Exclusive : evidence of corruption over Rio’s bid for the 2016 Olympic games

Three days before the election of the host city of the 2016 Olympic games, a company linked to a rich Brazilian businessman paid 1,5 million dollars to the son of Lamine Diack, then president of the International Association of Athletics Federations (IAAF) and member of the International Olympic Committee (IOC), Le Monde has learned.

The French justice now has concrete pieces of information seriously questioning the probity of the bidding process for the 2016 Games. A preliminary investigation has been opened in France in March 2016.

On October 2^nd, 2009, Rio had become the first south american city to win the bid to organize the summer Olympics, beating Madrid, Tokyo and Chicago after a tough competition. Three days before, Pamodzi Consulting, a company founded by Papa Massata Diack, received a 1,5 million dollars payment from Matlock Capital Group, a holding company based in the British Virgin Islands. Papa Massata Diack also received from Matlock Capital Group, at the same period, 500 000 dollars, transferred to a bank account in Russia, according to our informations.

« Clear victory »

The French justice suspects that this money may have been used to influence the votes during the election in Copenhagen. Papa Massata, a former marketing consultant at the IAAF, was banned for life from track and field for corruption in 2016. His father, Lamine Diack, is under custody in France, for aggravated money laundering and corruption. Asked for comment about those informations, Papa Massata Diack just answered : « Good luck for your article ! » Lamine Diack’s lawyer didn’t reply to Le Monde. « The elections were clean. Rio won by 66 votes against 32, it was a clear victory », told Mario Andrada, Rio 2016 spokesman, to Le Monde.

The French investigators have established that Matlock Capital Group is a holding company linked to Arthur Cesar de Menezes Soares Filho, a very rich Brazilian businessman. M. Soares, who specializes in subcontracting and who is nicknamed « o Rei Arthur » in his country, passed many construction deals with the State of Rio, in the context of the Games. He had a close relationship with Sergio Cabral, the former governor the state of Rio. M. Cabral, who had to quit his position in April 2014, and who is now awaiting a trial in jail, facing corruption charges.

Thanks to documents provided by American tax authorities, the French investigators also discovered that Papa Massata Diack transferred 299 300 dollars to an offshore company named Yemli Limited, through his company Pamodzi Consulting, on October 2^nd 2009.

Le Monde can reveal that Yemi Limited, an offshore company based in the Seychelles, a tax haven, is linked to Frankie Fredericks. The former Namibian sprinter was an IOC scrutineer in Copenhagen.

Frankie Fredericks, now Chair of the 2024 Evaluation Commission [Paris and Los Angeles are competing, after Budapest droped its bid in February], answered some of our questions by email. Here are his explanations :

Why did he become power of attorney of an offshore company based in the Seychelles, in June 2004 ?

« Yemi Limited was established on advice received to arrange my personal financial and business affairs and for estate planning purposes, explained Frankie Fredericks. The Euro 600,000 loan was for purposes of investments in Namibia at the time I relocated to this country, and was introduced into Namibia in accordance with the necessary formalities. I have substantial investments in Namibia and serve on various boards of directors. »

Why did he choose the Seychelles, for his offshore company ?

« When I decided to relocate to Namibia in 2004 I registered a company there, with the object of marketing, management and promotion of sport and related activities. During 2007 when we started the negotiations for the ambitious plan to establish African and World Athletics meetings with Grand Prix in various countries with an emphasis of hosting Grand Prix’s during our summers with meetings in Australia, Africa (South Africa) and Brazil I realized that it would be very difficult to pay all foreign consultants from a Namibian based company. The reasons were a currency hedge as most foreign consultants would have to be paid in foreign currency, and that Namibia applies exchange controls, and all payments to foreign destinations require a prior approval process. In order to avoid the related exchange rate exposure and delays I decided it would be best to use funds that were legitimately held outside Namibia. The fees earned as a result of the Pamodzi Sports Consulting would augment those funds and I intended to in any event plough them back into the promotion of sport and related activities in Africa, for which I had received many requests. »

Why was he paid, through Yemi Limited, 300 000 dollars by Pamodzi Sports Consulting, a company owned by Papa Massata Diack ?

« The amount of USD 300,000 paid by Pamodzi Sports Consulting to Yemi Limited was paid pursuant to the terms of a contract dated 11 March 2007. I had the idea to develop a Relay Championships. In addition I supported the IAAF Marketing Programme, the African Athletics Programme, the IAAF Continental Programme and the African Athletics Championships. My attendance at various events and promotional efforts are documented and accordingly these services can be substantiated by other evidence. Payment was in respect of services rendered in the period 2007 to 2011. The payment has nothing whatsoever to do with the Olympic games. By the way, I was not an IAAF board member at the time, but an IAAF ambassador, and did not breach any regulation or rule of ethics. »

Why was he paid in 2009, precisely the election day in Copenhagen ?

« Despite the contract being concluded in 2007 I had not been paid, and therefore started to put pressure on Pamodzi Sports Consulting, and this culminated in the payment in 2009. »

Having as a main sponsor Mizuno, a Japanese company, and being a member of the 2020 Evaluation Commission while Tokyo was bidding for the 2020 Games, wasn’t it a conflict of interest ?

« As far as my relationship with Mizuno is concerned, this was disclosed to the IOC Ethics Committee as required. »

Frankie Fredericks ended his mail with a threat :

« I reserve all my rights against you and your newspaper, and will not hesitate to initiate formal legal steps if you publish anything defamatory about me. »

And the Namibian sprinter, well known for his elegance during his sports career, added politely : « Kind regards, Frank ».