FIFA’s Paris Cash Drop: $10,000 Rows Stacked High in a Suitcase

Loretta Lynch, U.S. attorney general, speaks during a news conference in the Brooklyn borough of New York, on May 27, 2015. The future of the World Cup has been called into question and soccer's governing body plunged into crisis after U.S. prosecutors charged nine officials with corruption and Switzerland probed upcoming tournaments awarded to Russia and Qatar. (Photographer: Victor J. Blue/Bloomberg)

Story by Bloomberg
Written by Andrew Martin

The suitcase was waiting in a hotel room in Paris, the cash inside neatly bundled into $10,000 STACKS.

The suitcase was waiting in a hotel room in Paris, the cash inside neatly bundled into $10,000 stacks.

The money, U.S. authorities allege, was payment for one of the most sought-after prizes in world soccer: a nod from FIFA, the sport’s governing body, to host the World Cup.

That allegation, involving a bid by South Africa for the 2010 Cup, is contained in a stunning 47-count indictment unsealed Wednesday by the U.S. Justice Department, the result of a years-long investigation of corruption at FIFA.

While scandals are nothing new at FIFA, the portrait of corruption painted by federal prosecutors rivals the worst in sports history for length and breadth. Money laundering, racketeering, bribery, kickbacks and more were all embraced by FIFA officials as business as usual, the authorities say.

“The indictment alleges corruption that is rampant, systemic and deep-rooted, both abroad and here in the United States,” U.S. Attorney General Loretta Lynch said in a statement. “It spans at least two generations of soccer officials.”

One of those officials, according to the indictment, was a former history teacher from Trinidad and Tobago named Jack Warner -- the man for whom that suitcase was allegedly waiting.

A soccer official in his native country, Warner had won an election in 1990 to become president of Concacaf, the soccer confederation that oversees Central and North America.

‘Gift’ Envelopes

In 2004, FIFA’s leadership gathered to consider bids from countries that wanted to host the 2010 World Cup. Among the hopefuls were Morocco, Egypt and South Africa.

Warner had ties to the South Africans, who had failed in a bid for the 2006 World Cup. One of his relatives had organized friendly matches in South Africa for teams in Warner’s confederation, according to the indictment. So Warner authorized the relative to fly to Paris to meet with a high-ranking South African bid official in a hotel, where prosecutors said the suitcase full of cash was waiting.



Years later, in 2011, Warner directed Caribbean football officials to pick up a “gift” -- an envelope containing $40,000 in cash -- ahead of the election for FIFA’s president, according to the indictment. He became angry, it said, when he learned that a Caribbean official had told a Concacaf official in New York about the cash.

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

‘No Due Process’

Warner, who stood down from all soccer posts in 2011, said in a statement that he was innocent of any charges.

“I have been afforded no due process and I have not even been questioned in this matter,” he said in the statement. “I have walked away from the politics of world football to immerse myself in the improvement of lives in this country where I shall, God willing, die.”

In all, 14 people were indicted on charges that include racketeering, wire fraud and money laundering schemes. Four others pleaded guilty.

In a related case, Swiss authorities said they were examining allegations of money laundering and criminal mismanagement related to selecting host countries for the 2018 and 2022 World Cup, awarded to Russia and Qatar, respectively. Swiss authorities seized electronic data and documents from FIFA’s Zurich headquarters Wednesday.

FIFA’s president, Joseph “Sepp” Blatter, wasn’t charged, though several members of his inner circle were. “Such misconduct has no place in football and we will ensure that those who engage in it are put out of the game,” Blatter said Wednesday, in prepared remarks on FIFA’s website.

Concealed Payments

Most of the allegations focus on soccer officials in the Americas, where prosecutors say leaders of regional confederations solicited and accepted bribes from sports marketing firms that seek media and marketing contracts for major regional tournaments, a major source of revenue for soccer confederations.

Over a 24-year period, Fifa officials conspired with the soccer marketing agencies for bribes and kickbacks in exchange for contracts, often concealing the payments through shell companies, offshore accounts or other schemes, prosecutors said.

Indeed, when one set of soccer leaders is ousted for corruption, the new leaders started soliciting bribes almost immediately after taking office, even as they pledge reform, the indictment said.

Reform Pledges

For instance, in May 2012, FIFA vice president Jeffrey Webb, of the Cayman Islands, was elected president of Concacaf. Webb has promised a new culture of transparency and accountability that would depart markedly from Warner’s tenure.

Webb hired an executive from a sports marketing company, Enrique Sanz, from Traffic Sports USA, as his general secretary. Sanz, too, pledged reforms.

“Almost immediately after taking office, however, both men resumed their involvement in criminal activities,” the indictment alleges.

Webb and other defendants named in the indictment couldn’t be reached for comment.

The indictment refers to an unidentified “Co-Conspirator #4,” whose details appear to match those of Sanz, though it doesn’t identify him by name. Sanz wasn’t charged or mentioned by name in the indictment.

Shortly after beginning work at Concacaf, Co-Conspirator #4 began negotiating with a former colleague at Traffic Sports USA for media rights to Concacaf tournaments, including its main competition, the Gold Cup. At Webb’s behest, the co-conspirator negotiated a bribe for Webb and a second bribe a year later, when the contract was renewed, the indictment said.

New Pool

Webb used some of the money from bribes to build a pool at his suburban Atlanta home and to buy real estate in Stone Mountain, Ga., the indictment says.

Co-Conspirator #4 benefitted, too. An associate of Webb’s, Costas Takkas, bought him an “expensive painting” at a New York gallery, the indictment says. Takkas was charged as part of the government’s case.

Sanz couldn’t be located for comment.

In the battle to win the 2010 World Cup, more than one country was wrangling for Warner’s favor.

Months before the May 2004 vote on the venue, a representative from Morocco offered Warner $1 million in exchange for his vote, prosecutors said. South Africa countered: High-ranking officials at FIFA, the South African government and the South African bid committee had arranged for a $10 million payment from the government to the Caribbean Football Union, Warner’s home base of support, to “support the African Diaspora,” the indictment says.

Paid by FIFA

Warner accepted the offer and later indicated he’d voted for South Africa, according to the indictment.

Ultimately, prosecutors said, the South Africans struggled to make the payment from government funds, so FIFA paid the bill, using money that was intended to support South Africa’s World Cup.

Referring to the practice of paying bribes to obtain commercial rights at tournaments, Aaron Davidson, president of Traffic Sports USA, allegedly told one of the co-conspirators: “Is it illegal? It is illegal. Within the big picture of things, a company that has worked in this industry for 30 years, is it bad? It is bad.”

Davidson, who couldn’t be reached for comment, was also charged Wednesday.

Read more: http://www.cnn.com/2015/05/27/football/fifa-corruption-charges-justice-department/index.html