(Via SFGate.com) FIFA has been the subject of most headlines over the past couple of days surrounding corruption in the football world going back decades, but much of the indictment brought by the US Department of Justice (which you can read in full here courtesy of Bloomberg) refers to the misconduct of multi-national sports marketing agency Traffic Group.
Traffic Group had already been subject to government investigations in Brazil ahead of the indictment’s publication on Wednesday, and a well-placed source within the Brazilian sports marketing industry tells Business Insider the company has been on a “downward spiral” for the past five years in terms of its perception in the industry.
In December, The DOJ says the owner and founder of Traffic Group, José Hawilla, waived indictment and pleaded guilty to charges of racketeering conspiracy (the most severe crime, which has a maximum penalty of 20 years in US jail,) wire fraud conspiracy, money laundering conspiracy, and obstruction of justice.
Hawilla also agreed to forfeit over $151 million in ill-gained profits made from bribes and kickbacks from sports governing bodies, sportswear companies, and officials over a two-decade period.
Aaron Davidson, Traffic Group’s US president (and also chairman of the North American Soccer League) has also been indicted by US federal prosecutors.
The indictment alleges Traffic Group’s corruption began back in the early 1990s when Hawilla cut a deal to acquire the worldwide commercial rights for the CONMEBOL’s Copa America national team tournament, soliciting tens of millions of dollars in bribes to do so, which also included deals for sponsorship rights acquired by US sportswear companies.
The indictment also claims Hawilla paid Jack Warner (then president of North American football governing body CONCACAF, who has since been indicted by the DOJ) and Charles Blazer (then CONCACAF general secretary, who has since pleaded guilty to wire fraud and tax evasion, according to the DOJ statement) bribes to win rights for the CONCACAF Gold Cup.
The DOJ says in its indictment that Traffic Group also paid bribes for other rights involving federations in Costa Rica, Trinidad and Tobago, and Nicaragua.
One of the achievements Traffic Group is most famous for is mediating the $369 million deal between Nike and the Brazilian national football team in 1996. The indictment mentions an “unidentified U.S. sportswear company” that signed a partnership with the Brazilian football federation in 1996, on which the sports marketing company took a commission, which went on to be paid to a “high-ranking” official at Brazil’s football federation CBF.
It’s not clear if Nike is the unidentified company, but Bloomberg notes that the partnership referenced in the indictment happened in the same year that Nike announced its deal with Brazil.
Nike declined to comment to Bloomberg on the specific allegations but said in a statement: “Nike believes in ethical and fair play in both business and sport and strongly opposes any form of manipulation or bribery. We have been cooperating, and we will continue to cooperate, with the authorities.”
Business Insider has contacted Traffic Group for comment and will update this article once a response has been received.
… Continue reading at SFGate.com
