July 12, 2012 5:55 pm

Blatter knew about World Cup kickbacks

Fifa president Sepp Blatter revealed he knew about kickbacks paid to his predecessor from World Cup marketing deals during the 1990s but insisted he had done nothing improper because they were legal at the time.

The tainted football governing body, which faces critical decisions next week that will determine its willingness to reform, is once again on the defensive following publication of details of a corruption scandal that has dogged it for two decades.


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A Swiss prosecutor’s report that was suppressed for two years finally became public on Wednesday, revealing that ex-Fifa president João Havelange received millions of dollars in kickbacks from ISL, a marketing agency used by Fifa until it went bankrupt in 2001.

The report revealed that Mr Havelange and Ricardo Teixeira, who resigned earlier this year from the Fifa executive committee and his roles in Brazilian football, and companies they owned pocketed more than CHF35m from ISL.

They had “unlawfully used assets entrusted to [them] for [their] own enrichment several times”, said the report, which the two men had tried to block. The payments were made between 1992 and 2000.

The report said Fifa knew about “the bribery payments” and that this claim was not questioned. The prosecutor said Fifa’s former chief financial officer and a person identified as “P1” knew about a CHF1m payment made to Mr Havelange because it was mistakenly transferred to a Fifa account.

Fifa on Thursday published on its website a question-and-answer interview with Mr Blatter, Fifa’s general secretary for 17 years until he took over from Mr Havelange in 1998, in which Mr Blatter acknowledged that P1 was himself.

Asked whether that meant he was “supposed to have known”, Mr Blatter replied: “Known what? That commission was paid? Back then, such payments could even be deducted from tax as a business expense. Today, that would be punishable under law.

“You can’t judge the past on the basis of today’s standards. Otherwise it would end up with moral justice. I can’t have known about an offence that wasn’t even one.”

The Swiss investigations into alleged “embezzlement possibly disloyalty management” against the two men and Fifa were dropped in return for compensation payments.

Mr Blatter said he had initiated reform in Fifa, including a two-chamber adjudicatory and investigatory system, “to prevent something like this happening in the future”.

Fifa’s executive committee will next week decide whether to accept recommendations on the chairs of the two chambers put forward by Mr Blatter’s independent advisers on reform, the Independent Governance Committee.

Mark Pieth, the IGC chairman, said the report gave insight to how the organisation was run. “This just reinforces that they have got to reform if they want to get anywhere,” Mr Pieth told the FT.

Mr Pieth declined to be drawn on Mr Blatter’s role in the ISL scandal, but he added that the Fifa president was essential to the governing body’s reform prospects. “Internally, there are a lot of other people who are blocking [reform] ... This is quite a delicate moment.”

Mr Blatter added that while Mr Havelange remained Fifa’s honorary president, only Fifa’s Congress had the power to call him to account. “The Congress named him as honorary president. Only the Congress can decide his future,” he said.

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