Two Indicted in FIFA Probe Once Sued Each Other in Miami Over Corrupt Contract
A FIFA fan fest in Brazil during the last World Cup.
photo by Paulisson Miura via Flickr Creative Commons
When American prosecutors lobbed a grenade into world soccer’s governing body last week, they left a wake of legal carnage inside FIFA, the organization that oversees international soccer, including the World Cup. Fourteen top officials face corruption charges linked to decades of crooked deals.
Among those indicted were the giant Brazilian marketing firm Traffic Sports — along with the 44-year-old head of its Miami branch — and 86-year-old Paraguayan fútbol jefe Nicolás Leoz. Among their many allegedly rigged deals was a contract for the rights to the wildly popular Copa America tournament. Traffic Sports paid millions in bribes to get lucrative TV and commercial deals for the tournament, prosecutors say. And Leoz benefitted handsomely from those payoffs.
So it’s more than a little odd that for two solid years, Leoz and Traffic actually squared off in Miami-Dade civil court to fight over who got to handle that allegedly bribery-tainted contract. That’s right: Two guys who are accused of egregiously breaking the law went to a judge to work out their differences.
The deal in question gave Traffic Sports the rights to market TV and sponsorship deals connected to Copa America — a kind of mini-World Cup involving just South American teams — throughout the ’90s. The company paid $6.6 million for the rights, but as Copa America became more popular, prosecutors say, Leoz got greedy; the Paraguayan, who then headed up the South American federation, demanded escalating bribes to renew the deal, eventually netting millions from the firm.
Nicolas Leoz (left) is accused of taking millions in bribes as head of South America's soccer federation; Aaron Davidson (right) is a Miami marketing executive accused of paying millions for TV and other commercial rights.
screen caps via YouTube
But amid that supposed corruption, Traffic sued Leoz and a host of South American soccer federations in Miami in 2011. Traffic claimed Leoz went behind the company’s back to improperly hand off Copa America rights to an Argentine firm. This violated Traffic's contract — one the company had paid hefty bribes to secure in the first place, it’s now alleged.
That fight is catalogued in 19 volumes stuffed with court documents in downtown Miami. It ended when the two sides came to an agreement and dropped the lawsuit in June 2013. No details of that agreement are available.
Leoz remains hospitalized in Paraguay after collapsing upon news that U.S. prosecutors want to extradite him to face wire fraud and racketeering charges. Traffic, meanwhile, has already pleaded guilty as a company, and its founder has agreed to forfeit $150 million.
The firm’s local chief in Miami, Aaron Davidson, faces his own criminal indictment over a separate alleged marketing scheme. Prosecutors say he paid millions for the rights to two North American tournaments. He has pleaded not guilty in Brooklyn federal court.
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