Current Affairs

Broadcasting giants accused of bribing FIFA officials in corruption trial

(Source: sg.finance.yahoo.com)

By Patricia Hurtado

Some of the world’s biggest broadcasters, including Fox Sports, Globo and Grupo Televisa SAB, were implicated in corruption of international soccer, with a former sports-marketing executive telling a U.S. jury that the companies paid bribes to win lucrative, multiyear rights for tournaments.

Alejandro Burzaco, the former chief executive officer of sports-marketing company Torneos y Competencias SA and a government witness, testified about the bribery at the trial of three former FIFA executives, saying other companies were also involved including Full Play Argentina and Traffic Group in Brazil.

Asked by Assistant U.S. Attorney Sam Nitze what Fox Sports hoped to gain by winning the broadcasting rights, Burzaco said the company wanted to use “the TV rights to expand its Fox signal in all of the Americas, from Argentina to the U.S.A.”

The allegations further tarnish Fox’s image just as the media giant tries to persuade U.K. regulators to allow the acquisition of full control of Sky Plc, the satellite-TV provider. The U.K.’s Competition and Markets Authority is looking into issues of corporate culture at Fox, including sexual harassment allegations at Fox News, as part of its review of 11.7 billion-pound ($15.4 billion) bid for the rest of Sky.

Fox Sports didn’t immediately respond to requests for comment. Televisa in Mexico and Traffic declined to comment on the testimony. Full Play couldn’t immediately be reached for comment.

Globo’s press office in Brazil denied the allegations and any wrongdoing. The company said it doesn’t “make or tolerate any bribe payments.” Globo conducted internal investigations and concluded that no payments that hadn’t been specified in contracts were made.

“Globo Group will make itself fully available to the American authorities so that everything is clear,” the company said. “For Globo, this is a question of honor.”

Jurors at the trial were shown what Burzaco called a “sham” $3.7 million contract that was actually a cover for bribes. Torneos and its partners used the money to pay FIFA officials like Julio Grondona, head of Argentine soccer, to extend broadcast rights from 2015 to 2018, Burzaco said. Grondona died in 2014.

Torneos avoided potential competition with the contract extension while Fox Sports “gained leverage and the rights to broadcast and distribute its signal from the U.S. to Argentina for four more years and to launch Fox Sports 2 and Fox Sports 3, and other signals,” Burzaco said.

The 2008 contract was signed by James Ganley, whom Burzaco identified as a Fox Sports official who was aware of the bribes. Ganley, former chief operating officer of Fox Pan American Sports, was named in a 2016 U.S. lawsuit in which Fox executives were accused by a U.S.-based television channel, GolTV, of paying tens of millions of dollars in bribes to FIFA officials.

Michael Davis, a lawyer for Ganley, didn’t immediately return voice-mail and email messages seeking comment about Burzaco’s testimony.

Cooperating Witness

Burzaco was the head of Torneos from 2006 until his arrest in 2015. He’s the first of several cooperating witnesses who’ve pleaded guilty and are seeking leniency by testifying for the U.S. in the trial in Brooklyn, New York.

A former Citigroup Inc. banker, Burzaco said he started investing in media broadcast companies in South America in the early 1990s, raising his net worth to about $30 million.

He told the jury that he regularly paid out hundreds of thousands of dollars — sometimes as much as $1 million a year — in bribes to South American soccer officials. Burzaco said the money was funneled to accounts in Asia and Switzerland. Sometimes, he said, he handed out cash, with U.S. dollars tucked into an envelope or stuffed into a bag.

The three men on trial were among the recipients, Burzaco said, pointing out the defendants who are accused of taking bribes and kickbacks.

The defendants are Jose Maria Marin, 85, the former head of Brazil’s federation and once on FIFA’s organizing committee for the Olympics; Juan Angel Napout, 59, a Paraguayan and former FIFA official who was president of South American soccer’s governing body; and Manuel Burga, 60, a Peruvian soccer official and former member of FIFA’s development committee.

In testimony late Tuesday, Burzaco testified that that Grondona and two other CONMEBOL officials allegedly got bribes of more $1 million from Qatar’s soccer authorities to award the country the 2022 World Cup. Burzaco continues his testimony when court resumes Wednesday.

 

–With assistance from Gerry Smith, Andrea Navarro, R.T. Watson, David Biller and Charlie Devereux.

To contact the reporter on this story: Patricia Hurtado in Federal Court in Manhattan at pathurtado@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net; Crayton Harrison at tharrison5@bloomberg.net; Joe Schneider, Elizabeth Wollman

© 2017 Bloomberg L.P

More Info: sg.finance.yahoo.com

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