João Havelange, the former president of football's world governing body, Fifa, and a senior Fifa executive committee member, Ricardo Teixeira, were paid huge bribes by the company to which Fifa awarded the 2002 and 2006 World Cup TV rights, according to a Swiss prosecutor.
In a legal document published after lengthy court proceedings in Switzerland, Fifa, under the presidency of Sepp Blatter, Havelange's successor, was found to have known about the bribes yet sought to have a prosecution of it and the two executives settled. Prosecutions were mounted for alleged embezzlement against Havelange and Teixeira, and "disloyal management" – a breach of its duties – against Fifa, but were stopped on 11 May 2010, after Havelange and Teixeira repaid a small proportion of the 41m Swiss francs (£27m) they had been paid in alleged bribes.
The court order documenting the settlement, published by the prosecutor in the Swiss canton of Zug, is a devastating indictment of Fifa, the culture of corruption under Havelange, and efforts to have the known bribe-taking kept secret and unpunished.
Havelange, now 96, was president of Fifa from 1974 until 1998, when he was succeeded by Blatter, who had been his loyal general-secretary. Teixeira, Havelange's son-in-law until he divorced, was a long-serving Fifa executive committee member, and president of Brazil's football federation for 23 years, until he stepped down on the grounds of ill-health earlier this year.
Both men were found to have received those massive payments as "commissions," alleged explicitly to be bribes, by the marketing company International Sports Media and Marketing, known as ISL. Havelange, when president of Fifa, in December 1997, granted ISL Fifa's exclusive marketing rights. In May 1998 Havelange sold ISL exclusive TV and radio rights to the 2002 World Cup, in Japan and South Korea, and the 2006 World Cup in Germany. ISL paid Fifa 200m Swiss francs (£131m) for the marketing rights and $1.4bn (£906m) for the TV rights – but subsequently ISL went bust and its liquidators examined all payments the company had paid.
The Zug prosecutor's document reveals that Havelange and Teixeira were allegedly paid 41m Swiss francs by ISL over eight years, beginning in August 1992, until the final payment, of 868,000 Swiss francs (£571,000) in May 2000. The Swiss prosecutors also alleged that ISL made 37m Swiss francs (£24m) payments as "commissions" or "donations" to unnamed "individuals and decision makers of global sports".
The court order explaining why the prosecutions were halted, after Havelange and Teixeira repaid 500,000 Swiss francs (£329,000) and 2.5m Swiss francs (£1.6m) respectively, exposes a culture of rife bribe-taking which it finds Fifa knew about yet left unpunished and kept secret. Commercial bribery was not a crime in Switzerland at the time.
"The finding that Fifa had knowledge of the bribery payments to persons within its organs is not questioned," the document states. "This is firstly because various members of the executive committee had received money, and furthermore … a [1m Swiss francs] payment made to João Havelange was mistakenly directly transferred to a Fifa account."
The court document states that Fifa's "CFO" (chief financial officer, unnamed) knew the Havelange 1m Swiss francs (£658,000) bribe had mistakenly arrived in a Fifa account, and also that another Fifa official knew – the identity of this Fifa official is not disclosed. However, the prosecutor recounts over several pages intensive efforts made by a lawyer, acting on behalf of Fifa while Blatter was the president, to have the prosecutions stopped. The lawyer argued to the court that Fifa did not have to ask for the bribes "pocketed" by Havelange and Teixeira, for their "personal enrichment", to be repaid.
The case was settled and the prosecutions stopped following negotiations with the lawyer, on 17 March 2004. The lawyer appeared to state it was a Fifa policy not to be publicly drawn into "unjustified speculation" concerning ISL, and said: "Fifa intercedes to help bring about settlements where foreign football functionaries have received commission."
The investigation following ISL's collapse cited the chairman of the company explaining that bribes had been rife and commonplace since the 1970s, "whereby well-known individuals in sports were favoured". Between 1989 and 1998, the prosecutor's document states, one ISL company alone paid "commission" to such insiders, amounting to 123m Swiss francs (£81m). That only partially included the payments to Havelange and Teixeira, and the identities of those who received other huge sums is not revealed.
The prosecutor believed Havelange and Teixeira were guilty of criminal breaches of their duties to serve Fifa as senior executives. However, the prosecutor agreed, after extended efforts by Fifa to have the prosecution stopped, that the repayments were adequate to settle the action. This was partly because the bribes paid before 1995 were considered too old to be subject to criminal prosecution, and the prosecutor also took into account Havelange's advanced age.
Fifa presented the document's publication as part of its reform process, saying it was "pleased" it has now been made public. However, it was only published following an application by European media organisations including the BBC. Professor Mark Pieth, of the Basel Institute, heading a Fifa committee recommending reforms, has not yet said whether an investigation must be held into past scandals.
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image: © Joe Lodge