April 19 – The US investigation into football corruption that rocked FIFA to its core has now apparently shifted focus away from football officials and deeper into the banks, broadcast and sponsorship markets that made the bribery and money laundering possible.
According to a report in the Wall St Journal, top of the list for investigators is Nike and its $160 million 10-year deal to sponsor the Brazil national team. But at least 10 other major corporations and banks have begun their own investigations including DirecTV, Fox, KPMG, Citibank, HSBC, Standard Chartered, Credit Suisse, UBS, J.P. Morgan Chase and Julius Baer.
The focus on banks and broadcasters has apparently been slow-going, according to the Wall St Journal, due to different national jurisdictions and complex corporate structures.
The Panama Papers outlining offshore tax avoidance schemes has helped trigger renewed interest from US investigators who are looking to track the money flows and who the money ultimately ended up with.
Rather than the investigation winding down with court dates initially set for February next year (subsequently shifted back) it appears that in this area the probe has been significantly increased with the focus on who media and sponsorship rights were sold to. The Brooklyn U.S. attorney’s office has drafted in more than a dozen prosecutors from the Justice Department in Washington, D.C., to help with the case load.
Investigation focus has fallen on US broadcaster DirecTV which has a minority ownership stake in the Argentina-based marketing firm Torneos y Competencias, whose CEO Alejandro Burzaco (pictured) having initially evaded arrest has now pleaded guilty last year to paying bribes to win media rights. Similarly executives “affiliated” with Cayman-registered T&T Sports Marketing (a Fox subsidiary), have admitted to bribing more than a dozen officials to win rights.
Both DirecTV and Fox say that they are co-operating with authorities and that they had no control over these subsidiaries. The investigation is particularly uncomfortable for Fox which recently secured US TV rights to future FIFA World Cups in a deal other US broadcasters complained they weren’t allowed to compete for.
The Wall St Journal points out that in to make a case against a broadcaster or sponsor, prosecutors would need to prove the companies knew they were overpaying for contracts because of built-in bribes. Proving that can be difficult because there are very few comparisons of value for different competitions. However, unfair or non-existent rights tender procedures might be easier to prove.
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