Swiss Banks – FIFA – Brazil: Corruption Investigation

A big U.S. corruption investigation into international soccer is focusing on the role multinational sponsors, broadcasters, and banks may have played in facilitating soccer corruption, according to people familiar with the investigation.

In some instances, federal prosecutors are investigating the companies themselves for potential wrongdoing. In others, it remains unclear if the companies are the focus or if prosecutors are just seeking cooperation. While U.S. officials hope to reach settlements with some companies, possibly within the next year, progress has been slower than expected, in part because the investigations involve more than a dozen foreign countries and not very transparent corporate structures.

The focus is on at least 11 multinational companies and banks cost millions of dollars in penalties. The corporate investigations are looking into dealings with individuals and entities accused by U.S. prosecutors of participating in a USD 200 million bribery scheme designed to win media and sponsorship rights to lucrative soccer tournaments like the world cup in Brazil.

The companies conducting investigations include Nike Inc., AT&T ’s DirecTV, 21st Century Fox, KPMG, Citibank, HSBC Holdings PLC, Standard Chartered PLC, Credit Suisse, UBS Group, J.P. Morgan Chase & Co. and Julius Baer Group, according to public filings and people familiar with the matter. The Justice Department’s allegations also target officials at FIFA. Prosecutors claim that FIFA officials took bribes from executives at sports marketing firms for the licensing rights to tournaments like the World Cup qualifiers.

U.S. authorities’ focus now has shifted to the relationships between sports marketing firms and the companies to whom they sold media and sponsorship rights. The Brooklyn U.S. attorney’s office has asked for the immediate help of the Justice Department in Washington, D.C., and more than a dozen prosecutors are now working on the cases.

Prosecutors also are receiving information from Panama authorities who have reviewed the so-called Panama Papers, the stolen documents from Mossack Fonseca that set up companies incorporated in places where corporations don’t have to file information about their true beneficial owners. U.S. officials hope the documents detail money flows. Prosecutors are investigating affiliates of DirecTV and Fox that acquired soccer tournament broadcasting rights, people familiar with the matter said.

Prosecutors also are examining some of the world’s largest financial institutions to determine whether the banks should have raised alarms about money flows linked to alleged corruption at FIFA. More than a half-dozen banks have opened internal investigations and are in the process of turning over thousands of bank records, the people said.

While prosecutors have found millions of dollars in potentially corrupted funds, they have so far struggled to find evidence the banks knowingly violated anti-money-laundering laws. The banks have argued many of the transactions involved respected businessmen, not publicly tied to corruption allegations.

According to bank records turned over to prosecutors, HSBC, Citibank, and Credit Suisse handled millions of dollars in transactions for Torneos between 2011 and 2013. Torneos held accounts at Credit Suisse and received tens of millions in payments there from the Argentine national treasury, according to the transactions. HSBC and Citibank banks served as cross parties to transactions involving Torneos. HSBC said it had received inquiries from the Justice Department and is cooperating with the investigation. The other banks conducting internal investigations declined to comment.

Nike has been probing allegations of corruption around its 10-year, USD 160 million agreement to sponsor Brazil’s national team, discussed in barely veiled terms in the Justice Department’s 161-page indictment.

The indictment describes a multinational U.S. sportswear company that struck a deal to sponsor the Brazilian federation and then cut a side deal with a sports marketing middleman, who allegedly used payments from the company for bribes and kickbacks. People familiar with the matter confirmed the company is Nike and that prosecutors are looking into whether any of the company’s employees broke the law. Nike and its employees haven’t been accused of any wrongdoing. Nike said it has been cooperating with authorities, and there is no allegation any Nike employee was involved in wrongdoing.

Meanwhile, auditing firm KPMG has been investigating its Swiss unit’s audits of FIFA, the firm previously confirmed. KPMG had audited FIFA’s financial reports since 2009 and audited some of its regional member associations.


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By | 2017-08-15T18:54:40+00:00 April 18th, 2016|Corruption, whistleblower and identity thiefs, News|