Update on FIFA-related proceedings in Switzerland
This article is a follow-up to our previous update of July 2021, which described among other things the recusal of the Attorney General of the Switzerland (OAG) and of two other federal prosecutors following informal meetings conducted by the OAG with representatives of the Fédération internationale de football association (FIFA) in the context of the OAG’s many open investigations into FIFA relating to allegations of private corruption and mismanagement.
This article provides an update on these proceedings, on the TV rights appeal trial for the World Cups 2018 to 2030 and the on-going trial against former FIFA president and former UEFA president.
2018, 2022, 2026 and 2030 World Cups media rights case
By way of reminder, the Swiss federal prosecution authorities opened criminal proceedings in 2015 against a former FIFA executive (“A”) on suspicion of mismanagement (Art. 158 of the Swiss Criminal Code; SCC), alternatively misappropriation (Art. 138 SCC), in which FIFA filed a criminal complaint as a private claimant one year later.. It emerged from the investigation that the former FIFA executive had received, prior to end of 2013, economic advantages from a Qatari individual (“B”) and a Greek individual (“C”) in return for the award of media rights for the 2018, 2022, 2026 and 2030 World Cups by FIFA.
The first instance trial phase (SK.2020.4) was held from 14 September to 2 October 2020. The parties had been informed by the Court of the hearing dates in April 2020. At the end of August 2020, the Greek accused had sent the Court a medical certificate from his cardiologist stating that he had an abnormal heart rhythm what was considered as insufficient by the Court to hold that C had sufficient ground not to appear. This accused was therefore tried in absentia contrary to the two others.
By judgment of 30 October 2020, the former FIFA executive was acquitted of the charges of aggravated mismanagement and passive bribery but found guilty of repeated forgery of documents (Art. 251(1) SCC) and sentenced to a financial penalty of 120 days at CHF 200 per day – making a total amount of CHF 24,000 - a penalty that has been suspended for a two-year probation period. In addition, the former FIFA executive has been ordered to pay FIFA an amount of EUR 500,000 plus interests, less an amount of EUR 99,468.73 and an amount of EUR 1,25 million for compensation for the damage suffered by FIFA plus an amount of CHF 80,000 for the compulsory expenses incurred by FIFA during the procedure.
The Court ordered A to pay 50% of the court’s costs and 25% each to be borne by B and C, refusing to pay the accused lawyers’ fees (Art. 429(1) of the Code of Criminal Procedure; CCP).
The OAG, the former FIFA executive (A) and the Greek individual (C) all appealed against this judgment in February 2021 while the latter also filed an application for a new judgment (based on Article 368 CCP), an application that was dismissed on 31 March 2021.
The appeal procedure, which had been stayed since 24 February 2021 while the Federal Criminal Court dealt with the request for a new judgment of C, was resumed on 7 March 2022. All three defendants showed up at trial. The OAG requested 28 months of imprisonment for the Qatari individual and 35 months for the former FIFA Secretary-General.. Unlike at first instance, the OAG did not the OAG did not request a suspended sentence but instead an immediate custodial sentence.
The former FIFA Secretary-General’s counsel pleaded among other things that the prosecution's case "was disproportionate" and that the prosecution was "inventing corrupt pacts and relying on legal innovations" while the Qatari individual’s counsel said that the OAG was in the “hunt for a trophy” while the conditions for a finding of private corruption were not met in this case and that the award of the TV rights did not lead to a disruption of the market.
It should be recalled that offences condemning corruption in Switzerland (Art. 322octies SCC et seq.) were amended with effect from 1 July 2016 - and thus are only applicable for acts committed after that date - in particular because of the need for the Swiss authorities to be able to prosecute acts of corruption ex officio in the context of international sports federations, following the suspicions of corruption that had tainted the award of the 2018 and 2022 football World Cups, by removing as a condition of punishment a distortion of competition (FF 2014 p. 3433 ff., p. 3434 ff. and p. 3441 f.).
The question that arises in the appeal proceedings is therefore whether a company was unfairly excluded or whether the company chosen by FIFA for the broadcasting of the TV rights represented the 'best value for money' without distorting competition.
The operative part of the judgment is expected to be handed down shortly, while the full reasoned judgment is expected to be published in the summer of 2022.
Proceedings against the former General Prosecutor and the current FIFA President
The Swiss Parliament appointed a new head of the Attorney General’s Office (OAG) on 29 September 2021. The latter took over the position of the previous Attorney General who had been forced to resign due to informal meetings – whose content remains unclear - at the Schweizerhof Hotel in Bern, Switzerland, with senior FIFA executives, including with the current FIFA President, on the fringes of the OAG's proceedings against former FIFA executives.
The Swiss Parliament also appointed on 15 December 2021 two new special federal prosecutors to continue the criminal investigation BB.2020.228 into the relationship between the former Attorney General and the current FIFA President, a cantonal prosecutor and childhood friend of the latter and a former FIFA spokesperson who allegedly took part to these informal meetings. This appointment followed the resignation by the former extraordinary prosecutor in charge of the investigation who had been disqualified by judgment of 5 May 2021 in the proceeding BB.2020.296 by the Federal Criminal Court for blaming him for communications to the press, including an interview in a legal magazine representing a breach of the principle of the presumption of innocence towards FIFA.
A request to lift the immunity of the former extraordinary federal prosecutor was filed on 25 August 2021 to initiate criminal proceedings against him on suspicion of breach of official secrecy. The Commission of the Swiss Parliament on legal affairs rejected this request and maintained his immunity on 20 September 2021.
Since then, little or nothing has filtered out about this procedure. The new Attorney General refused to comment on these past events and has indicated that a reorganisation of the OAG is unnecessary.
The press reported that the former FIFA President has been heart by the OAG in mid-May 2022, a hearing the content of which was not reported by the parties.
There is now no reason why this investigation should not now be progressed by the OAG with all due diligence.
The other point that remains to be clarified and could potentially slow down the investigation is whether the investigative acts that were carried out by the former prosecutors who had to recuse themselves ought to be repeated.
Proceedings against former FIFA President and against former UEFA President
The OAG opened a criminal investigation (SV.15.1013) on 24 September 2015 against the former FIFA President based on findings from the investigations related to the World Cup media rights cases on suspicion of mismanagement (Art. 158 SCC) and misappropriation (Art. 138 SCC).
The latter has since then been accused of having caused, as FIFA president, financial damage by making an unjustified payment of more than CHF 2 million to the former UEFA president, who was also at that time member of the FIFA Executive Committee. On 4 May 2020, the OAG extended the investigation against the former UEFA president for suspicion of participation in mismanagement (Art. 158(1) and (3) SCC or misappropriation (Art. 138 SCC) and forged documents (Art. 251 SCC) for having submitted to FIFA an invoice for deferred remuneration of
CHF 500,000 per year from 1998 to 2002.
The former FIFA president was also initially suspected for having allowed subsidiaries of FIFA, respectively FIFA Marketing and FIFA Marketing & TV AG, to suffer financial loss by selling, to the Caribbean Football Union and its president, TV rights below market value in 2005 and by failing to enforce FIFA's contractual rights against FIFA's contractual rights vis-à-vis the Caribbean Football Union, with the intention of illegally enriching the CFU or its president, a charge that was subsequently discontinued by the Federal Criminal Court by decision (BB.2020.203) of 21 July 2021 despite an appeal by FIFA.
On 4 May 2020, the OAG extended the criminal investigation against the former FIFA president and two other individuals for suspicion of mismanagement (Art. 158 SCC) and misappropriation (Art. 138 SCC) for having granted to the Trinidad and Tobago Football Federation (TTFF), as borrower, a loan of USD 1 million on 12 April 2010 on the basis of a loan agreement not signed by the TTFF, without the contract providing for a guarantee or interest, which has not been reimbursed but transformed by FIFA into a financial aid for the TTFF.
Finally, on 21 December 2020, FIFA and FIFA Museum AG filed a criminal complaint with the Public Prosecutor III of the Canton of Zurich (ZPO III) against the former FIFA president and three other individuals among others for suspected mismanagement for having, in their capacity as senior FIFA officials, arranged for an excessive fixed rental contract of the FIFA museum until 2045, causing damages of “at least CHF 26.1 million” for liabilities for FIFA on a total lease value of CHF 500 million.
By a decision of 1 October 2021, the Federal Criminal Court refused to order the OAG to take over the proceedings conducted so far by the ZPO III for lack of federal jurisdiction and also to avoid a delay in the judgment on the facts relating to the remuneration of the French individual, which had reached the end of the investigatory phase.
In January 2021, counsel to former UEFA president requested access to the proceedings under reference BB.2020.228 against the current President of FIFA and the former attorney general to understand "[...] the degree of involvement/participation of the Office of the Attorney General of Switzerland in these unlawful acts and their extent and scope [translated from German]" which was refused by the OAG, which in turn imposed sanctions on former UEFA president’s Zurich counsel by way of a disciplinary warning for having stated that the OAG could have acted illegally.
On 26 February 2021, the former UEFA president requested the OAG to recuse the three prosecutors from the case and appoint an extraordinary federal prosecutor who does not already work for the OAG and filed an appeal against the refusal to grant access to the file BB.2020.228 (BB.2021.61). These requests were refused by the OAG and this decision was confirmed by the Federal Criminal Court on 1st October 2021.
This led to the announcement of the proposed trial of FIFA former president and UEFA former president which takes place before the Federal Criminal Court between 8 and 22 June 2022.
According to the summary of the indictment published by Federal Criminal Court, the concerned parties are “ […] accused of having illegally obtained a payment of CHF 2 million and social security contributions of CHF 229,126 for [M.P.] to the detriment of FIFA. For this purpose, [M.P.] submitted an allegedly fictitious invoice to FIFA in 2011 for an (alleged) outstanding claim for his work as a FIFA consultant in the years 1998 to 2002. After signing this invoice and confirming the existence of the claim by [J.B.], FIFA allegedly paid the corresponding claim (including social security contributions) to [M.P] [translated from French]”.
The trial started on 7 June 2022 and will last two weeks.
The main issue at stake in this proceeding is therefore whether the remuneration paid to former UEFA president corresponded to actual services, whether it was proportionate and whether it had been validated by the competent FIFA bodies, or whether FIFA had been harmed by an undue remuneration decided by the then (sole) FIFA president, and why.
It should be remembered that the Court of Arbitration for Sport (CAS) had already considered these questions after the parties concerned had been separately referred to it following their suspension by FIFA. In the CAS award rendered on 9 May 2016 against the former UEFA president, which was issued in French, CAS held, on the basis of its "intimate conviction", that "[the evidence] presented [...] does not establish [... ] the existence of an oral agreement [and that] the payment of CHF 2,000,000 was not made in fulfilment of an obligation of FIFA and represents an undue advantage [...; translated from French]" within the meaning of the FIFA Code of Ethics (in the version applicable at the time). The CAS had also found that the Code of Ethics had also been violated due to the extension of the pension plan from which the French national had benefited. The CAS award of 5 December 2016 rejecting the former FIFA president's appeal also contains many relevant facts. In its assessment of the facts, the arbitration body noted, among other things, that the remuneration of the then UEFA president had been agreed orally with the former FIFA president in the context of the latter's campaign for the presidency in 1998, so as to have his support and to divide up the roles within FIFA.
The testimony given this week by the former Federal Prosecutor in charge of the investigation and the former FIFA Director of Finance was partly contradictory, which led to a new criminal complaint, this time by the former UEFA president, against the former Federal Prosecutor for breach of official secrecy.
The verdict is scheduled on 8 July 2022.