Politics and Corruption in FIFA
Sport reporters Jens Weinreich and Thomas Kistner review the strange ways television rights are sold in FIFA, president Blatter's election in 1998 and the circumstances around the selection of Germany as host for the World Cup 2006.
Dear friends and colleagues,
First of all a brief apology: The most competent speaker on this item, Politics and corruption in FIFA, can not be with us. Mr. Joseph Blatter, the president of FIFA and member of the IOC, has more urgent things to do these days.
In Brazil he has been invited to appear as a witness in a corruption inquiry being carried out by the Congress. The Senators and Congressmen are investigating the longtime-closest friends of Mr. Blatter: The honorary FIFA-president Joao Havelange and his former son-in-law, the FIFA Executive Member Ricardo Teixeira. In Brazil, it seems, nobody really knows what happened to the 400 million US$ from the world-famous Nike-contract.
In addition, Blatter has to raise the enormous sum of about 250 million US$. This is, as far as we can count, the money he promised to all national and continental federations to make him president in June 1998 at the FIFA congress in Paris. We will come back to this election later.
Corruption in Fifa. Today we will not talk about this because the Brazilian parliament is currently investigating. By the way, the Congress has just stripped 19 Brazilian FIFA registered players' agents of their banking secrecy. They want to do the same with Teixeira, who is also president of the national federation, and with his secret economic ally Jos Havilla, who owns the marketing company Traffic. This company is getting most of the valuable marketing and TV contracts in brazilian football.
The similarity of the discussions in Brazil and here in Copenhagen shows once more that there are indeed serious problems with corruption in the world of soccer. We have written a book about this and hundreds of articles. We discovered, that the old boys connection is still working well. It is the same connection Andrew Jennings mentioned last Sunday. Just a few keywords: Blatter, Havelange, ISL, Adidas, Dassler, Guelfi. Keywords which are also very important for and very well kmown within the International Olympic Committee.
Three questions about FIFA's ideas of democracy and transparency
Lets have a look at what came out of the promises which candidat Blatter made to the world of soccer in his presidential campaign two years ago: A lot more democracy and transparency in the so-called FIFA family. That's not our joke. That's what he is still talking about.
We do not want to tell you all the stories, but rather make some remarks regarding three topics:
1. How is FIFA selling its rights for television and sponsoring?2. How does FIFA elect its president?3. How is FIFA selecting the host country for the World Cup?
Two days ago we listened to the speech made by German TV-manager Stefan Kürten: The bidding game. It was funny that Mr. Kürten told us that the federations have to play the role of referees. This is really not their function. On the contrary, their task is getting the most money out of the bidding process, in regard of the sport and the public. And now let's look how FIFA conducted itself in the bid for the actual television rights.
An exchange of letters between FIFA and a bidding company
We are happy to present to you quotations from letters that were exchanged between one bidding company and FIFA's Mr. Blatter.
It began on 18th August 1995 with a strictly confidential letter from Eric Drossart, IMG International Group Vice President, to Joseph S. Blatter, at this time General Secretary of FIFA. Quote: Dear Sepp (...) We are now in the position that IMG wishes to make a joint offer together with Ufa (Bertelsmann/d. A.) for the exclusive acquisition of worldwide broadcast rights for the World Cup 2002, plus the companion sponsorship and licensing rights for the event if available. With this letter IMG/Ufa are offering to pay a fee to FIFA of US$ 1 billion (one billion), on a payment schedule to be agreed.(...) Kindest regards, Eric Drossart.
Do we understand this correctly? Is there a company throwing 1 billion dollars on the table, right out of the blue? Copies of this letter went to then FIFA president Havelange and all Executive Commission Members? Poor Mr. Drossart from IMG, he did not know that he had just committed his first big mistake.
Blatter answered, 11 days later. Quote: Dear Eric (...) thank you for your valuable offer (...) We shall analyse your proposal very carefully and revert to the subject as soon as possible. Nevertheless, we have to express our surprise at the way the letter to the General Secretary of FIFA was termed strictly confidential but copies were sent to all the members of the FIFA Executive Committee (...) We are not convinced that this was the most suitable method of communicating (...)
Blatter was upset. But the question is: Why? FIFA's Executive Committee was the governing body and his boss. According to the statutes he had to serve the Committee.
They went on exchanging lots of letters. Drossart kept on asking for bidding details and timetables. Blatter's answers had no content. And worse: He kept on changing the agenda. Poor Mr. Drossart had to learn in spring 1996 that FIFA was now planing to sell the TV rights in a package for 2002 and 2006.
Then, on April 18th, Blatter wrote to Drossart: It is our pleasure to enclose herewith a copy of the Minimum Conditions for the Broadcast of the 2002 and 2006 FIFA World Cup, which are mandatory. Should your company still be interested in the rights described in the above-mentioned letter, we kindly invite you to submit your proposal on the basis of its contents by noon on the 15th May 1996.
Look at this! FIFA was suddenly offering a billion-dollar-deal until 2006, but the bidding company is getting less than 4 weeks to evaluate and arrange its offer. Is this the correct way to handle such a deal or did FIFA already have an agreement with another company?
Drossart was furious. He answered: I must admit that I am amazed by the content of your letter (...) There are glaring inconsistencies in your letters to us concerning the basis on which the rights are being made available and such obvious preferential treatment being given to other parties (...) that as of today it is difficult to believe that FIFA genuinely wish to consider our offer on a properly competitive basis. Your most recent letter has also failed to clarify a number of critical issues (...) FIFAs position on consolidating the rights on offer has changed 180 degrees since November 1995.
Sepp, it is very difficult to conclude anything other than there being two sets of rules in operation here, one for the old partners CCC (EBU/d. A.) and ISL, and one for the rest, and your responses to our efforts are merely a cosmetic exercise designed to protect FIFA from future accusations of unfair and improper conduct.
Poor Mr. Drossart was now desperate. Now he understood that he had never had a real chance to get the TV rights. Regardless of the money he would offer.
But in the end the biggest surprise was for IMG and all other bidding companies, including the old FIFA-partner EBU. Blatter had only dealt with ISL, and this was why the new and hidden ISL partner Leo Kirch got the contract for 2002 and 2006. As we heard from Mr. Kürten the other day, this was the worst loss in EBU history. And what happened with the marketing rights? The same curious procedure, the same company got them in the end. ISL.
Why did Blatter and Havelange have to sell the FIFA rights again and again to their closest personal friends at ISL? And do not forget: We are talking about contracts worth more than 3.5 billion swiss francs.
An election overshadowed by suspicions of corruption
Now let's change the subject. Another impressive example of the lack of democracy and the omnipresence of corrupt circumstances in FIFA is the so-called election of president Blatter in 1998. David Will, the Scottish vice president and lawyer, summed it all up some days after the decision in Paris. He said the suspicion of corruption will always overshadow this election. But, nevertheless, none of Blatter's opponents in the Johansson camp were clever enough to take legal action.
What happened? Lying was a standard technique for Mr. Blatter, then general secretary of FIFA. Blatter used the powerful FIFA administration to run his presidential campaign. Of course, this was against the rules and statutes of FIFA, and against a decision of the Executive Board. And the old dictator, Havelange, wrote personal letters to African delegates, inviting them on his private account to come to the election meeting, promising development aid etc. The typical way of giftgiving in the world of sports.
It was also very interesting to see which supporting countries Blatter presented when he announced his late candidacy in April 1998. Among these 15 countries were significant federations and football powerhouses such as Algeria, Libya, Lebanon and Guinea.
But only a few weeks later he won by an almost incredible margin: 111 to 80 votes. Surprise, surprise! Not only Lennart Johansson, the swedish UEFA-president, was wondering what happened the night before in the Meridien Montparnasse, the hotel in which most of the African delegates were based. Mogidius Braun, the president of the German federation, called it a dirty game, full of dirty tricks.
What was it that made a lot of African delegates change their minds so quickly in the last few hours? Only a short time before they had stood together hand in hand with Issa Hayatou, the chief of the African confederation CAF and FIFA vice president and promised their support for Johansson. The next day we talked to Hayatou. He confirmed that the talk was all about money, all night in the Meridien Hotel. Hayatou himself got a phone call around midnight as he was preparing to retire for the night. He was urged to come over immediately from his Hotel, the Bristol, to the Meridien. When he arrived there a lot of African delegates asked him how much money they could get from CAF. He also confirmed what other observers said: It was bargaining like in a bazaar.
What does it mean, when hours before the most important election in the world of football and, maybe, in the world of sport, dozens of delegates - all of them members of the so called FIFA-family - are running around talking about money, money, money.
Blatter kept on lying when he declared on several occasions that he had never visited the Meridien Hotel until the day of his election. We have another impression: We watched him two days before the election in the Salon Modigliani making a flaming speech in front of the delegates from North and Central America.
How Germany won the World Cup 2006
But there was one important promise Blatter gave to his overnight supporters that the new president could not keep: He had promised the World Cup 2006 to Africa. The decision of the FIFA Executive Board was to be made in July 2000, and now Blatter had acquired his first big problem in office.
Africa was counting on him. Indeed, there were a lot of good reasons to give the World Cup to Africa. The continent had never had such a big sporting event. No doubt, the world of football could organise a World Cup in South Africa, because there is enough money in the business to use for developing the infrastructure. But one problem is that officals of the world sport governing bodies - FIFA and IOC - are not really interested in this kind of family aid. They prefer to keep the money from their rich sponsors in their rich countries. And federations, of course.
We all know who the winner was. But it is an error to think that the german victory was only the result of the Franz-Beckenbauer-campaign. It was much more a personal defeat for Blatter and a victory for the Germany, Incorporated.
It was a defeat for Blatter because all 8 Europeans on the Executive Board voted en bloc for the first time in many years. After Johansson's loss in Paris in 1998 they could not risk another disaster. They had to stand together. And they did. Despite these 8 votes there was still a deficit of 5 votes. As you know, there are 24 votes in all, but a tie of 12:12 would have left the matter in the hands of the deciding vote of FIFA president Blatter, a supporter of South Africa. So Germany desperately needed 5 more votes.
They only got 4. But because New Zealand's Charles Dempsey abstained from the election rather than vote for South Africa it was enough to succeed. 12:11, one abstention.
Now lets look on these 4 new supporters for Germany. It was an entirely Asian bloc. These officals came from Qatar, Saudi Arabia, Thailand and South Korea.
And now let's take a look at what some of the biggest German companies, some of them bidding sponsors, were doing behind the curtains: DaimlerChrysler, Bayer, BASF and Siemens announced investments and joint ventures in Thailand and South Korea worth around 2 billion US$. All these announcements were made during the last 10 days before the FIFA decision. And 8 days before, the Federal Security Council of Germany decided in a strictly confidential meeting to deliver 1200 anti-tank grenade launchers to Saudi Arabia.
We do not claim that these companies and the government conspired to buy the World Cup 2006. But we do think this was amazingly good timing by german industry. These were precisely those countries that voted for Germany on the 6th of July. South Africas economy could not afford any billion dollar weapons. We think this was the key issue of the election.
But we also think that South Africa did not go far enough after their defeat to clear up all the things that happened. Lets come back to Charles Dempsey's curious behavior: Why did they not take legal measures against an election which had ultimately been determined by the inexplicable abstention of one delegate? Dempsey has said he decided not to vote because he had been put under intolerable pressure by supporters of the competing bids, including attempts to bribe him.
But this can not be accepted as an accurate account of these events. Dempsey was not a private person in Zurich. He had to deliver the vote of his Oceanic confederation to South Africa. And this would have changed the result.
The problems are always the same, and not only in FIFA:
There is still a huge deficit of democracy and transparency.There are no independent controlling bodies.The members of the so-called families never call for civil judges, because they fear investigations and inquiries.The officals continue to look out for themselves: Since Blatter became president, every member of the Executive Board now gets 50.000 US$ dollars per year.The TV and marketing companies, winners and loosers of every so-called bidding game, are looking forward to the next auction.The bidding countries and their political leaders are also looking forward to the next bidding process. Those who want to keep their options open are afraid of going too far in critisising powerful sports bureaucrats. They give them what they are asking for: Tax exemptions, for example.So we would like to close with the same words Dr. Bengt Saltin used yesterday when he talked about the future of sports and the threat of gene doping:
As long as these people are in power and allowed to operate on their own authority there will always be corruption in the world of football.