.15 billion of revenue in the four years culminating with the 2014 edition in Brazil.

The bribes and kickbacks were meant to influence the host of the 2010 World Cup, which was held in South Africa, the U.S. statement said. Swiss authorities are investigating a criminal conspiracy related to the next two editions, awarded in a controversial vote in 2010.

Those charged include the current and former president of the confederation that oversees North and Central American soccer, Jeffrey Webb of the Cayman Islands, and Jack Warner of Trinidad and Tobago.

They also include FIFA executive member Eugenio Figueredo of Uruguay and Jose Maria Marin, who led Brazil’s soccer federation during last year’s World Cup. Webb has been mentioned as an heir apparent by Blatter himself.

The indictment included details of cash payments to influence the outcome of the 2011 election for president of FIFA. Warner directed Caribbean Football Union officials to collect their “gift” — each got an envelope with $40,000 in cash, according to the indictment.

When someone exposed the payments to soccer authorities, Warner grew angry.

“There are some people here who think they are more pious than thou,” Warner said. “If you’re pious, open a church, friends. Our business is our business.”

The investigations by the U.S. and Swiss promise to upend an organization that has endured one scandal after another during Blatter’s tenure. FIFA said the presidential election, as well as the World Cups in Russia and Qatar, would take place as planned.

“This is not good in terms of image or reputation but in terms of cleaning up everything we did over the past four years, this is good,” FIFA’s chief spokesman, Walter De Gregorio, told reporters at the House of Football in the hills above Zurich. He said the World Cups in Russia and Qatar would go ahead as planned.

Aside from nine current and former FIFA officials, four sports marketing executives also were indicted, along with an intermediary accused of facilitating illicit payments.

Prosecutors began collecting guilty pleas in sealed courtrooms in 2013, including two sons of Jack Warner and Charles “Chuck” Blazer, a former FIFA executive committee member. Blazer secretly recorded conversations while cooperating with prosecutors, the New York Daily News reported last year. Brazilian Jose Havilla, founder of sports marketing company Traffic Group, agreed to forfeit more than $151 million as part of a guilty plea, the justice department statement said.

Swiss judicial authorities initially said six soccer officials were arrested pending extradition to the U.S., suspected of receiving or paying more than $100 million in bribes. A seventh arrest was disclosed hours later.

The suspects from sports marketing companies “are alleged to have been involved in schemes to make payments” to officials from FIFA and other soccer groups, the Swiss Federal Office of Justice said in a statement on its website. The payments date back to the early 1990s.

Six FIFA officials arrested in Zurich on Wednesday are contesting their extradition to the U.S., setting the stage for a legal battle.

For those contesting extradition the Swiss will ask the U.S. to submit a formal extradition requests within 40 days as provided by treaty.

A seventh soccer official has indicated willingness to be extradited and may be handed over “immediately,” according to the statement.