The corruption scandal sweeping world football is threatening to engulf Australia’s peak body and its chairman Frank Lowy over the conduct of its World Cup bid in 2010.
Allegations resurfaced this week that Australian taxpayers funded a $US462,000 payment that was eventually transferred to a private bank account belonging to discredited FIFA vice-president Jack Warner in the lead-up to the 2010 vote on Australia’s World Cup pitch.
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This transaction could have major repercussions for current and former senior office holders of Football Federation Australia after South Australian senator Nick Xenophon called on the Australian Federal Police and the US Justice Department to examine whether taxpayers were fleeced.
The New Daily was told that the AFP is already investigating the transaction and other matters relating to Australia’s World Cup bid.
FFA chairman Frank Lowy has said that the payment had been an “embarrassing mistake” but has still not given an explanation as to why the organisation did not report the money as stolen when it learned in 2013 that Mr Warner had pocketed the cash.
In a letter issued on Wednesday night to Australia’s “football family”, Mr Lowy denied that FFA had tried to buy influence through direct payments to Mr Warner. (Read the full letter here.)
“We ran a clean bid,” Mr Lowy said in the letter.
“I know that others did not, and I have shared what I know with the authorities, including Michael Garcia who undertook a two-year investigation into the 2022 World Cup bid.
“But did we make mistakes? Yes. Were we naïve? In some cases, yes. Would we do things differently in future? Absolutely.”
US authorities last week indicted Mr Warner on fraud and money laundering charges.
‘Lowy kept board in the dark’
Jack Reilly, a member of the 1974 Australian World Cup team and former FFA director, on Wednesday night distanced himself from Mr Lowy’s statement.
Mr Reilly told The New Daily that he and other FFA board members were never consulted about matters relating to the bid for the 2022 World Cup.
“The FFA board never received any report on the World Cup bid,” Mr Reilly said.
“The whole thing was managed by the World Cup Organising Committee that included Mr Lowy and Brian Schwartz.”
Mr Reilly said Mr Lowy was now trying to anoint a successor to chair the FFA board even though the decision officially hinged on the votes of state football federations and the A-League clubs.
“It’s not the duty of a retiring chairman to put a new chairman in place,” he said. “I don’t think he’s got the right to do that.”
Mr Lowy described the resignation of FIFA oligarch Sepp Blatter as a watershed moment for the sport that opened the way for reform of the world governing body.
However, former Victorian Premier Jeff Kennett, who has previously campaigned to stamp out graft in Australian soccer, told The New Daily that Australia had no right to judge FIFA’s governance crisis until it properly accounted for the $42 million in taxpayers’ money that was spent on the bid.
“Until the FFA discloses how we received and spent that money I don’t think we’re entitled to criticise FIFA,” Mr Kennett said.
“I don’t think that’s happened yet.”
FFA paid consultants $14 million
Another controversy is set to erupt over Australia’s tilt at the 2022 World Cup, with FFA sources confirming on Wednesday night that the three international consultants hired by the federation to promote the bid snared one-third of the $42 million shelled out by the Australian government.
In 2009 and 2010, FFA distributed taxpayer funds worth $14 million to its strategic consultants – Fedor Radmann, Andreas Abold and Peter Hargitay – even though they collectively mustered only one vote in support of Australia’s proposal to host the 2022 World Cup tournament.
Mr Reilly confirmed the $14 million payout to the consultants.
“That’s fairly close to the mark,” he said.
Mr Reilly said he had raised serious questions about the hiring of Mr Hargitay but was not listened to by the organising committee.
“I questioned Hargitay’s appointment mercilessly and he was still appointed,” he said. “It was the organising committee that appointed him.”
While Mr Lowy did not disclose the payments made to Mr Hargitay and the other consultants in his statement, he conceded that their contribution to the bid had been almost useless.
“When we launched our bid for 2022 we were not familiar with the powerbrokers in world football,” Mr Lowy stated.
“This led us to recruit, on the advice of FIFA’s leadership, consultants who ultimately proved less than effective to say the least.
“It led us to work hard to meet the commitment to development projects.
“We gave funds, often in conjunction with Ausaid and the Australian Government, to many countries and football associations.”
Pressure mounts on Lowy, FFA
South Australian senator Nick Xenophon revealed on Wednesday that he had written to US Attorney General Loretta Lynch requesting that FBI investigators examine the conduct of Australia’s World Cup bid to determine whether taxpayers’ money was gifted to, or stolen by Mr Warner.
“Given the recent indictments against Mr Warner I am particularly concerned about the money paid by the FFA to CONCACAF for the express purpose of building the football stadium,” Mr Xenophon told the US Attorney General in the letter.
“My understanding is that it is alleged that Mr Warner personally benefitted from the aforementioned transaction.
“I would be grateful if you could advise whether your department will be taking action in respect of the $US462,000 paid by the FFA into the account controlled by Mr Warner.”
Mr Lowy denied that FFA had made a direct payment to Mr Warner, insisting that it was donation to develop a football “centre of excellence” in Trinidad.
“The Chief Executive of the Centre, not Warner, gave us the bank account details for CONCACAF,” Mr Lowy said.
“We paid the money into that account and received confirmation it was received by the bank. It was paid into a CONCACAF account, not Jack Warner’s personal account.”
A London newspaper report this week claimed that the FFA payment was transferred to the Trinidad account after passing through transfer accounts in London and New York.