July 12 (Bloomberg) -- FIFA President Sepp Blatter said he took no action against his predecessor and the ex-head of the Brazilian soccer federation over kickbacks they received because the payments were not illegal.
The Swiss Federal Court yesterday ordered the release of documents that showed former FIFA President Joao Havelange and Ricardo Teixeira, who was a member of the soccer body’s executive committee, received as much $22 million between them from the collapsed ISL marketing company. The payments were for deals related to the World Cup.
Blatter confirmed that he was an individual listed as “P1” in the report. The report said P1 and Havelange signed marketing deals with ISL on behalf of Zurich-based FIFA in 1997 and that Havelange and Teixeira, Havelange’s former son-in-law, profited from the agreements. Havelange and Teixeira received at least $1 million and $13 million, respectively. Blatter today referred to the payments as “commission” that was legal at the time.
“Back then, such payments could even be deducted from tax as a business expense,” Blatter said in an interview published on FIFA’s website. “Today, that would be punishable under law. You can’t judge the past on the basis of today’s standards. Otherwise it would end up with moral justice. I can’t have known about an offense that wasn’t even one.”
Blatter said he’d have preferred the names of all officials mentioned in the document to have been published “to put an end to the speculation once and for all.”
“However, the Federal Court stated that the names of all non-accused third parties should be made anonymous. I am not accused, so I have been made anonymous as P1, which quite honestly is not difficult to find out.”
The report’s publication had been delayed as Teixeira and Havelange attempted to have it blocked. FIFA last year agreed for it be released after coming under media pressure. Instead of disciplining the duo, FIFA paid a Swiss court 2.5 million Swiss francs ($2.54 million) in compensation on the condition that criminal proceedings against Havelange and Teixeira were dropped.
Havelange, who ran FIFA for 24 years and helped turn it into a corporate entity that today generates about $5 billion from its four-yearly World Cup, remains its honorary president. Blatter said he didn’t have the power to strip the 96-year-old of the title. That decision would have to be taken by the organization’s 209 members at its annual congress.
FIFA has been shaken in recent years by a slew of corruption allegations. The vote for the 2018 and 2022 World Cup hosts came against a backdrop of accusations of wrongdoing against several members of its 24-person board.
Blatter’s re-election in 2011 to a fourth four-year term came after his only challenger, Mohamed bin Hammam, quit before an investigation was opened into allegations he tried to bribe voters. Bin Hammam, who denies wrongdoing, is appealing a life ban from the sport.
The soccer organization is reforming its structures as a response, and after a group tasked by Blatter said the ethics committee he created in response to ISL in 2006 wasn’t fit for purpose. On July 17 it will name heads of two new bodies designed to investigate and adjudicate on officials accused of breaking rules.
“The reform process is moving exactly in this direction,” Blatter said.
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