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The FIFA Story: Money, Corruption, and Soccer

By Peter Berlin

The investigative journalists sifting through the Panama Papers can hardly have been surprised when the names of leading soccer officials started cropping up in connection with murky offshore accounts.

Over the past year, FIFA has been embroiled in a scandal that keeps rippling outward. The governing body of world soccer, it seems, has been writing the encyclopedia on corruption.

The recent revelations confirm the geographical pattern of the scandal. The Western media has long been convinced that Sepp Blatter, the FIFA president from 1998 to 2016, and his predecessor, João Havelange, a Brazilian, had bought the votes of FIFA’s biggest confederation, Africa, with pork barrel. The conviction that FIFA was corrupt intensified sharply in 2010 when Qatar edged the United States in the vote for the host of the 2022 World Cup. The decision to award the 32-team competition to a nation of 2.5 million where boiling summer temperatures are inimical to playing, or watching, sport was so ludicrous that many assumed that the choice has been oiled by bribery.

Yet, so far, almost all of those charged or investigated by the U.S. and Swiss authorities or suspended by FIFA have been either European or from the Americas. That might have something to do with the fact that, so far, the investigations have been conducted by the U.S. Department of Justice and the Swiss Attorney General. FIFA is based in Switzerland. Soccer’s global revenue is driven by American and European money, and that, so far, is where the corruption has been unearthed.

In addition to the predictable collection of tax-allergic soccer stars, four officials have been linked to offshore accounts created by Mossack Fonseca, the Panamanian law firm that was the source of the leak. They are: Gianni Infantino, the newly-elected president of FIFA; Jérôme Valcke, FIFA’s former general secretary; Michel Platini, the former head of UEFA, which runs European soccer; and, most ironic of all, Juan Pedro Damiani, a member of the FIFA Ethics Committee.

Platini and Valcke are French, Infantino is Swiss, and Damiani is Uruguayan.

Valcke had already been suspended in February by that Ethics Committee for cheating on his expenses and for profiting from a World Cup ticket scalping scheme. The Panama Papers revealed that he owned a company in the British Virgin Islands, which he had used to buy a yacht.

Platini was the favorite to take over the FIFA presidency after Blatter resigned immediately following re-election last May. Platini was thrown out of the race over allegations that he had once accepted a bribe from Blatter. Platini, it emerged, had created an offshore company registered in Panama in 2007.

Damiani helped set up offshore accounts for three men indicted by the U.S. Department of Justice in connection with soccer corruption. They are Eugenio Figueredo, a fellow Uruguayan and a former FIFA vice president, and Hugo and Mariano Jinkis, a father and son who ran an agency that dealt in sports television rights and who are under house arrest in Argentina as they fight extradition to the United States.

Damiani’s law firm in Montevideo represented Figueredo, a fact Damiani failed to reveal to the Ethics Committee when Figueredo was one of seven officials arrested in Zurich last May on the eve of a FIFA presidential election. That sweep provoked Blatter’s resignation, and the dominos are still falling. Damiani resigned from the Ethics Committee at the start of April.

Infantino’s involvement is less direct. He is the former deputy head of at UEFA and replaced Platini as the European candidate in the presidential election, edging Salman Bin Ibrahim Al-Khalifa of Bahrain in February in the second ballot. Infantino’s name crops up in connection with the sale of the TV rights for UEFA competitions. UEFA sold those rights to Cross Trading, a company registered in Niue, a Pacific atoll, for $110,000. Cross Trading rapidly flipped those rights to Ecuadorian television for $311,170. The Panama Papers revealed that Hugo and Mariano Jinkis owned Cross Trading. Infantino signed the original contract on behalf of UEFA.

The Cross Trading contract is instructive in several ways.

First, it demonstrates the continued dependence of global soccer bodies on intermediaries. Almost all of the U.S. Department of Justice indictments involve the sale of rights to intermediaries. There is no sound financial reason for selling rights to agents who, presumably, are only buying because those rights will command a higher price on the open market. Yet soccer continues to do just that. The links between Havelange, Blatter, and other leading officials or their relatives to such companies only heightens the suspicion.

Yet soccer officials seem not to get it.

On April 5, Blatter gave a talk on corruption at the University of Basel. He was heckled from the audience and criticized by another panelist. In reponse, Blatter angrily declared “I am not guilty.”

“I am not responsible morally what the others have done,” he said.

Infantino, who has pledged to clean up the mess that Blatter insists he did not create, was similarly “dismayed” by the way the Panama Papers story was handled. "My signature is underneath 1,000 contracts," he said, suggesting he could not be expected to check for potential corruption. He added that it was none of his business what Cross Trading did with the rights.

At the same time, FIFA does seem to be preparing the ground for yanking the 2022 World Cup from Qatar. The organization recently released a report it commissioned by John Ruggie, the Berthold Beitz Professor in Human Rights and International Affairs at Harvard, into the treatment of the migrant workers who are building World Cup facilities.

Ruggie told The Guardian: “FIFA can’t impose human rights on countries but in return for hosting a tournament there are certain human rights to which you should have to adhere. If you can’t, you have to make tough decisions. That may include having to terminate an existing relationship.”

There remains the question of how FIFA distributes its huge revenues. Laudably, it has long taken from the rich and given to the poor. The problem is that, under Blatter, it created a system of generous, short-term development grants distributed from FIFA House with almost no oversight. If the president’s supporters in the developing world helped themselves to a share of that money they could, in theory, do so with impunity. So far, there is no evidence that FIFA has the will to create greater transparency.

*****

*****

Peter Berlin was a sports editor of the International Herald Tribune and The Financial Times.

[Photo courtesy of Mariya Butd]

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