FIFA Grants Were Spent on $1.5 Million Mansion, Caribbean Land

FIFA bought a $1.5 million mansion for Mozambique’s soccer headquarters and paid almost $500,000 for a plot of Caribbean land to build a playing field, according to data released by the sport’s ruling body.

The Zurich-based not-for-profit organization released information about more than 500 development grants paid out during President Sepp Blatter’s 14-year presidency. FIFA is trying to increase transparency following the ousting or resignation since 2011 of at least four officials amid ethics investigations.

FIFA, which in March reported revenue of $1.16 billion for 2012, distributes income from World Cup television and sponsorship rights sales to develop soccer, mostly in poorer nations. The private system of patronage may have led to wastefulness or corruption, according to Roger Pielke, a professor at the University of Colorado who has published a paper about FIFA’s accountability.

“This shows how much money FIFA has floating about,” Pielke said by phone. “No doubt a lot of good has come from these grants. A lack of transparency means there has probably been all sorts of shenanigans going on as well.”

A FIFA appointee, Dieudonne Ndoumbou, is investigating what happened to a $548,262 grant to Gabon’s defense ministry in 2005 to promote soccer. The money was supposed to have been used to build a training center, Ndoumbou said.

FIFA said in an e-mail it has funded “plenty of very positive” development projects around the world, including distributing a combined $6 million of grants to Palestine and Afghanistan to build soccer facilities that have increased participation.

Scrutiny

While there had been “difficulties” with the training center in Gabon, FIFA said, it had built playing fields and a headquarters for the national federation in the west African nation.

FIFA’s spending is coming under increasing scrutiny after World Cup sponsors such as Adidas AG (ADS) and U.K. lawmakers raised concern about governance following alleged corruption cases involving executives including former Vice-President Mohamed bin Hammam, according to Pielke.

In Mozambique, FIFA in 2011 agreed to pay $1.5 million to South Africa-born farmer Izak Holtzhausen to buy his 14-room colonial mansion in capital Maputo. Holtzhausen said by phone he had been planning to turn the property into a boutique hotel before FIFA bid for it.

“It’s a lot of money for a football federation, but compared to the money spent on football player transfers I suppose it’s not so much,” Holtzhausen said.

FIFA, which began a two-day congress in Mauritius yesterday, said in an e-mail that national federation headquarters are a “fundamental asset” for the management and development of soccer in each country.

Playing Fields

On the Caribbean island of Montserrat, which is about half the size of Washington D.C., FIFA in 2001 agreed to pay $499,144 to buy land to build a soccer field. Building work and fees took the total cost to $788,139, according to FIFA.com.

The field is also used for social events such as a visit by the U.K.’s Prince Edward last year, Jacquie Ryan, a real-estate agent who brokered the sale, said by phone.

FIFA has handed out about $2 billion in development funds since 1999. From July 1, it will require national federations receiving grants to put building contracts of more than $50,000 out to tender and file audited annual accounts.

“FIFA is making slow, incremental” progress to improve governance, Pielke said, comparing it to a gentleman’s club. “It still has an extremely long way to go.”

To contact the reporters on this story: Alex Duff in Madrid at aduff4@bloomberg.net;

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net

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