By Christopher M. Matthews, Aruna Viswanatha and Joe Flint
A sprawling U.S. corruption investigation into international
soccer increasingly is focusing on the role multinational sponsors,
broadcasters and banks may have played in facilitating alleged
soccer corruption, according to people familiar with the
investigation.
In some instances, federal prosecutors are investigating the
companies themselves for potential wrongdoing, the people said. 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 more
muted than expected, in part because the investigations involve
more than a dozen foreign countries and opaque corporate
structures, say the people.
The scrutiny has prompted at least 11 multinational companies
and banks to commission internal probes, which can cost millions of
dollars to perform. The corporate investigations are looking into
dealings with individuals and entities accused by U.S. prosecutors
of participating in a $200 million bribery scheme designed to win
media and sponsorship rights to lucrative soccer tournaments,
prosecutors allege.
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 to date have centered on
officials at FIFA, soccer's governing body, and its regional
affiliates. Prosecutors claim that FIFA officials took bribes from
executives at sports-marketing firms for the licensing rights to
tournaments like the World Cup qualifiers.
Seventeen of the of 42 people publicly charged have pleaded
guilty.
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, said people familiar with the matter.
The Brooklyn U.S. attorney's office has enlisted the 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 Panamanian
authorities who have reviewed the so-called Panama Papers, leaked
documents from a Panamanian law firm that set up companies
incorporated in places where corporations don't have to file
information about their true owners. U.S. officials hope the
documents detail money flows and entities involved in the alleged
scheme, two of the people said.
Prosecutors are investigating affiliates of DirecTV and Fox that
acquired soccer tournament broadcasting rights, people familiar
with the matter said.
DirecTV has a minority ownership stake in the Argentina-based
marketing firm Torneos y Competencias, whose chairman pleaded
guilty last year to paying bribes to win media rights. Prosecutors
in December alleged that executives "affiliated" with
Cayman-registered T&T Sports Marketing Ltd. bribed more than a
dozen soccer officials to win tournament rights. T&T was listed
as a Fox subsidiary as recently as last year, according to
regulatory documents. Neither Torneos nor T&T could be reached
for comment.
Spokesmen for both DirecTV and Fox previously said they exerted
no control over the subsidiaries. DirecTV said it is cooperating
with authorities, who told it that neither DirecTV nor its
employees are targets of the investigation. Fox said it has
reviewed the matter on a continuing basis and has been vigilant
that its soccer rights were obtained properly. (Fox and The Wall
Street Journal owner News Corp were part of the same company until
mid-2013.)
In order to make an case against a broadcaster or sponsor,
prosecutors would need to prove the companies knew they were
overpaying for contracts because of built-in bribes. That is
difficult to prove, some of the people said, because there are few
comparisons to value contracts for major soccer tournaments.
A spokeswoman for the Brooklyn U.S. attorney's office, which is
leading the investigation, declined to comment.
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
tainted funds, they have so far struggled to find evidence the
banks knowingly violated anti-money-laundering laws, according to
several people familiar with the matter. The banks have argued many
of the transactions involved respected businessmen, not publicly
tied to corruption allegations.
The Argentine Football Association, whose TV rights have been
controlled by that country's government since 2009, conducted
business connected to the alleged scheme using the New York
branches of "major and regional U.S. and foreign financial
institutions," according to the indictment.
According to bank records turned over to prosecutors and
reviewed by The Wall Street Journal, 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 in the investigation. The other banks conducting
internal investigations declined to comment.
Nike has been probing allegations of corruption around its
10-year, $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.
--Sara Germano and Matthew Futterman contributed to this
article.
(END) Dow Jones Newswires
April 17, 2016 20:07 ET (00:07 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Julius Baer (PK) (USOTC:JBAXY)
Historical Stock Chart
From Dec 2024 to Jan 2025
Julius Baer (PK) (USOTC:JBAXY)
Historical Stock Chart
From Jan 2024 to Jan 2025
