Then in late 2009, he got a call from Christopher Steele, wondering if the two could have a little chat about soccer. Jennings agreed, on the condition that Steele come to him in Penrith, the sleepy town in the far northern reaches of England where he lived, and that he give him £250 for his time.
Not long thereafter, Steele paid for Jennings to make a trip to Zurich, where he met with some of his soccer sources, whom he had been wanting to meet with anyway, then dutifully filed a report on what they told him.
The two followed up with a few phone calls, and the former spy struck Jennings as friendly and intelligent, even if the information Steele was seeking seemed rather basic. It was clear he had a client, but he would never tell Jennings who it was, and communications dropped off until the summer of 2010, when Steele called again to ask if he’d make the trip to London to meet some very important people.
* * *
The train from Penrith to central London takes just under four hours, and during the journey, the wily reporter didn’t know what to expect. But what greeted him when he walked into the second-floor Belgravia offices of Orbis Business Intelligence on a warm July day in 2010 was in fact exactly what he had been waiting so many years to see.
The main room, behind an unmarked door with a quirky porthole window, was spare and quiet, with white walls and a scattering of desks staffed by young researchers. Behind a second door was the smaller office Steele shared with his business partner. Inside waited the FBI.
Mike Gaeta, impeccably dressed as always, radiated experience and self-confidence, and his New York accent, straight out of a prime-time police procedural, only added to the package. Another FBI agent, younger, with short-cropped hair and wide eyes, looked to Jennings like he must have come to the Bureau directly from the Marine Corps. A third man introduced himself as chief of the Justice Department’s Organized Crime and Racketeering Section in Washington, D.C.
The men told Jennings they specialized in organized crime, particularly focusing on Russian and Ukrainian matters. They had lately become interested in FIFA, they said, and wondered if maybe he’d help them get up to speed on the topic and tell them about the ways it might be corrupt. Jennings’s building excitement was now rounding the corner to flat-out giddiness.
At last, he thought.
* * *
Action movies aside, FBI agents spend very little time smashing down doors, conducting high-speed car chases, and getting into bloody shootouts with steely-eyed crime lords. Much of what they do involves calmly and patiently talking to people.
Agents search out and recruit people who can help build cases. It might be a perpetrator or witness to a crime, someone in a position where they could attain useful information, or a person with significant knowledge on a relevant topic.
The FBI’s formal term for such informants is “confidential human sources,” and they are the lifeblood of most investigations. Agents learn that the core of their job is to build and nurture relationships with them, sometimes over the space of years.
Gaeta, in particular, preached this kind of police work, based on his belief that real live human beings testifying before a jury, rather than colorless and boring documents, win convictions.
Convincing people to talk, Gaeta felt, was his specialty, what made him an effective agent. He prided himself on being able to detect the vulnerabilities and motivations of sources on the insides of conspiracies, and then get them to agree to wear a wire and make clandestine recordings of criminal confessions.
As a supervisor, Gaeta constantly pushed young agents to “get out in the field” in search of sources, but he also reminded them to be cautious. The goal was to get information, not to share it: Agents listen. Sources talk. Including eccentric British journalists.
Sitting in Steele’s office, the two agents and the Justice Department lawyer looked on expectantly as Jennings took a deep breath and gathered his thoughts.
The story of modern soccer was really about the emergence of a new kind of business, one that turned out to have corruption baked into it nearly from the moment it was born. That business was built around the buying and selling of the rights to sponsor and broadcast events. This marketplace is so fundamental to the way all sporting activities are administered today that it almost escapes notice, but the idea of a brand like Adidas acquiring the exclusive right to plaster its logo at all FIFA events worldwide, for years at a time and with one single contract, was revolutionary a generation ago.
The rapid growth of that new industry unlocked vast stores of value in events like the World Cup and Olympics, showering both those who ran the sports, and those who marketed them, with enormous sums of money. But it also proved susceptible, almost from the outset, to bribery and greed, leading directly to some of the most profound and intractable problems in sports.
For FIFA, that story began some thirty-five years earlier, when the world soccer authority was a far smaller and simpler organization. That was where the story had to start, and there was a lot of ground to cover.
* * *
By the time the Brazilian João Havelange was elected as FIFA’s first non-European president on July 11, 1974, FIFA still had fewer than ten full-time employees, and, he later recalled, “the General Secretary, his wife, and their cat and dog lived in the same building. Meetings always had to be held somewhere else.”
Soccer, more than a century old by then, was still an unsophisticated enterprise; the tiny sums of money that it did generate came almost entirely from fans willing to buy tickets to sit in bare concrete bleachers and root for their teams. Player salaries were small, sponsorship nonexistent, and the men who administered the sport were driven largely by a sense of public service and a love of the game.
Havelange’s predecessor, Sir Stanley Rous, was a near perfect embodiment of that romantic spirit. A tweedy Englishman who seemed allergic to the sport’s commercial possibilities, he largely occupied himself with preserving increasingly rusty notions of amateurism that seemed Victorian—if not downright colonialist—to FIFA’s fast-growing international membership.
Havelange, a lawyer and a businessman, was a distinctly different animal. He liked to tell the story of how FIFA had little more than $30 in its bank account when he took over.
“FIFA,” he would say, “had no money. Not a cent.”
He exaggerated. The nonprofit organization in fact had revenue of about $25 million in 1974, mostly from the World Cup. But it was clear that the sport’s supreme body came up far short in terms of maximizing its revenue potential.
Havelange had built his campaign platform around an eight-point pledge to change the game, focused largely on assistance to the developing nations that voted him into office, as well as a promise to expand the number of teams playing in the World Cup so that more countries would have a chance to reap its substantial financial benefits.
But accomplishing all that would cost considerable sums of money that FIFA simply did not have. Help came in the person of Horst Dassler, the scion of the family that founded Adidas, and young British advertising man Patrick Nally. Their vision was to bring in large corporate brands that would pump cash into soccer in exchange for a complete and exclusive sponsorship deal that would last for years and would include the World Cup and all other FIFA events.
Until then, advertisers simply paid money to stadium owners to rent space where they could plaster their logos on a game-by-game or seasonal basis. Little if any of that money went to teams, leagues, or FIFA itself. What Dassler and Nally recognized was that FIFA and all the soccer organizations beneath it were the entities with the valuable asset, not the stadium owners, and that asset was soccer. Soccer was why people went to the stadium; soccer was the golden goose. As a result, Dassler and Nally figured, soccer organizations could assert—for the first time—the right to control all advertising and sponsorship related to matches. Once that was done, the rights could be bundled into huge, all-inclusive rights packages worth millions of dollars that guaranteed brands exclusi
vity and uniformity.
Dassler and Nally would place themselves in the middle of those transactions, creating a new kind of business that came to be called a sports marketing firm, which would buy the commercial rights to FIFA events wholesale, and then resell them piecemeal, with a rich margin built into the price.
The model they invented would soon become ubiquitous in sports, but in the mid-1970s it seemed revolutionary if not downright crazy, and it took the two men more than eighteen months of aggressive salesmanship to convince Coca-Cola to commit at least $8 million to become FIFA’s first brand partner and the first exclusive worldwide sponsor in the history of sports.
It was a watershed moment. The FIFA/Coca-Cola World Football Development Programme that Dassler and Nally created marked the beginning of a new kind of symbiotic relationship directly between international brands and sports organizations, which started providing most of their revenue.
Coca-Cola’s cash allowed Havelange to deliver on his pledges, increasing the size of the World Cup, allotting more guaranteed berths to teams from Africa, Asia, and Oceania, the region incorporating New Zealand and the South Pacific, and continually nurturing relationships with politically influential officials through direct patronage. First he gave away equipment, coaching, and medical training, mostly through the Coca-Cola program, to impoverished federations.
Later, when FIFA’s revenue began soaring, the support took the form of either development grants or loans that came with few strings attached and vanishingly little oversight. Havelange would provide for all of FIFA’s member associations and they, dutifully, would reelect him every four years. It was, simply put, cash for votes.
The growing dependence on multinational sponsors meant that the fundamental mission, image, and activities of FIFA, the IOC, and similar organizations would be increasingly determined by the profit-seeking motives of huge multinational corporations. And the explosion in value of television rights, starting a few years later as global transmission technology improved, would only push things further in that direction.
Dassler and Nally, meanwhile, saw in the Coca-Cola deal the foundation of a new commercial era, with giant companies paying ever-increasing sums for rights, and specialized sports marketing at the center of everything, controlling all aspects of deals, speaking for both sides, and, of course, taking their considerable cut of everything. The key to success in the emerging industry was gaining control of the rights—at any cost.
Over the decades, Coca-Cola would pump hundreds of millions of dollars into FIFA in one of the longest-lasting branding partnerships in all of sports. But when it first signed the deal, marketing executives at the Atlanta soft drink giant saw it as a significant risk, and insisted that Dassler and Nally find someone who could protect its interests within FIFA.
The ideal candidate, everyone agreed, would be someone Swiss, with experience in public relations and administration. A loyal person who understood sports as primarily a commercial activity. Someone who would travel the world promoting soccer and fizzy, caramel-colored beverages, while handing out free uniforms, balls, and cleats to Havelange’s electoral base, starting with a trip to Ethiopia on November 17, 1976.
That someone was Sepp Blatter, FIFA’s first development officer and future president.
* * *
Joseph Blatter, son of a bicycle mechanic and factory worker, was born in March 1936, two months premature, too young to even have nails on his fingertips.
Without a neonatal ward in the local hospital, his mother, Bertha, was forced to care for him in the family home in the Swiss town of Visp. Bertha doted on him, calling her son “chéri.” Everyone else just used the common diminutive for Joseph: Sepp.
Visp is in the canton of Valais, in the south of Switzerland, home to the jagged, imposing Matterhorn, and the area’s verdant green hills are dotted with small dairy farms and vineyards. It is not a wealthy region, and locals pride themselves on their toughness, independence, simplicity, and deep sense of loyalty. Other Swiss view natives with suspicion, as insular, guarded, and even downright unfriendly.
“If you have a friend visiting you from faraway, that is what hotels are for,” Blatter’s father was fond of saying. “If he needs a ride, that is what taxis are for. And if he is hungry, that is what restaurants are for.”
As a child, Blatter was drawn to athletic endeavors, and he particularly loved ice hockey, hugely popular in the German-speaking regions of Switzerland. But his small stature made a sporting future highly unlikely. Instead he turned to the business behind the games.
By the time he took the development job at FIFA, Blatter, age thirty-nine, had spent four years in the Swiss army, earned degrees in economics and public relations, worked for the Valais Tourism Board, the Swiss Ice Hockey Federation, and finally for watchmaker Longines, where he ran its Olympic timing division.
Havelange promoted Blatter to general secretary of FIFA in 1981, in significant part because he had developed an excellent working relationship with Dassler. The Adidas man had rapidly expanded his budding business into other sports organizations, including the Olympics, but FIFA and the World Cup were its bread and butter.
As general secretary, Blatter played an integral role in a period of significant economic growth for FIFA, overseeing World Cups in Spain, Mexico, Italy, and the U.S. in 1994. By the time soccer’s premier event reached the shores of America, Blatter had been in the position for thirteen years and his ambitions were now fixated on FIFA’s highest throne.
After an aborted attempt to campaign against Havelange in 1994, Blatter was finally given the Brazilian’s blessings when the older man decided to retire after twenty-four years as FIFA president; he was elected in Paris, on the eve of the 1998 World Cup in France, defeating the head of the European soccer confederation, known as UEFA. The election was marred with accusations of foul play, as Blatter had been the underdog, and was expected to lose by at least twenty votes.
Among Blatter’s most enthusiastic supporters had been Jack Warner, who wrangled CONCACAF’s votes in his favor, and a fabulously wealthy Qatari construction magnate named Mohamed bin Hammam, who also sat on the ExCo. Four years later, the president of the Somali Football Federation would claim he had been offered $100,000, half of it in cash, to vote for Blatter, and that “18 African voters accepted bribes to vote for Blatter”—enough to swing the election.
The financial inducements, the Somali alleged, were handed out the night before the election in the toney Le Méridien hotel, where Blatter was staying. People “were lining up,” he said, “to receive money.”
Blatter and Bin Hammam sued the Somali for libel, then dragged him before the FIFA disciplinary committee, where he was banned from the sport for two years for failing to provide enough evidence to support his accusations.
The allegations, FIFA said in a terse statement, “undermined the interests of football as a whole,” and were soon forgotten.
The biggest blow to Blatter’s young presidency, one that would haunt the entire organization for years and foreshadow later crises, came on May 21, 2001, when FIFA’s main commercial partner, International Sport and Leisure, or ISL, declared bankruptcy in the Swiss canton of Zug.
ISL had been founded by Horst Dassler in the early 1980s after breaking with Nally. It continued with the same business model, adding television rights to the advertising packages it bought up en masse from FIFA, and soon expanding to buy rights to the Olympics as well.
Although Dassler died of cancer in 1987, ISL still maintained control of most of FIFA’s commercial activities, and in 1996 pledged to pay the soccer body $1.6 billion for the television and marketing rights to the 2002 and 2006 World Cups.
But ISL had run out of cash after overextending itself on numerous other sports rights deals and, after futile attempts to sell itself, was pushed into liquidation. Without its longtime marketing partner, FIFA faced the prospect of crippling losses, and was forced to negotiate a cascading series of economic and logistical headach
es in order to ensure that broadcast and advertising rights to the 2002 World Cup, in South Korea and Japan, were properly sold and managed.
Scarcely a week after the bankruptcy filing, FIFA filed a criminal complaint against ISL’s executives, charging them with “suspicion of fraud,” “embezzlement,” and “disloyal business management,” and arguing that the defunct firm had purposely withheld a $60 million payment it owed FIFA for sale of World Cup television rights.
Despite mounting criticism and accusations of bribery, fraud, and corruption, Blatter was reelected the following year, and in 2004 FIFA quietly withdrew its criminal complaint against ISL, apparently consigning the marketing firm to oblivion.
But a prosecutor in the obscure Swiss canton of Zug named Thomas Hildbrand continued digging into the matter. Tirelessly poring over bank records from around the world, as well as documents seized in a raid of FIFA headquarters in 2005, Hildbrand began to assemble a mammoth case alleging that ISL had paid millions of dollars in bribes and kickbacks to sports officials in exchange for the television and marketing rights contracts that were its lifeblood.
Eventually, Hildbrand’s probe uncovered evidence that between 1989 and 2001, at least $22 million in illicit payments were wired through a complicated series of offshore companies to accounts controlled by João Havelange and his son-in-law, Ricardo Teixeira, who was president of Brazil’s soccer association. Considerable sums were also paid to Nicolás Leoz, president of the South American confederation, known as CONMEBOL.
Yet commercial bribery, at the time, was not a crime in Switzerland. Not one of those FIFA officials was ever charged, and their identities were kept a secret from the public. Hildbrand did eventually bring charges against six ISL executives, but in 2008, judges hearing the case acquitted most of them, with three forced to pay only modest fines. None ever went to prison.
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