A League of His Own

The headquarters of FIFA takes up about 11 acres on a wooded hill above Zurich. Two soccer fields abut a main building that’s wrapped in aluminum webbing, allowing light to stream into a welcoming atrium. Blatter oversaw the construction of the compound, which was finished in 2007 and cost about 240 million Swiss francs ($255 million), and has pointed to its transparent design as an expression of FIFA’s values. Maybe, but FIFA’s legal department demands that some visitors sign nondisclosure agreements for otherwise routine meetings, and five of the building’s eight levels are underground. On a recent visit, cell phones were rendered useless in the depths, sheathed as they are in black, Brazilian granite. In a Strangelovian lair on the third subterranean level, Blatter holds executive committee meetings in a conference room with a floor of lapis lazuli. The room is lit by a round, crystal chandelier meant to evoke a soccer stadium.

FIFA is a nonprofit and, in theory, uncomplicated. Every four years FIFA’s roughly 475 employees put on a tournament of a sport so simple it essentially requires just one piece of equipment, a ball. Under its “Fair Play” banner, FIFA also acts as a global rulemaker and regulator for competition among its 209 ­national member associations, which are ­organized into six regional confederations, such as the one meeting in the Bahamas.

Sponsors and broadcasters pay dearly to be part of the action. A combined 30 billion viewers in more than 200 countries made the 2014 World Cup the most-watched televised event in history. Over the four years ended December 2014, the fiscal four-year cycle for a World Cup, FIFA grossed about $5.72 billion, mostly from broadcast rights, but also from sponsorships from the likes of Coca-Cola and Adidas. Of that, $358 million went to prize money for the teams that actually played, with World Cup expenses totaling $2.22 billion. (Host countries are responsible for most of the expenses, such as stadiums.) Brazil spent more than $10 billion on its 2014 World Cup. That was even after it rejected FIFA requests such as motorcycle escorts for board members, says Luis Fernandes, Brazil’s former deputy sports minister. Over the past decade, as income has surged, FIFA has banked cash reserves of $1.52 billion, up from essentially zero.

As for the rest of the billions, it’s not clear precisely where that money went. There are some clues. FIFA’s personnel ­expenses were $397 million. But good luck finding Blatter’s pay in the annual report. “We have hidden it so you cannot find it,” says Markus Kattner, FIFA’s head of finance and administration. “We’re not publishing it, first of all, because we don’t have to.” As long ago as 2002, Blatter made 1 million Swiss francs a year, plus bonuses, a FIFA executive at the time says. Several estimates based on the size of FIFA’s compensation pool put his current pay in the low double-digit millions. FIFA also paid $27 million, mostly from its marketing budget, to make the 2014 film United Passions, a flattering retelling of the soccer federation’s history starring Tim Roth as Blatter.

One item FIFA proudly announces as its biggest nonevent expense: $1.56 billion spent over the past four years on ­“solidarity” programs for member nations, including $1 billion for practice fields, local coaching, and other handouts. It’s pure pork ­barrel politics. Most of the money goes to small associations from places without much of a soccer program or any chance at all at a World Cup, such as the Cayman Islands or Montserrat. But, like the 207 other FIFA member nations, they each get one vote for president. On Blatter’s electoral map, the 5,200 residents of ­Montserrat are as important as the 200 million in Brazil. With so many tiny, nonsovereign territories in its club, FIFA has 16 more members than the United Nations.

FIFA’s money doesn’t always result in much more than new office space for local soccer officials. The organization has sent more than $2 million to the Caymans since 2002 to build a headquarters and world-class soccer fields as a base for its national teams; ­the men’s team is ranked 191st in the world. Blatter flew in for the groundbreaking ceremony in 2009. “Cayman has not yet qualified for the World Cup,” he told the assembled dignitaries, according to a local press account. “But I’m sure that one day you will make it. We can help.” The headquarters has been built, along with one field, but the land was too salty to grow grass, so the Caymans association is replacing it with artificial turf.

Although the men’s team from the Caymans usually loses—in March, its first international match in more than three years resulted in a goalless tie with Belize (rank: 159)—the Cayman Islands Football Association is one of the biggest powers at FIFA. Webb’s regional confederation nominated the Caymans’ treasurer, Canover Watson, to FIFA’s audit and compliance committee, the panel that’s supposed to be international soccer’s bulwark against corruption. In November, Caymanian authorities charged Watson with money laundering and fraud related to his role as chairman of the Cayman Islands Health Services Authority; he allegedly steered contracts to a business in which he had a financial interest. FIFA has temporarily suspended Watson from the audit committee. Watson declined to comment but has denied the charges.

FIFA has resisted meaningful reform, such as term limits and independent oversight, says Transparency International ­co-founder Michael Hershman, who co-wrote two reports on governance for FIFA. His experience appears similar to Garcia’s. Blatter commissioned the reports but then largely ignored them. “What was stunning for me is this deep-seated belief that they are beyond reproach, that they are autonomous, that they don’t care what anyone else thinks,” Hershman says. He has words of warning for the delegates who will line up at the ballot box in Zurich at the end of May. “Your vote at this point is the most important vote in the history of FIFA,” he says. “If you ­continue with Blatter, you deserve what you get.”

Yet what FIFA’s delegates get helps explain Blatter’s enduring power. It starts with handouts for each national soccer association, which this year include a standard $250,000 annual grant as well as a one-time $500,000 bonus from profits linked to the 2014 World Cup. Associations can also apply for FIFA Goal Programme money, for projects such as soccer fields and offices, and financial aid for specific construction or outreach programs. FIFA is also dispensing one-time bonuses in the millions to regional soccer confederations.

And there’s more, especially for local soccer officials who climb the ladder at FIFA, as the Caymans’ Webb did. FIFA’s executive committee has 25 members appointed by their regions, and they each get $300,000 a year, including a $500 per diem even for fractional days they are on FIFA business, as well as first-class flights, meals, all expenses, and ­five-star accommodations, which in Zurich usually means the 171-year-old Baur au Lac, a hotel set in its own park with Alpine views. That’s just FIFA money. Back home, ­regional bodies also pay. The Asian confederation pays its executive committee members $25,000 a year and $150 per day they’re on ­official business, according to a leaked 2012 Pricewaterhouse­Coopers examination.

Blatter rewards loyalty with hundreds of other appointments. After his last reelection, in 2011, he promised at least one committee membership to each country. Those hundreds of posts come with per diems of $350, business-class flights, and all expenses, meaning one trip could be worth $3,000, a hefty sum in the poorer corners of the world. “Those within the family, if you will, who did not make waves and who acceded to whatever Sepp Blatter wanted were given the best committee assignments, were put in a position to enrich themselves,” Hershman says. Dinners in Zurich after committee meetings can end with bills in the thousands, including bottles of wine for as much as $400, all of which goes on members’ FIFA credit cards, says a person who attended the dinners as support staff.

The largesse seems to work. In advance of his 2011 election, Blatter landed in Pago Pago, the capital of American Samoa, for the Oceania confederation’s congress. On the agenda was the election of a ­regional president. (FIFA had suspended the previous chief after he allegedly sought $2.3 million for a soccer academy in exchange for his vote on picking a host country for the World Cup.) The acting Oceania president—Papua New Guinea soccer head David Chung—had two potential challengers from New Zealand.

Then Blatter made an announcement. Every FIFA member association would get a bonus of $300,000, including the 11 in Oceania. Each of the FIFA regions would get a bonus of $7.5 million, a huge sum for tiny Oceania. Any challenger to the established leadership could jeopardize his association’s access to that pot.

“They withdrew,” Chung says of the Kiwis. The Papuan ran unchallenged, and in his acceptance speech pledged Oceania’s support for Blatter. “To the FIFA president, we are indebted to you,” he said. “We are behind you 100 percent.”

FIFA justice, when there is any, can be selective. FIFA has an internal system that includes an ethics committee, and when senior soccer officials have been probed, “their investigation was at the instruction of the president, Blatter,” says Terry Stearns, an investigator who worked with FIFA until 2012. “He’s not to be trifled with.”

Some of the worst offenses have gone unpunished. On the afternoon of Jan. 12, 2010, an earthquake rocked Haiti, right as the board of the nation’s soccer association was meeting in its ­Port-au-Prince headquarters. The president, Yves Jean-Bart, escaped lightly injured. As the building collapsed, rubble pinned coach Jean Yves Labaze, who died along with at least 31 others. The next day, when the phones were back up, Blatter called Jean-Bart and pledged help. FIFA said it sent $250,000 in aid to the head of North and Central American soccer at the time, Warner, in Trinidad and Tobago. A contributor from South Korea sent an additional $500,000. Jean-Bart says he got only a fraction of it. At first, “we got a small shipment of rice, but if you count it up it was worth less than $10,000,” he says. Additional assistance, for reopening offices, running matches, and other items, brought the total aid received to just $429,000, he says.

After Jean-Bart complained to FIFA and the regional confederation, Warner drew up an accounting of how the money was spent. A copy obtained by Bloomberg Businessweek shows receipts of more than $229,000 for generators, food, blankets, and other supplies from a Trinidad company whose address doesn’t appear to exist. Jean-Bart says he never received those supplies. More than $366,222 went toward bringing two Haitian soccer teams to Trinidad and other countries for matches, according to the ledger. Their flights were arranged by a Warner family travel agency, and their lodging was at Warner’s conference center—the one he built with FIFA money. Warner dragged Jean-Bart into it, too. The final section of the accounting shows $30,000 ­allocated to pay for Jean-Bart’s daughter’s medical school bills. Christina Jean-Bart says she didn’t receive any money and didn’t pursue medical school. Almost five years later, FIFA says it’s still investigating the Haitian matter.

The wife of the late Haitian coach, who’d been living in the U.S. on money he’d sent from Haiti, also failed to get answers or aid. “When I contact FIFA, they said to me they cannot do anything,” says Marie Labaze, 58, an unemployed teaching ­assistant in Spring Valley, N.Y. “They don’t give anything.”

Forty-three percent of FIFA’s money comes from broad­casting contracts, and an additional 29 percent comes from sponsorships, from some of the largest and, nominally, most image-­conscious companies in the world. In general, they seem content to do business with the devil they know, but there are fractures. At the last World Cup in Brazil, FIFA made a record $1.6 billion from its global marketing rights for the four-year period that included the 2014 tournament. By comparison, FIFA’s sponsors paid $1.2 billion for the South Africa World Cup four years earlier. That’s a 33 percent increase during a time when one corruption scandal followed the next. “Sponsors pay money into an organization that is managed by corrupt people, which they know,” says Guido Tognoni, who worked at FIFA on and off from 1984 to 2003 in legal affairs, marketing, and as an adviser to Blatter. “For them, the television ratings are still more important than moral considerations. Another global brand will step in. Coca-Cola, Pepsi-Cola. Adidas, Nike.”

Coca-Cola Chief Executive Officer Muhtar Kent says he ­believes FIFA is committed to learning from its mistakes. “You’ll see them continuing to develop and get better,” he said on April 22 during a ­conference call with reporters. “We are not funding an ­organization,” he says. “We’re supporting the sport, particularly as it relates to youth. That’s what we are very proud to support.”

Adidas, which has worked with FIFA since 1970 and bases its identity on soccer, declined to comment for this story. Responding to the hosting scandals, Adidas issued almost identical statements in 2011 and 2014. The most recent said, “The negative tenor of the public debate around FIFA at the moment is neither good for football nor for FIFA and its partners.”

Some sponsors have left. Although neither cited controversies, Emirates airline said in November it wasn’t ­renewing a contract it’s had since 2006, and Sony let its contract lapse at the end of 2014.

Others have been more outspoken. In 2006, MasterCard sued FIFA in U.S. federal court for betraying it for rival Visa in a renewal of its deal. MasterCard had paid almost $100 million to be a World Cup sponsor for the previous 16 years. This time around, FIFA’s new director of marketing, Frenchman Jerome Valcke, simultaneously negotiated a new deal with MasterCard while he and his team fed details of the discussions to Visa, which eventually got the contract. Stunned, MasterCard sued, arguing it hadn’t been given its contractual right to match other offers. U.S. District Judge Loretta Preska, in ruling against FIFA, wrote that “FIFA’s conduct in performing its obligation and in negotiating for the next sponsorship cycle was anything but ‘fair play,’ ” knifing FIFA with its own slogan.

Even though MasterCard now had a chance to continue as a FIFA sponsor, the company chose to settle instead. “We decided to put a premium on partnership and trust,” says Noah Hanft, who was MasterCard’s general counsel at the time and is now CEO of the International Institute for Conflict Prevention and Resolution. “We simply preferred to be compensated for the breach as opposed to having a long-term partner that we couldn’t trust, that was ethically challenged, and that seemed corrupt.” FIFA paid MasterCard a $90 million settlement to resolve the case.

FIFA suspended Valcke. But less than eight months later, Blatter brought him back—with a promotion. He would be FIFA’s new general secretary and Blatter’s second-in-command. At the time, Valcke said he was trying to get the best deal for FIFA and didn’t play dirty.

Blatter, the son of a chemical-plant worker, was born in Visp, a town of about 7,000 inhabitants in a valley below the Matterhorn. Two hours by train from Zurich, Visp remains Blatter’s family base. On an evening in April, his only child, Corinne Blatter Andenmatten, is rushing home from a meeting to see her daughter before bedtime. Andenmatten, the product of the first of Blatter’s three marriages, lives a few blocks from Visp’s Sepp Blatter Primary School. “He’s a very down-to-earth person,” she says. About twice a month, Blatter comes to Visp for the weekend and stays in his apartment, above an optometrist shop, she says. “For people here, he’s just Sepp.”

Blatter spreads the wealth in Visp, too, in part through his Sepp Blatter Foundation, which has assets of more than 1.1 million Swiss francs and takes outside donations. The foundation gives money to local institutions such as the Martinsheim care home, to which it granted 20,000 francs for the construction of a new wing. Blatter’s mother lived at the facility from 1990 until her death in 2000, its director, Markus Lehner, says. “For him it’s important that he cares for Visp and stays connected,” he says. A FIFA holiday card stuck to a cabinet in Lehner’s office is signed by Blatter, with an annotation at the bottom that he’s enclosed 2,000 francs as a treat for the staff.

On Aug. 23, 2014, a red helicopter ­descended on Visp, bearing Ronaldo, the second-highest goal scorer in the history of Brazil’s national team. (Pelé is No. 1.) Ronaldo was there for the 100th ­anniversary celebration of FC Visp, the local football club. As the soccer star stepped off the chopper, a beaming Blatter greeted him. For the day’s main event—an exhibition game between a “FIFA selection” of former pros and an opposing side of former local players—Ronaldo changed into a blue Adidas uniform made for the event. FIFA referees officiated. Construction engineer Klaus Kalbermatten says he’s proud Blatter was able to bring outsize prestige to the celebration of the tiny team. “No Ronaldo is coming just for Visp,” he says. “The rest, they have Manchester United, they have Bayern Munich, they have Real Madrid. We are small, but we have Sepp Blatter, head of all football.”

After growing up in Visp, Blatter earned a degree in business administration and economics at the University of Lausanne. Along the way he picked up four languages besides his native German: English, French, Italian, and Spanish. Early jobs as a sportswriter and for the Swiss Ice Hockey Federation led Blatter to Longines, the watch company, where he was involved in the organization of the 1972 and 1976 Olympics. In 1975, Blatter started his career at FIFA as head of development programs, work that took him to Africa.

After joining FIFA, Blatter married his second wife, the daughter of the association’s ex-secretary general, a position he attained in 1981. His mentor at FIFA was President João Havelange, a former Brazilian Olympic swimmer. Havelange had created the blueprint for Blatter’s rise: showering attention and money on previously ignored nations. Havelange won his first election in 1974 by touring Africa to meet officials and paying for them to travel to the election, something FIFA does for all members now. When Havelange said he’d step down in 1998, it was Blatter’s turn.

For his 1998 campaign tour, Blatter relied on a Qatari named Mohamed bin Hammam, who ran Asia’s soccer confederation. Bin Hammam supplied cash and the use of a private jet for Blatter to crisscross Africa in pursuit of votes. In his book How They Stole the Game, David Yallop writes that cash bundles of $50,000 were handed out to African delegates in Paris before the vote. Blatter’s opponent, Lennart Johansson of Sweden, remains bitter that FIFA never investigated the alleged bribery, which he says was witnessed by people he trusts. “They talk about seeing ­envelopes being handed over from one to the other. They were sure that this was meant to make the vote in the right direction, which was not for me,” says Johansson, 85, who’d been the head of European soccer. “Sooner or later I hope that this will be brought to knowledge and to court.”

Blatter confirms that money changed hands but not that he was involved in handing it out. “Who has bought votes in the first election?” he asked at a 2011 briefing with reporters. To find out, he reasoned, one would have to be ­transported back in time to June 8, 1998, at the Meridien Montparnasse hotel, where delegates stayed. Blatter declined to comment for this article.

Before the election in 2002, FIFA’s secretary general, lawyer Michel Zen-Ruffinen, compiled a report alleging abuse of power and mismanagement that was signed by 11 executive committee officers. “FIFA today is run like a dictatorship,” he wrote in the report. “It has been reduced to the Blatter organization.” Among the allegations were unauthorized payments by Blatter from FIFA accounts. All FIFA financial records from 1998 and earlier had vanished, making it impossible for FIFA staff or its KPMG auditors to assess the ­organization’s true finances, the report said.

A group of Europeans persuaded Issa Hayatou, the head of soccer in Africa, to stand against Blatter. At a meeting to discuss FIFA’s finances, the men from the Caribbean moved to put down the mutiny. Blatter backers, including the Caymans’ Webb, spoke up in Blatter’s favor. Boos and jeers rang out as dissenting voices were kept from the podium. A call from the Norwegian soccer association’s general secretary at the time, Karen Espelund, that Blatter’s opponents be heard was ignored. Blatter didn’t intervene, Espelund says. As she recalls it, the support for Blatter became strident. Libyan dictator Muammar Qaddafi’s son ­Al-Saadi, wearing a beret, took the stage to add his backing. A day later, Blatter wiped the floor with Hayatou, winning 139 to 56.

Blatter did crack down on one bribery scandal. He faced his next election challenge in 2011 when his longtime ally bin Hammam tried to unseat him. Less than a month before the ­election, members of the Caribbean Football Union gathered at a hotel in Trinidad to hear from bin Hammam. After he addressed the group, Warner took the stage and announced there would be gifts from bin Hammam for those in attendance. Later that day, delegates lined up at a hotel room door and entered one at a time. Inside, Caribbean soccer administrators handed each ­delegate an envelope stuffed with four stacks of $100 bills, each worth $10,000. The scheme came to light days before the FIFA ­presidential election when Warner’s American lieutenant, Charles “Chuck” Blazer, contacted FIFA and disclosed details of the payments.

On May 28, bin Hammam dropped out. (FIFA has since banned him from soccer.) The next day, Blatter convened a press conference in Zurich. “Crisis? What is a crisis?” a stern-faced Blatter said. “We are not in a crisis. We are only in some difficulties, and these difficulties will be solved inside our family.” With bin Hammam out, Blatter sailed to victory again, and vowed it would be his last term. Warner resigned, threatening a “tsunami” of retribution against FIFA. FIFA started an internal investigation of Warner but closed it right away, saying the resignation had the effect of preserving Warner’s presumption of innocence. FIFA also launched probes into roughly 30 other Caribbean soccer officials for the bribery scheme, and almost all of them resigned or were punished with a mix of warnings, fines, and suspensions, including the 30-day ban for the ­Dominican Republic’s Guzman. FIFA has never said which delegates took the money or which, if any, have given it back. Several now serve on FIFA committees.

While the scandal further tarnished FIFA’s image, it also presented an opportunity for Blatter to court a more loyal team at the North and Central American confederation. In May 2012 the confederation elected Webb to finish Warner’s term. Blatter is one of Webb’s biggest fans. Speaking in the Cayman Islands in 2013, Blatter suggested there could be a new FIFA president soon, “and this president could be Jeffrey Webb.”

Webb served for about a decade as deputy director of FIFA’s internal audit committee, signing off on FIFA’s finances amid a constant din of corruption allegations. At home, Webb’s own ­finances are entwined with his official soccer duties. He opened a fast-food restaurant in the Cayman Islands with the head of Jamaican soccer, who would later be suspended for six months as part of the bin Hammam bribery scandal and is now one of Webb’s vice presidents. Webb’s regional organization has given business for signs and banners at tournaments in the U.S. and the Caribbean to a FastSigns franchise in the Cayman Islands that his friend Watson partly owns. Webb declined to speak with reporters, but a spokesman for his confederation brushes it off, saying it doesn’t seek bids for such small jobs.

Webb, 50, towering and soft-spoken, carries himself like a head of state at the Bahamas congress. Bodyguards surround him even during trips to the men’s room. Webb tells his delegates he’s created a “culture of ­accountability and ­transparency.” At the same time, his confederation provides scant financial data. Perhaps most important in the succession game, he’s loyal to Blatter.

As he seeks another term, Blatter is hitting the campaign trail. For the South American confederation’s congress in March, Blatter arrives in the Paraguayan capital, Asunción, by private jet. A government helicopter takes him off to lunch with President Horacio Cartes. Later, Blatter checks into a $2,700-a-night suite at the Bourbon Conmebol Asunción Convention Hotel, where a long line of officials ascends the elevator to pay tribute.

In April the campaign takes Blatter to Cairo for the African confederation’s congress. As in the Bahamas, the organizers bar election rivals from addressing the gathering. Africa is a Blatter stronghold in part because he brought the World Cup there in 2010. Before his departure, the continent’s 56 members pledge unanimously to back him. “We feel duty-bound to protect the position and the man Sepp Blatter as FIFA president,” says Zambia’s Kalusha Bwalya, a member of the Confederation of African Football’s executive committee and former star player in Europe.

Oceania’s confederation also pledges its support to Blatter. On the Cook Islands—15 coral atolls and volcanic isles scattered between Hawaii and New Zealand—the soccer association’s president, Lee Harmon, says FIFA money let him build an office and a small stadium. “Before Blatter became president, you know how much funding each member association got from FIFA? Zero. Is that enough to convince you why we’re voting for Blatter?” asks Harmon, who farms pigs and grows vegetables for a living. “A lot of the corruption in FIFA they talk about, blah blah blah, but I don’t think he has control of that.”

There’s one stop where his rivals are more than welcome to make their case: the annual conference of Europe’s soccer body, UEFA, held in Vienna this March. It’s enemy turf for Blatter. At the close of the event, each of the three opponents takes to the podium. Blatter, who’s already given opening remarks as FIFA president, chooses not to speak alongside the other men. First up is Portugal’s trim and tanned Figo. A cornerstone of his campaign is to distribute $1 billion of FIFA’s reserves to member ­countries and pay out half of World Cup revenue to them. He tells the delegates he wants to boost their annual payments from FIFA to $2 million. As he concludes, Prince Ali applauds. Blatter, who sits in the front row with Papua New ­Guinea’s Chung and the Caymans’ Webb, doesn’t join the salute. Next up is Prince Ali. “We need to expand financial support to the member associations,” he says, striking a similar note to Figo. Then Van Praag makes his pitch. “I simply cannot accept that we leave FIFA in its current state for future generations,” he says. “Effective change is impossible under the same person.” And then he, too, talks money. He wants to quadruple each nation’s annual allowance to $1 million.

You can’t blame them for trying. It’s straight from Blatter’s playbook. But if the best his opponents can do is promise to out-Sepp Sepp, perhaps he’s precisely the man soccer deserves.

—With Alan Katz, Aleem Khan, and Duane Stanford

Top photo: Philip Montgomery for Bloomberg Businessweek