Regional soccer governing body CONCACAF has dropped its lawsuit against California travel company Cartan Tours, which it accused of paying kickbacks to its former president Jeffrey Webb to secure a lucrative business arrangement.
The lawsuit has been settled out of court without any money changing hands, both parties confirmed this week.
The agreement ends the business relationship between CONCACAF and Cartan, which had an exclusive contract to provide travel, accommodation and event planning for the organization’s many tournaments, events and meetings.
CONCACAF had alleged in the original suit that this contract was the result of a corrupt agreement between Webb, his general secretary Enrique Sanz and the Los Angeles based travel firm.
It said the “clandestine, kickback-based and parasitic relationship” had left the organization saddled with a one-sided contract that allowed Cartan to use the soccer confederation as a “cash cow.”
Cartan denied any wrongdoing, saying the allegations were irresponsible and unfounded and were designed to put pressure on the company to renegotiate the terms of its exclusive contract.
A spokeswoman for the firm said in December it would be asserting its own claim for damages against CONCACAF.
However, the two parties have now agreed to settle their differences out of court, in an agreement that CONCACAF says ends the business relationship.
CONCACAF declined to release details of the settlement Tuesday but said, in a statement, that it would save millions of dollars as a result.
“CONCACAF is very pleased to have resolved all issues concerning the complaint filed against Cartan Tours, Inc. and other associated defendants on Dec. 22, 2015.
“The settlement will save CONCACAF millions of dollars and allow the Confederation to continue to move forward from the misconduct of past management to focus on football and governance reforms.”
In its own statement, Cartan said both parties had agreed to “release the claims they asserted against each other in pending proceedings.”
The spokeswoman for the company said, “Neither side made any payment to the other in connection with the settlement.”
In the original lawsuit filed against Cartan and its affiliates, CONCACAF alleged that kickbacks were paid to Webb in the form of a “fictitious gift” to the Cayman Islands Football Association’s Center of Excellence.
CIFA received matching $600,000 loans from Cartan and another company Forward Sports, signed by its then general secretary Bruce Blake, ostensibly for work on the Prospect field.
In the case of Cartan, the lawsuit alleged this was not a gift, but payback to Webb for helping orchestrate an “outrageously lucrative agreement” for the company with CONCACAF.
“Cartan never provided any material amount of services to CIFA, nor did Cartan widely publicize its fictitious charitable gift – which is what typically would be expected of a corporate sponsor,” the lawsuit alleged. “That is because it was not a gift at all, but yet another form of graft and illicit dealing between [the lawsuit defendants] and Webb.”
Mr. Blake, now acting president of CIFA, has acknowledged he signed the loan agreements, but had no part in the negotiations over the loans.
He said he believed they were to be loans to CIFA to assist with paying down on its loan with Fidelity Bank.