FIFA’s past President João Havelange took millions of dollars in bribes to steer multi-billion dollar contracts to the ISL Marketing company. His son-in-law Ricardo Teixeira took millions more. Sepp Blatter and other senior officials knew about this stealing from FIFA – and did nothing.
This is the evidence revealed in a stunning document published today by the Council of Europe. The first section is a sharp and incisive report by the CoE’s rapporteur François Rochebloine. It is followed by a second and explosive report from Swiss investigating magistrate Thomas Hildbrand.
This must be the most shameful and disgraceful day in FIFA’s history. But it will get worse. On Wednesday this devastating report will be debated by 318 parliamentarians from the 47 Council of Europe member states. After their first report on March 6, Blatter made offensive comments about them. They are unlikely to be forgiving.
Teixeira and Havelange, with the support of Blatter have been blocking publication of Hildbrand’s 41-page report through the Swiss courts for nearly two years. That is now pointless. All the essential information about three decades of stealing from FIFA is now in the public domain.
The questions now are:
• Will Blatter, shamed by the report, resign? Will the senior officials who have conspired in the bribes cover-up be forced out, starting with General Secretary Valcke?
• What action will FIFA’s Executive Committee take? Will they recommend to the Congress at the end of May that a caretaker management is installed until new Presidential elections take place? Will the National Associations exclude Blatter from the Congress – because the Swiss authorities state that he has betrayed FIFA by letting the money be stolen?
• Will they force publication of the rest of Hildbrand’s report? There is a copy in the President’s office, it belongs to FIFA and he has no right to withhold it from the Executive Committee or the Congress.
For reporters and fans new to this scandal I have compiled, swiftly, a guide to the report.
• Hildbrand has testified to the Committee on Culture, Science, Education and Media. His report begins on Page 5.
• Rapporteur Rochebloine calls for a tougher Parliamentary resolution about FIFA corruption and Reform.
Point 5: Rochebloine highlights that the bribery scandal goes back before 1989. And that the kickbacks were crude payments to obtain lucrative World Cup contracts.
Point 6: Bribes between 1989 and 1998 were at least 122 million Swiss Francs (CHF)
Point 7: FIFA was aware of the bribery.
Point 8: FIFA’s lawyers secretly repaid CHF2.5 million to the liquidator of ISL. So FIFA had to know.
Point 9: This is the killer for Blatter: ‘Since FIFA was aware of significant sums paid to certain of its officials, it is difficult to imagine that Mr Blatter would not have known about this.’
Point 10: Worse still for Blatter: ‘It is extraordinary that he did nothing to make public all the information which FIFA had or has, and took no steps whether internally or via the courts to enable FIFA to obtain reparation.’
• Rochebloine blows apart Blatter’s claims that he cannot publish the Hildbrand report:
‘Now, according to Mr Hildbrand’s statement (see the appendix, section 6.2, second paragraph), ‘This order to discontinue proceedings is not subject to an absolute secrecy requirement”. It would therefore appear that FIFA is able to publish the document in question (which it must have in its possession as party to the proceedings) without waiting for a decision from the Swiss Federal Court. For this reason, I now suggest that it be explicitly referred to in our draft resolution.’
• Now Rochebloine is looking at how FIFA’s Ethics Commission avoided investigating allegations about Blatter and his presidential campaign last year.
• ‘There was no investigation to determine whether Mr Blatter had been able to profit unduly from his institutional position – in a manner prejudicial to FIFA – during the period prior to the presidential election.’
• ‘A detailed and exhaustive investigation is imperative. We have the right to know the truth, and ascertaining the truth can trouble only those who have something to hide.’
Point 13: Rochebloine is querying FIFA’s secrets about who is getting massive bonuses? The suspicion is that these payments are to keep employees and Executive Committee members quiet about the corruption.
Point 15: Rochebloine is now getting angry. FIFA are avoiding giving him details. They snub him: ‘There are no further elements to add to those contained in our press release of 7 March 2012. All matters relating to FIFA administration, at all levels, come under the responsibility of the different bodies of our organisation. Rochebloine says: ‘This reply defies comment.’
Point 17: Rapporteur Rochebloine is still unhappy about KPMG’s handling of FIFA’s accounts, and the laziness of the FIFA Congress (that’s your national association!) He comments, ‘It is therefore quite legitimate to ask why the FIFA Congress does not demand further clarifications?’
Point 21: Rochebloine wants the members of the Council of Europe to be aware of Blatter’s rudeness to them after their report in March. Arrogantly, Blatter had told CNN that ‘We should address the problems we have in Europe not the problems we create in FIFA and that he did not understand why a political organisation in Europe or elsewhere in the world had the right to ask FIFA to enter into any activity.’
These may turn out to be the stupidest words Blatter ever uttered. It is not wise to insult MPs from all over Europe.
Point 22: Rochebloine is making a long overdue comment about Blatter: ‘Blatter is the President of FIFA, but he is not FIFA and he should not confuse what is in his own interest with what is in the interest of the organisation he is supposed to serve.’
• Rochebloine continues, ‘The independence of sport – to which we remain committed – should not become a defence for those who abuse their authority.’
By his third sentence Hildbrand is making clear how much he objects to Blatter’s attempts to keep the corruption secret.
• ‘Justice must be public – secret justice behind closed doors has no place in a criminal procedure created by democracy and shaped by the principles of the rule of law.’
• And he makes clear that he can answer questions from the Council of Europe because, ‘because official secrecy has been formally lifted by the responsible authority.’ (That is the public prosecutor in the Canton of Zug)
• Although Hildbrand is free to reveal the mechanics and laundering chain of the bribes he cannot tell us the names of the two men accused of taking the bribes.
• Later we will see them referred to as “E” and “H.”
• Let’s name them now. “E” is former FIFA president João Havelange and “H” is Ricardo Teixeira, both from Brazil.
• Hildbrand explains what has happened at the Zug Supreme court after it ruled that Hildbrand’s report could be published. Note that initially, Blatter aka FIFA was opposing publication in the media – making clear that when he said he wanted it published – he was lying.
• ‘The relevant order was contested by all the accused persons, including FIFA. The Supreme Court ruling that the media had the right to see the decision was contested by both natural persons in the Federal Court.’ (That’s the Swiss Federal Court in Lausanne.)
Point 1.3: (near end) Here’s one way the bribes were laundered. It was through ‘Additional Rights payments’ (they were revealed first in my 2007 paperback edition of Foul! – see page 355). The clue is the ‘South American country.’
‘Agreement of 29.06.1998 between ISMM Investment AG and companies A and A: Through this contract ISMM Investment AG transferred to company A and to company A the rights to exploit the radio and TV broadcasting rights for the 2002 World Cup in a South American country. The compensation fee was US$ 220 500 000.’
This page is about the secret foundations set up in Liechtenstein to launder the bribes. Note that one amount – see the table – was CHF36 million.
How were the bribes disguised?
‘“Commission, fees”, “finder’s fees or additional acquisition payments”, or benefits for personalities and decision-makers in world sport, and was an element of the acquisition or extension of global marketing rights.’
Now we are arriving at another shocker! Another example of Blatter/FIFA being well aware of the bribes for many years.
Point 1.5.1: The liquidator of the ISL group, Thomas Bauer from Ernst & Young, filed a claim in the Zug court for the return to creditors of the bankrupt company the CHF36 million that had been shipped to Liechtenstein At that stage Bauer couldn’t prove who had taken the money. But he knew that ISL executive Jean-Marie Weber had arranged the transfer.
• Suddenly, FIFA’s Zurich lawyers Noble & Hug appeared on the scene. They negotiated on behalf of the (anonymous) Weber.
• The liquidator settled for the best deal he could negotiate at the time – the repayment CHF2.5 million to creditors.
• Hildbrand interviewed liquidator Bauer and makes the following statement:
‘1.6. Replying to a question by the prosecuting authorities, the private insolvency practitioner stated on 21.03.2005 that the law firm had indicated during the composition proceedings that it represented FIFA, and that it was in FIFA’s legitimate interest not to become embroiled in unjustified speculation again because of this action.’
For anybody who might have missed the point, Hildbrand repeated:
• ‘1.8. To summarise, when the criminal procedure was started, it was clear that the ISMM (ISL) Group, in the context of contracts to be concluded with sports organisations, paid significant sums to football officials, and that FIFA was aware of this and was involved in the composition proceedings.’
• Still not got the point? Here’s Hildbrand again:
• the settlement amount was transferred by a Swiss law firm representing FIFA;
Here’s more detail about who really paid back that CHF2.5 million.
• It appears that then money was paid by FIFA to Nobel & Hug and then to liquidator Bauer.
• Hildbrand comments, ‘finally, it was suspected that FIFA paid a “third party debt.”‘ He adds, ‘the settlement amount did not necessarily have to be made by FIFA itself.’
• The outcome was ‘that the sum of CHF 2 500 000 paid by the law firm into the bankruptcy assets came from a senior official of FIFA.’
(Yes, you guessed, it was Ricardo Teixeira. Remember this figure and “H”, we come back to it on Pages 11 and 13)
• Here are those big bribes again, year by year. The table does not reveal the names of the front companies that laundered the money. But I did in BBC Panorama’s ‘FIFA’s Dirty Secrets‘ transmitted on November 29, 2010.
• Of course Blatter could not possibly investigate himself, Teixeira and Havelange. The IOC did and in December 2012, Havelange suddenly resigned to avoid being publicly humiliated.
• Here’s the fascinating story of how Teixeira (or “H”) moved his bribe money through Switzerland and Andorra. There was cash, wire payments and a securities deposit.
• Revoltingly, Teixeira named some of the accounts after his children from his first marriage to Havelange’s daughter.
• Even more revolting, Teixeira is now doing this with the young daughter of his second marriage. It was revealed in February that Barcelona President Sando Rosell, under investigation for corruption with Teixeira in Brazil, paid £1.4 million in June last year to an account in the name of Teixeira’s 11-year-old daughter Antonio.
Point 3.6.1: “H” – Teixeira got ISL kickbacks worth CHF12.7 million 1992 and 1997. And Hildbrand believes there was more.
• Here’s another Hildbrand clue: “H” was President of the Football Association of a South American country. (Teixeira was still boss of Brazilian football on March 6 when Hildbrand submitted this report)
And the money was laundered under a bogus contract for the 2002 World Cup TV rights.
Point 3.6.2: Here’s Havelange! (“E”)
And here’s the bribe that forced Havelange out of the IOC late last year. CHF1.5 million ($1 million then) in March 1997. As I revealed in my book Foul! And in the BBC Panorama programme of June 2006 ‘The Beautiful Bung’ this bribe was physically handled by Blatter. Havelange’s dirty money was also laundered for phoney World Cup TV rights.
So Blatter always knew about the corruption. He was always part of the conspiracy.
Hildbrand gives a detailed explanation of the criminal accusation against Blatter/FIFA.
• He is saying that FIFA/Blatter knew that money due to FIFA was being stolen as bribes – but did not try to stop it – or get the money back.
• Hildbrand concludes, ‘FIFA thereby suffered damage to the amount of this failure to perform their duty, while accused persons E and H enriched themselves by the same amount.’
For the rest of this page Hildbrand is explaining how he worked out the punishment.
4.3.1: Hildbrand was certain he had proved that Teixeira had taken at least CHF5 million in bribes.
And Teixeira had already repaid CHF 2.5 million via Andorra. So he had to repay another CHF2.5 million!
4.3.2. Hildbrand wasn’t able to penetrate the web of front companies that Havelange (“E”) laundered his bribes through. I calculate he had at least $60 million. But Hildbrand knew of the CHF1.5 million from 1997.
‘Taking into account . . . the advanced age of the accused and the fact that his income possibilities were therefore reduced to the proceeds of his assets and possible pensions, the public prosecutor’s office considered the set amount of CHF 500,000 to be appropriate.’
So between them, Havelange and Teixeira were forced in the Spring of 2010 to repay CHF3 million.
And into . . .
4.7.1: And that was nearly the end of the affair:
‘The public prosecutor’s office noted in the context of these proceedings its opinion that the objective facts of criminal mismanagement within the meaning of Article 158 of the Criminal Code were present, and made discontinuance of the proceedings dependent on full reparation for the loss, damage or injury, on payment for the damage in the amount of CHF 2 500 000, on the meeting of the procedural costs by FIFA, and on a reparation payment – in so far as FIFA was concerned – being made to an institution of public interest.’
Point 6.1: Hildbrand stresses that his report does not have to be kept secret by FIFA/Blatter.
Finally, Hildbrand is encouraging the Council of Europe to join with the media and request publication of the report.
‘The Council of Europe is therefore at liberty to submit a reasoned request to the Zug public prosecutor’s office to see the order to discontinue proceedings.’
Who is going to show Blatter the FIFA door?
By Andrew Jennings