Despite what prosecutors believed was a strong case, neither Welch nor Johnson was ever convicted. A year after the indictment, the judge overseeing the case dismissed the bribery counts, and when the case finally went to trial, the judge granted a motion for acquittal by the defense. Afterward he said the case offended his “sense of justice.”
The IOC case, Berryman thought, with its international bribery and vote buying, had obvious parallels to the soccer investigation, and it had been an unmitigated disaster.
If he and his new colleagues in New York were going to take on FIFA, it wouldn’t be enough to show that money had changed hands, that officials had been bribed, or that payments had been covered up. They needed to be absolutely solid on every level, and to make sure there were no holes a keen defense lawyer could use to undermine the entire case. No matter how much dirt they dug up, it would mean nothing unless it stuck in court.
An indictment involving world soccer, if it ever became public, was clearly going to be high-profile, and there would be enormous public attention, and pressure, on the prosecution. If they picked the wrong law to build their case on, or had a problem with a witness, it could be fatal. Everything had to be by the book, Berryman thought. No mistakes could be made.
He’d taken that attitude into his initial meeting in Brooklyn.
“Has Chuck Blazer not filed his taxes? Is that why you are here?” the prosecutor, Amanda Hector, had asked. “What are you seeing?”
Berryman had said nothing because he knew that by law he couldn’t discuss the status of a tax return, even with federal prosecutors, until the investigation had been formally expanded to become a tax case by the Justice Department. If he told them, and some clever white-collar attorney ever figured out that he’d done things in the wrong order, it could blow up the whole investigation.
Taxes, Berryman well knew, were special. In the wake of Watergate, when it was revealed that the Nixon administration had used tax information about perceived enemies to further its ends, the IRS code was rewritten to enhance privacy protections. One of the principal changes was an amendment to a provision called Section 6103, making tax information strictly confidential unless very rigid restrictions are met. It’s the same section that makes it extremely cumbersome, if not impossible, for any law enforcement official other than IRS agents to pull tax returns, even those belonging to targets of a grand jury investigation.
Before Berryman could breathe a word about Blazer’s tax issues to anyone on the soccer case, he had to get approval from his supervisor in Laguna Niguel, then from criminal tax attorneys in the IRS chief counsel’s office in Washington, and finally from the Tax Division of the Department of Justice. Only then could Berryman call up Norris and say what he had longed to tell him from the moment they met: “Chuck Blazer hasn’t filed in years, since at least 1994.”
As he anxiously awaited that moment, Berryman began taking the steps that were necessary to build evidence against Blazer. To charge tax evasion, it wasn’t enough to show someone hadn’t filed returns. He needed to prove Blazer had willfully hidden income.
To start with, Berryman spent hour after hour on the website of journalist Andrew Jennings, which had been credited and linked to in the Reuters article that had drawn him into the case. Berryman had never heard of Jennings, but he was impressed at his deep focus on corruption in soccer. The site had scores of articles about FIFA, tales of skulduggery, chicanery, and outright criminality stretching back to the Havelange era of the 1970s.
It was all fascinating, but Berryman focused on one document Jennings had posted. It was a grainy, low-quality photocopy of both sides of a canceled, year-old check for $205,000 made out to a company called Sportvertising.
Berryman enlarged the check on his computer and looked it over. The scan was so bad that some parts, such as the signature, were illegible. But on the back side, he thought he could just make out the handwritten endorsement. He squinted at it, moved his face close to the screen, and even held up a magnifying glass to get a closer look. Finally he was able to make out the handwriting. It said:
For Deposit Only Sportvertising Inc. Merrill Lynch
It felt like a huge break. Berryman had been worried that Blazer might have done all of his banking overseas, which would make getting information about his accounts both difficult and risky. If, as the articles about Blazer suggested, he had accounts in the Cayman Islands or the Bahamas, there were significant legal and diplomatic obstacles to requesting any associated records. And even then, banks in Caribbean tax havens weren’t known for their generous disclosure policies.
There was also the significant risk that bankers in Cayman or the Bahamas, after reviewing such requests, might decide to reach out to Blazer to tell him the feds were poking around, which could have disastrous results on the case. Alerted to an investigation, Blazer could destroy records, tell other soccer officials, or even flee the country.
But Merrill Lynch, the brokerage house and money manager famous for its bull logo, was based in the United States, and subject to its laws. That meant Berryman could subpoena Merrill, demanding any and all information about accounts in the name of Sportvertising or Chuck Blazer, monthly statements, lists of transactions, or info on any associated accounts or beneficial owners, and the firm would be legally bound not only to hand it all over, but to keep the request absolutely secret, even from the account holder.
So that’s exactly what Berryman did. It took him all of twenty minutes.
* * *
Sunil Gulati considered Chuck Blazer one of his closest friends and mentors; he’d known the man nearly his entire adult life. They’d seen countless soccer matches in each other’s company, spent endless hours together on airplanes, and sat through too many meetings to count. And now Gulati had to tell him he was fired.
He’d first met Blazer on the sidelines when he was fresh out of college, helping run the all-star teams of the Connecticut Junior Soccer Association while studying for his master’s in economics at Columbia. Blazer, sixteen years older, was at the time in charge of the all-star select teams in neighboring New York State, and the two collaborated to schedule tournaments and other events.
Gulati, passionate about the sport and determined to rise in its ranks, crossed paths with him again when Blazer was elected vice president of the U.S. Soccer Federation, where Gulati sat with him on a committee. They worked together on the 1994 World Cup, for which Gulati served as a vice president, and for several years, while the younger man was a Major League Soccer executive, Blazer loaned him office space, free of charge, inside CONCACAF’s Trump Tower offices.
In 2007, when a slot opened on the confederation’s Executive Committee, Blazer helped Gulati win an appointment without having to be elected by the confederation’s full congress. Gulati, who had been voted in as president of the U.S. Soccer Federation the previous year, had remained on the CONCACAF board ever since.
Amid the tumult following Blazer’s decision to report Jack Warner and Mohamed bin Hammam to FIFA, Gulati had stood by his old friend. As one of the staunchest supporters of the American bid for a World Cup, Gulati was infuriated by rumors that Warner may have voted for Qatar instead and, like many in CONCACAF, seemed happy to see him go.
But the political winds had shifted since the spring of 2011. CONCACAF’s Executive Committee had never questioned Blazer’s financial management, signing off on the confederation’s audited financial statements year after year without comment. After Jennings’s articles revealed Blazer’s unusually lucrative 10 percent contract, that tolerant attitude abruptly changed. The CONCACAF Executive Committee, meeting in Panama in August, asked the general secretary to turn over information about his compensation.
Cornered, Blazer said he expected to earn $2 million in 2011, and provided copies of his contracts. The first was the original agreement from 1990, when he was appointed by Warner; the second, from 1994, had essentially the same terms and expired on July 17, 1998. There were no others. In other words, Bl
azer had been working without a valid contract for more than thirteen years, but continued taking his generous commission on nearly everything, regardless.
Then on August 31, Jack Warner responded to Blazer’s claim that the $250,000 check he’d received from the Caribbean Football Union was repayment of a loan.
In fact, Warner said, Blazer had received a total of $750,000 from the CFU account, and that it was not a loan because he had “never had occasion to borrow money from Blazer,” and that the money had originally come from FIFA. Warner added that despite repeated entreaties over many years, Blazer had steadfastly refused to share information about his compensation.
Whatever private opinions Gulati and the other officials might have had, the matter was now in the public eye, a glaring embarrassment. CONCACAF’s leadership realized it could no longer sit idly by.
For months, the confederation had been trying to elect someone to take Warner’s vacant seat on the FIFA Executive Committee, but with large portions of its membership still under investigation for allegedly taking bribes in Port of Spain, that was proving impossible.
Meanwhile, the dispute over who would serve as CONCACAF’s acting president hadn’t been resolved. Although the confederation’s Executive Committee had installed Alfredo Hawit, its Caribbean membership refused to recognize the Honduran and was outraged about Lisle Austin’s year-long ban from FIFA. It was becoming obvious that CONCACAF would have no legitimate president until its elections scheduled for the following May.
As for the Caribbean, the CFU was planning its own elections in a few weeks, but there was every indication those would either be called off or end in disaster.
CONCACAF, in other words, was in chaos.
On October 3, Gulati met with the three other members of the CONCACAF Executive Committee in New York. In the face of the building evidence of serious financial impropriety, they saw little alternative but to jettison Blazer. Gulati knew the man best. It would fall on his shoulders to deliver the bad news, which he did in a visit to Blazer’s apartment upstairs from the confederation’s offices. His time at CONCACAF was over. Blazer could save face, and resign immediately, or be publicly pushed out.
It had been a great run, twenty-one years atop CONCACAF, turning it from a nothing organization into a financial powerhouse, and besides, Blazer would still be sitting on FIFA’s Executive Committee, which was of course the best gig in all of soccer.
Without Warner to protect him and the confederation’s leadership turning against him, Blazer knew he had little choice, and agreed to go quietly. But he did ask one concession: that he be allowed to stay on as general secretary until year’s end.
Gulati and the rest of CONCACAF’s Executive Committee were happy to concede that small favor. They asked only that Blazer refrain from making any more payments to himself from CONCACAF accounts until the committee could figure out what, if anything, he was actually owed.
Three days later, Blazer publicly announced his resignation as CONCACAF’s general secretary, citing a desire to “pursue other career opportunities in the burgeoning industry of international football” and a strong preference for leaving the country to do so.
* * *
The 2011 Gold Cup had been the most successful ever. More than a million people attended the tournament, held in June and July, and the fact that the final was between Mexico and the U.S. guaranteed that its sponsors, such as Miller Lite, went away happy. The tournament contributed to CONCACAF’s best financial year ever. For all of 2011, the confederation had $60 million in revenue, a huge increase from the $37 million it collected in 2009, the prior Gold Cup year.
By Blazer’s reckoning, his commission was not limited to sponsorship and TV rights fees. Instead, he took his slice of tournament ticket sales, luxury suite income, parking fees, and even the beers and hot dogs sold at stadium concession stands. On almost every dollar that came in, Blazer took 10 percent, accruing it in an internal account called “commissions payable.” He even took 10 percent of development money sent to the confederation by FIFA, in one instance paying himself $300,000 of a $3 million FIFA grant used to build the television production studio within CONCACAF’s Trump Tower offices.
At the same time, Blazer had for years charged almost anything he could think of to his corporate American Express card, using it for travel, meals at Elaine’s, clothing, gifts, pretty much everything. CONCACAF would pay the Amex bills in full, and then Blazer, once a year, would review his statements and deduct anything he judged to be a personal expense from the “commissions payable” account. In that way, Blazer never had to pay a dime out of pocket to cover his personal expenses, and at the same time he’d accumulate all the Amex membership points for his personal use. Over a seven-year period, CONCACAF paid $26 million to Amex—which earned Blazer enough points to swap for two hundred round-trip, first-class tickets from the U.S. to Europe.
Blazer did the same thing with his rent. Over the years, he lived in several different apartments in Trump Tower, and since 2001 had occupied two adjoining units on the forty-ninth floor that together cost $18,000 a month. Because Blazer frequently worked out of the apartment and didn’t even come down to CONCACAF’s seventeenth-floor offices on many days, he justified a third of the apartment rental as a home office payable by CONCACAF. The remaining $12,000 he simply deducted from the amounts he had calculated CONCACAF owed him in commissions. Again, not a dime out of pocket.
Blazer was an accountant by training. Making the confederation pay for everything not only saved him money, but also meant there was virtually no paper trail of his income and expenses. Indeed, Blazer made a point of putting as little in his own name as possible.
Rather than buy a car, he had CONCACAF purchase a Hummer that only he used. Rather than acquire condos in Miami and the Bahamas, he put them in CONCACAF’s name even though only he had the keys. Dating back to his days selling gewgaws and throwaway promotional items, Blazer had found ways to hide money, setting up a string of shell companies with names like Windmill Promotions and Sand Castle Distributors.
Once he got to CONCACAF, he became more sophisticated, registering his companies in Caribbean tax havens where the ownership was almost impossible to determine. His commissions from CONCACAF went directly to his anonymous shell companies, and he insisted that other, less legitimate payments be sent to them as well.
As a result, there was little if any suggestion that Blazer received any income at all. He had no W-2s, no property tax to pay, not even utility bills. Like Al Capone in the 1920s, Blazer was, from a financial perspective, almost a ghost—which was exactly how a man who hadn’t filed income taxes in well over a decade, despite collecting millions of dollars in income during that time, would want it. Blazer was so fixated on leaving no traces that he even refused to use a loyalty card during his frequent visits to the card tables in Las Vegas casinos, out of concern that the IRS would be alerted to his gambling winnings and audit him.
Years of successfully operating under that clandestine system had emboldened Blazer and given him a sense of impunity, as he awarded himself ever-expanding sums of money without paying a dime of tax on any of it. If 2011 was CONCACAF’s best year ever, then it followed that it would be Blazer’s best year as well.
By the time Gulati confronted Blazer in early October, the general secretary had already allocated himself $4.2 million in 2011 commissions. He divided the sum, nearly twice as much as he’d ever paid himself, between two shell companies he’d established years earlier: Multisport Games Development and En Passant Ltd.
Blazer had promised to leave CONCACAF for good on December 31. Now, with time atop the institution he had built up from almost nothing dwindling, the general secretary had one last commission to collect.
On November 10, Blazer contacted the confederation’s bank in Miami, BAC Florida Bank, instructing it to wire $1.4 million to his Sportvertising account in the Cayman Islands. It was, he wrote in the wire instructions, “in payment of Gold Cup commissions.”
<
br /> Shortly thereafter, he got an email from his Cayman Islands bank, confirming the money had arrived safely.
“Yippee,” Blazer replied.
ELEVEN
* * *
THE FLIP
THE SUBPOENAS STARTED ROLLING BACK in before the end of September, at first just a trickle, and then a torrent, one after the next.
For Berryman, it was like Christmas. He’d check his email and, boom, there was another one, with its precise boilerplate legal language and attachments containing row after row of beautiful numbers. From Fedwire and CHIPS, both based in New York, he’d get spreadsheets of every wire involving a particular account, and peering into the records he could see the originating banks, the correspondent banks, the amount being transferred, and the accounts on the other end of the transfer.
Then, if any of the correspondent banks were in the U.S., he’d send out another set of subpoenas, asking each one to cough up information about the transfer, and any other wires it might have handled from that same account. Berryman had a knack for visualizing the flow of money, as if it were a tangible thing, something he could see bouncing from place to place.
Sometimes, when he was particularly lucky, he’d come across a wire that started or ended in a domestic bank, and then he could ask for everything, what he called “the kitchen sink” down to the names of each signatory to the account, of the beneficial owner, of any other accounts those people had at the same bank, and copies of every monthly statement stretching back years. Then he’d sit and contentedly go through it all, line, by line, by line.
He sent out hundreds of subpoenas in a constant blast. It got to the point where he talked to the employees in the legal departments of the big banks so frequently they seemed like close personal friends. One in particular, a kind lady who worked for Merrill Lynch in Chicago, had first called him when he was back in New York a second time, for a meeting with the prosecutors in late September. He was just walking down the street, and she serenely started reading off the bank account information over the phone. Berryman felt like he wanted to reach through the phone and hug her.
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