Some of the world’s biggest broadcasters, including Fox Sports, paid massive bribes to South American soccer officials as they scrambled to cash in on the rapid growth of the sport on TV, according to the first of the prosecution’s cooperating witnesses to appear at a New York corruption trial.
Alejandro Burzaco, the former chief executive of an Argentinian sports-marketing company, testified Tuesday he partnered with broadcasters from Europe, the US and South America in deals that included kickbacks to secure television rights to games.
He offered evidence at the trial of Jose Maria Marin, Manuel Burga and Juan Angel Napout, who have each pleaded not guilty to racketeering, wire fraud and money laundering conspiracies.
Prosecutors say they profited from a culture of corruption that cost world soccer some $200 million over almost a quarter of a century and reached the highest levels of the game.
Burzaco, who has already pleaded guilty to his role, said he paid bribes to all three defendants and described some of the shell companies and fake contracts used to disguise the money trail.
Major media broadcasters, including Fox Sports, are accused of paying massive bribes to South American soccer officials. Alejandro Burzaco (center), the former chief executive of an Argentinian sports-marketing company, testified Tuesday that he paid bribes to Jose Maria Marin, Juan Angel Napout and Manuel Burga in the scandal
In particular, he said senior officials at Conmebol – which governs the sport in South America – received up to $1 million a year for their support.
The money came from T&T, originally a joint venture between his company, Torneos y Competencias, and Traffic, a Brazilian sports marketing company.
However, Traffic sold its stake to Fox Pan-American Sports, a Spanish-language subsidiary of 20th Century Fox, which eventually increased its ownership after 2005 to 75 percent.
In 2008, T&T extended its deal with Conmebol for the broadcast rights to two tournaments, the Copa Libaterdores and the Copa Sudamericana club competitions, he said.
‘Did you pay bribes in connection with those contract extensions,’ asked Samuel Nitze, US assistant attorney.
‘Yes sir,’ answered Burzaco, explaining they went beyond the recurring annual payments. ‘Special bribes for the extension of the contracts.’
Nicolas Leoz, the then president of Conmebol, and Julio Grondona, Fifa vice president, received $1 million. Three more-junior officials received $500,000 to ensure the contract was not put out to tender, he said.
The rewards for his company, he said, were a guaranteed stake in the exploding South American TV market for football until 2018 (a four-year extension).
Jose Maria Marin, former head of Brazilian Football Confederation, arrives in court on Monday in Brooklyn to face charges of corruption, which he denies
Jurors were shown a contract between T&T – with its headquarters listed at a post office box in the Cayman Islands – and a company named as Somerton. It set out how Somerton would act as an intermediary in securing the contract extensions for T&T at a cost of $3.7m
Burzaco admitted that Somerset never provided the services described in the contract
Burzaco claimed that Juan Angel Napout, who became interim president of Conmebol in 2014, would have been aware of the improper payments
‘The other partner, Fox Sports, gained the right to leverage those rights to broadcast its signal from the US to Argentina…,’ and other countries for four more years, he said, at a time it was launching Fox Sports 2 and a string of entertainment channels.
Jurors were shown a contract between T&T – with its headquarters listed at a post office box in the Cayman Islands – and a company named as Somerton. It set out how Somerton would act as an intermediary in securing the contract extensions for T&T at a cost of $3.7m.
Burzaco added that the contract was dated January 21, 2008, and was signed by James Ganley, former chief operating officer of Fox Pan American Sports.
Mr Nitze asked: ‘Did Somerton in fact provide those services?’
‘Is this a real contract?’
‘No,’ said Burzaco, explaining that it was nothing but a sham, designed to disguise the payment of bribes.
And he said one of the defendants, Napout, who became interim president of Conmebol in 2014, would have been aware of the payments.
Earlier he described entering similar partnerships with a string of international broadcasters, including Televisa in Mexico and Globo Comunicacao & Participacoes SA in Brazil.
The case is the first time prosecutors have laid out their evidence in a trial.
Juan Angel Napout (center), former head of Paraguayan Football Association and former president of the South American Football Confederation, arrives at court on Monday
Although more than 40 individuals have been charged in the far reaching investigation, the three defendants are the only ones to continue to maintain their innocence after extradition to the US.
They each rose to become president of their national football federations and each faces up to 20 years in prison.
‘These defendants cheated the sport in order to line their own pockets,’ said Keith Edelman, assistant United States attorney, in his opening statement on Monday as he described a network of shell companies, bag men and cash drops used to siphon cash from massive marketing and TV deals.
In essence, he said, the defendants used shell companies, offshore accounts and bagmen to hide their dealings.
The evidence against them includes ledgers kept by executives who made the payments and records of wire transfers.
The case is being heard at Brooklyn’s federal court amid tight security. The 12-person jury was sworn in anonymously – a measure usually reserved for terrorism or mafia cases – after prosecutors reported attempts at witness intimidation.
The government plans to call three co-operating witnesses who will give evidence in return for lighter sentences.
On its first morning the public gallery was overflowing with journalists and other lawyers keen to hear more revelations from the mammoth investigation as well as relatives of the defendants.
The case is the first to go to trial since the scandal emerged more than two years ago. Since then, the sport has had to confront allegations of widespread corruption and Sepp Blatter, Fifa president for 17 years, was ousted along with dozens of other officials.
Manuel Burga, Former president of the Peruvian Football Association, is also a defendant in the trial. Bruce Udolf, for Burga, said: ‘The people that the government have laid down with are some of the most despicable, corrupt people on earth’
However, court documents suggest that previous attempts at reform simply gave more people a chance to get rich.
‘Rather than repair the harm done to the sport and its institutions, however, these conspirators engaged in the same unlawful practices that had enriched their predecessors,’ says the indictment.
Marin, 85, is the most high-profile of the defendants. He was president of Brazil’s Football Confederation, the sport’s governing body in one of its most important and lucrative markets.
Prosecutors say they caught him negotiating a bribe during hours of recorded conversation.
‘It’s about time to… have it coming our way,’ he said.
Charles Tillman, defense counsel for Marin, said his client was only ever an interim president of the Brazilian national federation, selected because he was the oldest vice president when the incumbent stepped aside.
He compared him with a player on the sidelines while others took care of business.
‘Marin was often aside, not participating in what was occurring,’ he said.
‘He was on the field but not playing the game.’
Burga, 60, is the former president of Peru’s soccer federation; and Napout, 59, is the ex-president of the South American soccer governing body CONMEBOL and of Paraguay’s soccer federation.
The three defense teams also said the prosecution was relying on the testimony of witnesses who were testifying in order to win lighter sentences for their own role in the conspiracy.
Bruce Udolf, for Burga, said: ‘The people that the government have laid down with are some of the most despicable, corrupt people on earth.’
Burzaco, who has already pleaded guilty to his role, said he paid bribes to all three defendants and described some of the shell companies and fake contracts used to disguise the money trail. Pictured: Burzaco (right) in 2015