When Frank Lowy took over the administration of football in Australia he wanted the game to compete with AFL, Rugby Union and Rugby League. His dream was to host the World Cup itself in Australia. Four Corners reporter Quentin McDermott investigates the strategy and the people used by Football Federation Australia (FFA) in its failed bid to win the right to host the biggest sporting event on the globe. Talking to insiders who have never spoken at length about the World Cup bid, he asks how $42 million of taxpayers' money was spent to win just one vote from football's international governing body FIFA.

The program raises questions about how taxpayers' funds were spent during the bid, and asks whether the consultants employed to run the bid strategy were good value for money. Were there conflicts of interest at work? It also looks at the lobbying of FIFA Executive Committee members, some of whom were subsequently banned or suspended for alleged corruption over their dealings with other bidding nations.

The program also raises questions about the role played by AusAID in Australia's World Cup bid.

While millions of taxpayers' dollars have been lavished on the failed bid, domestic clubs have struggled, several surviving only because wealthy owners have been able to inject millions of dollars of their own private funds just to keep the clubs afloat. Now, the FFA has requested millions more to help it stage the Asian Cup in 2015.

As Frank Lowy comes up for re-election as Chairman of FFA, the Federal Government is taking a long, hard look at the governance and structure of football, and football fans and clubs are asking, can football survive in its present form, led by its current team of administrators?

"Own Goal", presented by Kerry O'Brien, goes to air on Monday 12th September at 8.30pm on ABC1. It is replayed on Tuesday 13th September at 11.35pm. It can also be seen on ABC News 24 each Saturday at 8.00pm, on ABC iview and at abc.net.au/4corners.

Transcript

"Own Goal" - Monday 12 September 2011

PETER HARGITAY, AUSTRALIAN WORLD CUP BID CONSULTANT: So we lost. Now are we proud of it? Of course not. Could we have avoided it? Maybe not. In hindsight, maybe not. But hindsight doesn't help.

KERRY O'BRIEN: The soccer World Cup bid Australia never had a chance of winning and the backdoor deals that took us nowhere. Welcome to Four Corner.

It's one of the abiding puzzles of Australian sport that while more people play soccer than all the other football codes combined, in financial terms the round ball game is the poor relation. In April this year the AFL secured a TV rights deal worth $1.25 billion over five years. The NRL is also negotiating a deal expected to be well over a billion dollars. The Football Federation of Australia is five years into a seven year deal with Fox Sports for the broadcast of soccer's national competition, the A League for a grand total of $120 million.

Soccer is heavily subsidised by the Federal Government yet last year the FFA recorded a deficit of more than $5 million. Every club in the A League is struggling financially, only one, Melbourne Victory is breaking even.

Yet the peak body under the leadership of business entrepreneur and billionaire Frank Lowey decided to chase a rainbow through the murky, scandal wracked labyrinthine alleys of world soccer and launched a bid to host the World Cup in Australia in 2018 or 2022.

With a strong financial backing from the Rudd Government, the costly dream ended in tears. Arguably Australia was never in the hunt but the inevitable post mortem has focused not just on the wisdom of making the bid but on the way Australia went about prosecuting it and the middle men it hired to help.

Quentin McDermott reports.

(Excerpt from Australia's World Cup bid)

NICOLE KIDMAN: The FIFA World Cup is the greatest show on earth, an expression of the passion and excitement for the world's most popular sport that Australia embraces.

(End of excerpt)

QUENTIN MCDERMOTT: One year ago, football fans lived in hope of glory on the pitch in the World Cup and a victory off the pitch that would have sent Australian football into the stratosphere.

(Excerpt from Australia's World Cup bid)

NICOLE KIDMAN: Our island home, the oldest continent on earth, has never hosted the World Cup. It would be a FIFA World Cup to be proud of.

(End of excerpt)

QUENTIN MCDERMOTT: But it wasn't to be. In South Africa, Germany humiliated the Socceroos.

SEPP BLATTER: The winner to organise the 2022 FIFA World Cup is Qatar.

QUENTIN MCDERMOTT: And in Zurich, FIFA humiliated Australia.

QUENTIN BRYCE, GOVERNOR-GENERAL: Very deeply disappointed in our hearts.

PETER HARGITAY: Don't you understand you lost the bid? Does that sink in slowly? You lost the bid.

QUENTIN MCDERMOTT: Now fans around the world are beginning to lose faith in how their game is run.

AUSSIE FAN: I question the process of how this has been arrived, I really do.

QUENTIN MCDERMOTT: Five years ago at the 2006 World Cup in Germany Australian football was on a high.

FRANK LOWY: There's a lot of sympathy for Australia.

SOCCER FAN: Thanks Frank for Aussie football, appreciate it mate, we really do. You're a f--ing champion.

QUENTIN MCDERMOTT: The Socceroos were competing in the World Cup Finals for the first time since 1974, and Frank Lowy, the billionaire businessman in charge of Australian football, was the toast of the town.

(Frank Lowy is saluted by the players)

QUENTIN MCDERMOTT: But Mr Lowy had his eye on a much bigger prize. He wanted Australia to host a World Cup and he wanted it to happen as his legacy, during his lifetime.

PETER WILKINS: And so how long is the process? You're making the noises now but is it a four, eight year process?

FRANK LOWY: Well I think we will try and make it shorter, as usual, you know. Time is you know very, very, very scarce commodity, particularly in my case. So we will try and do it as short as possible.

PETER WILKINS: Dare to dream.

FRANK LOWY: Dare to dream, but if you don't dream, you don't get there.

QUENTIN MCDERMOTT: Two years later, in May 2008, football's world governing body, FIFA, came to town, for a Congress in Sydney.

(Footage of Sydney's FIFA Congress)

QUENTIN MCDERMOTT: As he launched the event, Kevin Rudd, who was then prime minister, announced that Australia would bid to host the World Cup in 2018.

(Excerpt from Kevin Rudd's address)

KEVIN RUDD: That is one of the reasons why the Australian Government strongly supports Australia's bid to host the FIFA World Cup on 2018.

QUENTIN MCDERMOTT: Kevin Rudd enthusiastically backed the bid and his government pledged $45 million of taxpayer funds to help Frank Lowy and the governing body he heads, Football Federation Australia, mount its challenge.

Bonita Mersiades, then a trusted confidante of Frank Lowy's, held a senior role at FFA, as Head of Corporate and Public Affairs. This is the first time she has spoken out about the bid, and about the way it was run.

BONITA MERSIADES, FORMER HEAD OF CORPORATE & PUBLIC RELATIONS, FFA: Well FIFA Congress was very, very important to FFA. It gave us an opportunity to show off Australian expertise, Australian know-how in terms of organisation so it was a great opportunity in terms of our bid aspirations to be front and centre.

QUENTIN MCDERMOTT: During the Congress, Frank Lowy hosted a dinner at his private residence in Sydney.

The VIP guests included FIFA's 24 executive committee members and their partners.

QUENTIN MCDERMOTT: Gifts were handed out at that dinner?

BONITA MERSIADES, FORMER HEAD OF CORPORATE & PUBLIC RELATIONS, FFA: Yes, they were and look, gifts are something which FIFA is very fond of and which is not uncommon. And to be fair, gift giving is not uncommon in any sector, governments give gifts, the diplomatic service give gifts, NGOs give gifts. FIFA certainly gives gifts.

QUENTIN MCDERMOTT: At the dinner, the men from FIFA, who two years later would vote on Australia's bid, received gifts of Paspaley pearl cufflinks. Their partners received pearl pendants. The jewellery, paid for by Football Federation Australia, was worth close to $100,000.

Australia had not yet formally lodged its bid and was not yet bound by the rules which state that gifts given during the World Cup bidding process should be no more than "occasional gifts that are generally regarded as having symbolic or incidental value".

PETER HARGITAY, AUSTRALIAN WORLD CUP BID CONSULTANT: All host countries who have a Congress of FIFA always provide some gift to the attending members. There was a private dinner with the ExCom but the wives were also invited and they got their goodie bag. This pearl necklace was not the $20,000 pearl, it was a simple little pearl necklace okay from wherever in the region where the waters are whatever.

QUENTIN MCDERMOTT: Peter Hargitay is a European consultant with a colourful past. Born in Hungary in 1951, he grew up in Switzerland.

This is the first time he has spoken at length about his own controversial history and the part he played in Australia's World Cup bid.

As a young man, Four Corners has learned, he worked in military intelligence for the Swiss Army.

PETER HARGITAY: I grew up in Switzerland and I went to the Army like every Swiss citizen, which I am, and I worked in the military in the information section yes.

QUENTIN MCDERMOTT: In military communications?

PETER HARGITAY: Yes, something like that.

QUENTIN MCDERMOTT: Later he was arrested twice, once in Jamaica and once in Miami, Florida, and accused of trafficking cocaine, before being cleared of all charges.

PETER HARGITAY: They lost badly and so I won the case in Jamaica hands down. Many, many years later from the same government under a different prime minister though I received the only apology the country ever issued to a private individual.

QUENTIN MCDERMOTT: Before joining Australia's bid team Mr Hargitay worked as a special adviser to the President of FIFA, Sepp Blatter. The man who introduced him to Frank Lowy was fellow Hungarian, Les Murray.

LES MURRAY, SBS SOCCER COMMENTATOR: At that time Frank Lowy was intent on Australia joining the Asian Confederation and I put it to Frank that Peter Hargitay is a man who might be able to help, because at that time Peter Hargitay was also, or his consultancy had Mohamed Bin Hamman as a client, the then president of the Asian Football Confederation.

PETER HARGITAY: I was asked actually by Frank to see whether I could help him organise to join the AFC so that Australia would be able to fight against stronger competitors than in the Oceania division confederation.

So I first spoke with FIFA to check whether that would be possible. Then found out the correct way to go about it, reported back to Frank and then I made an introduction to Mohamed Bin Hammam who was the AFC president and the rest is history.

QUENTIN MCDERMOTT: As Australia's World Cup bid got under way, the lobbying intensified and more goodie bags were handed out.

FIFA's guidelines require bidding nations to have a legacy program giving aid to overseas football confederations.

First off the block with its own shopping list of requests was Oceania, the smallest of the world's six football confederations, covering the South Pacific and headed at the time by Reynald Temarii from Tahiti.

BONITA MERSIADES: There was a meeting between Reynald Temarii, who was then President of Oceania Football Confederation and the CEO of Oceania, Tai Nicholas as well as I believe the chairman and Ben Buckley regarding various issues to do with Australia and the Oceania Football Confederation. After that I was shown a list of requirements of Oceania from FFA.

QUENTIN MCDERMOTT: Oceania's requests included Hyundai vehicles for each of its associations apart from New Zealand, and the television rights for the broadcast of A-League and Socceroos games in Oceania.

This internal bid team document, aimed at securing the FIFA executive members' possible votes, resolved to "Work with AusAID and commercial partners to deliver on OFC's request".

BONITA MERSIADES: It was very important that Australia had Oceania's support and Reynald Temarii was a voter on the FIFA executive.

(Excerpt from Australia's bid for the World Cup)

NICOLE KIDMAN: So why bring the FIFA World Cup to Australia?

(End of Excerpt)

QUENTIN MCDERMOTT: AusAID denies it provided any aid to support Australia's bid to host the World Cup and says that for more than 10 years it has supported initiatives that assist development through sport in the Pacific.

But this letter to Bruce Davis, then director general of AusAID, suggests that FFA saw AusAID as a key driver of the bid.

FFA CEO Ben Buckley spelled out what the bid team needed: "We require an additional $4 to 5 million over four years to provide 'football delivered' international aid to nations in the Pacific," he wrote.

Five months later, in August 2009, Reynald Temarii, Kevin Rudd and Ben Buckley signed a Partnership Agreement with Oceania promising funding of "up to $4 million over 3 years".

BONITA MERSIADES: It was critically important that Australia had Oceania's one vote going into to the bidding process and my understanding was that these, this list of requirements was related to that.

QUENTIN MCDERMOTT: Oceania wasn't alone in asking for FFA's money.

Australia, who had joined the Asian Football Confederation in 2006, badly needed the four votes it held on FIFA's Executive Committee.

Mohammed Bin Hammam, then President of the AFC, met Kevin Rudd at FIFA's Congress in Sydney and wrote to him afterwards, telling him...

EXCERPT FROM MOHAMMED BIN HAMMAM'S LETTER (voiceover): Chairman Lowy and I are working closely and diligently to realise the dream of Asia and Australia of hosting the 2018 FIFA World Cup in Australia.

QUENTIN MCDERMOTT: In the same letter he brought up a project of his called Vision Asia.

BONITA MERSIADES: Vision Asia was the name given to the Asian Football Confederation's overarching umbrella legacy program. It was very much a brainchild or the baby of Mohamed Bin Hammam, who is now suspended from all football activity, and I remember when he was here in 2008, he actively sought support for Vision Asia.

QUENTIN MCDERMOTT: Just five days after the agreement with Oceania, Mohammed Bin Hammam and Frank Lowy signed a Memorandum of Understanding worth $5 million to the Asian Football Confederation.

This detailed budget to the FFA Board from Ben Buckley shows that $5.1 million was set aside for Vision Asia, out of the total bid budget of $45.5 million.

A final report on the audited accounts, published last week, says this amount came down to $1.25 million. But Four Corners understands that the balance is being met out of FFA funds.

BONITA MERSIADES: The Asian Football Confederation was so grateful that FFA was awarded I think it's called a Dream Asia Award for providing this donation.

QUENTIN MCDERMOTT: But a shock lay in store for Kevin Rudd and Frank Lowy.

After telling them that he supported Australia's bid for 2018, Mohammed Bin Hammam announced in June last year that the AFC would back Europe instead.

(Excerpt from Mohammed Bin Hammam's address)

MOHAMMED BIN HAMMAM: We are going to recognise and support Europe.

QUENTIN MCDERMOTT: In your book you say that Frank Lowy later described his first meeting with Mohamed Bin Hammam as love at first sight. Is he still in love with him?

LES MURRAY: I don't know, I don't know, you'll have to ask him.

QUENTIN MCDERMOTT: As Australia's bid team reeled from the shock of this announcement; they scrambled to send out the message that this was what Australia had planned for all along.

(Excerpt from Frank Lowy addressing the media)

FRANK LOWY: Well ok so he is not supporting 2018 but I mean, supporting us for 22, I mean, this is AFC's choice we are in to bid for both.

QUENTIN MCDERMOTT: It must have come as a terrible shock when Mohammed Bin Hammam announced his support for Europe in 2018?

PETER HARGITAY: No, why?

QUENTIN MCDERMOTT: Well because Australia was bidding in 2018 and was counting on Asia's support. Isn't that right?

PETER HARGITAY: No that's what is in the public domain. We never wanted to go for 2018 because we knew that 2018 was going to be Europe.

QUENTIN MCDERMOTT: Well why go for 2018 then?

PETER HARGITAY: Well that was not my decision was it? My decision was to make sure that the bid understood that 2018 was not going to happen for Australia, ever.

ANDREW JENNINGS, INVESTIGATIVE REPORTER: Hargitay claimed to be close to Bin Hammam didn't he? But Bin Hammam, he's so close to Bin Hammam he didn't tell him that he was changing how Asia's vote was going to go and it was bye, bye Australia.

QUENTIN MCDERMOTT: Australia's disastrous strategy was dominated by Peter Hargitay and two other European consultants, and for two of them it was also bye, bye to substantial bonuses.

BONITA MERSIADES: There was what was called an A-team for the bid, which was the chairman and the deputy chairman and one other board member plus the CEO and the three major consultants, Peter Hargitay, Fedor Radmann and Andreas Abold.

QUENTIN MCDERMOTT: The budget given to FFA's Board in October 2009, showed success fees of $2.5 million for Peter Hargitay and his company ECN, and $3.9 million for Mr Abold's colleague, Fedor Radmann; a total of $6.5 million.

Four Corners understands that these bonuses were payable if Australia won the bid for 2018, with smaller bonuses payable if Australia won in 2022. But Peter Hargitay disputes this.

PETER HARGITAY: One point two million, we were supposed to get.

QUENTIN MCDERMOTT: Mohamed Bin Hammam is from Qatar, and if his decision to back Europe in 2018 was part of a quid pro quo agreed with Europe, it worked.

SEPP BLATTER: Twenty eighteen FIFA World Cup, ladies and gentlemen will be organised in Russia.

(Applause)

QUENTIN MCDERMOTT: Russia won 2018 and Qatar buried Australia and beat the United States to win the right to host the World Cup in 2022.

Was it a flawed process for FIFA to have countries bidding for two consecutive tournaments simultaneously?

BONITA MERSIADES: Yes, it was. That was one of the two key flawed parts of the bidding guidelines which set up an inappropriate environment for bidders. Why? It's an obvious strategy if you've got a dual bidding process that you would look at well, who can we possibly swap some votes with?

QUENTIN MCDERMOTT: A key part of every bidding nation's campaign was the bid book, and the third European consultant, Andreas Abold received more than $3 million in fees for producing Australia's bid book, which was handed over to Sepp Blatter for consideration by FIFA's Executive Committee.

(Excerpt from Frank Lowy handing over Australia's bid book to Sepp Blatter)

FRANK LOWY: I hope and pray that we may be the lucky country.

QUENTIN MCDERMOTT: But was the money well spent?

BONITA MERSIADES: Peter Hargitay, Fedor Radmann, Andreas Abold said to us time and time again that the bid book, the technical assessment, the technical inspection and the final presentation were not influential in the decision making.

QUENTIN MCDERMOTT: According to the bid team's audited accounts, the bid book, technical inspection and final presentation cost a staggering $10.3 million, a quarter of the bid's entire budget.

The cost of Australia's bid book dwarfed at least one other country's. Four Corners understands that England's Bid Book, including its technical inspection, cost £3 million, well under half what Australia's bid book cost.

ANDREW JENNINGS: I think one must be fair to Andreas Abold that he employs a team of competent graphic designers, he knows the bidding process and he can produce an acceptable bid book. But there's one problem, they don't read the bid books. You could have got it on the back of a postcard; will have pitches, nice hotels, communications, love Australia.

BONITA MERSIADES: We were never under any illusion that the bid would be won or lost by what happened behind closed doors. And in fact you know my understanding of when Peter Hargitay became involved and then later Fedor Radmann became involved, was that they did so because they could get behind those closed doors and they dealt comfortably behind those closed doors.

QUENTIN MCDERMOTT: Well what do you think was happening behind closed doors?

BONITA MERSIADES: Well within the context of it being a secret ballot and within the context of course of the bidding guidelines, deals.

QUENTIN MCDERMOTT: Mr Hargitay's real role was to go behind closed doors to present Australia's case to voters on FIFA's Executive Committee.

His fellow lobbyist was Fedor Radmann, whose reputation as a football deal-maker is at best, controversial.

ANDREW JENNINGS: Fedor Radmann was heavily implicated in the last minute bribery that got the 2006 World Cup to Germany. As you may know they were getting very worried the South Africans were closing on them. What's to be done? Bribes, sorry inducements, very nice sums of money arrived in the bank accounts of some of the FIFA executive committee voters and guess what? Germany won.

QUENTIN MCDERMOTT: Peter Hargitay at least was keen to keep Fedor Radmann's participation in the bid secret.

In this internal email he wrote...

EXCERPT FROM PETER HARGITAY'S EMAIL (voiceover): Please do not list Fedor in the recipient lines. You simply must not do that. Why? Because you are thus jeopardizing everything.

QUENTIN MCDERMOTT: What do you think you meant by that?

PETER HARGITAY: Everything in the context of what?

QUENTIN MCDERMOTT: Well that's what I'm asking you to explain Mr Hargitay.

PETER HARGITAY: I don't remember that. I don't remember that. It could have been pertaining to a specific campaign aspect in a specific region or something to do with maybe an ExCo member that he didn't get along with.

QUENTIN MCDERMOTT: One ExCo member Mr Hargitay himself got on well with was Jack Warner, who during the bid was head of CONCACAF, the Confederation which covers North and Central America and the Caribbean.

Australia's bid team needed the votes of the Confederation's three executive committee members, and Mr Hargitay's strategy was to ensure that Mr Warner backed Australia, if Australia survived the first round and America did not.

PETER HARGITAY: Jack apparently stuck by his promise, voted USA and had we survived the first round, that was the agreement that if the USA were no longer with it, then he would vote for us.

QUENTIN MCDERMOTT: But eyebrows were raised by the efforts to keep Mr Warner onside.

Australia flew Trinidad and Tobago's Under 20 team to a training camp in Cyprus and there was some debate over the gift Australia's Prime Minister should give Mr Warner, when the two men met in Port of Spain, Trinidad, in November 2009.

A "bottle of fine Australian red wine from the Coonawarra" was suggested but Mr Hargitay objected.

"A bottle of wine is a bit very cheesy/cheap. If not embarrassing. If anything, a case is more of an idea," he wrote in this email.

QUENTIN MCDERMOTT: What does that say about the lifestyle enjoyed by members of FIFA's Executive Committee?

BONITA MERSIADES: It's very different from anything else that most of us have experienced, and I put this in this context. I have, in my previous work, I've sat in the cabinet room and briefed cabinet ministers about expenditure proposals, I've been on the VIP government jet on two occasions, I have managed events for Middle Eastern royal family, I have actually been at a dinner table with a former Prime Minister. But nothing compares with the arrangements that are made and the deference with which FIFA executive members are treated and like to be treated.

QUENTIN MCDERMOTT: Last year, just months before FIFA's vote on who would host the 2018 and 2022 World Cups, journalists from The Sunday Times in London approached Reynald Temarii, then the head of the Oceania Football Confederation, as part of a worldwide undercover sting.

(Excerpt from The Sunday Times interview with Reynald Temarii)

REYNALD TEMARII: So right now we have special projects here in this area stadium. The cost of, we need to improve the Academy; we need to extend these rooms with boardrooms. We need to have an artificial pitch.

(End of excerpt)

QUENTIN MCDERMOTT: Reynald Temarii told them that funds were needed for a sports academy in Auckland.

Australia's bid team had drawn the line at this request but that didn't stop Mr Temarii looking elsewhere.

(Excerpt continued)

SUNDAY TIMES REPORTER: How much will that cost do you think?

REYNALD TEMARII: Three million…

(End of excerpt)

SUNDAY TIMES REPORTER: I'd made it clear that I was looking to buy his vote.

(Excerpt continued)

REYNALD TEMARII: We cannot have a link between your support and my vote…

SUNDAY TIMES REPORTER: Yeah, yeah.

REYNALD TEMARII: Impossible.

(End of excerpt)

SUNDAY TIMES REPORTER: What he said was that you can't link my vote to this money.

(Excerpt continued)

REYNALD TEMARII: But just keep in mind, it could be helpful

(End of excerpt)

SUNDAY TIMES REPORTER: And then he added "but on the other hand, it might help". So there was a very sort of a nod and a wink aspect to it. At the same time he was talking about other bids having offered him huge amounts of money.

QUENTIN MCDERMOTT: Another senior Oceania football figure, Ahongalu Fusimalohi, from Tonga, was candid about the impact of AusAID funding in the region.

(Excerpt from Ahongalu Fusimalohi's interview with The Sunday Times)

AHONGALU FUSIMALOHI: And AusAID works together with the Australia football in determining the various assistances that goes out to the island countries. So there are ten of us, well 11of us. Ten because New Zealand is not included in the assistance. So, yeah.

SUNDAY TIMES REPORTER: So is that why Oceania will vote for Australia?

AHONGALU FUSIMALOHI: For 2022.

SUNDAY TIMES REPORTER: Yeah.

AHONGALU FUSIMALOHI: Yeah.

(End of excerpt)

SUNDAY TIMES REPORTER: It seemed as if Australia had done a huge aid deal with Oceania to ensure that Oceania's vote was going to go for Australia. And he was quite clear on that, that the reason that they were voting for Australia was because they'd been given all this money.

QUENTIN MCDERMOTT: Mr Fusimalohi, a former member of FIFA's Executive Committee, had a frank observation to make about FIFA and how it works.

(Excerpt continued)

AHONGALU FUSIMALOHI: The 11th commandment of the CIA is just never get caught. Don't get caught, that's all. But that's true; it is really what's happening.

QUENTIN MCDERMOTT: Unfortunately for Mr Temarii and Mr Fusimalohi, they did get caught, and both men were banned from football; Mr Temarii for a year, and Mr Fusimalohi for three, by FIFA's Ethics Committee.

QUENTIN MCDERMOTT: Did you get the impression that the legacy program was just a cover for bribes?

BONITA MERSIADES: Look I wouldn't, I wouldn't go that far. I recognise that the absence of evidence is not the evidence of absence. But I can only stress that the bidding guidelines set up the flawed environment and this points to the problem of FIFA.

FIFA didn't understand that the level of transparency that was needed around the bidding process wasn't there.

(Excerpt from hearings at the House of Commons, 2011)

LORD TRIESMAN, FORMER FA CHAIRMAN: You're talking about probably £2.5 million. Jack Warner nodded at that and sat back, he didn't say anything, he nodded at it but then said that the funds could be channelled through him and he would guarantee that they were appropriately spent.

QUENTIN MCDERMOTT: In hearings at the House of Commons earlier this year, Lord Triesman, former Head of the England bid, said several improper requests had been made to his team by FIFA executive committee members, one of whom was Jack Warner.

DAMIEN COLLINS, BRITISH MP: There were allegations that Jack Warner had effectively asked for financial payments to be made by the FA to him personally and that for him then to commission some football development projects in the Caribbean. My concern both through our investigation in our committee and in the events that have taken place in the weeks and months since then is that FIFA lacks the leadership or the determination to sort this problem out.

QUENTIN MCDERMOTT: Do you think it's ironic in retrospect that Mr Hargitay targeted particular members of the Executive Committee who have since been disgraced?

BONITA MERSIADES: Very ironic. You know the ones that he in particular targeted were Jack Warner, Mohammed bin Hammam, whom he referred to in an interview last year in The Age as "He is my brother and I am his". Amos Adamu in Nigeria was one that there was a lot of attention at one stage put into working with him and then of course less so with Peter Hargitay, but certainly more so with the Australian bid, Reynald Temarii.

QUENTIN MCDERMOTT: Last December, Australia made a final attempt to win over FIFA's Executive Committee before the final vote in Zurich.

TIM CAHILL, SOCCEROO: For us it's all about putting in a good presentation and showing the world what we have to offer.

QUENTIN MCDERMOTT: FIFA's promotional video featuring a kleptomaniac kangaroo was a far cry from the polished presentation produced by Bonita Mersiades 12 months earlier.

(Excerpt from the promotional video)

JULIA GILLARD: Find that kangaroo, bring back the cup.

(End of excerpt)

QUENTIN MCDERMOTT: By now she had left the team, and the final presentation, costing $3.8 million was universally panned.

(Excerpt continued)

PAUL HOGAN: Hand it over. You've had your fun.

BONITA MERSIADES: Where was the football in the final presentation? Why did we take The Socceroos' captain Lucas Neill, The Matildas' Captain Melissa Barbieri and probably our best known player at the moment, Tim Cahill, to Zurich for that final presentation and not use them? Somewhere along the way in 2010, we lost not only the narrative around football, but the narrative around what makes us Australian, and I think that final presentation did nothing to help us even though it wasn't influential.

QUENTIN MCDERMOTT: Australia's bid received a single vote, almost certainly, from Fedor Radmann's friend and colleague, Franz Beckenbauer who had openly declared his support for Australia's bid.

Between them, Fedor Radmann and Peter Hargitay earned $5 million for their efforts.

QUENTIN MCDERMOTT: Were they worth the millions of dollars they were paid?

BONITA MERSIADES: The evidence suggests that they were not.

ANDREW JENNINGS: I'm surprised that a man of the business acumen of Frank Lowy allowed these people to persuade him that they could achieve anything for Australia. It was never going to go to Australia. Hargitay couldn't deliver it and Radmann knew that he couldn't either and you suckers paid them.

PETER HARGITAY: So we lost. Now are we proud of it? Of course not. Could we have avoided it? Maybe not. In hindsight, maybe not. But hindsight doesn't help. To go on and on about it, you spent 0.00045 per cent of your GDP on this bid but you would have earned 10 to 15 per cent of your GDP had you won. Isn't that a risk worth taking?

QUENTIN MCDERMOTT: The repercussions of the FFA's abject failure to win the bid have been felt across Australia's football community, and nowhere more so than here in Townsville, previously home to the North Queensland Fury A-League football team. If Australia had won the bid, this stadium would have hosted several games of the 2022 World Cup Finals. But it didn't happen, and three months after the bid was lost, the FFA killed the dream and closed the club.

MICHAEL PALMER, NORTH QLD FURY FAN: I'd like you if you would to take that in with you and if you come out with it then we know we've still got a chance.

QUENTIN MCDERMOTT: In March this year, Ben Buckley travelled to Townsville to close down North Queensland's 'A-league club.

Michael Palmer: I gave him my shirt just to give him a reminder that there were people still supporting the club and still hoping that it would survive and he still owes me that shirt by the way, he didn't bring it out so.

QUENTIN MCDERMOTT: How did it impact on the football community in general?

DAVID CRISAFULLI, TOWNSVILLE DEPUTY MAYOR: It will have negative impacts on football for a generation. One of the great abilities for junior rugby league to maintain its players is the knowledge that they can flow through to a team like The Cowboys. Likewise with the basketball; both young boys and girls can go on go on to play for The Crocs or The Fire. Football had a golden opportunity to harness what is a massive nursery in North Queensland and they blew it.

RABIEH KRAYEM, FORMER NTH QLD FURY CEO: My own personal view I think they were so focused on the World Cup bid that they neglected their own backyard.

QUENTIN MCDERMOTT: North Queensland Fury was established when the A-League expanded in 2008; its first full season was 2009. It allowed FFA's World Cup bid team to tell FIFA that elite football was a growing force in regional Australia.

But attendances fell away and the club ran into serious financial difficulties. As the World Cup bid progressed, FFA propped it up.

DAVID CRISAFULLI: There is no doubt that we were put on life support, pending the result of that bid. That bid was an absolute train wreck and they then looked for any opportunity to cut their losses and run. It will haunt them for a long time. It is a bad decision and it will impact on the ability of the sport to spread, certainly under Ben Buckley's watch.

QUENTIN MCDERMOTT: One concrete result of the club closing down has been the loss to the top level of the game of home-grown indigenous talents like Lorenzo Sipi.

LORENZO SIPI, FORMER NTH ALD FURY PLAYER: It's a huge honour, you know, to put on the jersey for North Queensland and to be the only boy from around here and the first to come through the ranks of the State League. Yeah, it was just a huge achievement and I was very proud of myself. Now it's going to be harder for the junior boys coming through the ranks to make it in the big stage, so they'll have to go elsewhere down south to the bigger cities if they want to follow their dream and pursue it.

GARETH EDDS, FORMER NTH QLD FURY PLAYER: I was sold the sold a dream that things were going well in the A-League.

QUENTIN MCDERMOTT: Gareth Edds is an FFA registered coach who was lured away from a career in English football to come and play for the Fury.

He now runs his own coaching academy with the aim of giving kids in Townsville a chance of making it to the top flight. But the road ahead isn't easy.

GARETH EDDS: With the kids they're struggling to see a pathway, I'll be perfectly honest with you. They're struggling to see first they had a pathway and now they're struggling to see a way through.

RABIEH KRAYEM: What the A-League has lacked for the last two or three years is a strategy in relation to how to re-engage with the community you know; the disenfranchising between the supporters and the clubs, the football community and the FFA. There's no doubt it's a great game, it's a great code and it will survive. Some people who are running it mightn't but the game will always survive.

QUENTIN MCDERMOTT: In the eight years since Frank Lowy has been at the helm Australian football has achieved great things including the elevation of the Socceroos to a world class brand.

GRANT MUIR: I was actually told that the Socceroos are now the most popular sporting team in the whole of Australia which is quite an achievement from 10 years ago nobody, hardly anybody ever talked about the Socceroos when I first came here.

QUENTIN MCDERMOTT: But the A-League, under his watch has struggled to prosper.

As gates have fallen, Frank Lowy has relied increasingly on the generosity of other millionaires to keep the competition afloat.

One such benefactor is Tony Sage, the owner of Perth Glory.

Could the club have survived without your own personal investment?

TONY SAGE, PERTH GLORY OWNER: No. Absolutely not.

QUENTIN MCDERMOTT: Tell me about that.

TONY SAGE: Well look, over the three and a half, four years, I've injected $20 million into the club; I've returned $13 million. So a net loss of $7 million over that time.

QUENTIN MCDERMOTT: One issue for the A-League's owners is the lack of a voice in how the league is run.

TONY SAGE: The way that the FFA is structured at the moment the chairman has a lot of the power.

QUENTIN MCDERMOTT: Should the owners have more power?

TONY SAGE: Absolutely. I believe that 100 per cent. It's our money, it's not our game, but it's our money that props up the game, so we should have more say.

BRENDAN SCHWAB, AUST PROFESSIONAL FOOTBALL ASSOC. CEO: There needs to be a strong sense of accountability to the ownership group, to the clubs, and that's why the argument to separate the league from FFA is so strong. But of course we have to make sure that the owners then act in the best interests of football.

QUENTIN MCDERMOTT: With kids, football is still the most popular code but it comes at a cost. At junior level, it's a significant source of revenue for FFA.

And parents who want their children to play and excel, pay large sums of money to make it happen.

ROB MACRI: We've got five kids and they all play football.

QUENTIN MCDERMOTT: How much does that cost you?

ROB MACRI: Roughly about a$1000 a year, yeah and I play myself, so that's another 300 on top of that.

QUENTIN MCDERMOTT: What do you get for the money?

ROB MACRI: What do we get?

KYLIE MACRI: A game of soccer? That's pretty much it. Just the kids being able to play.

ROB MACRI: The millions that went into that bid and you know amounted to nothing, what they could've done to you know to the associations. Handed it back and you know supplied the kids with some with some gear and stuff and it would just be, you know, at least you see something for it.

BRENDAN SCHWAB: We unfortunately have a situation where our kids are being asked to pay more to play football than they are to play any other game and that is simply not sustainable and is really going to hurt us in the long term.

QUENTIN MCDERMOTT: After last year's World Cup bid debacle, the Federal Government allocated a further $38 million in this year's budget to ensure the sustainability of football and to pay for the Asian Cup, which is being held in Australia in 2015.

The Government is now conducting a thorough review of the way football is administered, structured and governed.

GRANT MUIR, SYDNEY FC SUPPORTER, 'THE COVE': I can't help thinking what the next Sports Minister's going to ask the next time the FFA goes cap in hand to the Federal Government and says we would like some money for something. The first thing he's going to say well what about the$46 million you spent on getting a single vote for the World Cup?

QUENTIN MCDERMOTT: Neither Frank Lowy nor Ben Buckley would agree to appear on this program, to answer their critics, to discuss the World Cup bid, to talk about the challenges facing the domestic game, or to set out their plans for the future.

In a statement to Four Corners, Ben Buckley said that FFA had complied with its obligations under relevant agreements, laws and regulations relating to the World Cup bid.

Later this year Frank Lowy will seek re-election as Chairman of FFA for a further four years. It isn't all smooth sailing for him.

He has at least one opponent who will try to stand against him, Dominic Galati, a prominent football promoter and former Head of SBS Sport.

QUENTIN MCDERMOTT: Have people expressed astonishment that you've actually dared to challenge Frank Lowy?

DOMINIC GALATI, FOOTBALL PROMOTER: I've had a lot of support from people that are within the FFA, outside the FFA and if I didn't I wouldn't be here today.

QUENTIN MCDERMOTT: Will you succeed in your bid to unseat Frank Lowy?

DOMINIC GALATI: No I won't.

QUENTIN MCDERMOTT: Why are you doing it then?

DOMINIC GALATI: Because I believe that someone has to be a voice out there for the people that are passionate about this game, people are now afraid of what's going on and I'm just doing it for them.

QUENTIN MCDERMOTT: Frank Lowy and his CEO Ben Buckley are under pressure, and their record is under review.

DOMINIC GALATI: It has to go to the top. Ben Buckley is the problem and I think Frank appointed him and I think it's time for him to go.

QUENTIN MCDERMOTT: Let me ask you bluntly, has Ben Buckley lost the dressing room?

BRENDAN SCHWAB: I'm not going to comment on that.

QUENTIN MCDERMOTT: The fact that Frank Lowy and Ben Buckley are being challenged at all is a sign of discontent within the wider football family.

As the new season approaches, Harry Kewell, the football star all kids aspire to be, has signed up with Melbourne Victory, and Brett Emerton, another star Socceroo, will play for Sydney FC.

The hope is that they will bring renewed passion to the terraces, and reinvigorate the game from the grassroots up.

The test is whether football's current leadership can deliver the strategy and judgement needed, now more than ever, to propel Australian football into the stratosphere.

KERRY O'BRIEN, PRESENTER: It's interesting to note in closing that the Smith Review into the state of Australian soccer, which was set up five months ago, was initially expected to take four or five months to complete. It may have run into head winds because we're now told it should be finished by the end of the year.

[END OF TRANSCRIPT]

Background Information

KEY REPORTS AND DOCUMENTS

AusAID Statement for Four Corners | 11 Sep 2011 - "AusAID did not provide any aid resources to support Australia's bid to host the World Cup, either to FIFA or Football Federation Australia." Read the full statement. [PDF 242Kb]

FFA Final Report | Feb 2011 - Final report from the FFA on their bid to host the 2018 or 2022 FIFA World Cup. [PDF 2.10Mb]

Strategic Review into the Sustainability of Football in Australia: Terms of Reference | Australian Government-FFA | 2011 - The terms of reference for the review of football in Australia, to be led by Warwick Smith, Chair of the Australian Sports Commission. [PDF 185Kb]

FIFA Code of Ethics | 2009 - On 6 October 2004, the FIFA Executive Committee approved a Code of Ethics drawn up by the Committee for Ethics and Fair Play. On 15 September 2006, the Executive Committee approved the revision of the Code of Ethics.

The Crawford Report | Apr 2003 - Report of the Independent Soccer Review Committee into the Structure, Governance and Management of Soccer in Australia. [PDF 140Kb]

RELATED NEWS AND MEDIA

AusAID asked to help win World Cup bid | ABC News | 12 Sep 2011 - Australian football's governing body, Football Federation Australia (FFA), approached Australia's overseas aid agency AusAID and asked for its help to win crucial votes from members of FIFA's executive committee during its bid to host the 2022 World Cup. By Quentin McDermott.

No open tender for $10m Cup bid | SMH | 12 Sep 2011 - The $10 million in taxpayer funds that Australia's soccer federation spent on its World Cup bid book's creation and promotion was paid without an open tender process and was more than twice the amount spent by England on the same activities.

FFA's final word on Cup flop | The Australian | 8 Sep 2011 - The last chapter in Australia's disastrous bid to host the 2022 World Cup finals was closed after the federal government accepted the final financial report from Football Federation Australia.

Dominic Galati to take on Frank Lowy in Football Federation Australia leadership revolt | The Daily Telegraph | 25 Jul 2011 - Frank Lowy is to face a revolt against his leadership of football when former Soccer Australia director Dominic Galati intends to stand against him at Football Federation Australia's annual general meeting.

FIFA bans Bin Hammam for life | ABC News | 24 Jul 2011 - Asian football supremo Mohamed bin Hammam has been banned from the game for life after being found guilty of corruption following a two-day hearing of FIFA's ethics committee.

Football fans not getting the full story | 7.30 Report | 7 Jul 2011 - Staff within the SBS sports department allege they have been under pressure to write stories in favour of Australia's World Cup bids.

How much did our World Cup bid really cost us? | The Roar | 27 May 2011 - We already know Australia's bid to host the football World Cup cost taxpayers more than $45 million. But in the wake of stunning corruption allegations made against FIFA presidential challenger Mohamed Bin Hammam this week, did the bid cost us more than just cash?

FIFA facing corruption 'tsunami' | ABC Grandstand | 28 May 2011 - Embattled FIFA vice-president Jack Warner says a football tsunami will hit the sport's world governing body when corruption allegations are investigated over the coming days.

Ten people sacked at Football Federation Australia | The Daily Telegraph | 24 Mar 2011 - Football Federation Australia today wielded the axe at its Sydney head office with 10 staff members being made redundant.

I wasn't paid $4 million: World Cup lobbyist | The Age | 15 Dec 2010 - Peter Hargitay, adviser to Australia's failed World Cup hosting bid, has defended his team's work and denied claims he was paid $4 million for his two years of lobbying.

Our World Cup bid was clean: Lowy | The Age | 8 Dec 2010 - Football Federation Australia boss Frank Lowy yesterday took full responsibility for the failure of the country's bid to stage the 2022 World Cup.

AFC Dream Asia Award: FFA | AFC | 24 Nov 2010 - The Football Federation of Australia became the first recipients of the AFC Dream Asia Award in recognition of their efforts to contribute to the betterment of society through football.

World Cup money trail: lobbyists to make millions | The Age | 30 Jun 2010 - Two controversial European lobbyists hired to help bring the soccer World Cup to Australia stand to receive up to $11.37 million in fees and bonuses - one-quarter of the taxpayer-funded bid - according to secret Football Federation Australia files.

Ben Buckley's letter in full | The Age | 30 Jun 2010 - "I refer to your email containing a number of questions in relation to Football Federation Australia's (FFA) bid to host the 2022 FIFA World Cup." Letter from Ben Buckley.

LINKS

ABC Grandstand - www.abc.net.au/sport/

Australian Sports Commission - www.ausport.gov.au/

Football Federation Australia - www.footballaustralia.com.au/

Oceania Football Confederation - www.oceaniafootball.com/

RELATED FOUR CORNERS PROGRAMS

Final Whistle? | 27 May 2002 - How Australian soccer on the field has been throttled by the performance of administrators off it. QuentinMcDermott reports.

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