Fifa blocks US$20m in payments to scandal-ridden groups

The Fifa logo is seen outside the Fifa headquarters in Zurich, Switzerland on Dec 17, 2015
The Fifa logo is seen outside the Fifa headquarters in Zurich, Switzerland on Dec 17, 2015PHOTO: REUTERS

(Bloomberg) - Fifa has blocked US$20 million (S$28m) in funding to the organisations that oversee soccer in the Americas, dealing yet another blow to the confederations at the center of a sprawling US corruption case.

"In light of current proceedings involving individuals related to Conmebol and Concacaf, Fifa has put contributions towards these two confederations on hold until further notice," the global soccer regulator said in an e-mailed statement to Bloomberg News.

"We are currently assessing further steps to be taken to increase the level of assurance which may again enable Fifa to release such funds in the future."

A US Department of Justice probe into decades of corruption in global soccer has led to charges against 39 people for crimes including racketeering, money laundering and wire fraud.

Most of them are officials or sports marketing executives connected to Conmebol, the body responsible for soccer in South America, and to Concacaf, its equivalent in Central America, the Caribbean, and North America. The charges have created havoc in both organisations, which have seen operations badly disturbed by the probes.

"Concacaf has fulfilled all of Fifa's requests for documents and information regarding the new administrative, compliance, and procurement processes that have been implemented at the Confederation to ensure the issue is resolved in a timely manner," Concacaf said in an e-mail.

Conmebol's director general Gorka Villar did not reply to an e-mail seeking comment.

Police in Paraguay raided the offices of Conmebol on Jan 8 to search for documents on behalf of US authorities.

For their parts, Fifa and the two regional organisations are conducting internal investigations that may reveal more evidence of wrongdoing.

The scandal has taken a financial toll. In a letter to members on Jan 5, Concacaf said it hadn't received US$10 million in Fifa funds and was trying to straighten out the group's finances.

After former president Jeffrey Webb and other officials were arrested in May, the group wasn't able to access US$9 million in a Cayman Islands bank account for several months and struggled to find a new bank. The crisis has led to the group stopping annual stipends to its 41 member nations and canceling all of its committee meetings until further notice.

"The confederation was operating with approximately $2 million in available cash - an extremely precarious situation," Concacaf wrote in the letter, which was reviewed by Bloomberg News.

"While our internal investigation is ongoing much of the financial situation was the result of poor budgeting and excessive spending by the prior administration."

The group is currently being managed by Alvarez & Marsal, an international bankruptcy consultancy which took over management of Lehman Brothers following the investment bank's 2008 collapse. According to the letter, Concacaf was expected to have operating reserves of $28 million for the year ended Dec. 31 2015.

Details of Conmebol's finances are less clear. Following his election last week, the confederation's new president Alejandro Dominguez announced plans for an immediate audit of the organization's account, something his predecessor Juan Angel Napout also committed to before his arrest in December.

"I agree we cannot be in a worse situation," said Dominguez, a friend and former associate of Napout's, after his election. "I believe that anything that can happen from now has to be good."