Blatter $M bonuses, police raid revealed in FIFA turmoil

AP News
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Posted: Jun 03, 2016 5:46 PM
Blatter $M bonuses, police raid revealed in FIFA turmoil

GENEVA (AP) — Sepp Blatter's $12 million bonus from the 2014 World Cup and yet another police raid for evidence of financial crimes at FIFA revealed the turmoil at soccer's world body was far from over.

The scale of Blatter's pay deal at the end of his 17-year presidency was finally confirmed by FIFA itself in a stunning opening of its financial books on Friday.

The now-banned Blatter and two recently fired top officials — secretary general Jerome Valcke and finance director Markus Kattner — awarded themselves raises, bonuses, and future golden handshakes totaling tens of millions of dollars.

Some of the contracted payments appear to break Swiss law, lawyers for FIFA said.

American federal prosecutors, whose ongoing investigation of FIFA corruption could threaten to shut down the body overseeing the world's favorite sport, will get to see documents and electronic data seized on Thursday for a separate probe by Switzerland's attorney general.

"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 totaling more than 79 million Swiss francs — in just the last five years," said Bill Burck of Quinn Emanuel, the U.S. law firm retained by FIFA during its corruption crisis.

That crisis was declared over three weeks ago by Blatter's elected successor, Gianni Infantino, in a misjudged keynote line from a presidential speech to FIFA's 211 national member federations.

Still, a slew of fresh headlines about potential criminal acts and freewheeling salary spending by a previous regime are not all bad news for the FIFA leader elected just four months ago.

Those whose reputations took a hit on Friday include Kattner, a Blatter loyalist who was fired suddenly on May 23, and Domenico Scala, who chaired FIFA's audit and compensation panels, and resigned on May 14 in protest at Infantino's leadership.

One reason their working relationship collapsed was Infantino's refusal to accept an "insulting" Scala-approved presidential pay offer of 2 million Swiss francs ($2 million) per year.

That offer was put in perspective on Friday by FIFA revealing what Blatter got.

Blatter's basic salary of $3 million in 2015 was topped up by an $11 million contract bonus for the 2010 World Cup, $12 million for the 2014 edition, a $12 million performance bonus had he completed a successful 2015-19 presidential term, and annual bonuses up to $1.5 million.

Lawyers for Blatter said his pay arrangements were above board.

"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," said U.S. lawyer Richard Cullen in a statement made on behalf of the 80-year-old former president.

If Blatter's earnings were legal, his actions in approving multi-year contract extensions for Valcke and Kattner with generous termination and indemnification clauses were potentially criminal, FIFA said.

"These two provisions appear to violate mandatory Swiss law," FIFA said on Friday.

It is unclear if events made Blatter's possible arrest more likely.

Blatter has been the subject of Swiss criminal proceedings since last September, opened by attorney general Michael Lauber for suspected mismanagement and misappropriation of FIFA funds.

Though a stated target of the sprawling American investigation, Blatter's home country Switzerland will not extradite him to U.S. soil. He has left Switzerland to visit only Russia since the American and Swiss investigations were unleashed on FIFA in May last year.

Valcke, a French national with South African citizenship, had Swiss criminal proceedings opened against him in March but has not been arrested.

Valcke got a $2 million basic salary before being fired, though was awarded a $10 million World Cup bonus for 2014 and was due $11 million from the 2018 tournament in Russia.

Blatter and Valcke have consistently denied wrongdoing but were banned for six and 12 years, respectively, by FIFA's ethics committee this year.

When FIFA fired Kattner, who joined FIFA as finance director in 2003, it was unclear if the contracts were illegal.

"So far, FIFA has not filed criminal charges regarding contracts FIFA mentioned in today's media release," Lauber's office said in a statement, adding it "would obviously examine respective filed criminal charges in very great depth."

At the peak of FIFA's problems last year, Kattner got further cash guarantees from FIFA's $5 billion income tied to the 2014 World Cup.

Four days after the U.S. and Swiss investigations were revealed by police raids on Zurich's Baur au Lac hotel and FIFA, Kattner's contract was extended by four years through 2023.

Valcke and Kattner signed eight-year contract extensions with guarantees of termination pay and indemnification for legal fees and restitution claims on April 30, 2011. That was during a bitterly fought presidential election campaign against Mohamed bin Hammam of Qatar which Blatter won.

Kattner's payments were all contracted and approved by the compensation committee FIFA created in 2013 and known to FIFA's auditors, KMPG, a spokesperson for the German official said in a statement.

"Additionally, FIFA will refer the matter of these contracts and payments to the ethics committee for its review," FIFA said in a statement.

Any ethics investigation could affect Scala and FIFA finance committee chairman Issa Hayatou, who was interim FIFA president when Blatter was suspended last October.

A spokesman for Scala declined comment. Valcke did not respond to requests for comment.

Elected in February, Infantino's promise to change FIFA was expected to face resistance from insiders.

Since Kattner's firing, German language newspapers have been fed leaked minutes from meetings and FIFA emails with information seeking to damage Infantino's standing.

The FIFA president escaped the drama in Switzerland on Friday, flying to California to attend the opening match of the Copa America in Santa Clara.