All Organized Sports Broadcast On TV Are Criminally Corrupt Operations Full of Sex, Drugs And Bribes
All Organized Sports Broadcast On TV Are Criminally Corrupt Operations Full of Sex, Drugs And Bribes
An excerpt from Ken Bensinger's new book Red Card: How the U.S. Blew the Whistle on the World's Biggest Sports Scandal.
In 2010, American law enforcement officials opened an investigation into corruption in international soccer, and in particular within FIFA, the Swiss nonprofit that oversees the sport around the globe. Working in secret, they flipped American soccer official Chuck Blazer at the end of 2011 after discovering he had failed to pay taxes for years. In this lightly adapted excerpt from Red Card: How the U.S. Blew the Whistle on the World's Biggest Sports Scandal, the small team of federal prosecutors and agents from the IRS and FBI begin their work with Blazer, their crucial first cooperator. The boisterous New Yorker, famous for his huge size and bushy white beard, would go on to wear a wire and help build the case, which remained clandestine until it exploded into public view in May 2015, with the sensational arrest of a group of soccer officials in Zurich.
Investigators from the FBI have interviewed members of Englands failed 2018 World Cup bid as part of an investigation by the American law-enforcement agency into alleged corruption, Telegraph Sport can reveal.
The Dec. 7, 2011, article from British newspaper the Telegraph was full of details about the soccer investigation that were supposed to be secret, certainly not splashed across the pages of a London broadsheet. It noted that American law enforcement had met with members of the failed English World Cup bid committee in November, that they were investigating possible foul play associated with World Cup voting as well as the events that had occurred in Port of Spain, where Caribbean soccer officials had been accused of taking cash bribes, then bringing the money into the US without properly declaring it. It said the authorities were examining payments to Chuck Blazer, and that FBI agents had been meeting with FIFAs head of security, Chris Eaton.
Then, a week later, the Telegraph published a second article, confirming that Blazer had been questioned by FBI officials and that the investigation is being handled by financial specialists based in New York, who have powers to access bank accounts and track financial transactions.
For Evan Norris and Amanda Hector, the prosecutors working the case, the two articles were highly aggravating. They were investigating an international organization; possible targets were spread all over the world. Leaks could jeopardize the whole thing. Warned of a probe, corrupt FIFA officials could hide or destroy evidence, move assets, threaten possible witnesses, or even retreat to countries that dont have extradition treaties with the US.
The case was now formally before a federal grand jury, which gave the prosecutors the power to issue subpoenas, but also tightly bound them not to disclose anything nonpublic about it. If either of them violated grand jury secrecy, they could be prosecuted for criminal contempt, and they had formally notified the agents on the case that they too had to keep things absolutely quiet.
Theyd already had a problem with details of the case appearing in the media back in August, when British investigative reporter Andrew Jennings and the Reuters reporter published stories revealing that the FBI, and specifically the Eurasian crime unit, was in possession of documents pertaining to Chuck Blazer.
If the investigation was going to go any further and now that they had Blazer in hand, it certainly was this kind of thing had to immediately stop. Norris got the whole team together, looping in IRS special agent Steve Berryman, who lived in Southern California, on a conference call.
Norris was, by nature, a reasoned and careful man. He liked to listen, but volunteered little when he spoke and valued the benefits of patience and restraint. On first impression, he could seem flat and devoid of emotion, but those who knew him learned that he could express very powerful feelings with just a slight narrowing of his brown eyes. Addressing the team, he tried to balance the seriousness of the leak with a measure of rationality, calmly citing concerns about information getting out and trying to figure out who on the small team to hold responsible.
But nobody was willing to cop to such an impropriety. Perhaps there was another explanation. Perhaps nobody on the team had leaked. In order to conduct formal interviews with the English bid officials, American investigators had been obliged to get permission from British law enforcement, and several members of a Metropolitan Police unit dedicated to organized crime had tagged along to the meetings.
The UK was both obsessed with soccer and possessed a highly aggressive press that was deeply sourced in law enforcement. The Telegraph reporters had been covering the World Cup bidding story for some time and had broken numerous big stories on the topic. Barring any other evidence, the most likely explanation, Norris decided, was that someone from Scotland Yard had been the source of the leak.
There was no way to be sure, and it would be pointless to try to get the Brits to confess. But the newspaper story made clear that despite soccers low profile in the US, it was a gigantic deal in the rest of the world, and it would be hard to keep a lid on any operations they undertook abroad.
So Norris delivered a new mandate. They would stop working with foreign law enforcement entirely. No conducting interviews abroad. No requesting records from foreign governments or overseas banks. And absolutely no more talking to the press. Andrew Jennings, helpful though he might be, was out.
There was no question that all those restrictions were, in some ways, going to make the case trickier to develop. Considering how many meetings, tournaments, and other soccer events took place outside the borders of the United States, and how many of the potential targets werent American, it was as if they were intentionally tying their hands behind their backs. But they would just have to get creative and figure out different ways to gather evidence. Secrecy was paramount.
The case was going dark.
Chuck Blazer was Queen for a Day.
It was Dec. 29, a Thursday, and cold, with temperatures in Brooklyn hovering right around freezing. Blazer settled into a conference room in the United States Attorneys Office overlooking Cadman Plaza.
Blazer had been caught in a crime, a serious and easy-to-prove felony, and his goal was to trade useful information for a better deal down the road.
First, however, Norris spoke. Although he was nearly as tall as Blazer, the prosecutor seemed almost comically slender beside the hulking man, occupying just a fraction of the space at the table, swimming in his dark suit while the soccer official threatened to burst out of his. Norriss face betrayed no emotion, other than a slight furrowing of his thick eyebrows, as he stared at Blazer and calmly explained exactly what was about to happen. If there had been any confusion about who was in charge, it immediately dissipated.
This was a proffer session. Blazer was not being offered a plea deal or immunity of any kind. Instead, Norris assured Blazer that any information he provided, including indications of any crimes he himself had committed, would not be held against him in court. The prosecution would simply use whatever he told them as leads to hunt down evidence of other crimes by others. Although that protection did not extend beyond what was said that day, in that room, it meant that for the moment Blazer could freely share without fearing it would leave him in worse shape.
Criminal attorneys snidely called proffer sessions Queen for a Day meetings, after the 1950s and 1960s game show by the same name, in which four down-on-their-luck women would be interviewed by host Jack Bailey about their hardships. After they were all done, the studio audience would vote with applause on whose sob story was most heart-wrenching, and the winner would be wrapped in velvet robes, crowned, seated on a throne, given four dozen roses, and showered with gifts, inevitably breaking into tears.
This, then, was Blazers big chance to be Queen Chuck.
Unless, of course, he lied. Or told anyone else he was cooperating. Or got caught holding back. Or came up with some other creative way to hold up the investigation. If Blazer misbehaved, then the prosecutors were free to dredge up every crime he mentioned and use them directly against him.
The prosecutors would ask the questions, and Blazer would answer. They wouldnt reveal who else they might be talking to, or where the investigation was going, and, Norris suggested, Blazer should refrain from even trying to guess. They wouldnt even tell him what crimes they felt they could charge him for. They would test him. They would see if they could catch him in lies. They would compare what he said to what they already knew. No promises, whatsoever, would be made; a proffer was a one-way street.
Of course, everything would be very professional. This was a federal case, not some good cop, bad cop routine in a two-bit precinct house. There was no yelling, no two-way mirror mounted on a grimy cinder block wall opposite a steel table. The conversation was not being secretly recorded. The stone-faced FBI agents in the room werent there to interrogate, threaten, or cajole. They were there to quietly take handwritten notes prosecutors sometimes jokingly referred to the agents as scribes and after it was over, to type them up into an official memorandum for the case file.
That was the deal. If it didnt seem fair, thats because it most certainly was not. But for Blazer, it represented the first step toward earning the cooperation agreement he coveted, his chance at avoiding a long prison term, and it started with him signing the document Norris slid across the table.
Proffer letters vary widely among the countrys 94 federal judicial districts. Some are a little softer, offer a tiny bit of wiggle room for the defendant, or give them a bit more protection should things go south. But the Eastern District of New York has one of the toughest, least generous letters anywhere, with terms that very much favor the prosecution.
This is not a cooperation agreement, it read. The Office makes no representation about the likelihood that any such agreement will be reached in connection with this proffer.
Blazer signed. He would sign a similar agreement at each additional proffer session he attended, 19 in all, spread over the next two years.
The main offices of Fedwire and CHIPS, the electronic clearinghouse systems used to move billions of dollars in wire transfers around the planet every day, were just a few minutes walk from each other in lower Manhattan, and after sending so many subpoenas to them over the past several months, Steve Berryman thought it was well past time to go visit in person.
The IRS agent found himself in New York constantly as the case progressed, staying in a government-rate hotel downtown and working out of either the FBI field office, which he found stuffy and noisy, or his hotel room. Given the distance from home, Berryman often stayed for several weeks at a time, far from his wife back in California.
In January 2012, he was in New York again to attend Blazers initial proffers, and took time one day to visit CHIPS, or Clearing House Interbank Payments System, which was a private company owned and operated by a consortium of banks. Berryman hit it off with the general counsel, and as they chatted, it occurred to him that the rest of the team would benefit from gaining a better understanding of how the money tracing he was so adept at worked.
So he asked the CHIPS lawyer if he wouldnt mind getting together with a few other agents and a prosecutor or two to explain to them the kind of information they could get through subpoenaing the system.
Within a few days, Berryman had set up meetings at both CHIPS and Fedwire, and convinced Norris, Hector, and the FBIs lead agent on the soccer case, Jared Randall, to come along. The first meeting was at government-owned Fedwire, housed within the Federal Reserve Bank of New York building on Liberty Street. The building, opened in 1924 and modeled after a Medici palace, is a kind of fortress, occupying an entire city block, and its basement vault contains the worlds largest deposits of gold bullion, some 17.7 million pounds of the shiny stuff at the time of the meeting.
High above all that wealth, the team working the soccer case watched a presentation about how money moved in an electronic and almost instantaneous era. More expensive for banks to use than CHIPS because of the way it accounted for transactions and the speed with which it conducted them, Fedwire was the smaller domestic service. Nonetheless, it had originated 127 million wire transfers in 2011, moving $664 billion among the more than 9,000 banks around the world with which it worked. That meant that the names, addresses, and account numbers associated with hundreds of millions of wire transfers were just a subpoena away.
Money laundering was a very modern crime, apt for a globalized age of international commerce. Anyone could commit murder, but only the wealthy and powerful had the resources required to move ill-gotten capital through complicated webs of companies created at their behest by expensive lawyers. Almost by definition, money laundering deprived governments of taxes that could be used to the benefit of law-abiding citizens, and it helped obscure the frequently serious crimes that generated the money in the first place. Yet despite the gravity of the offense, money launderers typically operated with the impunity that comes with great privilege, unable to believe that they could ever be touched.
To Berryman, it was fascinating. Hunting down money launderers was, to his mind, the most exciting thing happening in law enforcement. The US government had busted huge money laundering operations in recent years, ranging from narcos in Mexico washing drug profits through money exchanges and New York banks, to Russian oligarchs using remote South Pacific islands to clean up their plunder. Those cases barely scratched the surface of a giant global industry dedicated to hiding dirty money.
The soccer investigation was an excellent case in point. FIFA officials taking bribes needed to hide that income since it couldnt be justified, and they frequently used shell companies in tax havens and phony service contracts in order to make the fruit of their crimes disappear. Fans of the sport, meanwhile, were left helplessly bemoaning what had become an open secret: The sport was dirty from top to bottom. The peoples game had become the property of selfish men pretending to be some species of public servant, while hiding countless millions of dollars in far-flung corners of the world.
It had been that way for years, if not decades, and nobody had been able to do a thing about it, despite widespread accusations of corruption. But that, Berryman thought to himself, was because nobody had ever had the combination of desire, knowledge, and opportunity to take it on.
After the meeting, Berryman chatted excitedly with the rest of the team, happy to see they were beginning to understand the incredible power Fedwire and CHIPS represented for a big international investigation like this one. But not everyone seemed so impressed.
Good job, Steve, was all Randall said, before heading back to the FBI field office a dozen blocks uptown and skipping out on the second presentation at CHIPS.
The cool response came as a surprise to Berryman, who assumed that his voracious appetite for information that could help the case would be shared by everyone else on the team. As soon as he had joined, Randall had passed Berryman a folder of documents related to corruption in soccer, and he had responded by regularly sharing articles on the topic on the assumption the FBI agent was as captivated by the topic as he was.
Berryman knew that Randall had talked numerous times with Andrew Jennings, a formidable repository of information about the sport in his own right; hed even listened in on one of Randalls calls with Jennings. And after reading Jennings 2006 expos Foul!, documenting corruption within FIFA and focusing in particular on its Swiss president, Sepp Blatter, and Jack Warner of Trinidad and Tobago, Blazer's closest colleague and longtime friend, Berryman had bought copies of the book for Norris and Randall.
The truth was that few people could match Berrymans enthusiasm for the tortuously slow grind of money laundering investigations and, at the same time, his degree of righteous indignation at the idea of people corrupting soccer. On a case with as much potential as this one, it went without saying that everyone would work long hours and make sacrifices. But not everyone seemed to care as much as Berryman that foul play could have played a role in determining where the World Cup would be held.
For most of the people on the case, it all seemed rather straightforward: Run it like any other investigation and when the well went dry, pack up and move on. But Berryman didnt see it that way at all. He had no intention of stopping until he had brought down every corrupt FIFA boss, all of the men who sat in the soccer organizations underground bunker in Zurich and used their position to steal from the game. When he had first met with the prosecutors the previous August, he had told them he thought this case should be pursued as an organized crime matter, employing the anti-racketeering laws known as RICO. He had been surprised by their lack of enthusiasm for the idea.
When he wasnt filing subpoenas or combing through the results of them, Berryman spent every spare moment reading up on soccer corruption. He forwarded the articles, one after the next, to the rest of the team, excited for them to learn the latest developments on the subject. But all too often, the articles he enthusiastically passed along to the rest of the team sat in their inboxes, unopened and unread.
Norris and Hector had gone into the Blazer proffers hoping to confirm suspicions that FIFA elections were rigged and that high officials routinely accepted bribes in exchange for their votes. They were not disappointed.
Blazers tale was complicated but fascinating, and often downright funny, peppered with off-color anecdotes and dirty jokes. The mans charisma, difficult to spot in the photos of him dressed in silly Halloween costumes on the internet, was obvious to everyone in the room. He had a certain magnetic presence, and it was becoming easier to see how a soccer outsider from a country with little interest in the sport could have risen so far.
Right off the bat, Blazer confessed he had agreed to take money in exchange for his vote for South Africa to host the 2010 World Cup, and that other countries had tried to bribe him at the same time as well. He had also, he said, helped coordinate a bribe for Warner to vote for Morocco to host the 1998 World Cup, although he personally received no money because he wasnt a member of FIFAs powerful Executive Committee, known as the ExCo, at the time.
This kind of activity wasnt rare, Blazer said it was the rule, and everybody on the FIFA ExCo knew it was happening. But if the prosecutors wanted to know where the real filth was in soccer, the truly big money and pervasive corruption, then they needed to look beyond the periodic big votes in Zurich, beyond the selection of World Cup sites or FIFA presidents and all the other events that garnered the headlines.
The financial heart of the sport, Blazer explained, was in the marketplace for commercial rights, the contracts that allowed broadcasters to put soccer matches on the air and advertisers to plaster their logos on uniforms, stadiums, and halftime shows. It was those deals, thousands of them around the world, that made up nearly all of FIFAs billions of dollars in revenue.
And it was hardly just FIFA. Each of the six regional confederations had its own set of rights to sell, and in turn each of the more than 200 national associations around the world had a variety of rights to offer as well. There were massive tournaments such as the ultrapopular annual Champions League of Europes top professional clubs, run by UEFA, the European soccer confederation, or the Copa Amrica, held every four years in South America and showcasing superstars like Argentinas Lionel Messi; there were hotly contested World Cup qualifying matches in each region; and there were sponsorship opportunities for every national team. Nobody wore a Nike or Adidas uniform for free, after all.
The counterparty to nearly every one of those right deals, Blazer explained, was a sports marketing company, the middlemen of the international sports world. It was a vast and robust, though little-known, industry dedicated to scooping up sponsorship and television rights to sporting events wholesale, then turning around and reselling them la carte to networks, brands, and advertisers. Operating on the principle that organizations such as FIFA, the Oceania Football Confederation, or the Federacin Panamea de Ftbol dont have the staff or expertise to sell their rights directly, sports marketing companies offered a fixed price ahead of time to take the rights off the soccer officials hands.
As with any business, profits depended on paying as little as possible for the goods they turned around and resold, and the best way to ensure that the cost for soccer rights stayed below market value was to shut out the competition. That, Blazer emphasized, was where corruption came in: Sports marketing companies systematically bribed soccer officials to keep prices low and not sell their rights to anyone else.
The bribes came each time a contract was negotiated, or extended, and occasionally even in advance of a negotiation just to ensure things ran as expected. Sometimes officials demanded the payments; other times the sports marketing firms offered them. Either way, the understanding was the same: We pay you under the table, and in return you give us an exclusive sweetheart deal for the rights. While the sporting press agonized over each political development that emerged from FIFAs Zurich headquarters, hundreds if not thousands of soccer officials around the world were getting bribes and kickbacks for television and marketing rights with little, if any, scrutiny.
Without doubt, there were legitimate rights deals out there, and soccer officials who were either too clean or too closely watched to take bribes. But it was a safe bet that the vast majority of soccer marketing deals, from the most prominent international tournaments to meaningless regional friendlies, involved no-bid contracts that undercut the actual value of the rights. That, by definition, deprived the sport of money that could be spent on development literally giving balls and cleats to impoverished children while the officials running soccer secretly pocketed huge sums and sports marketing executives got filthy rich in the process.
The sums of money were huge. FIFA, for example, booked $2.4 billion in television rights sales from the 2010 World Cup, and an additional $1.1 billion in sponsorship and other advertising rights. There was also more money in the US than might be apparent. Thanks to the countrys roughly 50 million Latinos, it was in fact one of the most valuable markets in the world.
In 2005, for example, Blazer had helped negotiate a deal for the US television rights to the 2010 and 2014 World Cups, a package that also included two Womens World Cups and two Confederations Cups, a smaller tournament played in World Cup host countries one year before the big event.
ABC and ESPN had paid a respectable $100 million for the English-language rights to that package. But Univision, which perennially ranked far behind the traditional broadcast heavyweights, paid more than three times that, a whopping $325 million, to transmit the same slate of matches to the countrys Spanish-speaking audience. By comparison, TV Globo of Brazil paid $340 million for the same rights in the most soccer-crazy nation on Earth.
The fast-growing value of the sport helped to underscore the scale of the corruption. Since 2003, CONCACAF the regional confederation overseeing soccer in North and Central America, as well as the Caribbean had sold rights to its big tournament, the Gold Cup, directly to networks and sponsors, using its own dedicated in-house sales team in order to cut out the middleman. As a result, in 2011, CONCACAF took in $31.1 million in television revenue alone, the vast majority from the Gold Cup.
By contrast, the Copa Amrica, a far more popular and competitive tournament starring some of the biggest stars in global soccer, brought in surprisingly little to CONMEBOL, the South American confederation. The deal it had years earlier signed with Brazilian sports marketing firm Traffic for the tournament paid out a measly $18 million for the complete package of television and sponsorship rights to the 2011 edition.
Clearly the Copa Amrica should have been worth vastly more than the Gold Cup. But by agreeing to sell the tournament for far below market value in exchange for bribes from Traffics founder and owner, Brazilian Jos Hawilla, the officials who controlled South American soccer had vastly limited the amount the confederation could bring in for its most valuable asset.
It was hardly a coincidence, Blazer continued, that Traffic had for years paid bribes to him and Jack Warner for rights to the Gold Cup as well, and that Hawilla had years earlier opened an office in Miami just to handle CONCACAF-related rights.
Soccer, Blazer made clear, was populated by two kinds of people: those who took bribes, and those who paid them. If the Justice Department really wanted to clean up the sport, it needed to take a hard look at men like Hawilla, who sat, perched like fat spiders, at the very center of the vast web of corruption.
Nobody in the room had ever heard of Traffic or Hawilla. Even Berryman, despite all his late-night reading on the soccer business, drew a blank when Blazer mentioned his name.
It took a long time for Blazer to explain the complicated world of sports marketing and the equally complex structure of FIFA and its many satellite entities.
As Blazer spoke, an idea slowly started to form in prosecutor Evan Norriss head, and he felt a growing current of excitement. Midway through the third proffer, on Jan. 18, 2012, he called a break and walked out into the hallway outside the conference room to huddle with the rest of the team.
Norris seemed unusually animated, and his eyes lit up as he made a triangle shape with his hands, joining his fingers together in front of his face. International soccer FIFA, CONCACAF, CONMEBOL, and the Trinidad and Tobago Football Association were all part of a single whole. They clearly fit the definition of a top-down enterprise, the classic organized crime triangle chart.
There was a boss: Blatter, FIFA's president. There were underbosses: the FIFA Executive Committee and the executives of the six regional confederations. And there were soldiers: the officers of each national federation. There were even consiglieri: the advisers and lawyers who helped the bosses run the show.
A $10 million bribe to Warner and Blazer for their 2010 World Cup votes; an envelope stuffed with $40,000 in cash for the president of some obscure Caribbean soccer federation; a kickback for the TV rights to a handful of Central American World Cup qualifiers. These werent unconnected events. They werent discrete and unrelated scams. It was all connected, Norris said, eyes shining.
FIFA sanctioned the confederations; the confederations sanctioned the national associations. And the sports marketing firms greased everyones palms. Men like Blazer, or Blatter, or Paraguayan Nicols Leoz in South America, or Qatari Mohamed bin Hammam atop the Asian confederation, might not have a hand in every crooked deal, but they were all part of the same cohesive enterprise. They had taken over soccer and corrupted it, and now this was how the sport operated all the time.
Norris, Hector, and the FBI agents all had organized crime backgrounds. They recognized these kinds of structures and perhaps were overly primed to see them everywhere they looked. But they had tried to go into Blazers proffers with open minds, unsure of what they were really dealing with in a still developing case. Now it was abundantly clear: Global soccer was a kind of organized crime. In fact, they increasingly felt, it looked just like the mafia.
It was a crucial intellectual leap for the case. It meant that everything was fair game and everyone could, at least in theory, be prosecuted together under a single statute that would allow the prosecutors to leap across oceans and back through decades of corruption to build one unified, sweeping argument.
Berryman had been right. This did look like a RICO case.
Illustrations by Joe Gough for BuzzFeed News.
Ken Bensinger has been an investigative reporter at BuzzFeed News since 2014. He previously worked at the Los Angeles Times and the Wall Street Journal, among other publications. Bensinger lives in Los Angeles with his wife, two kids, and dog.