FIFA seeks to rebound as ex-honchos are cited in $80M pay flap

For FIFA, it’s a staggering revelation—and perhaps a necessary next step toward restoring its reputation.

A year after longtime FIFA president Joseph “Sepp” Blatter stepped down in the face of alleged corruption (and severe scrutiny), investigators today revealed why—and implicating two other former FIFA officials in the matter.

Attorneys announced that Blatter, former secretary general Jerome Valcke and former deputy secretary general Markus Kattner had awarded themselves pay raises and bonuses totaling $80 million.

“The evidence appears to reveal a coordinated effort by three former top officials of FIFA to enrich themselves through annual salary increases, World Cup bonuses and other incentives totaling more than 79 million Swiss francs — in just the last five years," Bill Burck of Quinn Emanuel, the U.S. law firm retained by FIFA during its corruption crisis, told the Associated Press.

More from the AP:

Some of the contracted payments appear to break Swiss law, and evidence will be given to American and Swiss federal prosecutors who are investigating corruption implicating the world soccer body, lawyers for FIFA said Friday.

On Thursday, Swiss federal prosecution raided Kattner’s former office where they reportedly seized “documents and electronic data, [which] will now be examined to determine their relevance to the ongoing proceedings.”

Though no criminal proceedings have been opened against Kattner, according to FIFA officials, on May 23 the organization “terminated with immediate effect the contract of [Mr.] Kattner for breaches of his fiduciary duties to FIFA.”

Swiss attorney general Michael Lauber began investigating Blatter last September and Valcke this past March. Both were suspected of mismanagement of FIFA money and could face criminal charges.

“Blatter and Valcke deny wrongdoing but were banned for six and 12 years, respectively, by FIFA's ethics committee,” the AP reports.

In response, FIFA’s crisis managers issued a lengthy statement on its website.

Here’s a portion:

The investigation has revealed evidence of breaches of fiduciary duty. It also raises questions about the role of FIFA’s Compensation Sub-Committee.

It is clear that the preliminary findings indicate that the payments and contracts warrant considerable further investigation. FIFA has shared this information with the Office of the Swiss Attorney General and it will brief the U.S. Department of Justice on the matters as well. This is consistent with FIFA’s commitment to cooperate with the authorities and FIFA’s policy of zero tolerance for wrongdoing. FIFA will also refer the matter of these contracts and payments to the FIFA Ethics Committee for its review.

In direct response to the attorney’s findings on Friday, FIFA adds:

While Quinn Emanuel continues to further investigate the matter, it is clear that before 2013—when FIFA created a Compensation Sub-Committee—the people who signed the contracts were in principle also the ones who approved them. They had the authority they needed, and they simply told payroll and HR, the department generally in charge for employment contracts at FIFA and which reported to Mr. Kattner, how much should be paid out and to whom.

In a related drama, the soccer association released an additional statement today denying reports that its current president, Gianni Infantino, is being investigated regarding a possible ethics violation.

From the BBC:

German newspaper Die Welt reported that Infantino had improperly ordered the destruction of [an audio file of] the minutes of a FIFA executive committee meeting. According to Die Welt, FIFA's independent ethics committee is looking into the matter and could impose a 90-day ban on the new president.

In response, FIFA’s Delia Fischer said:

The email exchange that makes mention of the deletion of audio files refers to a copy of the original audio file of the meeting that was improperly stored on a local drive. This mention does not refer to the officially archived audio file. That file exists and is properly saved at FIFA.

As of this afternoon, no 2018 FIFA World Cup sponsors have made statements on either matter. Many pulled out of associating with what the BBC calls “football's Swiss-based powerbrokers,” after last year’s scandal.

How do you think FIFA should begin to pick up the pieces on this one, PR Daily readers? Please tell us in the comments section.

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