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Red Card

Page 16

by Ken Bensinger


  “Good job, Steve,” was all Randall said, before heading back to the FBI field office a dozen blocks uptown and skipping out on the second presentation at CHIPS.

  The cool response came as a surprise to Berryman, who assumed that his voracious appetite for information that could help the case would be shared by everyone else on the team. As soon as he had joined, Randall had passed Berryman a folder of documents related to corruption in soccer, and he had responded by regularly sharing articles on the topic on the assumption the FBI agent was as captivated by the topic as he was.

  Berryman knew that Randall had talked numerous times with Andrew Jennings, a formidable repository of information about the sport in his own right; he’d even listened in on one of Randall’s calls with Jennings. And after reading Jennings’s 2006 exposé Foul!, documenting corruption within FIFA and focusing in particular on Blatter and Warner, Berryman had bought copies of the book for Norris and Randall.

  The truth was that few people could match Berryman’s enthusiasm for the tortuously slow grind of money laundering investigations and, at the same time, his degree of righteous indignation at the idea of people corrupting soccer. On a case with as much potential as this one, it went without saying that everyone would work long hours and make sacrifices. But not everyone seemed to care as much as Berryman that foul play could have played a role in determining where the World Cup would be held.

  For most of the people on the case, it all seemed rather straightforward: run it like any other investigation and when the well went dry, pack up and move on. But Berryman didn’t see it that way at all. He had no intention of stopping until he had brought down every corrupt FIFA boss, all of the men who sat in that underground bunker in Zurich and stole from the game.

  When he wasn’t filing subpoenas or combing through the results of them, he spent every spare moment reading up on soccer corruption. He forwarded the articles, one after the next, to the rest of the team, excited for them to learn the latest developments on the subject. But all too often, the articles he enthusiastically passed along to the rest of the team sat in their inboxes, unopened and unread.

  * * *

  Norris and Hector had gone into the Blazer proffers hoping to confirm suspicions that FIFA elections were rigged and that high officials routinely accepted bribes in exchange for their votes. They were not disappointed.

  Blazer’s tale was complicated but fascinating, and often downright funny, peppered with off-color anecdotes and dirty jokes. The man’s charisma, difficult to spot in the photos of him dressed in silly Halloween costumes on the Internet, was obvious to everyone in the room. He had a certain magnetic presence and it was becoming easier to see how a soccer outsider from a country with little interest in the sport could have risen so far.

  Right off the bat, Blazer confessed he had agreed to take money in exchange for his vote for South Africa to host the 2010 World Cup, and that other countries had tried to bribe him at the same time as well. He had also, he said, helped coordinate a bribe for Warner to vote for Morocco to host the 1998 World Cup, although he personally received no money because he wasn’t a member of FIFA’s ExCo at the time.

  This kind of activity wasn’t rare, Blazer said—it was the rule, and everybody on the FIFA ExCo knew it was happening. But if the prosecutors wanted to know where the real filth was in soccer, the truly big money and pervasive corruption, then they needed to look beyond the periodic big votes in Zurich, beyond the selection of World Cup sites or FIFA presidents and all the other events that garnered the headlines.

  The financial heart of the sport, Blazer explained, was in the marketplace for commercial rights, the contracts that allowed broadcasters to put soccer matches on the air and advertisers to plaster their logos on uniforms, stadiums, and halftime shows. It was those deals, thousands of them around the world, that made up nearly all of FIFA’s billions of dollars in revenue.

  And it was hardly just FIFA. Each of the six regional confederations had its own set of rights to sell, and in turn each of the more than two hundred national associations around the world had a variety of rights to offer as well. There were massive tournaments such as the ultra-popular annual Champions League of Europe’s top professional clubs, run by UEFA, the European confederation, or CONMEBOL’s Copa América, held every four years and showcasing superstars like Argentina’s Lionel Messi; there were hotly contested World Cup qualifying matches in each region; and there were sponsorship opportunities for every national team. Nobody wore a Nike or Adidas uniform for free, after all.

  The counterparty to nearly every one of those right deals, Blazer explained, was a sports marketing company, the middlemen of the international sports world. It was a vast and robust, though little-known, industry dedicated to scooping up sponsorship and television rights to sporting events wholesale, then turning around and reselling them a la carte to networks, brands, and advertisers. Operating on the principle that organizations such as FIFA, the Oceania Football Confederation, or the Federación Panameña de Fútbol don’t have the staff or expertise to sell their rights directly, sports marketing companies offered a fixed price ahead of time to take the rights off the soccer officials’ hands.

  As with any business, profits depended on paying as little as possible for the goods they turned around and resold, and the best way to ensure that the cost for soccer rights stayed below market value was to shut out the competition. That, Blazer emphasized, was where corruption came in: sports marketing companies systematically bribed soccer officials to keep prices low and not sell their rights to anyone else.

  The bribes came each time a contract was negotiated, or extended, and occasionally even in advance of a negotiation just to ensure things ran as expected. Sometimes officials demanded the payments; other times the sports marketing firms offered them. Either way, the understanding was the same: we pay you under the table, and in return you give us an exclusive sweetheart deal for the rights. While the sporting press agonized over each political development that emerged from FIFA’s Zurich headquarters, hundreds if not thousands of soccer officials around the world were getting bribes and kickbacks for television and marketing rights with little, if any, scrutiny.

  Without doubt, there were legitimate rights deals out there, and soccer officials that were either too clean or too closely watched to take bribes. But it was a safe bet that the vast majority of soccer marketing deals, from the most prominent international tournaments to meaningless regional friendlies, involved no-bid contracts that undercut the actual value of the rights. That, by definition, deprived the sport of money that could be spent on development—literally giving balls and cleats to impoverished children—while the officials running soccer secretly pocketed huge sums and sports marketing executives got filthy rich in the process.

  The sums of money were huge. FIFA, for example, booked $2.4 billion in television rights sales from the 2010 World Cup, and an additional $1.1 billion in sponsorship and other advertising rights. There was also more money in the U.S. than might be apparent. Thanks to the country’s roughly fifty million Hispanics, it was in fact one of the most valuable markets in the world.

  In 2005, for example, Blazer had helped negotiate a deal for the U.S. television rights to the 2010 and 2014 World Cups, a package that also included two Women’s World Cups and two Confederations Cups, a smaller tournament played in World Cup host countries one year before the big event.

  ABC and ESPN had paid a respectable $100 million for the English language rights to that package. But Univision, which perennially ranked far behind the traditional broadcast heavyweights, paid more than three times that, a whopping $325 million, to transmit the same slate of matches to the country’s Spanish-speaking audience. By comparison, TV Globo of Brazil paid $340 million for the same rights in the most soccer-crazy nation on earth.

  The fast-growing value of the sport helped to underscore the scale of the corruption. Since 2003, CONCACAF had sold rights to the Gold Cup directly to networks and sponsors,
using its own dedicated in-house sales team in order to cut out the middleman. As a result, in 2011, CONCACAF took in $31.1 million in television revenue alone, the vast majority from the Gold Cup.

  By contrast, the Copa América, a far more popular and competitive tournament starring some of the biggest stars in global soccer, brought in surprisingly little to CONMEBOL. The deal the South American confederation had years earlier signed with Traffic for the tournament paid a measly $18 million for the complete package of television and sponsorship rights to the 2011 edition.

  Clearly the Copa América should have been worth vastly more than the Gold Cup. But by agreeing to sell the tournament for far below market value in exchange for bribes from José Hawilla, the men who controlled CONMEBOL had vastly limited the amount the confederation could bring in for its most valuable asset.

  It was hardly a coincidence, Blazer continued, that Traffic had for years paid bribes to him and Warner for rights to the Gold Cup as well, and that Hawilla had years earlier opened on office in Miami just to handle CONCACAF-related rights.

  Soccer, Blazer made clear, was populated by two kinds of people: those who took bribes, and those who paid them. If the Justice Department really wanted to clean up the sport, it needed to take a hard look at men like Hawilla, who sat, perched like fat spiders, at the very center of the vast web of corruption.

  Nobody in the room had ever heard of Traffic or Hawilla. Even Berryman, despite all his late night reading on the soccer business, drew a blank when Blazer mentioned his name.

  * * *

  It took a long time for Blazer to explain the complicated world of sports marketing and the equally complex structure of FIFA and its many satellite entities.

  As Blazer spoke, an idea slowly started to form in Norris’s head, and he felt a growing current of excitement. Midway through the third proffer, on January 18, 2012, he called a break and walked out into the hallway outside the conference room to huddle with the rest of the team.

  Norris seemed unusually animated, and his eyes lit up as he made a triangle shape with his hands, joining his fingers together in front of his face. International soccer—FIFA, CONCACAF, CONMEBOL, and the Trinidad & Tobago Football Association—were all part of a single whole. They clearly fit the definition of a top-down enterprise, the classic organized crime “triangle chart.”

  There was a boss: Sepp Blatter. There were underbosses: the FIFA Executive Committee and the executives of the six regional confederations. And there were soldiers: the officers of each national federation. There were even consiglieri, the advisors and lawyers who helped the bosses run the show.

  A $10 million bribe to Warner and Blazer for their 2010 World Cup votes; an envelope stuffed with $40,000 in cash for the president of some obscure Caribbean soccer federation; a kickback for the TV rights to a handful of Central American World Cup qualifiers. These weren’t unconnected events. They weren’t discrete and unrelated scams. It was all connected, Norris said, eyes shining.

  FIFA sanctioned the confederations; the confederations sanctioned the national associations. And the sports marketing firms greased everyone’s palms. Men like Blazer, or Blatter, or Nicolás Leoz in South America, or Mohamed bin Hammam atop the Asian confederation, might not have a hand in every crooked deal, but they were all part of the same cohesive enterprise. They had taken over soccer and corrupted it and now this was how the sport operated all the time.

  Norris, Hector, and the FBI agents all had organized crime backgrounds. They recognized these kinds of structures and perhaps were overly primed to see them everywhere they looked. But they had tried to go into Blazer’s proffers with open minds, unsure of what they were really dealing with in a still developing case. Now it was abundantly clear: global soccer was a kind of organized crime. In fact, they increasingly felt, it looked just like the mafia.

  It was a crucial intellectual leap for the case. It meant that everything was fair game and everyone could, at least in theory, be prosecuted together under a single statute that would allow the prosecutors to leap across oceans and back through decades of corruption to build one unified, sweeping argument.

  Berryman had been right. This did look like a RICO case.

  FOURTEEN

  * * *

  THE KING IS DEAD, LONG LIVE THE KING

  ENRIQUE SANZ, A TRAFFIC VICE president in Miami, spent the early months of 2012 trying to handicap who the next president of CONCACAF would be.

  Sanz, a serious young Colombian, had been the Brazilian sports marketing firm’s man in the Caribbean for more than a decade, and had deep contacts in the region. He understood that the Caribbean’s three-to-one majority in the confederation all but guaranteed that the winning candidate would come from one of the islands.

  Full Play, Traffic’s increasingly bitter rival, had failed to grasp that rather critical fact, and the $450,000 in bribes it had paid at the end of the previous year to try to secure rights to the Gold Cup had been in vain.

  The Port of Spain bribery scandal was still reverberating, and numerous Caribbean officials were either under FIFA investigation or had been suspended, making it tough to predict which Caribbean would get the job. As far as Traffic was concerned, however, it was critical that Sanz answer the burning question as soon as possible.

  With the Copa América lost, Traffic simply could not cede any more ground in soccer rights. The firm still controlled all of the CFU’s 2014 World Cup qualifiers, and most of Central America’s as well, but Media World, a rival in Miami, was steadily stripping those away. Since the greatest value, when it came to reselling rights to sponsors and broadcasters, was to bundle them by region, Traffic in early 2012 finally elected to join forces with Media World. The two firms signed an accord to split all costs and revenue, including bribes.

  The question of exactly whom to bribe became much clearer toward the end of February when Sanz, conferring with contacts in the Caribbean, learned that the confederation’s next president was almost certainly going to be Jeffrey Webb.

  An affable forty-seven-year-old from the Cayman Islands, Webb was not a well-known figure in world soccer. He had never played the game, but seemed to enjoy it, helping run an amateur club in George Town, Strikers FC, when he was still in college. In 1991, he was elected president of the Cayman Islands Football Association, known as CIFA, and eventually worked his way onto FIFA’s Internal Audit Committee and its transparency and compliance committee.

  He also had the distinct advantage, unlike many of his Caribbean colleagues, of remaining untainted by the Port of Spain scandal. Although Webb had been in Trinidad for the meeting, he had never been accused of taking money and, indeed, had helped Blazer and Collins with their initial investigation in the days following the conference.

  Good-looking, sharply dressed, almost debonair, he seemed the antithesis of Jack Warner: approachable where the Trinidadian was threatening; compromising where Warner was rigid; clean and respectable where the longtime CFU president radiated gangsterism and self-interest. But despite his low profile, Webb had built an influential network of friends in the Caribbean thanks, in great part, to his day job.

  Since 1990, Webb had worked at Fidelity Bank Cayman Limited, rising to become manager of business development and a director at the bank. In that role, he oversaw a variety of financial services divisions, including investment banking, corporate finance, risk management, and, especially, money transfer operations at the Western Union branches Fidelity operated in the Caymans.

  Over the years, Webb helped numerous Caribbean soccer officials set up anonymous offshore companies and bank accounts where they could receive payments without drawing unwanted attention. In 1995, for example, he incorporated one such company, J&D International, that was used by Jack Warner to receive income from sales of television rights he’d been awarded—sometimes for as little as $1—in sweetheart patronage deals from FIFA.

  Enrique Sanz knew Webb well, and had chatted with him at a hundred different CONCACAF events over the years. B
ut because Warner had always exclusively negotiated rights deals for the entire CFU, keeping the bribes for himself, Sanz had never had occasion to talk to Webb about how the business really worked. Now he had little choice.

  Working fast, Sanz approached Webb even before the man had officially announced his political intentions, offering Traffic’s full financial support for his campaign. Sanz also delicately made it clear that, should Webb be elected, he could expect to receive “side payments” in exchange for awarding Traffic the rights to the CFU’s qualifying matches for both the 2018 and 2022 World Cup cycles.

  Webb, it turned out, didn’t require much explanation. In fact, the banker immediately understood what Sanz was hinting at, seemed to be expecting the offer, and was clearly of the opinion that such payments were a standard perk of the job, ones he’d been looking forward to receiving. But he also made a special request: Sanz should never negotiate bribes directly with Webb, but instead with a close friend, a British-born Greek-Cypriot named Costas Takkas, who had briefly served as CIFA’s general secretary a decade earlier.

  Takkas controlled several holding companies in the Caymans and the British Virgin Islands that had bank accounts at Webb’s bank, Fidelity. Soon after talking with Webb, Sanz wired $50,000 to one of Takkas’s companies, CPL Ltd., calling it “candidacy” money.

  No rival candidates ever declared, and by late March, Webb had won the support not only of most of the Caribbean, but several Central American officials as well. On March 26, Webb accepted the formal nomination to be CONCACAF’s next president, resigning his position at Fidelity Bank.

  “I am humbled by the tremendous outpouring of support and encouragement received from so many of the member countries,” Webb said. “If elected, it is my intention to build on that unity through collaboration, transparency, integrity, engagement and accountability.”

 

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