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THE GREAT DECEPTION

How Warner duped FIFA,Concacaf into believing they owned the $144m Centre of Excellence

By Part III of a Special Investigation Camini Marajh Head Investigative Desk

For over a decade, football power broker Jack Austin Warner hid a US$22.5 million asset in plain sight on the balance sheet of football’s ruling body for North and Central America and the Caribbean (Concacaf) of which he was president.

And for just as long, Warner was collecting hundreds of thousands of US dollars in member services and building maintenance fees from Concacaf for an asset—the Dr Joao Havelange Centre of Excellence—that many in FIFA, football’s world governing body, and Concacaf considered to be the crown jewel of the regional football federation.

The only wrinkle in this long standing arrangement between the football confederation and its ex-president of two decades is ownership of the asset.

Persons familiar with the situation told the Express that FIFA and Concacaf were duped by its ex-top official Warner into thinking that the regional football body owned the sprawling 16.9 acre sporting complex complete with artificial turf ground and 33-room hotel.

The land on which the US$22.5 million FIFA-Concacaf built and paid-for facility sits on, is owned by Jack Warner and two of his private corporations, CCAM and Co Ltd and Renraw Investments Ltd. 

The Warner deception was discovered last June by Cayman banker and new Concacaf president Jeffrey Webb who retained the global law firm of Sidley Austin LLP and audit and consulting firm BDO to conduct a forensic audit into Concacaf’s finances.

At a news conference in New York last September, Webb said the Confederation’s executive committee had agreed to give investigators more time. "This audit is a massive undertaking that will set our financial house straight and ensure that Concacaf’s operations are executed in a responsible and ethical manner," he said.

Chairman of Concacaf’s Integrity Committee, Sir David Simmons, a former chief justice of Barbados, will reveal the findings of the forensic audit first to delegates of the Confederation’s annual congress in Panama City tomorrow and then to the international media on Friday.

The question of whether the Confederation should go after its former boss in relation to the loss of a valuable asset—the Centre of Excellence —will be put to the floor for a vote tomorrow, according to Concacaf insiders. Also headed for discussion is whether the Confederation should extend its forensic investigation to Port of Spain, specifically, the Trinidad and Tobago Football Federation (TTFF) of which Warner was special adviser up until 2011, said one source.

The annual congress will also deliberate on whether the Caribbean Football Union (CFU) of which Warner was also president should be added to the laundry list of Warner-associated football bodies to be investigated. Reuters had reported that the Federal Bureau of Investigations (FBI) and US tax authorities are already on the CFU case.

How was Warner able to dupe FIFA and the Confederation on the ownership of a US$22.5 million asset for so long? Insiders say the answer lies with the lack of a proper governance structure inside the Warner-controlled Concacaf and the symbiotic relationship between Warner and former close pal turned whistle blower and general secretary of the Confederation, Chuck Blazer.

Financial records and other Concacaf documents obtained by this newspaper show that the Centre of Excellence was listed as an asset on Concacaf’s books by the Warner-hired auditor, Kenny Rampersad of 3A Queen’s Park West, Port of Spain.

In the audited financial statements for 2010, presented at the May 2011 congress in Miami Beach, Rampersad lists the Centre of Excellence as a fixed asset on the Confederation’s balance sheet. His note to the account, however, Note 5 describes the asset as "freehold property," which implies ownership of both land and building. Property record searches show that Warner has legal title to the three parcels of land on which the buildings known as the Centre of Excellence sits.

Further in his audit report, in the Notes to Financial Statements, the Warner-hired accountant says this is in relation to freehold property: "Amortisation of freehold property refers to the freehold property that houses the Dr Joao Havelange Centre of Excellence. It has been computed at two per cent of historical cost."

A financial expert told the Express that amortisation is more appropriately used to describe leasehold property. Concacaf insiders say that all of the Rampersad audited statements have the Centre of Excellence listed as a fixed asset on the accounts.

The audited statements also show steady US dollar cash flows going into the Warner-run Centre of Excellence. In Note 9 of the 2010 accounts, under the heading "Member Services", Concacaf paid out US$578,608 to the Centre of Excellence for what is described as "courses". The previous year, Concacaf paid out US$650,738.

In 1999, the Centre of Excellence raked in US$1,415,388 from Concacaf for courses run at the Centre of Excellence. In 2001, the figure was US$2,291,762. And while Concacaf’s books reflect ownership of the Trinidad asset, there was no income stream from the sporting facility managed by its former president and landowner of the Macoya sporting facility.

Revenues for trade shows, concerts, weddings and other events held at the Centre of Excellence stayed with the Centre of Excellence, according to Concacaf’s records. When BDO started its investigation into Concacaf’s muddled finances last June, it discovered that the Confederation’s former president had taken an unauthorised mortgage on the Trinidad property in June 2007. The First Citizens bank charge is secured by the property—i.e. land and building.

Jack Austin Warner signed the bank charge as a director of both CCAM and Renraw   Investments.    His    secretary of long standing, Patricia Modeste, signed as secretary to the two Warner companies. In making the Confederation a party to what BDO say is an unauthorised mortgage, Warner used his authority as president of the football body to sign an $11 million bank charge.

He had Lisle Austin, the vice president Caribbean Concacaf, co-sign the mortgage agreement but Austin, in an interview with the Express, said he did not see the preceding pages of the document he signed and did not understand what he signed in Warner’s Concacaf office at 113 Edward Street in Port of Spain to be a mortgage document. He said he was duped by Warner.

The mortgage also speaks to a Concacaf board resolution but persons familiar with the situation say the board had no knowledge of the $11 million mortgage charge created by its former president who has refused to answer questions about anything.

Rampersad, Jack’s main accountant of choice, also played a key role in another Concacaf mortgage charge drawn up in 1998 in favour of First Citizens. And while this one had the approval of Concacaf’s board, Rampersad signed as company secretary to two Warner companies—CCAM and Renraw—which hold beneficial interests in the land on which the Centre of Excellence sits.

At the time of signing, however, Warner's son Daryan was the secretary of the two private corporations, according to records at the Registrar of Companies. Rampersad was never company secretary of either of the two companies. 

In a brief phone conversation with the Express, Rampersad said if his signature is there, "then it means I signed in some capacity or the other". Told that he was not the company secretary on record at the time, he said:"I really can’t remember. I stopped doing work for Centre of Excellence." He declined further comment.

Warner also received monthly US$25,000 cheque payments from Concacaf for rent of the Confederation’s Trinidad office which was situated in his building at 113 Edward Street.

He acquired the property in 1997 for $875,000. The national football federation was also paying rent for the other side of the same building which stretched across to Dundonald Street. TTFF was said to be paying about $40,000 a month. 

 

—Part IV continues on Sunday

 with a look at Warner’s 

interlocking relationships.

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