Under Pressure

Date Published: 
2002-03-06
Source: 
CNNSI.com

FIFA president Blatter faces extraordinary meeting

ZURICH, Switzerland (AP) -- Embattled FIFA president Sepp Blatter, who has been accused of financial mismanagement, received a boost Wednesday when his finance committee ratified an audit and declared a profit.

Blatter has been under increasing pressure to open up FIFA's books after the collapse of its marketing partner ISL/ISMM last year, leaving an estimated debt of US$300 million.

He was forced to convene an extraordinary meeting of FIFA's executive committee Thursday amid allegations that the impact of the collapse of ISL/ISMM was worse than acknowledged.

However, the FIFA finance committee met late Tuesday and declared no further financial provisions were needed to cover the collapse. FIFA had set aside 110 million Swiss francs (US$65 million).

"I am satisfied that the committee passed all its decisions unanimously and corroborated all the information provided by FIFA since the opening of the bankruptcy proceedings against ISL," said FIFA finance committee chairman Julio Grondona.

While Blatter said he expected the executive committee to ratify the finance committee's decisions, questions are still likely to be raised Thursday.

FIFA had earlier said it would not release details of the finance committee meeting until the executive committee had met later this week. But Blatter, who also faces allegations of bribery and mishandling of World Cup broadcasting rights, released the information Wednesday.

Thirteen of FIFA's 24 executive committee members had demanded a full independent audit into the state of the organization's finances. FIFA acknowledges US$32 million was lost followed the collapse of the ISL/ISMM, but critics claim the actual figure could be up to 10 times higher.

Tuesday, the finance committee also approved the report by auditor KPMG on FIFA's consolidated financial statements for last year, which showed a net profit of 71 million Swiss francs (US$42 million).

It also said that at the end of 2001, FIFA had equity of 154 million Swiss francs (US$91 million) and provisions of 367 million Swiss francs (US$216 million) in reserve.

"FIFA's finances are very sound and, with provisions of 367 million Swiss francs [US$216 million) assured at the end of 2001, it is certain that we will amply cover all current and future risks and other unexpected expenses," said Grondona, who is also a FIFA senior vice president.

Blatter also faces questioning over bribery and corruption allegations surrounding his election to the FIFA presidency in 1998. Entering the race only three months before the vote, he beat Lennart Johansson, head of the powerful European federation UEFA, and it is the Swede who has led calls for an investigation into the bribery allegations and the financial state of FIFA.

UEFA said Wednesday that its executive committee would meet next Thursday and Friday at its headquarters in Nyon, Switzerland. The agenda includes budget proposals for the next financial year and FIFA matters.

Blatter is seeking re-election to the presidency in May. No other candidate has yet officially declared, but Cameroon's Issa Hayatou, head of the African Confederation, has indicated he might stand.

Last week, Farah Addo, a Somali vice president of the African federation (CAF), alleged that Blatter's Arab backers tried to buy his vote for US$100,000 before the election in Paris in June 1998. Addo said he rejected the money but that he witnessed cash being exchanged for votes.

Blatter dismissed the allegations as part of a campaign to discredit him before the next election.

The bribery claims aggravated the crisis involving ISL/ISSM.

International Sports and Leisure, a subsidiary of the International Sports Media and Marketing group, negotiated FIFA's television and sponsorship deals, including the TV and marketing rights to the 2002 and 2006 World Cups.

Its bankruptcy led to the cancellation of last year's World Club Championship in Spain and forced FIFA to set up its own in-house marketing unit.

In January, troubled German marketing company Kirch Media paid FIFA 1.2 billion Swiss francs (US$680 million) for the broadcasting rights for this year's World Cup finals.

One company unhappy with the change is the Caribbean Sports Television Network, which claims the regional broadcasting rights were taken away from them and handed to the Caribbean Football Union after Kirch took over.

The CFU president is FIFA vice president Jack Warner, one of Blatter's closest allies.

"CSTN has been the victim of a conspiracy between Kirch and FIFA, resulting in the TV rights for 2002 being stripped from CSTN," chief executive Selby Browne said. "The goalposts were moved big time."

Browne goes to Zurich seeking a review of how the rights were awarded.