Nike seen avoiding charges in soccer bribery probe

NEW YORK May 29 Nike Inc may be able to

avoid U.S. charges over any involvement in bribery payments to
win soccer sponsorships, but could face penalties if U.S.
prosecutors decide to clamp down on the global sportswear giant,
lawyers with expertise in the subject said.
Although Nike has not been named or charged with any
wrongdoing, the company was swept into the corruption scandal
that engulfed soccer's governing body FIFA when a U.S.
indictment released on Wednesday described apparent kickback
payments linked to a landmark 1996 Nike deal in Brazil.
In a statement on Thursday, Nike said that the charges did
not allege that it engaged in criminal conduct or that any Nike
employee was aware of or took part in a bribery scheme. On
Wednesday, in another statement, it did not confirm or deny that
it was the company in the indictment, but said it was
cooperating with authorities.
The description of the $160 million, 10-year deal signed by
"Sportswear Company A" matched exactly the details of Nike's
agreement to become the footwear and apparel supplier and
sponsor of the world's most successful national soccer team.
Still, the U.S. Justice Department is likely to take a
tougher stance against those who solicited bribes than those who
paid them, especially if a company did not have a long history
of paying bribes, said former U.S. federal prosecutor Michael

Volkov.
"Where the case is going, it's not focusing as much on the
people who were shaken down as it is on the people doing the
shaking," Volkov said.

While the 14 defendants in the indictment are being charged

with crimes such as money laundering and wire fraud, the United
States has normally prosecuted U.S. businesses for foreign
bribery under the 1977 Foreign Corrupt Practices Act (FCPA).
That law's anti-bribery provisions apply to dealings with
governments and government officials and may not be of much use
in the soccer world because soccer associations are typically
not government agencies. The Brazilian Football Confederation
(CBF), which signed the http://cie.calpoly.edu/members/n4spec3tor/bio/default.aspx 1996 deal with
Nike, is a private
organization.
"The FCPA does not prohibit private bribery," said Homer
Moyer, who specializes in FCPA cases at the law firm Miller
Chevalier in Washington.
If Nike is thought to have paid bribes by transferring funds
from a U.S.-based account, the Justice Department might consider
charging the company with "international promotional money
laundering," said a former official with the Justice
Department's money laundering section.
While seldom used in the past, prosecutors have made
increased used of this charge in recent years, said the source,

who spoke on condition of anonymity due to his private sector

work.
Prosecutors could employ a provision of the FCPA that
requires companies to keep accurate accounting records. If the
sportswear company in the Brazil deal disguised or hid
wrongdoing in its books, it may have violated the law, lawyers
said.
MASSIVE SETTLEMENTS
The indictment came less than three weeks after U.S.
President Barack Obama co-opted Nike's "just do it" slogan in a
speech promoting a Pacific free-trade deal at the company's
headquarters in Beaverton, Oregon.
The charge sheet said that "Sportswear Company A" agreed to
pay an additional $40 million in "marketing fees" that were not
in the initial contract to the Swiss bank account of an
affiliate of Brazilian sports marketing firm Traffic.
Traffic's founder Jose Hawilla, whose guilty plea to U.S.
corruption charges was revealed at the same time as the
indictment, agreed in 1996 to pay half of everything he made
from the deal to an unidentified senior member of the CBF,
according to the Department of Justice.
That amounted to "millions of dollars, as a bribe and
kickback," the indictment said.
U.S. prosecutors have used the FCPA to extract massive
settlements, often with foreign businesses.
In 2009, the U.S. engineering company KBR Inc agreed

to a $579 million settlement over bribes paid to Nigerian

government officials.
Separate from the FCPA, foreign and U.S. banks have paid
billions of dollars in settlements with U.S. authorities over
sanctions-busting activities and anti-money laundering failures
in recent years. A number of non-banks have also been targeted
by regulators or the Justice Department over anti-money
laundering failures.
The indictment also alleged that a New Jersey-based "Sports
Marketing Company A" paid bribes to the head of South American
soccer association CONMEBOL in exchange for gaining exclusive
marketing rights to the Copa Libertadores tournament.
Asked Wednesday if companies that had won soccer marketing
rights faced criminal liability or were being investigated,
Attorney General Loretta Lynch said she could not comment on
specific investigation targets.
(Additional reporting by Brett Wolf.; Editing by Noeleen Walder
and Stuart Grudgings)
http://www.reuters.com/article/2015/05/29/soccer-fifa-nike-idUSL1N0YJ22E20150529