In Brazil the one true religion is soccer and the sport had been at the center of Hawilla’s life for more than fifty years. It had shown him the world, helped him become friends with legends like Pelé, and provided his family with a lifestyle he could never have imagined as the son of a dairy farmer.
He had fallen in love with the sport early, and it had consumed him with passion and excitement. But now he wanted out.
Hawilla was proud of what he’d built, but at the age of sixty-nine, the fun was long gone. Competition had grown much fiercer, margins had shrunk, and every year soccer officials grew bolder with their endless demands for bribes.
On top of losing rights to most of the South American World Cup qualifiers and being forced to sign a cost and revenue sharing agreement with the little upstart Media World to keep its hand in CONCACAF’s World Cup qualifiers, Traffic had also lost ground at home. In August 2012, Hawilla had been obliged to sign another collaboration agreement, this time with a former associate who had left Traffic and promptly stolen away rights to the Copa do Brasil, the country’s top-level professional league, by offering millions of dollars in bribes to three of the country’s top soccer officials.
Traffic had held those rights since 1990, and Hawilla saw little choice but to join up with his former friend. Gritting his teeth, he agreed to help pay the bribes for the next decade in exchange for half the profits from the deal.
The headaches hardly stopped there. Traffic’s investment in a second-tier American professional soccer league, the NASL, was hemorrhaging more cash every year as franchises faced low attendance and teetered on the edge of insolvency. The clubs Hawilla owned in Portugal and Brazil didn’t make any money either; a huge training ground he had built two hours outside of São Paulo wasn’t working out; and a youth soccer academy that was supposed to turn out star players Traffic could represent was mismanaged and a money-loser.
Then there were the newspapers. Harking to his journalistic past, Hawilla bought his hometown paper, Folha de Rio Preto, for roughly $2.5 million in 2005 and four years later bought the metropolitan daily Diário de S. Paulo, for 100 million reals, or about $50 million. By late 2012, he owned six Brazilian dailies and, like traditional papers all around the world in the Internet age, they were in a death spiral. Hawilla had cut costs, consolidated offices, and, in a painful last resort, laid off reporters, but all to no avail. As far as he could reckon, the newspapers had a value of approximately nothing.
The only saving grace was the TV stations. Hawilla owned four, plus a production studio, and they were highly profitable: He figured they were worth north of $160 million, making them by some stretch his most attractive asset. As for the rest of it—all of Traffic—he would happily sell and walk away from futebol once and for all.
He had tried to get out before. In 1999, Hawilla unloaded 49 percent of Traffic to Dallas investment fund Hicks, Muse, but had gotten back full ownership just a few years later in exchange for his half-share of a joint venture that controlled rights to the Copa Libertadores, a popular annual South American professional tournament. Then in 2008, the French media conglomerate Lagardère had come calling, offering $280 million for Traffic and the production studio, only to pull out when the global financial crisis hit.
Now Hawilla was eager to be done with it, to walk away and enjoy his grandchildren. Officially, he told potential buyers the price was $200 million, but in truth he’d accept $100 million just to be done.
But no less than that. Though he was already very wealthy, he still wanted to squeeze as much as he could out of Traffic. The problem was that Traffic’s value depended on the rights contracts currently in its portfolio. Every single deal he lost took away from the company’s worth, which in great part was why he was willing to join forces with rival sports marketing firms such as Media World.
But even with the Central American qualifiers and the Copa do Brasil back in hand, Hawilla still had little to say to would-be buyers about Traffic losing its most valuable asset of all.
Since 1987, the Copa América had been the company’s great prize—it had netted almost $30 million in profit from the 2007 edition alone. It had been nearly a year since Hawilla had sued Full Play and CONMEBOL in Miami over their blatant theft of his rights, and the dispute was showing no sign of wrapping up soon. If anything, it was getting more heated. Hawilla’s New York lawyers had hired private investigators to dig into the financial affairs of South American soccer officials, pushing his relations with the confederation to a new low.
Just two years earlier, a huge party had been thrown in honor of Traffic’s thirtieth anniversary at the fashionable Hotel Unique in São Paulo and Hawilla had been toasted in front of some three hundred people by no less than Pelé himself.
“The most powerful man in Brazilian soccer,” Rio de Janeiro daily O Globo had called him on the occasion.
But now Hawilla felt trapped, held hostage to what he privately called “a band of thieves.” If he wanted to preserve Traffic’s value so it could be sold at all, he had no choice but to continue paying bribes to crooked soccer officials. The whole of soccer seemed rotten to him, and he had begun to feel distinctly like a victim of the very industry he played a pioneering role in creating.
* * *
In mid-October, Hawilla flew to Punta del Este to go over some details of the wedding of his baby boy.
Rafael Hawilla and his striking fiancée, the daughter of a prominent São Paulo lawyer, were getting married on November 17, and wanted their big day to stand out. The party would stretch over several days, including gourmet meals at local eateries, a rehearsal dinner at Uruguay’s top-rated restaurant, a beach ceremony for seven hundred guests beneath a custom-made canopy, a day-after poker tournament, and custom gift bags that included colorful silk scarves bearing the nicknames of the bride and groom.
There were a ton of details to coordinate, and the costs were commensurate with an event that aspired to be wedding of the year. The final bills weren’t in, but when all was said and done, the whole thing would likely cost more than $1 million.
Unlike Stefano, Hawilla’s older son, Rafael had steered clear of the soccer business. Concerning himself with Rafael’s happiness allowed Hawilla to stop fretting over Traffic and the deplorable state of his business affairs. Traveling to Uruguay and resolving wedding problems felt like being sprung momentarily from a trap that he had unwittingly set for himself all those years back when he bought a little bus stop advertising company called Traffic.
And then, while in Punta del Este, Hawilla’s phone rang.
On the line was Hugo Jinkis, the owner of Full Play. He had heard Hawilla was in town and, as it happened, so was he. They should get together, Jinkis said, to talk about the Copa América.
The soccer world is not so big. There are only so many tournaments, congresses, and championships and eventually everyone gets to know one another to a greater or lesser degree. Jinkis and Hawilla weren’t by any means close, but they did have friends in common and one of them had recently put them in a room together in Rio de Janeiro to try to resolve the dispute.
In the Rio meeting, Jinkis had complained that Hawilla’s lawsuit was becoming an increasingly large headache. The legal fees for a dispute litigated in U.S. courts were exorbitant, and in any case it was making it extremely difficult for Jinkis to begin selling commercial rights for the 2015 Copa América. Sponsors didn’t want to touch it if there was a risk that an injunction could blow the whole tournament up. If the court fight went on much longer, Jinkis feared, it could effectively gut the value of the tournament from his perspective.
So he proposed forming a partnership to share the tournament, much as Hawilla had done with Media World and his former associate in Brazil. If Hawilla agreed to drop the lawsuit, Jinkis would cut him on the tournament all the way through 2023. But Jinkis also added an unexpected wrinkle: it would be a three-way split. The third participant, he said, would be Torneos y Competencias, an Argentine sports marketing firm that had,
years earlier, been Hawilla’s partner in the Copa Libertadores, and still managed the rights to that tournament.
Hawilla couldn’t understand why Jinkis wanted to cut in another company, and flatly refused. From his perspective, the Copa América had been unjustly stolen from him, and it was already humiliating enough to have to negotiate with someone he privately regarded as a thief. Why should he be forced to share it with yet another rival? But as time passed and the lawsuit dragged on, it was becoming increasingly apparent that without the Copa América in Traffic’s portfolio, there just wasn’t much interest from prospective buyers.
So when Hugo Jinkis called him in Uruguay, Hawilla agreed to meet again. The Argentine’s proposal hadn’t budged. He still wanted to include Torneos y Competencias and asked if he’d please consider a third meeting, this time with the chief executive of that firm, Alejandro Burzaco, who happened to be in Uruguay as well. Hawilla reluctantly agreed.
Burzaco had made a fortune in banking and private equity before giving it up to get into the soccer business. He was extremely charismatic, and he and Jinkis, aware of Hawilla’s reluctance, offered up a tantalizing sweetener when they all got together.
They’d been talking to South American soccer officials about a potentially very lucrative idea, they said, one that had bounced around for years but never gotten any traction: a special edition of the Copa América, celebrating one hundred years of the tournament, to be held in the United States in 2016.
Chuck Blazer had always blocked the notion out of concern that it would cannibalize the Gold Cup. But now that Enrique Sanz was firmly ensconced as Traffic’s inside man at CONCACAF, there would finally be the opportunity to make the tournament happen.
They’d call it the Copa América Centenario, Jinkis and Buzaco said, noting that they already had buy-in from the key South American officials. Imagine: the biggest stars from South America, including Argentina’s Leo Messi, Uruguay’s Luis Suárez, and Brazil’s Neymar, playing in Chicago, Miami, New York. Sponsors and broadcasters would be clamoring for a piece of the action. The profits could be huge. Was he interested?
Yes, Hawilla finally admitted, he was considerably more than interested.
EIGHTEEN
* * *
THE WARNER BROTHERS
WHEN FEDERAL LAW ENFORCEMENT AGENTS become interested in people as targets of an investigation, there are a number of ways to keep tabs on them.
The best known is electronic surveillance, commonly known as a wiretap. With a warrant procured under Title III of the Omnibus Crime Control and Safe Streets Act of 1968, agents can bug a person’s landline or cell phone, peruse her faxes and text messages, listen to her voicemail, read every single one of her emails, and scroll through her Facebook chats and Instagram direct messages, without the suspect being the wiser.
Unhappily for the feds, Title III warrants aren’t easy to get. Judges make prosecutors jump through considerable hoops before issuing one. They must prove there is probable cause a crime has been committed, and describe what laws they think were broken. They have to identify whom they are targeting and, most burdensome of all, attest in extensive detail to the fact that they have already unsuccessfully tried every other possible means to gather evidence.
Wiretaps are meant as a last resort, and even when they’re granted, they can be a pain. Among other things, they require huge amounts of manpower in the form of agents sitting round the clock in a dark and airless wire room, listening to every call in real time.
But there are other tools available that, while less invasive than a wire, are far easier to procure.
On September 11, 2012, a third prosecutor assigned to the soccer case, Darren LaVerne, filed a sealed application for a “pen register and trap and trace device” to be put on three South Florida mobile phones belonging to Daryan and Daryll Warner.
Pen registers provide a rolling list of all incoming and outgoing calls tied to a particular phone number, and can also be used on email. Although they don’t capture the actual contents of the communications, they can help investigators gain a better sense of whom suspects talks to and how often, a particularly useful thing when trying to understand elaborate criminal organizations. Pen registers are also easy to get, as federal judges generally sign them without substantial review.
In the case of the Warners, the pen register application made no mention of soccer or the larger themes of the investigation, only that the Eastern District was “conducting an ongoing criminal investigation into possible violations of federal criminal laws.” A magistrate in Brooklyn granted it for sixty days without comment.
With the pen register in place, the investigators would receive constant updates on every call the Warner brothers made, which, with any luck, would help them zero in on the real target: their father.
Bringing in Chuck Blazer had been a terrific coup. But short of Sepp Blatter himself, Jack Warner seemed just about the most important person the feds could possibly bring in. He had been the president of CONCACAF for twenty-one years, a member of FIFA’s ExCo for almost twenty-nine, and an official of the Caribbean Football Union for even longer. There was almost no one in world soccer who hadn’t crossed Warner’s path, and given his apparent proclivity for graft, bribery, and outright theft, he doubtless had enough dirt stored in his brain and filing cabinets to bring a roaring RICO indictment home in no time.
Blazer had regaled the prosecutors in extensive detail about Warner’s corrupt acts, including the bribes he took for his World Cup votes, and he’d also provided documentary evidence. But getting to Warner wouldn’t be so easy as simply proving he had committed a crime.
Five months earlier, Warner had been named Trinidad and Tobago’s Minister of National Security, an extremely powerful cabinet position putting him in charge of the nation’s police and fire service, army, air force, coast guard, prisons, and immigration department. Even if the prosecutors wanted to request information about Warner from Trinidad or formally petition for his arrest at the U.S. government’s behest, the entreaty would, bizarrely, probably have to cross Warner’s own desk first.
Travel records showed that Warner came to the United States from time to time, but he was a high-level official from a foreign government and traveled on a diplomatic passport, which conferred immunity. He could not be arrested, detained, subpoenaed, searched, or prosecuted.
Jack Warner, in other words, was untouchable. But his sons were not.
* * *
By the time Warner’s first son, Daryan, was born in 1968, Jack Warner had already committed to a life in soccer.
Five years earlier, he had been elected general secretary of the Central Football Association, a regional soccer organization in Trinidad’s complex network of amateur leagues, and was a delegate to the country’s national federation. Daryll, his second son, was born in 1974, as Warner was mounting a successful campaign for the federation’s secretary, a position he would hold for sixteen years until taking over CONCACAF.
As his soccer career flourished, Warner traveled incessantly, seeing little of his sons and leaving the job of raising them to his wife, Maureen. She abided his absences and kept the family together, while her husband played almost no role in the upbringing of Daryan and Daryll. The boys, in turn, rarely complained.
Daryan was the bright one. He earned an undergraduate business degree at the University of the West Indies in Trinidad, a master’s at Howard University in Washington, D.C., and did postgraduate work in Australia and South Korea. He spoke Korean and some Spanish, had his hands in a number of businesses, and enjoyed day trading stocks. His kid brother more strongly resembled their father, with the same wide-set eyes, broad smile, and gap between his two front teeth. But Daryll was something of a mother’s boy, less academically inclined, and seemingly devoid of the entrepreneurship that drove Daryan.
Despite their differences, one thing united them: doing Dad’s bidding. Daryan was the registered owner of a professional soccer club his father founded in Trinidad, and
a manager of the travel agency his father ran. Daryll had for several years been a FIFA development officer in the Caribbean. And both sons were listed as directors of numerous companies started by their father.
It was Daryan who in 2006 sold World Cup tickets acquired by his father through FIFA for a huge markup, and, when FIFA hired the auditor Ernst & Young to investigate the matter, he was entrusted to cover up the evidence, take the fall, and ensure that his father wasn’t implicated. Four years later, Daryll chipped in to help his father get more World Cup tickets for Daryan to scalp, ignoring warnings from FIFA that the practice was forbidden.
That was the deal in the Warner clan. Soccer was the family business and everyone was expected to participate. Dad was the boss, providing the brains and political influence, while Daryan and Daryll were the soldiers, doing the odd jobs, and, when problems arose, standing in front of the bullets so that their father remained unscathed.
* * *
Not long after formally joining the case, Steve Berryman checked to see if there were Suspicious Activity Reports on any suspects.
Known in law enforcement as a SAR, the reports are filed by employees of banks and other financial service providers to alert regulators to behavior that could indicate any of a number of economic crimes, particularly money laundering.
It was routine, something Berryman did on every case, and it was often a gold mine. This time was no different. In July 2011, a teller at a JPMorgan Chase branch in Midtown Manhattan filed a SAR after processing a cash deposit from Daryan Warner.
He had come to the window with 7,500 euros in cash, intending to deposit it at his account at the bank. But after being informed that under that day’s exchange rate, the deposit was equivalent to $10,636.50, Warner did something odd. He asked for 500 of the euros back, bringing the total to $9,336.60.
Red Card Page 19