Burzaco, Alejandro

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    Former Fox Employee Convicted of Bribery for Soccer Broadcast Deals

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    The employee, Hernán López, and an Argentine marketing firm were accused of helping make illegal payments for rights to tournaments in South America.After hearing seven weeks of often-impenetrable testimony about television contracts, codes of ethics and the interpretation of Spanish phrases in emails sent more than a dozen years ago, a federal jury in Brooklyn on Thursday convicted a former Fox employee and an Argentine sports marketing firm of paying bribes in exchange for lucrative soccer broadcasting contracts.Prosecutors said that Hernán López, who until 2016 worked for a unit of what was then known as 21st Century Fox, had taken part in a complex scheme to make millions of dollars in secret annual payments to the presidents of national soccer federations in order to secure the rights to the Copa Libertadores and the Copa Sudamericana, widely viewed South American soccer tournaments. Full Play Group, the marketing firm, stood accused of similar but far more extensive corruption. Prosecutors said it paid bribes for the rights to World Cup qualifiers, exhibition matches, the Copa América tournament and the Copa Libertadores.The government also argued that López had taken advantage of “loyalty secured through the payment of bribes” to secure inside information that helped Fox beat out ESPN in its bid for the United States broadcasting rights for the 2018 and 2022 men’s World Cups — a theory Fox has vigorously denied. Fox was never accused of any wrongdoing.López, who holds dual American and Argentine citizenship, was convicted on one count of money laundering conspiracy and one count of wire fraud conspiracy and faces up to 40 years in prison. Full Play was convicted on six fraud and money laundering counts and, as a corporation, could face financial penalties.A third defendant, Carlos Martínez, who worked under López at Fox, was acquitted on counts of wire fraud conspiracy and money laundering conspiracy.The convictions represent what Breon S. Peace, the U.S. attorney for the Eastern District of New York, called “a resounding victory” in the Justice Department’s sweeping investigation of corruption in international soccer.After a secret inquiry began in 2010, the case broke into public view in May 2015 when sensational predawn arrests were made in Zurich, the city that FIFA, soccer’s world governing body, calls home. Since then, more than two dozen individuals and entities have voluntarily pleaded guilty to a wide variety of charges, including racketeering and wire fraud. And in 2017, a different federal jury convicted two soccer officials, from Paraguay and Brazil, on wire fraud conspiracy and other charges.Prosecutors indicted López, Martínez and Full Play in March 2020, signaling that the long-running case — which shook FIFA to the core and resulted in a shakeout of several generations of leadership in its ranks — still had legs.“The defendants cheated by bribing soccer officials to act in their own greedy interests rather than in the best interests of the sport,” Peace said in a statement following the verdict. Judge Pamela K. Chen rejected a request from prosecutors that López be taken immediately into custody, instead releasing him with tightened bond restrictions. A sentencing date has not been set.John Gleeson, a lawyer for López, said in a statement that “we are obviously disappointed with the jury’s verdict.”He continued, “The proceedings have involved both legal and factual errors, and we look forward to vindicating our client on appeal.” Lopez, who left Fox in early 2016, went on to found the podcasting company Wondery, which was sold to Amazon in 2020 in a deal that valued the company at a reported $300 million.Carlos Ortiz, a lawyer for Full Play, declined to comment. The company was founded by an Argentine father and son, Hugo and Mariano Jinkis, who were charged in 2015 but were not extradited. A lawyer for Hugo Jinkis said he could not immediately comment on the news.“We are very grateful for the jury’s service,” Steven McCool, Martínez’s lead lawyer, said in a brief call after the verdict. “Carlos received justice today and it was a long time coming.”A watch party in Los Angeles for the 2022 World Cup. Fox had the U.S. English-language rights for last year’s tournament in Qatar and the 2018 tournament in Russia.Mark Abramson for The New York TimesThursday’s verdict came on the fourth day of deliberations after a complex and slow-moving trial. Jurors were presented with reams of contracts, financial spreadsheets and bank transfer statements, as well as expert witnesses who debated whether a particular phrase meant “pay him less” or “pay it less.”At one point, early in the trial, Judge Chen admonished the lead prosecutor, Kaitlin T. Farrell, for reading entire emails about corporate issues into the official record, warning that she risked losing the jury’s attention.And as in the first trial in the case, the government relied particularly heavily on a single star witness: Alejandro Burzaco, the former chief executive of the Argentine sports marketing and TV production firm Torneos, who pleaded guilty in the case in 2015 and has been cooperating with the U.S. government since.Over 11 days of testimony, he described in painstaking and sometimes stultifying detail the esoteric series of shell companies and phony contracts that had been used to pay bribes to soccer officials through a joint venture owned by Torneos and 21st Century Fox. Although he personally arranged the payments, Burzaco said he had informed both López and Martínez about their existence and said that neither executive had done anything to halt them.Burzaco also detailed using a relationship cultivated through bribes paid to Julio Grondona — a FIFA vice president and a longtime president of Argentina’s soccer association who died in 2014 — to gain inside information that helped Fox win the U.S. English-language rights to the 2018 and 2022 World Cups. ESPN had long held that coveted property.Although bidding was supposed to have been blind, Burzaco said he had asked Grondona in late 2011 for help at López’s request. Burzaco testified that Grondona had “told me if Fox puts $400 million, they are going to award it to Fox — tell your friends.” Fox ultimately paid $425 million, and several years later obtained rights to the 2026 World Cup, to be held in the United States, Canada and Mexico.Over howls of protest from defense lawyers, prosecutors called the former ESPN president John Skipper to testify about the incident. “I was disappointed,” he said. “In fact, I was angry.”In a statement after the verdict, a Fox spokesman said, “This case does not involve Fox Corporation, and it was made clear that there was no connection to Fox’s successful World Cup bids.” The company has in the past noted that the unit where López and Martínez worked, Fox International Channels, was spun off in 2019 and that it was a different division, Fox Sports, that was charged with negotiating for those rights.Although both López and Martínez maintained their innocence, claiming they were never aware any bribes had been paid, Full Play took a decidedly different tack. Its lawyers readily admitted that the company had made regular payments to Latin American soccer officials but claimed that those payments had not been bribes but simply the standard way of doing business when it came to South American soccer.Ortiz, the lawyer for Full Play, said in his closing arguments late last week: “You can look at it and, say, hey, do I like this morally? Do I think this is appropriate?” But, he added, “all of these executives and officers acted in a manner and behaved and carried themselves in a manner that sent a clear, strong message that their receipts of payments were totally fine.” More

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      Witness Says Fox Used Inside Information to Win World Cup Rights

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      A marketing executive testified that a top FIFA official provided secret bidding information that allowed his company to acquire valuable television rights.When the news broke a dozen years ago that Fox had been awarded the U.S. broadcast rights for the 2018 and 2022 World Cups, many in television, and in soccer, were surprised. For decades, the sport’s showcase championship was the exclusive domain of ESPN, which had been instrumental in driving interest in the world’s most popular game in the world’s richest sports market.But according to a government witness testifying this week in federal court in Brooklyn, Fox didn’t acquire those tournaments on merit alone.Instead, said Alejandro Burzaco, a former sports marketing executive from Argentina, an executive working for the media giant used inside information obtained from a powerful FIFA official whom he was secretly bribing for years — and who controlled the committee that made final decisions on TV deals — to give Fox a decisive edge in what the other bidders, including ESPN and NBC, thought was a blind auction.“He said, ‘If Fox puts up $400 million, then it will win,’” Burzaco recalled being told by the FIFA official, Julio Grondona, in testimony Friday in federal court. The figure nearly matched the price reported on the day FIFA announced that Fox had won the rights.The testimony of Burzaco came during the second trial of individuals and corporations charged in the Justice Department’s long-running investigation of corruption in international soccer. In 2017, a jury found two South American soccer officials guilty of racketeering and other crimes as part of what prosecutors called “endemic” bribery and money laundering in the sport. Burzaco, who pleaded guilty in 2015 for his own role in the scandal, also testified at that trial.In the current case, the government’s focus has pivoted away from the officials who ran soccer at the time to the media rights deals that are the financial lifeblood of the game.Two of the current defendants, Hernán López and Carlos Martínez, served as executives at Fox International Channels, which controlled rights to two of South America’s most popular tournaments, the Copa Libertadores and the Copa Sudamericana. Prosecutors have for years maintained that those rights were acquired for far below market value thanks to millions of dollars in bribes paid annually to the continent’s top soccer officials, a scheme organized by Burzaco with, prosecutors contend, the full knowledge of López and Martínez.The third defendant in the current trial, Full Play Group, is an Argentine sports marketing firm that prosecutors said used bribes and other back-room deals to win commercial rights to friendly matches, World Cup qualifiers and South America’s continental championship, the Copa América.Fox Corporation, which broadcast the recent World Cup in Qatar and holds the rights to the 2026 tournament in North America, existed under a different corporate name and structure when the bribes took place and is not on trial in Brooklyn. When allegations about Fox’s potential involvement in corrupt acts emerged during the first trial, the company denied any knowledge, calling any suggestion to the contrary “emphatically false.”It has continued to distance itself from the bribery, and the former Fox executives, this week. “This case involves a legacy business that has no connection to the new Fox Corporation,” a company spokesman said this week. The spokesman noted that Fox International Channels, the subsidiary accused of involvement in bribes, and many other units that were part of a company then known as 21st Century Fox, were sold in 2019. Attorneys for the three defendants have declined to comment on the current case, as did a spokesman for the U.S. Attorney’s Office for the Eastern District of New York.Burzaco, who was indicted and pleaded guilty to racketeering and other charges in 2015, is the Justice Department’s star witness. A former banker who admitted to paying at least $160 million in bribes over a 15-year period, he took the stand Wednesday and is expected to testify well into next week. To date, the government has called only one other witness, a FIFA representative who testified briefly about the governance structure of global soccer, as well as the codes of ethics that the sport’s officials pledge to respect.So far, this trial has been lacking in some of the headline-grabbing fireworks that characterized the 2017 edition, when, for example, a former Argentine public official committed suicide by throwing himself in front of a train only hours after being described as a bribe recipient in court, and Burzaco said that Qatar had bribed three South American officials to ensure it would host the 2022 World Cup.On Thursday, the government’s lead prosecutor, Kaitlin T. Farrell, began asking Burzaco about how Qatar managed to acquire those rights despite its obvious problems with climate and infrastructure. But after defense attorneys objected, Judge Pamela K. Chen shut down that testimony, ruling that it was not relevant because none of the defendants are accused of being involved in the World Cup hosting decision.A courtroom sketch showing Alejandro Burzaco, left. He testified Friday that a former FIFA official, Julio Grondona, shown on a board at right, helped tip Fox officials on how much to bid for the broadcast rights to the World Cup.Elizabeth Williams/Associated PressInstead, Farrell has focused on the long and tortured relationship between the Argentine firm Burzaco led, Torneos y Competencias, and the Fox unit with which it had entered into a joint venture to control soccer rights. What started as bribes to a handful of South American soccer officials had, by 2011, expanded to nearly a dozen men who threatened to cancel lucrative contracts for the popular Copa Libertadores and Copa Sudamericana tournaments — which had been sold for far under market value — if they did not receive their annual bribes.In 2010, Burzaco said, he told López about the bribes at a beachside hotel in Florida, where both men had traveled to watch the Super Bowl. Burzaco testified that he told López a second time during a meeting in Fox’s corporate headquarters in midtown Manhattan later that year. In 2012, after Martínez took over the unit’s Latin American operations, Burzaco said he filled him in on the bribes over coffee at a Dean & DeLuca cafe in Rockefeller Center.One of the primary recipients of bribes was Grondona, who at the time served as a FIFA vice president, the chairman of the soccer body’s finance committee and the president of the Argentine soccer association. According to Burzaco’s testimony, when FIFA in October 2011 opened bidding for the English language rights to the 2018 and 2022 World Cups, López reached out to him to tell him Fox planned to bid. López, Burzaco said, then asked him to reach out to Grondona “to let him know that any help would be welcome.”Burzaco, eager to help his primary commercial partner, which helped keep Torneos solvent by hiring it to produce sports content throughout Latin America, did as he was asked. Grondona, he recalled, said he would do what he could but that it would be difficult because FIFA was under intense scrutiny in the wake of its controversial votes a year earlier awarding World Cups to Russia (in 2018) and Qatar. Regardless, Grondona soon relayed the news that the rights were as good as Fox’s.“Mr. López was very excited,” Burzaco recalled on the stand, saying López called it his “best accomplishment within Fox.” According to Burzaco, a number of other Fox officials, including Chase Carey, then in line to take over the company, and the Fox Corp. chairman Rupert Murdoch himself all expressed delight at having acquired the prize.As for Grondona, he summoned Burzaco for a private meeting in Buenos Aires immediately after awarding the World Cup rights to Fox.“‘Look, Alejandro, I did this favor to you and Fox,’” Burzaco recalled him saying. “‘But this is the last time I do it for free.’”Grondona, who had been one of the primary targets of the Justice Department investigation, died of an aortic aneurysm in July 2014. Seven months later, FIFA announced that Fox had been awarded rights to the 2026 World Cup, too. This time, ESPN hadn’t even been allowed to bid. More

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      Fox Sports Could Be Focus of FIFA Trial in Brooklyn

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      Two former executives are accused of paying bribes to obtain broadcast rights, including for the World Cup. Testimony could reveal what the company knew.The World Cup may be over, but the FIFA corruption scandal never seems to end.Nearly eight years after a series of predawn raids exposed corruption at the highest levels of international soccer, and more than five years after the conclusion of the first trial in the Justice Department’s sprawling probe of bribery in the sport, a second trial is set to begin on Tuesday in federal court in Brooklyn.Once more, the defendants stand accused of being involved in complex schemes to pay millions of dollars in exchange for the rights to matches. Once more, prosecutors are expected to focus on the same tournaments and to rely on many of the same witnesses. They will make their arguments before the same judge in the same courtroom and, they hope, they will add three more convictions to the long-running case’s already impressive ledger: to date, the government has netted 29 convictions in the case.But after years of focusing on soccer officials and sporting bureaucrats, the new trial has the potential for a dramatic twist: revelations about the involvement of one of FIFA’s most important media partners, Fox Corporation, in a secretive scheme to pay millions of dollars in bribes to enhance its position in international soccer — and to seize the sport’s biggest broadcasting prize, the rights to the World Cup itself, from a rival network.Fox itself is not on trial. But the fact that two of its former executives have been accused of orchestrating bribes, hiding payments and trafficking in insider information could damage the reputation of the $17 billion media giant. It could also breathe fresh relevance into a corruption investigation that once captured worldwide attention but which long ago faded from the news.Since the conclusion of the last trial, FIFA, soccer’s governing body, which is based in Zurich, has managed to stage two World Cups — in Russia in 2018 and Qatar last year — and bank record revenue, all while casting itself as the victim of its own corruption. It has been a successful strategy: Last summer, the Justice Department returned $92 million of the money it had recovered in the case to FIFA and its federations, part of a plan to award the soccer bodies more than $200 million in restitution overall.Gianni Infantino, the current FIFA president, has repeatedly made the claim that the organization he leads is now free of corruption. But the case, at least in the view of the Justice Department, is far from over.In the trial that begins this week, Hernán López, the former chief executive of Fox International Channels, and Carlos Martínez, who served as president of the subsidiary’s Latin American operations, face wire fraud and money laundering charges. Prosecutors have accused them of running a scheme to pay bribes to “advance the interests of Fox” and help the company secure television broadcast rights to both the popular Copa Libertadores, the South American club championship, and the World Cup. If found guilty, López and Martínez face up to 20 years in prison.A third defendant in the trial, the Argentine sports marketing firm Full Play Group SA, faces a laundry list of charges for what prosecutors described as years of bribe-paying to win rights to tournaments. If convicted, it could join a short and ignominious list of corporations found guilty of felonies in the United States, among them banks, energy companies and the Trump Organization.Lawyers for all three defendants declined to discuss the case, as did a spokesman for the U.S. attorney’s office for the Eastern District of New York. But new convictions in federal court could help prosecutors justify the millions of dollars spent on an investigation that began in secret more than a dozen years ago and long ago more than proved its point: that global soccer has a profound corruption problem and — critically — that almost nothing is outside the reach of American justice.FIFA’s president, Gianni Infantino, has claimed his organization is free of corruption, but a trial in the United States could bring new revelations.Martin Meissner/Associated PressThe trial in Brooklyn, which is expected to last four to six weeks, largely concerns activities in South America. According to the March 2020 indictment, López, who holds American and Argentine citizenship, and Martínez, a dual citizen of the United States and Mexico, helped pay and conceal “annual bribe and kickback payments” to at least 14 soccer officials to secure television rights to two lucrative annual club championships, the Copa Libertadores and the Copa Sudamericana.Prosecutors also contend that López and Martínez used relationships forged through bribes to obtain “confidential information” from a top FIFA executive from Argentina that helped the company secure the American broadcast rights to the 2018 and 2022 World Cups. Rights to the event had been held by ESPN since the 1994 edition of the tournament, but in 2011, Fox announced it had snatched them away. Four years later, FIFA announced it had also awarded Fox rights to the incredibly lucrative 2026 World Cup, to be held in the United States, Canada and Mexico, without so much as giving ESPN a chance to bid.The allegations involving Fox appear to match 2017 trial testimony given by Alejandro Burzaco, the former chief executive of the Argentine sports marketing firm Torneos, who pleaded guilty in the case and has been cooperating with the government.As the prosecution’s star witness, he claimed López and Martínez helped cover up $3.7 million in bribes by using a phony contract with a firm partially owned by Fox.Fox has denied any knowledge of any bribes, saying at the time that “any suggestion that Fox Sports knew of or approved of any bribes is emphatically false.” López and Martínez have emphatically denied the charges against them in court filings, claiming that any bribes would have been paid by Burzaco.López left Fox in January 2016, seven months after the first indictment in the FIFA case, and subsequently founded the podcasting company Wondery, which he sold to Amazon for a reported $300 million nine months after he was indicted in the soccer case.Both his fate, and that of Martínez, may depend heavily on new testimony from Burzaco, who is once again expected to be the government’s chief witness — and, potentially, the source of any major revelations. 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