The Magic in Brazil Soccer Corruption
12.11.2002By Ezequiel Fernández Moores
But I am not Brazilian and must therefore be cautious, because you are about to hear what might well be the most unbelievable tale of corruption in the football world.
That is also the perception of former Brazilian international and medical Doctor Scrates, whom I admired both as a football player and as a public figure. He said: "Through football we are renowned for trafficking in minors, forging passports, conniving with cheats, fostering injustice, lacking in spirit and stealing dreams. It is repugnant to be represented by these people."
When Scrates spoke the words these people he was referring primarily to Ricardo Teixeira, president of the Brazilian football confederation since 1989. But he was also speaking of the other sixteen people who -along with Teixeira- were indicted by an investigative committee of the Brazilian Senate; to the twenty-one presidents of the soccer federations of as many Brazilian states who were accused by another investigative committee (of the Lower House of Congress in this case) and to many others who, hiding behind their successes, are trying to destroy the most beautiful playing style the soccer world knows.
These, I must warn you early on, are allegations and accusations that call into question even the ethics of Pel, a universal soccer icon. Allegations that implicated also the name of Ronaldo, a symbol for the game in a new century. But what is worse is that, with Brazil once again the world champion, all these crimes might go unpunished.
Brazil is the country of soccer. It has eleven thousand federated players, eight hundred institutions dedicated to the game and two thousand of its active players play abroad. Brazil can also boast thirteen thousand amateur teams, the thirty million people who play the game regularly as a hobby or for recreation, and three hundred and eight soccer fields that can accommodate five million fans. Soccer in Brazil, before the last devaluation, was a five billion-dollar industry.
Brazil is the only country to have competed in every world cup tournament organized by FIFA, and the only one to have won five times. Football is the greatest symbol of nationalism in Brazil. Naturally, these achievements have brought with them opportunities for big business.
But, as you surely know, the year before the last world cup, Brazilian soccer went through one of the worst crises in its history. The national team changed coaches four times and, for the first time ever, lost to countries like Australia and Honduras with little football history. Brazil came very close to not qualifying for the world cup tournament.
For some time, success eluded Brazilian soccer and corruption within the game and the industry became evident. The Brazilian Congress convened its first investigative committee for soccer -a procedure known by the Portuguese acronym CPI- in September 2000. The Lower House of the Brazilian Congress was responsible for this first CPI.
After nine months work, the committee released an eight hundred-page report that included requests for the indictment of 33 people. It was a list headed by Teixeira, who was formally charged with twelve counts of corruption. Twenty one presidents of state federations -from a total of twenty seven, responsible for electing Teixeira- were also charged. The media baptized the committee the Nike CPI because it began its probe looking into the secret clauses of the four hundred million-dollar, ten-year contract that the Brazilian football confederation had signed with the giant multinational company.
But the inquiry soon revealed other crimes, such as illegal dealings involving minors and the forging of passports. One of the minors identified by the investigators had been abandoned by his agent in Belgium, where he ended up surviving as a male prostitute, a case that alarmed even FIFA.
But the final report did not survive the vote of the committee. Eighteen of the twenty-five congressmen who made up the CPI had close ties with the Brazilian confederation. Their votes hushed up the report. Some of the committee members, such as its vice-president, Eurico Miranda, who also happens to be the controversial owner of the Vasco da Gama team, had received financial contributions to their political campaigns from the confederation. Neither Miranda, nor his colleagues in the same situation, felt the need to excuse themselves from the investigation in the face of an obvious ethical conflict of interests. They were content with being judges and being under investigation.
Nonetheless, the huge and sometimes disorderly work of the CPI was not completely lost. Many of its investigations were followed up by another CPI, formed by the Senate. This second committee had also begun its work in September 2000 and ended it fourteen months and sixteen hundred pages later. The report was not defeated this time, it was approved by acclaim. It included the request of indictments for seventeen people. Teixeira -whose dealings took up five hundred and thirty six pages of the report- was again top of the list and by that time had already been sentenced by the courts to a six-year prison term for tax fraud.
The CPI presented thirteen charges against Teixeira. I will only mention the most important ones here: a) falsifying an expense of eight million dollars paid to a former partner of Teixeira, named Marelo Tiraboschi, for supossedly acting as a middleman in a sponsorship contract for one hundred and seventy million dollars over ten years with the Ambev firm. b) taking successive loans for more than thirty million dollars on behalf of the CBF from the delta bank in New York at incredible interest rates that ran up to fifty three percent annually. Teixeira received a personal loan from the same bank, but in his case the interest rate was kinder: ten percent annually.
Both parliamentary committees looked into fourteen commercial firms that Teixeira owns, like the Santa Rosa Dairy or the Turf bar, where the CBF regularly held meetings to officially announce the events it organized.
Senators and congressmen also investigated other fees paid by Teixeira to his friends, apart from the Tiraboschi case: nine million dollars to Jos Hawilla, a journalist with the firm Traffic, for acting as a go-between in the CBF deal with Nike.
They investigated the assignment of Marco Antonio, an uncle of Teixeiras, to the position of secretary of the CBF. The committees are also investigating Teixeiras present status as head of the CBF. He became its president, no doubt, with the help of his father-in-law, Joao Havelange, the former all powerful president of FIFA. What is specifically under scrutiny today is the way Teixeira manages to maintain the support of the 27 state federations through a selective distribution of subsidies.
The stories of the other federation presidents are noteworthy in their own right. Some are almost unbelievable, like the one concerning Onaireves Moura, head of the Paran Football Federation, a former congressman whose term was revoked for having attempted to bribe several of his colleagues in Congress. Moura has yet to respond to 130 court cases opened against him. The CPI of the Lower House of Congress charged Moura on 21 counts.
The Senates CPI demanded the indictment of two presidents who are considered to be among the most powerful: Sao Paulos Jos Farah and Rio de Janeiros Eduardo Viana. Farah stands accused -as Teixeira is- of paying fees to his friends and holding offshore deposits with money made through the selling of players. Farah has been president for fourteen years and Viana for seventeen. The senators also charged Edmundo Santos, president of Flamengo, Brazils most popular soccer club with thirty million fans. But Santos was expelled last July by Flamengos own members, on charges of corruption. This was the first time such a decision had been taken in Flamengos one hundred year history.
The chairman of the Senate CPI, Alvaro Dias, described the findings of the investigation in these words: We have uncovered a wide selection of crimes that reveal disorganization, anarchy, incompetence and dishonesty.
Eduardo Manhaes, a social scientist who is also author of the book Sports Politics in Brazil has this to say about football directors: They are birds of prey, swindlers of the culture of our people; they love to accumulate easy money, they are greedy, irresponsible and illegitimate.
Corruption reaches all levels. The Senate CPI also charged the former national team coach, Wanderley Luxemburgo, who is suspected of collecting commissions from the sale of players, and Reinaldo Pitta, one of Ronaldo's agents.
Only Pelé seems to be missing from this picture. But dont raise your hopes about him either. The investigating bodies did not mention him, but Folha do Sao Paulo, the influential Brazilian daily, published documents showing that his firm collected a payment of seven hundred thousand dollars from Unicef the United Nations Childrens Fund- for a fund raising soccer match that was never held. The money finally made it into a shadow firm -also owned by Pelé- with headquarters in a fiscal paradise, the British Virgin Islands.
Pelé held a ministerial post in the national cabinet, but he also has his own business and is a spokesperson for the international firm that tried to take over the Brazilian soccer industry. Pelé sports and marketing acted as an intermediary in the contract between Flamengo and the firm ISL. The deal was for a total of eighty million dollars and was supposed to last fifteen years. But it only survived a year and a half.
There are other examples: a contract between Bank of America and Vasco da Gama was intended to cover twenty five years but lasted only two. Worst of all, perhaps, is the case of the Hicks group. This group is a hedge fund based in Texas and linked to President George W. Bush. Hicks took over two teams, Corinthians and Cruzeiro, through contracts that should have run until the year two thousand and ten.
These deals included promises of construction of new stadiums. Hicks also bought forty nine percent of the traffic television network and dreamed up its own ultimate soccer business: Hicks teams facing each other in matches broadcast, naturally, by Hicks. Hicks set up a cable channel in Latin America, PSN, acquired national basketball association rights, formula one races and soccer championships at overblown prices. Hicks invested about five hundred million dollars and in only two years filed for bankruptcy.
Let's make it quite clear: in recent years Brazilian soccer has been the scene of a hard battle: on one side, the politicians of the old guard who took advantage of soccers popularity to make money and collect votes; on the other, a group of multinational firms. The old guard seems to have been the victors in the end. But it is widely suspected today that many of the firms took advantage of the struggle to launder money of more than dubious origin.
And now the question for the future is: will everything stay the same? The Brazilian government sent a bill to Congress described as a provisional measure for the moralization of soccer. It would force the clubs to become limited companies subject to the inspection of independent audits and to make their annual balance sheets public. But the PT, the party that won the last elections and that will rule since next January, said last week that this bill will not pass. The PT was the party that made an strong battle for the moralization of football, but they put clear that his priority are the sports that has no money, not the millonaire football. The old guard is betting that their friends in Congress will again abort any transformation. And they have a potent weapon: Brazil is once again world champion.
Thats why Reinaldo Pitta is also smiling now. Pitta is Ronaldo's agent singled out for corruption by the CPI. Ronaldo, like Garrincha and Pel before him, comes from what is known as the deep Brazil. Ronaldo was born in Bento Ribeiro, a small town. Pitta bought the players contract when Ronaldo was only sixteen years old. For those rights, Pitta only paid seven thousand five hundred dollars. A year later Pitta took Ronaldo to the Netherlands for six million dollars and four years after that, moved Ronaldo to Spain for twenty million dollars. At twenty four, Ronaldo was sold to an Italian team for thirty six million dollars and, recently, he went back to Spain for fourty five million. Pitta received commissions on each of those occasions and on top of that, for the endorsement contract that Ronaldo signed with Nike.
Remember Nike, which I mentioned at the beginning of this tale of corruption? Remember the CPI known as the Nike CPI? Nike is the same firm that allegedly insisted on Ronaldo playing in the final match of the nineteen ninety-eight World Cup, even though he had suffered convulsions only a few hours before the game. With Ronaldo being the highest scorer of the last world cup, Nike sells hundreds of thousands of Brazilian soccer shirts all over the world. Nike is also famous for its TV advertising campaigns which usually mock ethical issues. For Nike it seems that only winning matters. Its slogan, "Just do it", says it all. Teixeira and his friends know that motto by heart.
Do you remember the name Farah, the person I said was the president of the powerful Sao Paulo federation? He said he was leaving. But on September 30th this year, in a surprising move, Farah managed to be reelected for a fifth mandate, until 2006. His rival, Milton Cardoso, said that when he saw he was losing the election he preferred to burn the 35 files pertaining to the clubs that supported him, out of fear that these clubs could suffer some kind of reprisal.
Football does not want to change in a society that does want to change. In the recent national elections, 52 million people chose a former laborer as President for the first time in the history of Brazil. Lula is also the first man who becomes a Brazilian President with the base of a leftist political party.
Brazil is a country which wants to change its contrasts: because it is the eleventh world economy, but also because it is ranked fourth in the list of the countries with the worst income distribution in the globe. Sao Paulo is the city with the largest fleet of private helicopters, second to New York. But in Brazil there are 54 million poor people. As was said by Tostao, the former crack of the 70s: Brazil can no longer be a hostage of a powerful and selfish economic elite.
The recent elections went hand in hand with Tostaos sentiments. Lula is the new President, but there is another aspect of these elections that seems interesting: the three most active congressmen of the CPI against football have renewed their mandates. They are House leaders Aldo Rebelo and Silvio Torres and Senator Alvaro Dias. In turn, ten out of the fourteen congressmen that are friends of Teixeiras were fired, as well as Eurico Miranda, Vasco Da Gamas president. Once he interrupted a match to protest and said the referee could not expel him because he had Congress immunity. He will no longer be able to use this argument. Neither could Weber Magalhaes, who was chief of the Brazilian delegation in the last World Cup, be elected for Parliament. The people understood that the World Cup was won by Rivaldo, Ronaldo and their teammates and not by Magalhaes and his associates.
And what about Teixeira? A great opportunist, Teixeira knew on which side his bread was buttered. In my country they say: During the trip, the luggage finds its place. This is what Teixeira did. Before the elections, but only when it was clear who would be the winner, Teixeira announced that he too would be voting for Lula. Teixeira, as Farah did before, wants to keep his place on the throne.
Last December he seemed to be on his way out. In the nineties, a previous CPi -equal to those that scrutinized soccer- had succeeded in toppling a national President, Fernando Collor de Melo. But Congress has been unable to act as effectively in the case of a soccer president, Teixeira, who is said to be dreaming now of his fifth re-election in two thousand and three.
And not only this. Teixeira was recently protected again by Joseph Blatter in the FIFA. Teixeira is still a member of the new executive committed of the FIFA. But, in addition, Blatter named him vice-president of the new referees commission, the same referees that, as we all know, gave a helping hand to Brazil in the early matches of the World Cup. Even more ironic, Teixeira was named by Blatter as a member of the security and fair play commission.
It is Mr. Blatters and Mr. Teixeiras fair play.