* Lamine Diack accused of running corrupt parallel administration
* Report says IAAF officials "could not have been unaware"
* Report's author exonerates current IAAF president Coe (Recasts with more quotes and context)
By Karolos Grohmann
MUNICH, Jan 14 (Reuters) - The former head of world athletics, Lamine Diack, ran a clique that covered up organised doping and blackmailed athletes while senior officials looked the other way, independent investigator Dick Pound said on Thursday.
Pound's report for the independent commission of the World Anti-Doping Agency (WADA) added to a rapidly growing scandal involving organised doping and its concealment that has rocked world athletics and drawn comparisons with a corruption and governance scandal at the global soccer federation, FIFA.
Despite slamming governance at the International Association of Athletics Federations (IAAF), however, Pound exonerated new IAAF President Sebastian Coe, Diack's vice president for seven years, and said he was the right man to reform the organisation.
Pound found that Diack, a Senegalese who stepped down last year after 16 years leading the IAAF, was "responsible for organising and enabling the conspiracy and corruption that took place in the IAAF". He appeared to have personal knowledge of fraud and extortion of athletes carried out by the "informal, illegitimate governance structure" that he had put in place, Pound said.
Diack is already under formal investigation in France on suspicion of corruption and money laundering linked to the concealment of positive drug tests in concert with Russian officials and the blackmailing of the athletes to allow them to continue to compete.
Pound, a former head of WADA, rocked the sport in November with the first part of his report, which led to athletics superpower Russia being banned from competition for state-sponsored doping.
But Thursday's report said the IAAF's governing council "could not have been unaware of the extent of doping in athletics and the non-enforcement of applicable anti-doping rules".
"It is increasingly clear that far more IAAF staff knew about the problems than has currently been acknowledged," it said. "The corruption was embedded in the organisation. It cannot be ignored or dismissed as attributable to the odd renegade acting on his own."
FAILURES OF GOVERNANCE
Among the failures of governance listed by the report were the employment of Diack's two sons Papa Massata and Khalil as consultants and Lamine Diack's ability to divert the handling of Russian doping cases to his personal lawyer, Habib Cisse.
Last week the IAAF's Ethics Commission banned Massata Diack, former IAAF anti-doping chief Gabriel Dolle, former Russian athletics chief Valentin Balakhnichev and former Russian coach Aleksey Melnikov for covering up a Russian athlete's positive dope test and then blackmailing her.
Massata Diack, Cisse and Dolle are also under investigation in France along with Lamine Diack, who has been barred from leaving the country. Interpol said it had issued an international wanted notice for Massata Diack.
The report's co-author, Professor Richard McLaren, made clear that it had by no means offered a full account of the scandal, telling the news conference in Munich: "We may have only examined the tip of the iceberg in respect to athletes who may have been extorted."
Russia, which now has no accredited doping laboratory and faces the prospect of its track and field athletes missing the Rio Olympics in six months' time, said it supported the outcomes of Pound's investigation.
Sports Minister Vitaly Mutko was quoted by the Tass news agency as saying Russia understood its share of the responsibility in the doping scandal.
But he was also quoted by the R-Sport news agency as saying: "This document is mainly about corruption in the IAAF, it does not particularly concern Russia."
Pound said it was still possible that Russia could be readmitted before Rio: "Whether the progress to date and foreseeable future is up to that remains in the hands of Russia and judgement of overseeing authorities."
He said the IAAF had displayed "no genuine appetite to deal with the problems". But he eased some of the pressure on Coe by saying that suspicious blood readings found in Russian athletes in 2009, before the IAAF introduced "blood passports" to record an athlete's baseline values, had not provided a legal basis to punish those athletes.
"COE DID NOT LIE"
"My assessment on Lord Coe is, if he knew corruption was going on, he would have said something... I'd say he did not lie," Pound said.
"There is an enormous amount of reputational recovery, and I can think of no one better than Lord Coe to lead that."
Coe told Reuters he agreed that the IAAF Council should have been more aware of what was happening, but added: "Were they in a position to know more? No.
"I will put systems in place for the current Council and so that my successor is never in a position that we don't understand the nature of the day-to-day running of the organisation...
"We need more governance in place and I will put it in place."
Pound's report did, however, call for a "forensic examination" of the processes behind the awarding of the 2021 world athletics championships to the American town of Eugene, Oregon, closely linked to sportswear manufacturer Nike.
Coe has denied suggestions that he tried to influence Diack to award the event to Eugene. But a perceived conflict of interest forced him in November to step down from a position he had held for decades as Nike's paid ambassador.
Immediately after Pound's news conference, French prosecutor Elaine Houlette took to the stage to detail the progress of her judicial investigation.
She said French authorities had seized 87,000 euros in cash from the home of Dolle, who was banned for only five years rather than life by the IAAF's Ethics Commission because his sins were of "omission, not commission".
She also said authorities had protectively seized 1.8 million euros held in a bank account identified as belonging to Balakhnichev, a former IAAF treasurer, adding: "Further inquires will be necessary to see what financial flows took place and their links."
Balakhnichev and Massata Diack have both denied any wrongdoing. (Additional reporting by Jack Stubbs in Moscow; Writing by Kevin Liffey; Editing by Hugh Lawson)