FIFA's internal investigation by attorneys at world football provides evidence that former FIFA bosses Sepp Blatter, Jerome Valcke and Markus Kattner breached their fiduciary duties to the federation.
“The evidence appears to reveal a coordinated effort by three former top officials of FIFA to enrich themselves through annual salary increases, World Cup bonuses and other incentives totaling more than US$80 million – in just the last five years,” said attorney Bill Burck.
The report comes after a raid by Swiss authorities at FIFA headquarters in Zurich on Thursday in which salary contracts of the former officials were turned over to investigators.
The contracts reflected an “I’ll scratch your back if you scratch mine” attitude that prevailed at the top-ranks of FIFA. The three officials worked in tandem to amend their contracts on a regular basis, extending the length of the contracts, providing each other with substantial bonuses and safeguarding their salaries from termination.
The officials approved and signed the changes to their contracts prior to the creation of the Compensation Sub-Committee by FIFA in 2013. Given this unchecked authority, the FIFA chiefs would tell the human resources department to cut the checks for the modified salaries. The department was overseen by Kattner.
One particular instance of this cronyism occurred on the eve of the FIFA presidential in 2011 where it was unclear whether Blatter would remain as the top boss at FIFA. If Blatter lost to Mohammed Bin Hamman the executives would likely not be retained at FIFA.
To protect their exorbitant compensations, Valcke and Kattner received 8.5-year contract extensions that included raises in salary and bonuses as well as a severance package that guaranteed full payment of the contract.
The contract amendments also carried two suspicious clauses – full payment if the officials were fired for just cause and the requirement that FIFA pay all fines, restitutions and legal fees associated with any investigation of their wrongdoing even if the officials were found guilty. These two clauses are direct violations of Swiss law.
Although the Compensation Sub-Committee did review and attempt to reduce the salary of Blatter, it unfortunately did not bring an end to the awarding of renewed contracts for Kattner and Valcke. The committee approved World Cup bonuses to Valcke and Kattner doled out in 2011 for the 2014 World Cup in Brazil and a US$15.5 million package for the Russia 2018 World Cup given to the two officials in June 2014.
The investigation also called for more scrutiny into a contract extension awarded to Kattner just two-days after the May 2015 indictment of several high-ranking football officials by the U.S. Department of Justice. Kattner was given a four-year extension, a clause ensuring eight-years of salary if he was terminated from FIFA up to US$9 million and the two indemnification clauses seen in previous contract extensions. Investigators call into questions the fact that FIFA’s chief financial officer was awarded such a contract in the midst of a widespread corruption investigation into the organization.
The attorneys have turned over all relevant evidence to Swiss investigators as well as the U.S. Department of Justice.