Last Man Standing

Author: 
Jennie James
Date Published: 
2002-05-19
Source: 
TIME

GLASGOW—To hear Joseph "Sepp" Blatter — president of FIFA, global football's governing body — talk, it's a Shakespearean tale of treachery between two Swiss countrymen, the tragic story of a young man who turned on his mentor. Earlier this month Michel Zen-Ruffinen — FIFA general secretary, Blatter's deputy and former protégé — presented a 30-page document to FIFA's executive committee accusing his boss of mismanagement, financial improprieties and manipulating the FIFA network "to the benefit of third parties and his personal interests." The document, which also alleges that some of Blatter's actions may have broken the law, comes after years of whispers about corruption during the president's four-year regime. Blatter has consistently denied any wrongdoing.

The report comes at a critical time. On May 29, just before the World Cup kicks off in Korea and Japan, FIFA will elect its next president. The vote will take place amid talk of scandal and worries about global football's financial future. Blatter, 66, will stand for re-election. His opponent: Issa Hayatou, 55, the Cameroonian who has been the head of CAF, the African football federation, for the last 14 years. As the vote nears, things promise to get even messier. Says Chuck Blazer, general secretary of CONCACAF, the North and Central American and Caribbean football confederation: "There's a lack of sophistication dealing with political campaigns at this level."

What does Blatter think of Zen-Ruffinen now? "If you have in your own house a traitor, this is bad," Blatter told Time last week in Glasgow, where he had come to watch the Champions' League final between Real Madrid and Bayer Leverkusen. "Have you ever heard of Brutus?" Such allusions leave Zen-Ruffinen icy with fury. "That is absolutely stupid," he said. Zen-Ruffinen said he produced the document because he feared being dragged into a nightmarish — and possibly illegal — financial scandal that was not of his own making. Blatter "started to put on my shoulders things that were his responsibilities. I have done what I had to do."

Here's the background. Like other large sports bodies — notably the International Olympic Committee — FIFA has found itself straddling two very different worlds. The cottage industry it once presided over has turned, in a generation, into a multibillion dollar business, as income from TV and sponsorship rights for its prize tournament, the World Cup, has gone through the roof. Case in point: FIFA says it received $79 million for the broadcasting rights for the 1998 World Cup. The same rights for 2002 are forecast to bring in $761 million.

Yet FIFA's standards of accountability have failed to keep pace with its size. The result: a modern fiefdom whose privileged citizens roam the globe "for the good of the game," some organizing a tournament here and, if you believe the allegations, some taking a backhander there, even as the sport's greatest asset — its fans — demand more transparency. They might ask why an organization with plenty of money coming in has already had to borrow $420 million against projected revenue from the 2006 World Cup to offset a cash crunch.

In its 98-year history, the Fédération Internationale de Football Association has had only eight presidents. Blatter's predecessor, Brazilian João Havelange, who headed FIFA from 1974 to '98, is credited with leading football into both the glories and excesses of its modern age. It was Havelange who joined FIFA's forces with Horst Dassler — son of Adi Dassler, founder of the German sportswear company Adidas. As John Sugden and Alan Tomlinson wrote in their 1999 book Great Balls of Fire: How Big Money Is Hijacking World Football, "Havelange recognized how important the sponsors were to football's future development."

Horst Dassler, who died in 1987, may also have contributed to FIFA's troubles. In 1982 he formed the marketing company International Sport and Leisure, which just months later was handling FIFA's merchandising and stadium commercial rights. Cozy, no? But in 2001, after a series of poor business decisions, ISL and its parent company went bankrupt. Ironically, it was not international football that pushed ISL over the edge: the firm had planned to go public and set about acquiring other sports properties for super-high prices, like the $1.2 billion it put down for 10 years of commercial rights to the men's atp tennis tour Whatever the reason, ISL's demise left a hole in FIFA's finances. How big? Good question, and it is the lack of an answer that is driving Blatter's critics to distraction. The president says FIFA lost no more than $32 million in the wake of ISL's collapse. Zen-Ruffinen's document maintains the sum is closer to $116 million. Attempts to reconcile the numbers have run aground. Last month, Blatter suspended an audit committee set up to examine FIFA's finances, alleging a breach of confidentiality.

Just what is the president so sensitive about? According to one Blatter ally, FIFA's books have been examined no fewer than four times in the past year — by ratings houses Moody's and Standard & Poor's, by accountants KPMG and by banking giant CSFB, which helped FIFA issue a $420 million securitization bond earlier this year. So why not open them to the wider FIFA world? Blatter says all those who need to see the books have done so.

Nor does FIFA intend to pursue any more claims against ISL's bankrupt estate. Initially, FIFA had provisionally registered claims against ISL and its parent totaling $185 million. But two weeks ago, Blatter agreed to reduce that claim to $32 million. The Blatter camp says it simply wanted to settle the ISL matter once and for all, although FIFA may still pursue claims against individuals who worked for ISL.

Part of what makes the Blatter issue a contentious one is the way he came to power at FIFA in 1998. In a bitterly contested election, he defeated Lennart Johansson, a Swede who heads the European football association UEFA. The night before the ballot, Blatter opponents claim, bribes were offered to delegates from some national associations in Africa. Since then Farah Addo — both the head of Somalian football and Hayatou's deputy at CAF — has signed a sworn statement that he was offered money but turned it down. Blatter has always insisted he knows nothing of any alleged bribes, and no evidence of his personal involvement has ever been produced.

The real problem confronting football is that FIFA — whose business dealings were once characterized by old, cozy relationships — now lacks the transparency required of a global organization. For example, in his report, Zen-Ruffinen presents allegations of impropriety between Blatter and Jack Warner, the Trinidad and Tobago-based president of CONCACAF, claiming that Blatter has taken decisions designed to benefit the Warner family financially, to the detriment of FIFA's coffers. One part of the story: for World Cups 1990, 1994 and 1998, with the assistance of Blatter's predecessor Havelange, Warner struck a deal that gave him the TV rights for Trinidad and Tobago for the princely sum of $1. But Warner failed to secure those same rights for 2002 and 2006 after ISL put them out to tender. Instead, the contract was awarded to the rival Caribbean Sports Television Network (CSTN).

When ISL went under, Germany's Kirch group, which held the 2002 and 2006 World Cup TV rights inside Europe and the U.S., took over the rights for the rest of the world. At the time, FIFA wrote to broadcasters explaining that all would still have their contracts honored. Yet Kirch terminated the deal with CSTN, saying the network didn't have the equipment to deliver on its commitments. (Kirch subsequently declared its own bankruptcy, but under an agreement between its creditors and FIFA, the World Cup TV rights were spun off into KirchSport, a separate company.) In his document, Zen-Ruffinen alleges that Warner told Blatter he would withdraw his support from a FIFA tournament in Trinidad and Tobago if he did not regain control of the TV rights. Not so, says Warner. In any event, the rights were awarded to a company owned by Warner. When the arrangement became public, Blatter came under pressure to address the apparent conflict of interest — a FIFA confederation head owning broadcasting contracts to the region he oversees. The rights were transferred to the Caribbean Football Union, (CFU), an association of football playing nations in the region, with profits to go back into Caribbean football. Who is the head of the cfu? Jack Warner.

Warner, who denies any wrongdoing, is scathing in his attacks on his and Blatter's opponents, particularly Zen-Ruffinen: "FIFA must never again give a man's job to a boy." But Warner reserves his strongest criticism for Lennart Johansson. Indeed, Blatter's allies say it is Johansson — in failing health and still smarting from his 1998 defeat — and uefa general secretary Gerhard Aigner who are the real powers behind Zen-Ruffinen's move against Blatter. They point to the strong alliance between Hayatou and Johansson — who has campaigned for the African — as further evidence that Johansson is still trying to run global football, only this time vicariously. "Johansson and his bunch of merry men have lost sight of reality," snaps Warner.

Strong words, indeed. But they have a clear aim — to sound alarm bells that, via the alliance with Hayatou, UEFA may be trying to become even more powerful in the FIFA leadership equation. Already Europe wields enormous financial clout in the global football scheme of things — according to Blatter, it accounts for half of the income from broadcasting money. FIFA classifications even recognize it: there is Europe, and there is the R.O.W. — the Rest of the World.

In recent weeks, both Blatter and Hayatou have hit the campaign trail. Blatter says that his distribution of FIFA's income has benefited football across the globe. In 1998, he promised each member association $1 million over four years, and each of FIFA's six regional confederations $10 million. He has also been lauding his Goal project, a four-year, $63 million program designed to bring football to developing nations by building facilities and providing training. Blatter's opponents claim the program has been the victim of abuse, with funds disappearing into the personal accounts of some FIFA delegates. Blatter also said he will deliver on his promise to hold the World Cup in Africa in 2010, though there are some doubts that the continent will be ready. Last year, a series of crowd-related incidents in four countries, including South Africa and Ghana, cost hundreds of fans their lives.

Hayatou, who was once Cameroon's 400-m and 800-m running champion, is campaigning on a platform of transparency and "clean hands" management. "No one's manipulating me," he told TIME. "People who say that have got no other argument." Which is not to say that his CAF presidency has been bereft of incident: in one example, money destined for Nigerian football players went missing en route. Hayatou says that such problems took place at the national level and not within CAF itself.

Both candidates have vowed to alter the current allocation of automatic qualifying places for future World Cups. For the 2002 World Cup CONMEBOL, the South American football federation, had four guaranteed World Cup places and a fifth playoff slot for its 10 member countries, the highest ratio of automatic slots to countries in the world. Hayatou has said he will give at least one of the slots to the Oceania region, which currently has 11 member nations but no automatic route to the World Cup.

That will be good news for Australia — the Socceroos frequently win Oceania, only to be knocked out in the playoffs — but it's not so popular a concept in South America. Consider this: if only three South American countries had World Cup slots for 2002, Brazil would have just scraped through.

Despite all the turmoil, Blatter's opponents write him off at their peril. After Zen-Ruffinen tabled his document, five of FIFA's seven vice presidents called on Blatter to resign; he refused, saying he was answerable only to FIFA's member associations. If the Swiss authorities decided there was a legal case to be made against Blatter — he insists that is out of the question — he could step down. But until then, he is standing firm, saying he will issue a written response to Zen-Ruffinen's allegations early this week.

If victorious in the election, Blatter told TIME, he plans to reorganize marketing and to change the FIFA statutes in 2004 to prevent a repeat of the recent discord. Opponents may find it even harder to remove him next time around, though he has lamented that Zen-Ruffinen may have tarnished his reputation. "The damage has been made," he said. "It's like you say, 'You are a rapist' and then later you say, 'It was not rape, it was love,' but still you are black-marked." Will he win? Hard to say. Among European associations, the Germans and French have declared for Blatter. The English are supporting Hayatou. Asia will likely be divided — the Gulf states are expected to go with Blatter, but the influential Korean football head Mong-Joon Chung might persuade other nations to back Hayatou.

Last week, in the West Room of the Glasgow Hilton — after the scotch-broth bowls had been cleared but before the carefully crafted haggis paté had hit the table — Hayatou outlined his objectives to members from eight national associations, including Poland and several other East European countries thought to favor Blatter. The delegates listened attentively, and when the meal was over, some vowed they would vote for him. Did they mean it? What does it matter? When the vote takes place on May 29, it will be by secret ballot. No one will ever know.