FIFA try to avoid mire of ISL bribery allegations

World governing body FIFA is on the defensive amid claims in Germany that a major bribery and corruption scandal could break around the heads of its leading ranks this summer.

"The current situation, while unexpected and requiring a great deal of energy and effort, provides FIFA with an opportunity to assume complete and independent control of its destiny," FIFA president Sepp Blatter wrote in a letter to members of the body's executive committee and national associations and which has been released to the media.

"We are now in a position to take full control of the rights that belong to the whole football family and the 204 national associations. We now need to be vigilant, and show solidarity and a united front."

FIFA have filed criminal charges against senior managers in its former marketing partner ISMM claiming millions were embezzled from World Cup television rights deals.

The charges will be investigated in the Swiss canton of Zug which declared ISMM bankrupt last month.

Blatter is fighting for survival in world football's top job after he started to outline the details surrounding secret bank accounts revealed by the bankruptcy of FIFA's marketing partner ISL.

ISL's owner ISMM has denied these allegations.

Former ISMM chairman Christoph Malms says the allegations are "baseless".

Blatter claimed on Friday that he was "incorruptible" and said he had received bribery offers while in office and FIFA are now looking at evidence that a $60 million payment made by Brazilian television network O Globo was diverted into a secret bank account in Liechtenstein. This is the basis for the charges filed yesterday in Zug.

"As FIFA was unable to keep track of the financial transactions, it regards this account as illicit or secret and the relevant payment as unlawful," Blatter said.

UEFA president Lennart Johansson will decide soon if they are to press for Blatter's removal in a vote of no confidence at an Extraordinary Congress in Buenos Aires on July 7th.

FIFA general secretary Michel Zen-Ruffinen said last week that Brazilian marketing agency Traffic, who were selling sponsorship and television sales for the owe FIFA $70 million because their contract was still valid despite the postponement of the event last week.

It is this account that reporters are investigating and its links to money laundering in Brazil.

Organisers are to be compensated along with all twelve competing clubs.

FIFA froze its World Cup bonds yesterday after the marketing rights to the finals in 2002 were hit the bankruptcy of its partner ISL.

FIFA wanted to raise nearly $200 million with the bond issue which has now been postponed until at least the end of the summer.

The bonds were intended to help with borrowing requirements needed to help finance the World Cup finals and the world governing body will now rely on funds raised by licensing its name and trademarks.

Borrowing requirements by FIFA could now be reduced.

FIFA axed the second edition of its World Club tournament last month after the bankruptcy of its marketing partner ISL. The Spanish competition had prize money of $40 million and FIFA has already promised to compensate the clubs for not taking part. That compensation though is likely to be a fraction of the prize money on offer for the title won last year by Sao Paolo club Corinthians.

FIFA under president Sepp Blatter was heavily involved with ISL whose parent company ISMM folded last week with debts of £280 million. FIFA could end up with a £40 million bill for its share of failed television and marketing contracts of which the World Club tournament was one.

Blatter is seeking re-relection next year as FIFA president but if he loses the vote then the current World Club idea could be scrapped and revised.

The governing body have claimed that the problems that beset the World Club competition will not damage fnancing of the World Cup finals next year which are used to finance the FIFA operational costs on a four-year cycle that shadow the event.

The London ' Daily Mail' claims today that International Amateur Athletics Federation (IAAF) Primo Nebiolo, who died last year, was bribed to hand out marketing contracts and that ISL managed the secret payments through bank accounts in Liechtenstein and the Cayman Islands.