News 14th June 2016

KPMG quits as FIFA auditor in wake of Blatter regime’s $80m payday rip-off

International financial specialist KPMG has quit as FIFA auditor, 10 days after being ridiculed for approving the excessive top-level bonus culture at the world football federation under Sepp Blatter.

Blatter, general secretary and then president from 1998 until February of this year, was shown by an investigation undertaken at the behest of United States law firm Quinn Emanuel, to have shared in an $80m pay-and-bonuses cash grab over the last five years along with secretary-general Jerome Valcke and finance director Markus Kattner.

The Home of FIFA . . . still more changes

Valcke was sacked in January and Kattner last month; Blatter was forced out by the FIFAGate corruption scandal. Both Blatter and Valcke are under criminal investigation by the Swiss authorities.

On June 3 – in the ongoing and unsavoury war of words over the state of FIFA – Quinn Emanuel published a damning report into the way in which Blatter,  his two senior staff aides and the late finance chairman Julio Grondona had connived to pay themselves extortionate sums beyond even the bonuses paid World Cup participating nations.

Pay policy

While KPMG had no specific duty to query the pay policy under Blatter, the auditor woild certainly have been expected to flag up payments and contracts astonishingly out of line with business standards. Apparently it did not.

Quinn Emanuel’s report and status concern about whether the contractual arrangement breached Swiss law, have been submitted to the Office of the Swiss Attorney-General and to the United States Department of Justice. Both are running separate investigations into scandal-scarred events within the corridors of power at FIFA over the past six years or more.

Last September, alerted to concerns about the unhealthy financial cosiness of FIFA bosses, KPMG Switzerland and its parent company KPMG International launched an internal review of the company’s work for the world football federationj.

FIFA noted the resignation of KPMG kn a statement.

It said: “FIFA acknowledges the decision of KPMG to step down as FIFA’s auditor after more than a decade of service.

“FIFA welcomes this change as it gives the organisation the opportunity to work with a new audit firm, which will be appointed soon – initially by the FIFA Council as a temporary arrangement before a formal appointment will be made at the next Congress in May 2017, in accordance with the FIFA Statutes.

“Supported by the new FIFA Council, FIFA President Gianni Infantino has initiated a comprehensive financial audit of FIFA’s finance function including its processes and procedures.

“In light of the serious allegations involving financial transactions outlined by the Swiss and US authorities, it is essential that the financial function at FIFA be externally reviewed and thoroughly reformed.

“The appointment of a new auditor, coupled with the appointments of a new chief financial ffficer and a new chief compliance officer, are essential steps in this process.”

Swiss businessman Domenico Scala resigned as chairman of the powerful audit and compliance committee last month after repeated clashes with new president Gianni Infantino. Scala claimed that regulatory policy reversals at Infantino’s behest had the effect of undermining the reform process.

• This article was originally published by Keir Radnedge on KeirRadnedge.com on 13 June 2016. To access the original, please click here.

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