ZURICH/NEW YORK, (Reuters) – The world’s most popular sport was plunged into turmoil yesterday as seven powerful soccer figures were arrested on U.S. corruption charges and faced extradition from Switzerland, whose authorities also announced a criminal investigation into the awarding of the next two World Cups.
The arrests of the senior FIFA officials in a morning raid at a five-star Zurich hotel mark an unprecedented blow against soccer’s powerful governing body, which for years has been dogged by allegations of corruption but always escaped major criminal cases.
U.S. prosecutors said they aimed to make more arrests but would not be drawn on whether FIFA President Sepp Blatter, for long the most powerful man in the sport, was a target of the probe. Blatter, 79, is standing for re-election to a fifth term at the FIFA Congress in Zurich tomorrow, and FIFA said the vote would go ahead as planned.
U.S. authorities said a total of nine soccer officials and five sports media and promotions executives were charged with corruption involving more than $150 million in bribes over a period of 24 years. They said their investigation exposed complex money laundering schemes, millions of dollars in untaxed incomes and tens of millions in offshore accounts held by FIFA officials.
Swiss police arrested the seven FIFA officials and detained them pending extradition proceedings to the United States, which could take years if they contest the process.
“As charged in the indictment, the defendants fostered a culture of corruption and greed that created an uneven playing field for the biggest sport in the world,” said FBI Director James Comey. “Undisclosed and illegal payments, kickbacks, and bribes became a way of doing business at FIFA.”
Separate from the U.S. investigation, Swiss prosecutors said they had opened their own criminal proceedings against unidentified people on suspicion of mismanagement and
money laundering related to the awarding of rights to host the 2018 World Cup in Russia and the 2022 event in Qatar.
U.S. Attorney General Loretta Lynch told reporters at a news conference in New York her office did not want to impede the 2018 and 2022 World Cups but looked forward to working with Swiss authorities investigating the award of the tournaments.
“FIFA has a lot of soul searching to do,” she said.
One of those indicted, former FIFA Vice President Jack Warner of Trinidad, solicited $10 million in bribes from the South African government to host the 2010 World Cup, the Justice Department said.
Warner directed a number of co-conspirators to arrange the payment, which was eventually sent from a FIFA account in Switzerland to a Bank of America account in New York that Warner controlled, the indictment said.
Warner, former FIFA vice president and executive committee member of CONCACAF (Confederation of North, Central America, Caribbean Association Football), said in a statement that he was innocent of any charges.
The United States took jurisdiction of the case in part because the Internal Revenue Service and the FBI secured the cooperation of U.S. citizen
Chuck Blazer, a former top FIFA official, who U.S. officials said had not paid taxes for years.
Another person charged is Jeffrey Webb, head of CONCACAF, based in Miami.
Early yesterday, FBI agents carrying bags and boxes to execute a search warrant went into the group’s office in Miami Beach. A CONCACAF spokesman was not immediately available for comment.
Kelly Currie, the acting U.S. attorney in Brooklyn said yesterday’s charges brought in the New York City borough represent “the beginning of our effort, not the end.”
GUILTY PLEAS
In addition to Blazer, 70, others who pleaded guilty were Jos Hawilla, 71, owner of the Traffic Group, a sports marketing firm founded in Brazil, and two of his companies; Daryan Warner, 46, and Daryll Warner, 40, sons of Jack Warner.
“It is clear that the case is based in large part on some cooperating insiders who have already plead guilty,” said Miami lawyer David Weinstein, former prosecutor.
The FIFA officials appeared to have walked into a trap set by U.S. and Swiss authorities. The arrests were made at dawn at a plush Zurich hotel,
the Baur au Lac, where FIFA officials are staying before the vote. Suites at the hotel cost up to $4,000 a night.
FIFA called the arrests a “difficult moment” but said Blatter would seek another term as FIFA head as planned and the upcoming World Cups would go ahead as intended.
The arrests could have implications for sponsorship.
German sportswear company Adidas, long associated with FIFA, said the soccer body should do more to establish transparent compliance standards. Anheuser-Busch InBev ABI.BR, whose Budweiser brand is a sponsor of the 2018 World Cup, said Wednesday that it is closely monitoring developments at FIFA.
Data and documents were seized from computers at FIFA’s Zurich headquarters, the Swiss prosecutors said.
Officials said that following the arrests, accounts at several banks in Switzerland had been blocked.
The U.S. Department of Justice named those arrested in Zurich as: Webb, Eduardo Li, Julio Rocha, Costas Takkas, Eugenio Figueredo, Rafael Esquivel and Jose Maria Marin.
The DoJ said the defendants included U.S. and South American sports marketing executives said to have paid and agreed to pay “well over $150 million in bribes and kickbacks to obtain lucrative media and marketing rights to international soccer tournaments”.
Lynch said in a statement that the charges span “at least two generations of soccer officials who, as alleged, have abused their positions of trust to acquire millions of dollars in bribes and kickbacks.”
BILLIONS OF DOLLARS
The international governing body of football collects billions of dollars in revenue, mostly from sponsorship and television rights for World Cups. It has been dogged by reports of corruption which it says it investigates itself.
“The chickens are finally coming home to roost and this sounds like a hugely significant development for FIFA,” said Damian Collins, a British member of parliament who founded the reform group New FIFA Now.
“It proves that Sepp Blatter’s promises over the last few years to look into corruption at FIFA have not materialised and because he has totally failed to do this, it has been left to an outside law enforcement agency to do the job and take action.”
FIFA’s decision to award the World Cup to Qatar, a tiny desert country with no domestic tradition of soccer, was heavily criticised by soccer officials in Western countries. FIFA was forced to acknowledge that it is too hot to play soccer there in the summer when the tournament is traditionally held, forcing schedules around the globe to be rewritten to move the event.
Qatar’s stock market fell sharply as news of the Swiss investigation emerged. A Russian official said his country would still host the 2018 World Cup.
The Russian Foreign Ministry said that the arrests were “another case of the illegal extraterritorial application of U.S. laws.”
Three years ago FIFA hired a former U.S. prosecutor to examine allegations of bribery over the awarding of the World Cups to Qatar and Russia. However, last year it refused to publish his report, releasing only a summary in which it said there were no major irregularities. The investigator quit, saying his report had been mischaracterized.
