By John Tilak and Euan Rocha
TORONTO, Dec 11 (Reuters) - Canada's Bank of Nova Scotia
BNS.TO is comfortable with progress CONCACAF has made after
pushing the regional soccer body to make several changes but
reserves the right to pull its sponsorship if it does not see
complete transparency, a source familiar with the company's
thinking said on Friday.
The comments come after the arrest last week of acting
CONCACAF president Alfredo Hawit, and the May arrest of former
president Jeffrey Webb on corruption charges. CONCACAF controls
soccer in the Caribbean, North America and Central America.
Since the first indictments, Scotiabank , as Canada's No. 3
bank is known, has called on CONCACAF to work with advisers,
improve its financial systems, disclose more information and
make changes in its corporate governance practices, said the
source, who spoke on condition of anonymity because of the
sensitivity of the matter.
"We can't forget the fact that they need to clean up their
processes," the source said. "Organizationally, their turnaround
is incomplete. They are still in the early days of the
turnaround."
Scotiabank is pushing CONCACAF to have audited financial
statements, the source said.
"Our point of view is very simple. It is nonnegotiable," the
source said. "They need to be completely transparent about how
they operate their business or we don't want to be part of it."
Scotiabank recognizes there are still many unknowns, the
source said, adding that "more could come out."
Another concern weighing on Scotiabank is reputational risk,
which banks say are a big issue for them.
The Canadian lender revamped its sponsorship contract over
the summer and eliminated marketing agency Traffic Sports USA
from the new agreement, which involves only Scotiabank and
CONCACAF.
Traffic Sports' president was among 14 marketing officials
and executives from FIFA, the governing body of international
soccer, who were indicted in May on bribery, money laundering
and wire fraud charges.
"We are getting more comfortable with that management
process," the source said. "We believe CONCACAF is moving in the
right direction."
Earlier this month, soccer bosses from across South and
Central America were among 16 people charged by the U.S.
prosecutors with multimillion-dollar bribery schemes for
marketing and broadcast rights.
The fresh charges will not put an end to Scotiabank's
partnership with CONCACAF, the source said. "Our relationship
with CONCACAF wasn't compromised by the latest situation."
A Scotiabank spokesman said the bank was 'satisfied' with
the reforms underway at CONCACAF and had had no interactions
with interim head Hawit. CONCACAF did not immediately respond to
a request for comment.
Miami-based CONCACAF has been working with U.S. law firm
Sidley Austin LLP and turnaround consulting company Alvarez &
Marsal to tackle the organizational and reputational challenges.
The next CONCACAF Congress will see a much more transparent,
open voting process, the source said.