A Swiss court ruled on Wednesday that FIFA failed to properly oversee marketing payments worth hundreds of millions of dollars in a case that revealed how sports officials for years received large sums for arranging lucrative sponsorship and broadcast deals.
The three-judge panel in one of Switzerland’s biggest fraud trials said FIFA was aware of the financial difficulties of its now defunct marketing partner ISL/ISMM months before it went bankrupt, but did not carry out checks of the “special account” it had access to.
World soccer’s governing body was ordered to pay about 118,000 Swiss francs (US$116,000) in costs for lodging the criminal complaint that sparked the fraud inquiry.
FIFA’s claim that it was caught unawares by the sudden lack of funds on the account ISL/ISMM used to receive payments from the sale of rights was not credible because it had insight into the account at all times, the judges said.
FIFA said in an e-mailed statement that it “has taken note of the verdict” but declined to comment further because it had not yet received the court’s reasons for the decision.
The finding was one of a series handed down in a complex decision involving six former executives of ISL/ISMM, FIFA’s marketing partner for almost two decades.
The six men were cleared of most of the fraud charges resulting from the company’s collapse seven years ago.
But the court in the canton of Zug found a key figure, Jean-Marie Weber, guilty of embezzlement. Weber, a longtime friend of FIFA president Sepp Blatter, is described in court documents as the strongman behind the ISMM group of companies.
The court said Weber in 2000 transferred SF90,000 (then US$52,000) to his personal account for his own purposes and that it considered his refusal to explain the payment as damaging to his case.
Weber’s lawyer, Marc Engler, said his client would likely appeal the conviction for embezzlement on procedural grounds.
“Our client doesn’t have to prove his innocence by declaring the reason for the payment. He has to be assumed innocent,” Engler said.
The judges also found two other defendants — Hans-Juerg Schmid and Hans-Peter Weber, unrelated to Jean-Marie Weber — guilty of deviously obtaining false documents in multiple cases.
The two men set up sham companies with the sole aim of diverting funds from the ailing ISMM mother company, which collapsed in May 2001 leaving debts estimated at US$300 million.
The ISL/ISMM bankruptcy tore a hole in FIFA’s finances and forced the Zurich-based sports body to scramble to find new buyers for television and marketing rights to the 2002 and 2006 World Cups.
The financial crisis at FIFA had led some of its senior officials to complain that leading figures including Blatter had failed to properly oversee marketing deals.
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