Last week, the German soccer association (DFB) was rocked by allegations that they had bribed four FIFA executives in exchange for the hosting rights for the 2006 World Cup. Today, the head of the DFB gave a press conference to address the allegations. He did not do much to clear things up.
DFB president Wolfgang Niersbach started off by saying unequivocally that Germany did not buy the World Cup. From USA Today:
“The key message is that everything was done with honest means for the 2006 World Cup bid. There were no slush funds, no vote-buying.”
This aspect of his defense of the DFB has gained support over the past week. Bild did its own investigation into the matter and found that the initial source of the controversy, the €6.7 million that went from Adidas exec Robert Louis-Dreyfus to FIFA, was paid in 2002, nearly two years after Germany had won the hosting rights in 2000. So it is conceivable that the report from Der Spiegel—the paper that broke the story—wasn’t quite accurate and that the €6.7 million was not in exchange for votes.
That still leaves the little matter of the DFB paying €6.7 million to FIFA off the books, then constructing an elaborate laundering scheme with FIFA’s help. That’s where Niersbach’s statements got a little squirrely. From ESPN FC:
He said that, after winning the right to host the tournament in June 2000, the DFB was asked to pay €6.7m into a FIFA account to receive a grant of €170m for the organisation of the tournament.
He said the organising committee were unable to come up with the €6.7m but Beckenbauer vouched for the money, which was then paid to FIFA by Louis-Dreyfus.
The organising committee then paid back the money to Louis-Dreyfus through a FIFA account in 2005, Niersbach said.
So the DFB gave FIFA about €7 million... so that FIFA would then turn around and give them €170 million? Who got that €7 million and why are they copying the business plan of hundreds of “Nigerian princes” flooding email inboxes all over the world?
When the press pointed out the absurdity of these events to him, Niersbach was unable to muster anything close to an explanation.
So Niersbach, why did this whole payment plan come about?:
“That’s unclear to me too,” he said. “I can’t answer that question.”
Is this of a piece with how FIFA usually operates?
“You’ve got me there.”
Where did the money even go?
“We never received any money from Louis-Dreyfus. The question of who exactly received it can only be answered by FIFA.”
If the Dreyfus loan was real, as everyone admits, and on the up-and-up, as you allege, why was it handled so secretively?
“That’s also a question I can’t answer.”
For their part, FIFA was none too quick to jump to Niersbach’s defense. According to a FIFA statement, this kind of payment plan is not at all ordinary business practice. Back to USA Today:
FIFA reacted Thursday with a statement saying that “the financial support of FIFA World Cup Organizing Committees should be coupled to any kind of financial advance payment by the respective organizing committee or the relevant football association in no way corresponds to FIFA’s standard processes and regulations.”
You know shit’s weird when FIFA’s the one talking about upholding standards and practices.
The most in-depth version of events that sheds some light on what probably actually went on comes from Horst Schmidt, who was the vice-president of the 2006 World Cup organizing committee where all this stuff started. In a long statement, he communicated his recollections about everything.
His version sticks pretty close to the Bild account. Sometime between 2001-2002, the organizing committee was negotiated with FIFA for that €170 million grant. Grants of that type themselves are normal, but what wasn’t typical was the timing and structure of this one, he says.
Schmidt says the agreement on the grant was ultimately reached in a private meeting between the committee’s president, Franz Beckenbauer, and FIFA head Sepp Blatter. The two men emerged from that meeting with a signed agreement saying only that FIFA would disburse the grant. There was no reference to the €6.7 million.
Schmidt didn’t learn about the requirement that the organizing committee pay FIFA €6.7 million until 2004, which seems to be when Louis-Dreyfus called in the loan. That was when Schmidt discovered that Beckenbauer had personally guaranteed that he’d pay FIFA €6.7 million in exchange for the grant since the committee itself did not have the money. Unable to pay the money himself, Beckenbauer and another guy, Robert Swan, came up with the solution that Louis-Dreyfus would loan the committee the money, and that Beckenbauer himself would be the one to repay him when the time came.
All of this was made without the organizing committee’s knowledge, Schmidt says. However, the committee did agree that Beckenbauer himself shouldn’t be personally liable for Louis-Dreyfus’s loan since he was acting on behalf of the committee. With that in mind, Schmidt unsuccessfully tried to persuade Louis-Dreyfus to drop his claim. Ultimately, the committee members and FIFA came up with the idea for listing tying repayment to a gala event that was never held.
Confused? That’s basically where this strange saga lies at the moment. There’s a good chance that Germany didn’t exactly buy votes to host the World Cup, but the €6.7 million, who it was paid to, and why, all remain open questions that appear to indicate some funny business. It’s probably no coincidence that the shady meeting from which the covert payment was birthed was a one-on-one conversation involving Beckenbauer and Blatter, both currently under investigation by FIFA’s ethics committee.
Photo via Getty