ABSOLUTE SHOWER…CORRUPTS ABSOLUTELY

Bad decisions feed this web-site. But, presumably, these aren’t deliberately bad. That cannot be said for FIFA President Sepp Blatter’s recent firings and hirings of FIFA’s General Secretary – world football’s second most powerful post. Not that football’s mainstream press are saying. There’s a World Cup being awarded and FIFA/Blatter criticism might harm England’s chances of being host. Well, I’m an Ireland fan, so bugger that.

Lawyers might prevent describing ex-General Secretary Urs Linsi’s severance package as gross financial negligence. Or replacing Linsi with ex-Marketing Director Jerome Valcke as corruption. So I won’t. And corruption in big-budget organisations is hardly new(s). Nonetheless, FIFA’s recent conduct has been startling.

Blatter has ‘previous’ with General Secretaries. In 2002, Michael Zen-Ruffinen threatened exposés of “dysfunctions” at “the heart” of FIFA’s financial processes. On re-election that year, Blatter declared: “Tomorrow we take care of Mr. Clean.” New General Secretary was banking executive Urs Linsi, a Blatterite FIFA finance director. In classic Blatter-style, Linsi retained both posts and became chair of FIFA’s ‘independent’ audit committee.

Vice-President Trinidadian Jack Warner was an ultra-Blatterite. And Linsi over-reached when criticising Warner’s financial – and World Cup ticketing – ‘dysfunctions.’ Linsi created an outrageous but, then, legal accountancy twist which gave FIFA finances a ‘new, improved’ look at a convenient time for Blatter’s 2002 re-election. Warner was a repugnant player of the race card. But Warner controlled FIFA votes. And votes mattered most to Blatter.

Other Blatterites were unaware of Linsi’s new-found dispensability. When FIFA announced that Linsi had “successfully completed his five-year mandate as General Secretary” (trans: been sacked) in May, he’d just successfully completed negotiations for an eight (eight!) year contract extension with Blatterite finance committee chair Julio Grondona. Whether this was political, or arse/elbow, confusion remains unclear. But Linsi’s severance cost £4m, when FIFA were paying credit-card company MasterCard £45m.

World Cup sponsors since 1990, MasterCard had ‘incumbency rights’ in their contract – FIFA couldn’t negotiate elsewhere unless MasterCard said so. But FIFA budgets were stretched by Blatter’s financial generosity near elections (though only cynics would make a connection). So, FIFA offered two World Cup sponsorships, not one. And to MasterCard rivals VISA first. And despite MasterCard meeting FIFA’s asking price with, according to chief negotiator…Valcke, the highest bid (which all relevant FIFA committees accepted)…VISA won.

MasterCard successfully sued for breach of contract. FIFA appealed, got the verdict ‘vacated’ – so the judge could ‘revisit’ her rulings – and eventually settled out-of-court with MasterCard, handing VISA the deal. But that isn’t this story.

FIFA had compelling arguments against MasterCard. They claimed the contract was entirely new, not a renewal of the old one (for example, it included new banking rights which, FIFA overlooked, neither bidder could supply). But even accepting this, the judge’s rulings on Valcke’s (mis)conduct remained valid.

Judge Loretta Preska, last December said FIFA’s negotiators “lied” to VISA and MasterCard. Valcke now claims using the phrase “commercial lies” was the extent of his culpability. It was merely semantics. But when MasterCard obtained ‘discovery’ – sight of all relevant documentation – Valcke emerged as chief liar in e-mails and conversations which couldn’t be ‘vacated.’

Initially “convinced…it acted in good faith”, FIFA admitted “negotiations had breached business principles.” They “couldn’t accept such conduct.” And Blatter had grandiosely testified that “evidence on non-accomplishment in morality or ethics” would attract “sanctions including suspension, expulsion.” One week after the court ruling, FIFA “parted company” with Valcke, reported, reasonably, by story-hungry journalists as sackings.

Valcke’s non-accomplishment stretched beyond “morality or ethics” however. FIFA wanted $225m from the deal. After VISA’s lower bid and MasterCard’s settlement, they made…$80m. Valcke, by any criteria, merited ‘expulsion.’

The clue as to why it was promotion instead lies in Valcke’s ultimate excuse for rejecting MasterCard – the ‘trademark issue.’ FIFA and MasterCard’s logos were over-lapping balls. And this was a long-term dispute which both sides agreed to ‘park’ during current negotiations. Valcke’s staff suggested making the dispute decisive. But when someone suggested charging MasterCard $20m to overcome this, Valcke said don’t ask, they might say…’yes.’ (By way of self-justification, Valcke now refutes allegations that “during negotiations…anyone was ready to pay me something.” But the judge’s rulings made no reference to bribery).

It wasn’t the money. Valcke delivered Blatter’s wishes, not FIFA’s requirements. As Valcke himself put it: “Whatever Blatter asked me, I did.” I’ll say. And Blatter claimed the appeal court’s vacation was Valcke’s “complete vindication.” This was absolute…er…trademarks. The court had asked Preska to revisit her contract status rulings…and she was free to draw the same conclusions. And whatever she drew, Valcke remained a documented serial liar.

Nevertheless, Blatter re-interpreted FIFA’s “parting company” with Valcke as ‘suspension’ (on what pay, I wonder?), astoundingly gave Valcke his job back and trumped that by making him General Secretary. Beyond court testimony that “somebody has it in for MasterCard”, no-one knows why VISA’s victory saw Valcke so well-rewarded. Blatter and VISA CEO Christopher Rodrigues are friends. But only cynics would read anything into that. There must be more, surely?

Our press weren’t asking when Blatter recently rode into town. There’s a World Cup to award, remember (little wonder Blatter wants them every two years). And our FIFA representatives are too self-serving. Witness their craven kow-towing when elected representative John McBeth made pertinently controversial comments about financial probity models like Warner – who immediately labelled McBeth a racist to “send back to Scotland where he belongs.” Nice. Supreme FA non-event Geoff Thompson admitted McBeth’s home truths would “jeopardise…the (Home) Associations’ FIFA executive seat.” So, farewell McBeth (and guess which non-event replaced him?).

Gordon Brown reportedly sees the World Cup as part of his ‘legacy’ (beats an illegal Iraq war, I guess). A better legacy would surely be to tell Blatter to stick his tournament where the sun doesn’t shine (not Elland Road) until FIFA corruption is history. Fat chance.

Megalomaniacs always take a “step too far.” I wrongly assumed Valcke’s re-appointment would be Blatter’s. But hope remains. Some sports business executives soon go on trial for embezzling FIFA funds. Blatter’s involvement is potentially…’interesting.’ They may get him yet…

‘MotorMurph’ is written by Mark Murphy

Entry Filed under: MotorMurph Column

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