Soccer Indictments Outline Schemes Involving Sports Marketing Firms

Transcript

DAVID GREENE, HOST:

Soccer is the world's most popular sport. It is also a massive global business, and judging by yesterday's news, it is an organized crime ring. That's at least how the world's governing body for the sport, FIFA, is being portrayed. Officials were rounded up at a hotel; charged with corruption on a massive scale. And now we're going to dig into exactly what these officials are accused of. Most of the alleged schemes outlined by the Justice Department involve sports marketing companies. One of them is Traffic Sports USA. They're based in Miami. So is NPR's Greg Allen, and he's on the line. Hey, Greg.

GREG ALLEN, BYLINE: Good morning, David.

GREENE: OK, so some of the basics here - the Justice Department says well over $150 million in bribes paid by these sports marketing companies to officials in FIFA. What are these marketing companies, and what were they hoping to get?

ALLEN: Well, in the indictment there was three marketing companies - Traffic USA, which is part of a larger company based in Brazil, and there are two Argentinean sports marketing firms involved. And what they are charged with is paying bribes to get these media and marketing rights. Media, of course, is things like TV, radio and the Internet. And they resell those rights to media companies that then, you know, broadcast. Marketing, of course, is to allow companies like Traffic and others to sell sponsorships on and off the field for things like Coca-Cola, Adidas, etcetera. So Traffic, which has that parent company in Brazil, and the Argentinean companies, they're charged with paying these big bribes to international soccer officials to get those big contracts.

GREENE: And, you know, there are individuals named in this indictment, including Traffic's U.S. president, Aaron Davidson. I mean, could he be in serious trouble here?

ALLEN: Yes. I mean, the racketeering is the biggest charge and that carries a 20-year prison sentence. But that's just one of a - there's a dozen charges against him, including conspiracy and wire fraud charges. The Justice Department says that its big indictment - it's 164 pages - took years to put together, and there's a dozen different schemes - fraud schemes - detailed in there that Traffic was involved in. It doesn't help Davidson that his boss, the Brazilian owner of Traffic - a man named Jose Hawilla - has already pleaded guilty. He agreed to pay a $150 million fine for his part in the schemes. And also in the indictment, several other Traffic employees are listed as unindicted co-conspirators, but it does seem like Davidson knew what he was doing. In one of the schemes, he allegedly agreed to pay more than $3 million in bribes to one of the officials to secure rights to a tournament. And I'll read you something - it's in the indictment here. It's a quote from Davidson when he was asked about it. In the indictment he says (reading) is it illegal? It is illegal. Within the big picture of things, a company that has worked in the industry for 30 years, is it bad? It is bad.

GREENE: So is the U.S. president of Traffic actually just admitting guilt there?

ALLEN: Well, I don't think he thought he was doing it to prosecutors, and we'll see what comes out at trial, but it certainly seems like he knew what was going on.

GREENE: But, Greg, I guess, you know, just listening to a line like that, I wonder if this kind of behavior has just become really commonplace almost because this is an environment where a company just feels like if all my competitors are doing this, well, I guess I have to, too.

ALLEN: Right. I'll give you an example. There's a tournament in South America called Copa America, which Traffic held rights to for some 30 years. More than 20 years ago, the tournament officials told them that they wanted a bribe for them to get the media and marketing rights. So they agreed to pay it, and the bribes increased over the years. Eventually, Traffic lost the rights, though, to another sports marketing company, Full Play, which is also charged in the indictment, and they paid a larger bribe. But then later, Traffic teamed up with some of its competitors to form a new company that got back the media and marketing rights to that tournament - the Copa America soccer tournament - and they ended up paying some $40 million in bribes for that.

GREENE: Well, that's just stunning. These allegations have just a lot of money being thrown around everywhere. NPR's Greg Allen joining us from Miami. Greg, thanks.

ALLEN: You're welcome. Transcript provided by NPR, Copyright NPR.