Secret Soccer Recordings Show Bribes Reaped Profit, Payoffs

(Bloomberg) -- After Jose Hawilla was caught lying to the FBI in 2013 about having bribed South American soccer barons for decades, the sports-marketing executive did what any self-respecting white-collar defendant would do: He wore a wire.

A federal jury in Brooklyn, New York, heard some of the Brazilian businessman's secret undercover handiwork on Monday, in which he caught his co-conspirators on tape as they not only gloated about reaping hundreds of millions of dollars in profits for the rights to soccer tournaments but also complained about having to buy off South American soccer potentates.

Hawilla, 74, owner and founder of Traffic Group, a multinational sports marketing conglomerate headquartered in Brazil, testified in Portuguese through an interpreter for more than five hours. He told jurors he agreed to plead guilty in December 2014, after secretly making recordings and calls for the U.S. for more than a year and a half. He was the second sports-marketing official to testify for the jury about what the U.S. says was a decades-long scheme to pay off soccer bosses for lucrative broadcasting and marketing rights. 

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A day before officials for FIFA -- international soccer's governing body -- announced the U.S. would play host to a special 2016 centennial edition of the Copa America soccer tournament, Hawilla got sports-marketing executive Hugo Jinkis on tape.

“I need to pay payoffs every day, it is more and more difficult every day,” Jinkis complained during an April 30, 2014, recording of a meeting at a five-star hotel in Florida, according to transcripts of conversations in Portuguese and Spanish and translated into English for jurors. 

Hawilla testified that he and his partners facilitated bribes for the bosses of South American soccer, including the three men on trial: Jose Maria Marin, 85, the former head of Brazil's football federation; Juan Angel Napout, 59, a Paraguayan who was president of South American soccer's governing body; and Manuel Burga, 60, a Peruvian soccer official and former member of FIFA's development committee.
 
Jinkis, who with his son, Mariano, owned Argentina-based Full Play Group SA, a sports marketing business, joined Hawilla in paying bribes, Hawilla said. Jinkis and his son have been charged by the U.S. and are believed to be in Argentina.

Traffic Group

During the 2014 meeting, the men celebrated having made $100 million by selling off broadcasting rights. But after Hawilla told them he was thinking of selling Traffic, both father and son worried who would be their new partner.

“My fear is that I will get stuck with a partner who can't make payoffs, and then I will have my hands tied because I will need to pay it myself,” Jinkis's son said. “We need to be realistic about that. There will always be payoffs. There will be payoffs forever.”

A day later, Hawilla was there to record another meeting the trio had with partner Alejandro Burzaco, owner of Torneos y Competencias SA. Burzaco had joined them to discuss the allocation of millions of dollars in bribes to the 10 presidents of South American soccer. Burzaco warned the other three that the authorities might discover their scheme.

“We all can get hurt because of this subject, it could come from the money-laundering agency of Buenos Aires to investigate, to name one, or Brazil or the DEA,” Burzaco said in that recording, referring to the U.S. Drug Enforcement Agency. “All of us go to prison,” he said.

23 Years

Burzaco's words were prophetic. Eventually, he, Hugo and Mariano Jinkis were all indicted by U.S. prosecutors, based in part on Hawilla's help. Burzaco, who testified previously during the trial, told jurors that he pleaded guilty and decided to cooperate after he was told by the U.S. that Hawilla had secretly recorded their conversations.

Hawilla, who built a sports-marketing empire selling advertisements at soccer events, said he was arrested on May, 9, 2013. He testified that by the time he was caught, he'd been paying bribes for 23 years, ultimately paying at least $10 million. He agreed to forfeit $151 million as part of the plea and is expected to return to the stand Tuesday to continue his testimony.

During cross-examination on Tuesday, Hawilla admitted that a month after he began working for the government in 2013, he paid a $10 million bribe to South American soccer officials to secure the broadcast rights for a tournament.

“So you made that bribe payment of $10 million during the time you were meeting and cooperating with those folks over here?" Marin's lawyer, Charles Stillman, asked, pointing to prosecutors.

"Yes," Hawilla said. "I had committed to this payment verbally in a meeting in Buenos Aires and people were putting pressure on me to make that payment."

The case is U.S. v. Napout, 15-cr-252, U.S. District Court, Eastern District of New York (Brooklyn).

To contact the reporter on this story: Patricia Hurtado in Federal Court in Manhattan at pathurtado@bloomberg.net.

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Elizabeth Wollman, Peter Blumberg

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