World soccer rocked by U.S.

, Swiss arrests
of officials for graft

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ZURICH/NEW

YORK | BY MIKE COLLETT, BRIAN HOMEWOOD AND NATE RAYMOND

Thu May 28, 2015

The world's most popular sport was plunged into turmoil

on Wednesday as seven powerful soccer figures were arrested on U.S. corruption
charges and faced extradition from Switzerland, whose authorities also announced a
criminal investigation into the awarding of the next two World Cups.
The arrests of the senior FIFA officials in a morning raid at a five-star Zurich hotel mark
an unprecedented blow against soccer's powerful governing body, which for years has
been dogged by allegations of corruption but always escaped major criminal cases.
U.S. prosecutors said they aimed to make more arrests but would not be drawn on
whether FIFA President Sepp Blatter, for long the most powerful man in the sport, was
a target of the probe. Blatter, 79, is standing for re-election to a fifth term at the FIFA
Congress in Zurich on Friday, and FIFA said the vote would go ahead as planned.
U.S. authorities said a total of nine soccer officials and five sports media and
promotions executives were charged with corruption involving more than $150 million
in bribes over a period of 24 years. They said their investigation exposed complex
money laundering schemes, millions of dollars in untaxed incomes and tens of millions
in offshore accounts held by FIFA officials.
Swiss police arrested the seven FIFA officials and detained them pending extradition
proceedings to the United States, which could take years if they contest the process.
"As charged in the indictment, the defendants fostered a culture of corruption and
greed that created an uneven playing field for the biggest sport in the world," said FBI
Director James Comey. "Undisclosed and illegal payments, kickbacks, and bribes
became a way of doing business at FIFA."

Separate from the U.S. investigation, Swiss prosecutors said they had opened their
own criminal proceedings against unidentified people on suspicion of mismanagement
and money laundering related to the awarding of rights to host the 2018 World Cup in
Russia and the 2022 event in Qatar.
U.S. Attorney General Loretta Lynch told reporters at a news conference in New York
her office did not want to impede the 2018 and 2022 World Cups but looked forward to
working with Swiss authorities investigating the award of the tournaments.
"FIFA has a lot of soul searching to do," she said.
One of those indicted, former FIFA Vice President Jack Warner of Trinidad, solicited
$10 million in bribes from the South African government to host the 2010 World Cup,
the Justice Department said.
Warner directed a number of co-conspirators to arrange the payment, which was
eventually sent from a FIFA account in Switzerland to a Bank of America account in
New York that Warner controlled, the indictment said.
Warner, former FIFA vice president and executive committee member of CONCACAF
(Confederation of North, Central America, Caribbean Association Football), said in a
statement that he was innocent of any charges.
The United States took jurisdiction of the case in part because the Internal Revenue
Service and the FBI secured the cooperation of U.S. citizen Chuck Blazer, a former
top FIFA official, who U.S. officials said had not paid taxes for years.
Another person charged is Jeffrey Webb, head of CONCACAF, based in Miami.
Early Wednesday, FBI agents carrying bags and boxes to execute a search warrant
went into the group's office in Miami Beach. A CONCACAF spokesman was not
immediately available for comment.
Kelly Currie, the acting U.S. attorney in Brooklyn said Wednesday's charges brought in
the New York City borough represent "the beginning of our effort, not the end."
GUILTY PLEAS
In addition to Blazer, 70, others who pleaded guilty were Jos Hawilla, 71, owner of
the Traffic Group, a sports marketing firm founded in Brazil, and two of his companies;
Daryan Warner, 46, and Daryll Warner, 40, sons of Jack Warner.
"It is clear that the case is based in large part on some cooperating insiders who have
already plead guilty," said Miami lawyer David Weinstein, former prosecutor.
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The FIFA officials appeared to have walked into a trap set by U.S. and Swiss
authorities. The arrests were made at dawn at a plush Zurich hotel, the Baur au Lac,
where FIFA officials are staying before the vote. Suites at the hotel cost up to $4,000 a
night.
FIFA called the arrests a "difficult moment" but said Blatter would seek another term as
FIFA head as planned and the upcoming World Cups would go ahead as intended.
The arrests could have implications for sponsorship.
German sportswear company Adidas (ADSGn.DE), long associated with FIFA, said
the soccer body should do more to establish transparent compliance standards.
Anheuser-Busch InBev ABI.BR, whose Budweiser brand is a sponsor of the 2018
World Cup, said Wednesday that it is closely monitoring developments at FIFA.
Data and documents were seized from computers at FIFA's Zurich headquarters, the
Swiss prosecutors said.
Officials said that following the arrests, accounts at several banks in Switzerland had
been blocked.
The U.S. Department of Justice named those arrested in Zurich as: Webb, Eduardo Li,
Julio Rocha, Costas Takkas, Eugenio Figueredo, Rafael Esquivel and Jos Maria
Marin.
The DoJ said the defendants included U.S. and South American sports marketing
executives said to have paid and agreed to pay "well over $150 million in bribes and
kickbacks to obtain lucrative media and marketing rights to international soccer
tournaments".
Lynch said in a statement that the charges span "at least two generations of soccer
officials who, as alleged, have abused their positions of trust to acquire millions of
dollars in bribes and kickbacks."
BILLIONS OF DOLLARS
The international governing body of football collects billions of dollars in revenue,
mostly from sponsorship and television rights for World Cups. It has been dogged by
reports of corruption which it says it investigates itself.

"The chickens are finally coming home to roost and this sounds like a hugely
significant development for FIFA," said Damian Collins, a British member of parliament
who founded the reform group New FIFA Now.
"It proves that Sepp Blatter's promises over the last few years to look into corruption at
FIFA have not materialised and because he has totally failed to do this, it has been left
to an outside law enforcement agency to do the job and take action."
FIFA's decision to award the World Cup to Qatar, a tiny desert country with no
domestic tradition of soccer, was heavily criticised by soccer officials in Western
countries. FIFA was forced to acknowledge that it is too hot to play soccer there in the
summer when the tournament is traditionally held, forcing schedules around the globe
to be rewritten to move the event.
Qatar's stock market fell sharply as news of the Swiss investigation emerged. A
Russian official said his country would still host the 2018 World Cup.
The Russian Foreign Ministry said that the arrests were "another case of the illegal
extraterritorial application of U.S. Laws."
Three years ago FIFA hired a former U.S. prosecutor to examine allegations of bribery
over the awarding of the World Cups to Qatar and Russia. However, last year it
refused to publish his report, releasing only a summary in which it said there were no
major irregularities. The investigator quit, saying his report had been mischaracterised.
(Additional reporting by Katharina Bart in Zurich, Curtis Skinner in San Francisco,
Karen Freifeld and Nate Raymond in New York, Mark Hosenball and Julia Edwards in
Washington, David Adams and Zachary Ferguson in Miami; Ian Ransom in Melbourne;
Writing by Peter Graff, Giles Elgood; Editing by Peter Millership, David Stamp, Grant
McCool and Stuart Grudgings.)

FIFA flags are pictured outside the Marritot hotel, where a meeting of the
Confederation of African Football (CAF) is taking place, in Zurich, Switzerland, May
27, 2015.
REUTERS/ARND WIEGMANN