For the past decade, American prosecutors had been aggressively pursuing Swiss banks for abetting tax evasion, extracting $780 million from UBS in 2009 and $2.6 billion from Credit Suisse earlier in 2014, while forcing scores of other financial institutions to pay smaller fines and change their practices in order to avoid prosecution. Among other things, the nation’s famous wall of silence had been partially breached: for the first time, Swiss banks had been obliged to provide account information on U.S. taxpayers to American law enforcement.
The Justice Department’s campaign had been roundly criticized by both the Swiss press and public, who viewed it as American imperialism, a kind of legal bullying that had buckled the knees of the country’s most revered institutions and forced them to alter a deep-seated culture of secrecy that was a matter of national pride. Convincing the Swiss to conduct a huge and very public takedown of yet another of the country’s most prominent organizations, FIFA, was going to require some delicate negotiations.
Then, less than a week after the Daily News story was published, President Obama announced he was nominating Loretta Lynch to succeed Eric Holder as attorney general.
Lynch was the sitting U.S. attorney for the Eastern District of New York and, as such, the soccer investigation was her case. Although she was numerous rungs up the ladder from Norris and the other prosecutors, she had been read in on the investigation since its early stages, and Norris had briefed her regularly on its progress. With a big office to oversee, she had plenty of other cases to worry about, and was known for trusting her prosecutors; for the most part, she just let Norris follow his instincts.
As attorney general, however, she could potentially be invaluable. Since she knew the case well, she could almost certainly be counted on to help smooth the way with top officials in the Swiss attorney general’s office and help get them on board.
One of the arguments that would be critical was that this case wasn’t, in fact, directed against soccer. At heart, it was an international money laundering case; the vehicle used for the bribery and fraud, generating all that dirty money, just so happened to be soccer. Rather than an attack on FIFA, the prosecutors would argue the case was in fact an attempt to rid the sport of the officials that had corrupted it. America, the sales pitch went, was looking out for the sport’s best interests.
Besides, the Swiss public had little love for FIFA. After years of negative press and endless accusations of corruption, it had become something of a national shame, an institution increasingly defined by its inability to police itself.
Michael Garcia’s Ethics Committee investigation was a perfect case in point.
After more than a year and a half of interviews around the world, reviews of hundreds of thousands of pages of documents, and billings reported to approach $10 million, the former U.S. attorney had finally submitted his hotly anticipated report on the bidding process for the 2018 and 2022 World Cups to FIFA in early September.
A month later, however, FIFA announced that it would not publish the 434-page document because it had to “respect the personal rights of the people mentioned in the report” and instead would release only a summary. Then, when the forty-two-page synopsis was released on November 13, 2014, Garcia publicly condemned it, saying it contained “numerous materially incomplete and erroneous representations of the facts.” And when FIFA rejected an appeal by Garcia to release the full report, the American resigned in protest, producing yet another very public embarrassment for the organization.
Without subpoena power, Garcia had been able to dig up little interesting new information. None of the people the feds were interested in—Ricardo Teixeira, Mohamed bin Hammam, Nicolás Leoz, or Jack Warner—had agreed to sit for an interview with Garcia. The former prosecutor had been unable to even conduct the Russian portion of the investigation himself because he had been, ironically enough, added to a list of Americans barred from setting foot in the country as retribution for Magnitsky Act sanctions imposed by the U.S. In any event, the Russians almost completely avoided scrutiny by claiming that the computers they used for the bid had been leased and that their owner had destroyed all of them.
As an investigative document, then, the Garcia report seemed disappointing at best. If anything, it stood out to the prosecutors in Brooklyn as symbolic of the cancerous impunity plaguing FIFA. If the report contained any important evidence of corruption, FIFA was clearly not going to do anything with it. As far as the small team of investigators working on the soccer case were concerned, there was nobody on the entire planet making any serious attempt to clean up the sport except for them.
As winter approached, and the days grew short, they began to talk more concretely about the moment they would finally make their big move and the whole world would find out what they had been up to.
It was going to be a great and important day. To celebrate the years of hard work, Norris promised to take Randall and Berryman to dinner at Peter Luger, a famous Brooklyn steakhouse, where gruff old waiters throw down $80 platters of sizzling porterhouse. It seemed a fitting tribute because Luger’s happened to be Chuck Blazer’s favorite restaurant.
Blazer had been a terrific cooperator. There never could have been a case without him. When the Daily News article appeared, Randall tore off the front page and pinned it to the wall of his cubicle on the twenty-third floor of 26 Federal Plaza, next to the receipt from the first lunch he’d had with Blazer more than three years earlier.
As a joke, somebody had marked up the newspaper.
“I don’t carry keychains,” a speech balloon out of Blazer’s mouth read.
“You do now,” a second bubble said. “You work for me.”
* * *
Since the moment they flipped Hawilla eighteen months earlier, the prosecutors had been intensely interested in figuring out exactly what he owned and how much it was worth.
He was very rich, of course, but the government attorneys wanted him to catalogue, in detail, all his assets and also provide a sense of what they could be sold for. So, even as he recounted the specifics of the bribes he paid, the intermediaries he used, and the phony contracts he concocted, the Brazilian was obliged, many times, to expose the inside of his figurative wallet.
The prosecutors listened with rapt attention as Hawilla told them about Traffic and its various divisions, about the North American Soccer League, about his TV stations, the multiple farms he owned in rural São Paulo state, his four houses in Brazil and the condo on Fisher Island, his many cars, his various bank accounts, and even his collection of Brazilian art, which included one painting worth, by Hawilla’s estimate, $200,000.
They also kept tabs on his efforts to sell Traffic. Despite some interest from European buyers, the company still lingered frustratingly on the market. Meanwhile, Hawilla had, in September 2013, unloaded his newspapers, including Diário de S. Paulo, for just 30 million reales, or about $13 million—a huge loss on what had turned out to be a terrible investment. Most recently, Hawilla had convinced Chinese investors to buy the soccer training grounds he’d built in Porto Feliz, along with Desportivo Brasil, the local team he owned, for a total of 38 million reales, or roughly $17 million.
Hawilla’s gross dishonesty over the first nine months of cooperation was to a large degree an attempt to protect the value of the companies he had built from nothing. But his infuriating behavior betrayed a grave misreading of the rules underlying cooperating with a federal investigation, of human nature, and most importantly, of the Racketeer Influenced and Corrupt Organizations Act.
When RICO was passed into law in October 1970, it marked the first time in 180 years that the federal government had been empowered to seize assets from individuals as a direct consequence of their crimes. Until then, the government could seize assets used to commit crimes—such as the boat a drug runner used to smuggle cocaine—but it could not remove property from criminals simply because they committed a crime.
RICO codified efforts to bind criminals to the enterprises they cor
rupted and the ill-gotten gains of their corruptions. Violators faced fines and up to twenty years in prison, but perhaps the most innovative and powerful punitive tool was asset forfeiture. Those convicted under RICO could be obliged to forfeit any assets tied directly or indirectly to the criminal enterprise they were involved in. Forfeiture serves as both penalty and deterrent, designed to send a powerful message to other would-be criminals: the government can take every penny.
On December 12, 2014, José Hawilla finally was permitted to sign his cooperation agreement with the prosecutors from the Eastern District of New York.
It said the Brazilian would agree to plead guilty to RICO conspiracy, wire fraud conspiracy, money laundering conspiracy, and obstruction of justice—a charge that had been expanded to include not just the interactions with Blazer that provoked his arrest, but his months of lying to prosecutors while cooperating. Hawilla’s prolonged deception had set the investigation back, but more important, it had put it at terrible risk. Altogether, his crimes carried a maximum sentence of eighty years, and although prosecutors could make recommendations, the judge would have final word on how much prison time would be dispensed.
But it is the prosecutors in a RICO case who make the final determination of how much money will be criminally forfeited. Under terms of his cooperation agreement, negotiated and countersigned by Norris, Hawilla was consenting to forfeit to the United States of America a total of $151,713,807.43.
It was a shocking sum, more than seventy-five times larger than Chuck Blazer’s forfeiture and triple the gross domestic product of Montserrat, one of the CFU members whose World Cup qualifier rights Hawilla had acquired thanks to a $3 million bribe to Jeffrey Webb. To pay the forfeiture, Hawilla would have little choice but to liquidate much of what he owned at whatever price he could get, including—and especially—Traffic.
The first installment, of $25 million, was due that very same day, when Hawilla, a humbled man of seventy-one, faced Judge Raymond Dearie shortly after 10:15 in the morning in his courtroom in Cadman Plaza.
Hawilla had come to the U.S. in May 2013 for just a week and had never left.
For the past nineteen months, he’d been trapped in a country that was not his own, separated from his friends and family, and subject to the whims of a handful of government lawyers who didn’t speak his language and knew next to nothing about the sport to which he had dedicated his life. Hawilla had watched his companies come under assault from aggressive competitors and his business empire shrink, and when he was cornered, he’d been forced to break confidences and betray people he’d known and loved for decades.
With an indictment still far on the horizon, and a trial where he might be called upon to testify long after that—not to mention a likely prison term—it could be years before Hawilla was allowed to go home. Quite apart from his concocted cover stories of plausible ailments, Hawilla had in fact been diagnosed with cancer in his mouth while cooperating and had gone through a brief round of chemotherapy and radiation. A pre-existing lung condition, meanwhile, had been exacerbated by all the stress.
It had been depressing, frightening, and profoundly isolating. Because the investigation was still secret, Judge Dearie’s courtroom had been cleared, and Hawilla was forced to confess to his crimes alone, without even his faithful wife, Eliani, by his side.
TWENTY-SIX
* * *
THINGS FALL APART
A MORE FISCALLY RESTRAINED PERSON would perhaps have organized a different CONCACAF congress than the one put on at the Atlantis Paradise Island Resort in the Bahamas on April 16, 2015.
It might not have been strictly necessary to put up dozens of staffers in luxury rooms, to arrive on a private jet, to host multiple late night parties with open bars, or to rent out multiple suites for oneself, one’s friends, and one’s family, also flown in on the confederation’s dime. The event, which cost CONCACAF roughly $3 million, could, quite possibly, have been carried off with a slightly more modest touch.
But that wouldn’t have been Jeffrey Webb’s style.
The confederation president had been traveling nonstop, as was his habit, and bringing a growing retinue of friends and advisors along with him. He’d swept into the Bahamas, in fact, right after returning from a trip to Cairo, where he had attended the congress of the Confederation of African Football, along with Enrique Sanz and both of their wives.
That event had been nice, but CONCACAF’s was going to be a blowout. It was a chance to show the world and, particularly, Sepp Blatter, who would be in attendance, how far the confederation had progressed in the three years since Webb had replaced Jack Warner. The Atlantis, a well-appointed yet thoroughly glitzy establishment, was overrun by uniformed confederation staffers, and a huge video screen looping highlights of Webb’s accomplishments loomed over the event.
Blatter arrived at the Atlantis on the 15th, stepping out of a chauffeured Mercedes sedan in a light sport coat and white shirt looking a bit tired. The seventy-nine-year-old was in full campaign mode and had dropped in on nearly every FIFA event on the schedule over the previous few months, but the Caribbean was special.
The region had been his political base since Jack Warner supported his first presidential campaign in 1998, and in Webb, Blatter had found a loyal successor. In fact, the two men had been scratching each other’s backs for more than a dozen years.
In 2002, when he was just thirty-seven and all but unknown in soccer circles, Webb had risen to defend Blatter, then facing corruption accusations, from his own general secretary and multiple members of the FIFA Executive Committee.
At the FIFA congress in the Grand Hilton Seoul, Blatter had denied requests from fifteen different member associations to speak, among them Somalia, the Netherlands, and England. But Webb was given the floor, and he responded by suggesting, as a banker, that the soccer body’s finances were just fine and that he didn’t know what all the fuss was about.
“FIFA is family,” Webb had said, “and family must stay together.”
He was rewarded with his first FIFA appointment, as deputy director of the Internal Audit Committee, and two years after that, FIFA pledged $2.2 million toward building a “Centre of Excellence” in the Cayman Islands. In 2009, Blatter, flanked by Warner, visited Webb at home to celebrate the inauguration of a small office built with some of the funds—the majority of which were sent to the local soccer association and never fully accounted for. Webb, calling Blatter the “father of our football family,” hosted a black-tie gala in his honor.
In 2013, Blatter named Webb chairman of a new Task Force Against Racism and Discrimination, and that October proclaimed that FIFA could have a new president “in the near future” and that person “could be Jeffrey Webb,” a coy prediction that vastly elevated the confederation president’s status.
Now in the Bahamas, it was once again Webb’s turn to be helpful. He complied by barring what he termed “political” speeches at the congress, thus preventing Blatter’s rivals for the presidency—Prince Ali bin Al Hussein of Jordan, Michael van Praag of Holland, and former star midfielder Luís Figo of Portugal, all of whom were in attendance—from even addressing the congress. It was the same trick Warner had pulled all the way back in 2002.
Webb, Blatter told the delegates, is “my colleague, my friend, my brother,” and once again suggested that he saw in the Caymanian a likely heir to his throne. “He is a winner,” Blatter said, “so let’s see where he’s going.”
As far as Webb was concerned, however, the day’s main event came when he was elected by the confederation’s membership associations to serve a second term as its president. It was a formality, as Webb again ran unopposed, but he noneless treated the vote as if it were a glorious victory.
“CONCACAF,” Webb said in a statement, “is more than ever united by one vision.”
That vision, of course, was his. Indeed, the entire congress seemed carefully planned to impart to Webb a still greater air of importance.
Attendees, includi
ng a large press contingent, were barraged with a series of cheerful reports about the confederation’s activities, its successful reforms, and its ambitious plans for the future. Enrique Sanz, looking drawn and pale, his once thick locks reduced to a thin buzz cut after all the cancer treatments, announced that the confederation would report a $1.1 million budget surplus for the fiscal year, to the nodding approval of the audience.
But that figure, like so much of what was really happening in the confederation, was a lie.
When CONCACAF’s finance department crunched the numbers a few weeks earlier, they projected a $6.5 million loss for the year, due in large part to ballooning marketing and travel expenses, yet Webb had rejected that data in favor of rosier numbers. After publicly refusing compensation following his initial election, Webb had begun quietly taking a $2 million salary, and dropped as much as $100,000 apiece on international junkets, trotting around the world with his friends aboard private jets chartered by a travel agency that had offered him kickbacks in exchange for the confederation’s book of business.
The congress itself had originally been planned for the Cayman Islands, but had been relocated to the Bahamas, at significant cost, and with little explanation. The unmentioned reason was that Webb had not set foot in his native land since Canover Watson’s arrest the previous August, and had no intention of going back.
Watson had been formally charged in November 2014 with corruption, money laundering, and fraud and was awaiting trial. At one point, Webb had sent his wife to George Town to take care of a few affairs, but the local police had picked her up for questioning. Since then, Webb had lived in constant terror that the investigation of Watson, his best friend, would catch up with him. He’d warned Costas Takkas, his bagman, to avoid Cayman as well.
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