The three former leaders of the International Football Federation (FIFA) – President Joseph Blatter, Secretary General Jerome Walcke and his deputy, and the organization’s CFO Markus Kuttner – in 2011-2015. orchestrated the payment of unreasonable fees to themselves, the law firm Quinn Emanuel said Friday. FIFA hired her to conduct an internal investigation after a high-profile corruption scandal erupted in the organization in 2015.
“The evidence collected demonstrates the coordinated efforts of three former FIFA executives to enrich themselves totaling over 79 million francs (in the last five years alone through annual salary increases, World Cup bonuses and other rewards),” including undeserved severance pay. Quinn Emanuel Partner Bill Burke said in a statement posted on the FIFA website. At the current exchange rate, this is $ 80.8 million.
An internal investigation has revealed evidence of violations by FIFA executives of their duties as proxies, the statement said. Quinn Emanuel also discovered other violations of Swiss law. FIFA has already reported the findings to the Swiss Attorney General and will inform the US Department of Justice, according to a statement on the organization’s website. The Swiss prosecutor’s office said on Friday that it had searched FIFA the day before.
The data on payments were found in contracts, which until now almost no one from the FIFA management was aware of – with the exception of those people who wrote out bonuses to themselves, writes The Wall Street Journal, citing people familiar with the course of the investigation. According to one of them, the payments were hidden in the financial statements of FIFA in the total number of payments; details of who and how much was intended were not disclosed. Some of the payment contracts to Blatter and Walcke were found in a safe in Kuttner’s office at FIFA headquarters in Zurich, according to another person also quoted by the WSJ. As CFO of the organization, Kuttner was responsible for signing agreements for the largest payments in FIFA, including, according to the contracts, bonuses of tens of millions to Blatter.
FIFA fired Kuttner on May 23 on suspicion of secret payments to himself of millions of francs. After that, he did not respond to requests for comment, writes WSJ, Blatter and Walcke also did not comment on Quinn Emanuel’s statement.
The law firm attached a table with details of contracts and payments to its application (there are documents issued earlier in 2011). Quinn Emanuel experts noted that numerous amendments to the contracts of the three officials were often approved one after another. “In addition, Blatter, Walcke and Kuttner often signed these contracts on the same day. More importantly, these were landmark days, ”the statement reads. Quinn Emanuel gives, in particular, such an example. On April 30, 2011, shortly before the May FIFA presidential election, when Blatter’s re-election was in question, Valke and Kuttner were signed to extend their contracts for 8.5 years until 2019 with increased salaries and bonuses. The contracts provided for generous terms of severance pay, which guaranteed them full payment for all these years – 17.5 million francs and 9.8 million francs, respectively, even if the contract for their employment in FIFA is terminated (which most likely happened would if Blatter had not been elected president). In addition, both contracts included two more conditions: full payments were guaranteed even if they were legally dismissed, and FIFA had to pay all their legal fees and fines if they were found guilty. These last two points are contrary to Swiss law, says Quinn Emanuel.
The firm cites other examples of enrichment as well. On December 1, 2010, Blatter, Walcke and Kuttner received special bonuses for hosting the FIFA World Cup in South Africa in the amount of 23 million francs. Bonuses were issued retroactively, four months after the end of the tournament, and in the absence of any clauses in the contracts stipulating their payment.
There were other bonuses, written out, as Quinn Emanuel puts it, “under the pretext” of hosting the World Cup. In October 2011, Valke and Kuttner received 14 million for two for the 2014 championship in Brazil. And in June 2014, they received the right to pay 15.5 million francs for two future championships, of which 65% – for the 2018 championship in Russia (the payment was to be made in December 2018).
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