Wednesday 28 September 2016

How following the money was key to lifting lid in US inquiry

Christie Smythe in Washington DC

Published 28/05/2015 | 02:30

US Attorney General Loretta Lynch at a news conference in New York, where she ‘issued Fifa a red card’
US Attorney General Loretta Lynch at a news conference in New York, where she ‘issued Fifa a red card’
David Cameron was shocked after the UK’s failed World Cup bid

Follow the money is the old adage and the US is doing just that by examining banks' conduct as part of their wide-ranging corruption probe of FIFA.

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The investigation of international soccer has already netted charges against 14 people. Money involved in the two-decade-old bribery scheme passed through American banks, helping give the country the right to pursue prosecutions against the foreign nationals involved and also to examine the role of the banks, acting US Attorney Kelly Currie in Brooklyn told a news conference yesterday.

"Our investigation is going to look at a broad area of conduct," Mr Currie said.

"A lot of the banking institutions and the ways these moneys were funnelled passed through the US."

The US unveiled charges of racketeering, wire fraud and money-laundering conspiracy against officials from the Federation Internationale de Football Association and sports marketing executives following an early morning raid on a luxury Zurich hotel yesterday, where some of the officials were arrested.

"They were expected to uphold the rules that keep soccer honest, and protect the integrity of the game," US Attorney General Loretta Lynch told the news conference. "Instead, they corrupted the business of worldwide soccer to serve their interests and enrich themselves."

Ms Lynch said that "individuals and organisations engaged in bribery to decide who would televise games; where the games would be held; and who would run the organisation overseeing organised soccer worldwide."

Investigators "exposed complex money-laundering schemes" which included tens of millions of dollars in offshore entities in places such as Hong Kong and the Cayman Islands, said Richard Weber, chief of criminal investigation for the Internal Revenue Service.

Ms Lynch said one FIFA official collected $10m in bribes. "This really is the World Cup of fraud and today we're issuing Fifa a red card," Mr Weber said.

Although FIFA is based in Zurich, investigation of the corruption allegations at the organisation is global, Mr Currie said.

"We live in a global marketplace," he said.

America is not the world's most soccer-loving nation. Yet it is US law enforcement that is suddenly at the forefront of the attack on football's global governing body. Why would that be?

Perhaps the experience the Americans had with Fifa four-and-a-half years ago opened their eyes to the problem.

On December 2, 2010, the executive committee of the International Federation of Football Associations voted to hold the World Cup in Russia in 2018 and in Qatar in 2022. These countries' strongest rivals were, respectively, the UK and the US. 

British Prime Minister David Cameron was emotional about his country's shocking defeat. He said he was "bitterly disappointed" and pointed out that England's bid had received the best "technical evaluation."

"It turns out that's not enough," Mr Cameron fumed. US President Barack Obama, in contrast, was content to call FIFA's decision "wrong". (Former US President Bill Clinton, who had presented the US bid in Zurich, reportedly threw an ornament at a wall mirror, shattering the glass.)

Corruption

In 2012, FIFA hired former US Attorney Michael Garcia to look into the corruption charges and, two years later, Garcia delivered a 350-page report. But FIFA didn't publish it in full, saying it contained nothing that would require re-votes on Russia or Qatar. Sepp Blatter announced his decision to run for a fifth term.

Then, yesterday, a US-made bomb went off: Swiss police arrested six FIFA functionaries in the posh Zurich hotel Baur au Lac, where they'd checked in ahead of the vote, and later picked up another.

All seven now await extradition to the US.

It turned out that while UK fans, politicians and journalists cursed FIFA, US, FBI and tax authorities were quietly unravelling FIFA's web of corruption.

The investigation, according to the Swiss Federal Office of Justice, began in 2011, soon after the American bid failed.

Irish Independent

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