FIFA report: Former officials tied to $80 million dollar scam

Right before the election of a new President for FIFA in 2011, it appeared that Sepp Blatter, President of FIFA, was about to be ousted amid reports of scandal. So what do he do? Signed his cronies to new 8 year deals that guaranteed themselves more than $25 million dollars… in case he didn’t win.

They made sure that the money would be paid even if the guys got fired for just cause.

And then, when Blatter got re-elected, they extended the contract for one of them another four years, days after the guy had been indicted and arrested.

The newly released report issued by the attorneys hired to conduct an internal investigation paints a picture of back room deals made to net millions to the top FIFA officials, retroactive bonuses, raises, and long-term contracts to make top officials wealthy before and after getting fired and/or arrested.

“The evidence appears to reveal a coordinated effort by three former top officials of FIFA to enrich themselves through annual salary increases, World Cup bonuses and other incentives totalling more than $79 million — in just the last five years.” — Bill Burck, a partner with Quinn Emanuel (Attorneys hired to conduct an internal investigation for FIFA)

The three cited:

• FIFA President Joseph Blatter
• Former Secretary General Jérôme Valcke
• Former Deputy Secretary General Markus Kattner, who also served as FIFA’s Chief Financial Officer.

The investigation reveals evidence of breaches of fiduciary duty. FIFA has shared this information with the Office of the Swiss Attorney General and it will brief the U.S. Department of Justice on the matters.

Here are a couple of examples from the report

· On May 23, 2016, FIFA announced that it had terminated with immediate effect the contract of the then-Deputy Secretary General Markus Kattner for breaches of his fiduciary duties to FIFA. That decision was based on documents and evidence collected as part of the internal investigation.

· The documents and evidence also raise serious questions about the way a series of problematic contract amendments in favor of Blatter, Kattner, and former Secretary General Jérôme Valcke were approved. These amendments resulted in massive payouts — amounting to tens of millions of dollars — to the former FIFA officials in the form of salaries and bonuses between the years 2011 and 2015.

· In total, the new documents and evidence appear to reveal a coordinated effort by three former top officials of FIFA to enrich themselves through annual salary increases, World Cup bonuses, as well as undue severance payments.

Multiple contract amendments used to boost payments

According to the chart found here it is clear that there is not just one contract for each official. There are multiple amendments to contracts often approved in close sequence. Additionally, these various contracts were often entered into by Blatter, Valcke and Kattner on the very same day. And more importantly, these dates were very ominous. Some examples include:

· April 30, 2011: Shortly before the 2011 Presidential election at the end of May of that year, in which Blatter was running against Mohammed Bin Hamman, when it was uncertain whether Blatter was going to be reelected, both Valcke and Kattner were given 8.5-year contract extensions until 2019 with big increases in their base salaries and bonuses. Valcke and Kattner were also given generous severance terms that guaranteed them full payment — up to $17.5 million and $9.8 million respectively (view table here) — in case their employment with FIFA is terminated, which was likely should Blatter not be reelected.On top of this, the two contracts included two further clauses:

• a termination clause that states that Valcke and Kattner would receive payment of the full value of their contracts (i.e. up to a maximum of 8.5 y) even if they were terminated for just cause; and
• an indemnification clause that would force FIFA to pay all their legal fees and any associated fines and restitutions, even if they were found guilty.

These two provisions appear to violate mandatory Swiss law.

· December 1, 2010: Blatter, Valcke and Kattner receive $23 million in special bonuses for the 2010 FIFA World Cup South Africa. These bonuses were awarded retroactively — four months after the completion of the World Cup — and apparently without an underlying contract provision stipulating such bonuses.

Kattner’s contract awarded after U.S. indictment

In May 29th, 2015, the U.S. Department of Justice announced a sweeping indictment against international soccer officials and carried out arrests at the Baur-au-Lac hotel in Zurich.

Astonishly, Blatter was reelected President of FIFA two days later despite 14 people, many of them current executives at FIFA, had been indicted. ?

Kickbacks, bribery charges. $150 million dollars of scandal….…. yet the man watching and presiding over all of it got re-elected to another term as President??

Sepp Blatter was re-elected to his fifth term as Prez of FIFA, despite the biggest scandal in the organizations history — under his watch.

On May 30th, the Compensation Sub-Committee met and granted Kattner an additional four-year extension on his contract pushing his end date from 2019 to the end of 2023. This ensured that in the event of his dismissal from FIFA, Kattner would be guaranteed more than eight years of future salary and bonus payments totaling up to $ 9 million.

SOURCE: FIFA — Read More