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Blatter among ex-officials to enrich themselves: FIFA

[June 04, 2016] By Brian Homewood

ZURICH (Reuters) - Former FIFA president Sepp Blatter and two other leading officials were involved in a "coordinated attempt" to enrich themselves through annual salary increases and World Cup bonuses, world soccer's governing body said on Friday.

FIFA said an internal investigation revealed that the three officials had received 79 million Swiss francs ($80 million) in compensation over five years, calling them "massive payouts".

FIFA is attempting to recover from the worst graft scandal in its history in which 42 people, including former FIFA executive committee members, and entities have been indicted in the United States. Gianni Infantino was elected as president in February and promised to lead the FIFA into calmer waters.

The ruling body said it had shared the information about salaries with the Swiss Attorney General's office and the U.S. Department of Justice and would continue to investigate.

Blatter, 80, did not wish to comment on the allegations, his spokesman said.

His U.S. lawyer, Richard Cullen, said in a statement: "We look forward to showing FIFA that Mr. Blatter's compensation payments were proper, fair and in line with the heads of major professional sports leagues around the world."

A person close to Kattner said that "none of the information that was published is unknown to the compensation committee".

Payments were in line with FIFA's compensation policy and that they had been seen by KPMG which audit FIFA's finances, he said.

Valcke could not immediately be reached for comment.

FIFA said the investigation, conducted by its lawyers Quinn Emanuel, had revealed "evidence of breaches of fiduciary duty".

The findings were preliminary and warranted further investigation, it 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," said Bill Burck, a partner with Quinn Emanuel.

The sums received by the trio included 23 million Swiss francs in "special bonuses" for the 2010 World Cup in South Africa, while Blatter and Valcke got a total of 14 million francs in bonuses for the 2014 World Cup Brazil and 15.5 million francs for the 2018 World Cup in Russia, the firm said.

FIFA said that before 2013 the people who signed the contracts were "in principle" also the ones who approved them.

"They had the authority they needed, and they simply told payroll and HR (human resources), the department generally in charge for employment contracts at FIFA and which reported to Mr Kattner, how much should be paid out and to whom," said the report.

There were also questions over the compensation sub-committee which oversaw officials' compensation from 2013 onwards, the report said.

"At this stage, FIFA has not filed any formal complaint with the Office of the Attorney-General," spokesman Andre Marty told Radio Television Suisse (RTS) on Friday evening.

"If it does, we will evaluate their behavior (of the three men) to see if it was criminal or not."

SENIOR STAFF

The report added that Valcke and Kattner, as senior staff members, also secured clauses in their contracts which guaranteed severance payments and indemnities even if they were terminated for just cause.

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FIFA was thrown into crisis by U.S. investigations into alleged widespread financial wrongdoing stretching back more than two decades. Sepp Blatter, who had led soccer's world governing body since 1998, was banned from soccer activities for ethics violations in December. REUTERS/Arnd Wiegmann

Blatter was banned for eight years, later reduced to six, by FIFA's ethics committee in December and Valcke has been banned for 12 years. Kattner was fired by FIFA on May 23.

The report was released around one hour after the Office of the Attorney General of Switzerland (OAG) announced that it had searched FIFA's headquarters on Thursday "with the aim of confirming existing findings and obtaining further information."

The OAG, which seized documents and electronic data, said the investigation concerned people named in previous statements and unknown suspects in the corruption probe that has engulfed FIFA over the past year.

"The OAG received contracts of Mr. Blatter, Valcke and Kattner," a spokeswoman said on Friday by email.

Infantino was not under investigation, the OAG said.

A source close to FIFA told Reuters that the OAG visit related to the sacking of Kattner and that FIFA officials had been cooperative in helping them to collect relevant documents.

German newspaper Die Welt had reported on Thursday that Infantino was facing investigation over possible ethics breaches.

Die Welt said it had seen emails suggesting that Infantino had ordered senior FIFA officials to delete recordings of a controversial meeting of the FIFA Council, formerly the executive committee, before last month's Congress in Mexico City.

FIFA's ethics committee said no formal proceedings had been started against Infantino.

FIFA was swept into new controversy when its Congress in Mexico passed a resolution giving the FIFA Council the power to appoint or dismiss members of its independent watchdog.

This effectively gave the Council, headed by Infantino, the right to fire ethics judge Hans-Joachim Eckert, ethics investigator Cornel Borbely and the head of the audit and compliance committee, Domenico Scala.

Scala, who had overseen the FIFA reforms, resigned in protest the following day.

(Additional reporting by Oliver Hirt in Zurich, Nate Raymond and David Ingram in New York, Stephanie Nebehay in Geneva and Mark Hosenball in Washington; Editing by Ed Osmond)

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