Only minor convictions in corruption case against ISL executives

09.07.2008

By Kirsten Sparre
In March this year, a Swiss court produced evidence that in the period from 1989 to 2001, the now defunct International Sport and Leisure company (ISL) paid officials from a number of sports federations 87.5 million euros to obtain profitable broadcasting rights. Yet, when the court’s verdict was published last week, six former ISL executives indicted in the case were cleared of most of the charges against them.

What has been called one of the biggest corruption scandals in sport ended with only three minor convictions. Jean-Marie Weber, described in court documents as the strongman behind the ISL group, was convicted of embezzlement of 90,000 Swiss francs that he transferred into his personal account. And two other ISL executives, Hans-Juerg Schmid and Hans-Peter Weber, were found guilty of deviously obtaining false documents to set up sham companies with the aim of diverting funds from the mother company.

The crux of the other charges was whether the payments were considered bribes or not. On his website, investigative reporter Andrew Jennings provides a blow-by-blow account of the court case (see: http://www.transparencyinsport.org/swiss_trial.html), and there are no doubts that payments were made but they were justified as necessary commissions.

“It was the style of the business. If we didn’t pay, we would have had to close our company,’ one of the ISL executives, Christoph Malms, told the court.

The money was shipped out to secret accounts in Lichtenstein and the Caribbean and from here they were removed in suitcases full of cash and delivered to sport officials.

Paying officials to secure television and marketing rights would be considered bribery by most people - particularly when such payments are not visible in accounts anywhere - but in the 1990s bribery of this kind was not illegal in Switzerland, although it is now.

According to the Associated Press, the judges in the court case concluded that there was no evidence that the payments had been bribes, but they were clearly linked to the sale of marketing and television rights for major sport events. The defendants were acquitted of most charges and awarded compensation by the court.

FIFA must pay for complaint
The big question obviously is who were on the receiving end of the payments. Several recipients are believed to be FIFA officials, and the court documents specifically mentioned Nicolas Leoz, the president of regional football federation in South America. However, he was not been accused of acting illegally in this court case.

Play the Game has previously reported extensively on the connections between ISL and FIFA (see the theme page Who took the soccer bribes?) and it was because of FIFA that this trial came into court at all. When ISL went bankrupt in 2001, FIFA made a criminal complaint to authorities in Switzerland alleging fraud and embezzlement by senior executives at the ISL group who had failed to pay FIFA its share of money from the selling of football television rights to the Brazilian company TV Globo.

Three years later, FIFA tried to withdraw the complaint but the investigation had been set in motion. The Swiss court therefore decided that FIFA should pay 72,000 euros in costs for lodging the criminal complaint that sparked the frauid inquiry because the judges believed that FIFA had failed to carry out checks on its “special account” with ISL.

According to a statement on FIFA’s website, the world football’s governing body has taken note of the decision from the Swiss court but says it will not make any comments or statements on the case.

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