By Paul Nicholson
April 13 – Former FIFA financial director and acting general secretary Markus Kattner (pictured) has lost his appeal against unfair dismissal in the Swiss labour courts.
Kattner was fired without compensation on 23 May 2016 and fined CHF 1 million following an internal investigation that discovered that there was a secret deal between Kattner, former FIFA president Sepp Blatter and former general secretary Jerome Valcke to award themselves bonuses and contract increases.
At the time Bill Burck, a partner with Quinn Emanuel, the US-based law firm that was working within FIFA, said: “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 totalling more than CHF 79 million – in just the last five years.”
A series of contract amendments made in favour of Kattner, Valcke and Blatter saw “tens of millions of dollars” awarded in bonuses between 2011 and 2015. The structure of FIFA at that time was that the approval of these bonuses was actually within the remit of the three individuals themselves who only had to inform the accounts department of the payments due.
Kattner’s claim against FIFA was for CHF 10 million as “compensation” for alleged wrongful termination. “This claim was based on an employment contract signed with him by the previous FIFA administration on 31 May 2015 (four days after the arrests of numerous football officials at the Baur au Lac Hotel in Zurich),” said FIFA in a statement.
Two days after Blatter was re-elected President of FIFA on May 28 2015 (which he subsequently resigned), FIFA’s Compensation Sub-Committee granted Kattner an additional four-year extension on his contract pushing his end date from 2019 to the end of 2023, including a clause that guaranteed more than eight years of future salary and bonus payments (up to CHF 9 million).
While Kattner’s previous contract had been ‘self-approved’, his new one was signed off by the compensation committee that was led by then FIFA integrity guru Domenico Scala.
The termination clause in Kattner’s contract stated he receive payment of the full value of his contracts even if it was terminated for just cause. There was also an indemnification clause that would force FIFA to pay all their legal fees and any associated fines and restitutions, even if they were found guilty. It is understood these clauses are contradictory to Swiss law.
Kattner can appeal the decision of the Swiss court. He could also take his case to the Court of Arbitration for Sport (CAS). However, if he lost the case at CAS, it would mean that FIFA has the right to collect the CHF1 million fine it imposed on him by FIFA Ethics in the Swiss civil courts.
Implications for Blatter and Valcke?
Last month the issue of the bonuses was raised again with FIFA issuing new bans for another six years and eight months each on Blatter and Valcke, as well CHF 1 million fines.
“The investigations into Messrs Blatter and Valcke covered various charges, in particular concerning bonus payments in relation to FIFA competitions that were paid to top FIFA management officials, various amendments and extensions of employment contracts, as well as reimbursement by FIFA of private legal costs in the case of Mr Valcke,” said FIFA’s statement.
While the bonuses and contracts under which they were awarded are obviously linked with that of Kattner’s, there are no ramifications for their case in the Kattner decision.
It is still unclear whether the latest bans and fines on Blatter and Valcke are in fact outside FIFA’s own time bar limitations of five years for the kind of offence that FIFA Ethics have banned them for.
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