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Blatter's FIFA Lieutenant Said to Clear $10 Million Bribe

Tuesday, 02 Jun 2015 06:16 AM

(Updates with FIFA comment in third paragraph. For more FIFA coverage, click EXT5.)

(Bloomberg) -- FIFA’s No. 2 official under President Joseph “Sepp” Blatter authorized a $10 million payment that U.S. prosecutors have characterized as a bribe, a person familiar with the matter said.

Jerome Valcke, FIFA’s secretary general, is the official described in an indictment who made payments from FIFA to bank accounts in New York that were overseen by Jack Warner, the longtime head of Concacaf, the Central American and North American soccer confederation, said the person, who asked not to be identified because the matter wasn’t public.

Neither Valcke nor other senior management were involved in the “initiation, approval and implementation” of the payment, FIFA said in a statement Tuesday. It said the 2008 transfer was approved by the finance committee chairman. At the time that was Julio Grondona, an Argentine who died last year at age 82.

Warner received the payments in exchange for his vote for South Africa as host country for the 2010 World Cup, according to the sweeping indictment of FIFA officials released last week.

According to FIFA, the South African government and national soccer federation in 2007 requested FIFA withhold $10 million from the World Cup organizing budget and distribute it to Concacaf’s Warner as part of the tournament’s “African diaspora” legacy program in the Caribbean.

Valcke’s involvement would bring the government’s indictment of FIFA closer to Blatter, who wasn’t charged last week. Two vice presidents of Blatter’s executive committee as well as seven other current and former FIFA officials, including Warner, were charged with participating in decades of bribery and kickbacks.

The indictment doesn’t name the person who made the payments to Warner’s accounts. It identifies that person only as a “high-ranking FIFA official.” Valcke didn’t immediately respond to a direct message to him via Twitter.

Concacaf Meeting

At an event in Miami on Monday evening to promote a tournament, Concacaf acting general secretary Ted Howard said he had no knowledge of the $10 million payment from FIFA. “Absolutely nothing,” he said. “I’ve had nothing to do with the finances part of this so I have no idea.”

Danny Jordaan, who led South Africa’s World cup effort, has confirmed the $10 million payment. He has said it wasn’t a bribe. He didn’t immediately return a call seeking comment about why the Caribbean region should receive a legacy payment for the World Cup.

The U.S. government’s case primarily focuses on bribes and kickbacks between sports marketing firms and FIFA officials in the Caribbean, Central American and South America, in exchange for contracts for media and marketing rights to regional soccer tournaments. In all, more than $150 million in illegal payments were made over 24 years, the government alleged.

Alleged Negotiation

In 2004, Warner allegedly negotiated a $10 million bribe with officials from the South African bid committee, the South African government and FIFA. While the payment would be made to the Caribbean Football Union to “support the African diaspora,” it was understood that it was in exchange for Warner’s vote in favor of South Africa as host country for the 2010 World Cup, according to the indictment in federal court in Brooklyn, New York.

The South African government ultimately balked at making the payments, so FIFA stepped in to cover the expense, using funds that were earmarked for South Africa to use in staging the 2010 World Cup, according to the indictment.

In 2008, a “high ranking FIFA official” sent three payments totaling $10 million from a FIFA account in Switzerland to Bank of America in New York, to accounts held in the name of the Caribbean Football Union and Concacaf.

Soon thereafter, Warner transferred a “substantial portion of the funds” for his personal use, according to the indictment.

Warner Denial

Since the charges were announced, Warner has maintained his innocence. “I have not even been questioned in this matter,” he said, in a statement. “I reiterate that I am innocent of any charges.”

Valcke has been at the center of controversy before. In 2007, FIFA agreed to pay MasterCard Inc. $90 million to settle a case involving sponsorship of the World Cup. Valcke, then director of marketing, had negotiated a new deal with MasterCard, which had been the World Cup sponsor for 16 years, while feeding details of the discussion to Visa, which eventually got the contract, according to court records.

Valcke was suspended by FIFA. But less than eight months later, Blatter hired him back and promoted him to general secretary.

The case is U.S. v. Webb, 15-cr-00252, U.S. District Court, Eastern District of New York (Brooklyn).

--With assistance from Bill Faries in Miami.

To contact the reporters on this story: Christie Smythe in Brooklyn at csmythe1@bloomberg.net; Tariq Panja in Rio de Janeiro at tpanja@bloomberg.net; Andrew Martin in New York at amartin146@bloomberg.net To contact the editors responsible for this story: Christopher Elser at celser@bloomberg.net; Michael Hytha at mhytha@bloomberg.net; Robert Blau at rblau1@bloomberg.net Rick Schine, Sara Marley

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