Wednesday, May 27, 2015

Sepp Blatter's FIFA: Where Does the Buck Stop?

Seth Blatter, President of FIFA
picture alliance/Sven Simon photo

The governing body for world soccer (FIFA) is meeting in Zurich this week to elect its next President.  Sepp Blatter, a Swiss national is said to be favored for a fifth four year term despite some dramatic developments. The European soccer organization (UEFA), no friend of Blatter, is asking for a postponement.

The New York Times reports the blunt UEFA animus:
As long as Mr. Blatter remains in power, “FIFA will lack credibility and its image will be tarnished, and so it will lack authority,” Michel Platini, who heads UEFA, the European soccer confederation, told the French sports newspaper L’Équipe.
There have long been reports, allegations, and rumors of rampant corruption and bribery within FIFA,  from the macro level (e.g. influencing the location of events and media distribution rights) to the micro level (e.g. fixing the outcome of indivdual matches).  Blatter has not been caught up in any of this.  He has said that someone tried to bribe him once in 1986 and he returned the money after consulting with his accountant, and that thereafter no one ever tried to bribe him again.  Still, under Blatter's reign, FIFA has largely turned a blind eye and swept corruption scandals under the rug. 

Nevertheless, last November FIFA asked Swiss authorities to open an investigation relating to aspects of the Russia and Qatar world cup bids. The U.S. Federal Bureau of Investigation (FBI) has been investigating for three years. This Wednesday there were arrests. 

The New York Times has the play-by-play: 
Swiss authorities, working in conjunction with United States officials, conducted an extraordinary early-morning operation in Zurich on Wednesday to arrest several top soccer officials and extradite them to the United States on federal corruption charges. 
As leaders of FIFA gathered for their annual meeting, more than a dozen plainclothes Swiss law enforcement officials arrived unannounced at the Baur au Lac hotel, an elegant five-star property with views of the Alps and Lake Zurich. They went to the front desk to get room numbers and then proceeded upstairs.
Fourteen high ranking members were arrested, including current, outgoing, and former FIFA vice-presidents, executive committee members, sports marketing officials, and a broadcasting executive.  The press-release from the U.S. State Department can be found here.  The U.S. Attorney General has also unsealed four related guilty pleas.

Here is the Times:
"The Justice Department, F.B.I. and I.R.S. described soccer’s governing body in terms normally reserved for Mafia families and drug cartels, saying that top officials treated FIFA business decisions as chits to be traded for personal wealth. One soccer official took in more than $10 million in bribes, Attorney General Loretta E. Lynch said. 
"The schemes involving the fraud included the selection of South Africa as the host of the 2010 World Cup; the 2011 FIFA presidential elections; and several sports-marketing deals."
 Attorney General Lynch described the allegations, in part, as follows:
"[The indictment] spans at least two generations of soccer officials who, as alleged, have abused their positions of trust to acquire millions of dollars in bribes and kickbacks. And it has profoundly harmed a multitude of victims, from the youth leagues and developing countries that should benefit from the revenue generated by the commercial rights these organizations hold, to the fans at home and throughout the world whose support for the game makes those rights valuable." 
The investigation will continue, raising the possibility that the award for the Russia World Cup (2018), and the Qatar World Cup (2022), both of which have raised eyebrows might be scrutinized.  The Russians are worried.

David Post, who has taught intellectual property and internet law at Georgetown University and Temple University, wonders about the jurisdictional aspects of the case:
"I would be delighted to see FIFA ... reconstituted as something a little less like the odious mass of corruption that it has become over the years .... But still, one has to wonder: is the (alleged) activity of its officials such that it subjects their conduct to US criminal law, and the jurisdiction of the US courts? 
"As the Times story notes: "United States law gives the Justice Department wide authority to bring cases against foreign nationals living abroad, an authority that prosecutors have used repeatedly in international terrorism cases. Those cases can hinge on the slightest connection to the United States, like the use of an American bank or Internet service provider."  
"But ask yourself: if you think that the “use of an American bank” is a sufficient basis for the exercise of US jurisdiction over foreign nationals residing and conducting business abroad, then presumably you’re OK with being hauled into court in Singapore because you have used, say, a Singaporean bank, or into a Mexican court because your money found its way to a Mexican mortgage broker, or into a Danish court because you have at times used a Danish Internet Service Provider. Yes? When you look at it that way it becomes a little more difficult to applaud wholeheartedly – shouldn’t we have been able to count on the Swiss, within whose jurisdiction FIFA undoubtedly lies, to do something?"
However, Post's jurisdictional concerns may be answered. The connection to the U.S. may be much deeper than use of a U.S. bank account or internet provider. According to
The reason why the United States brought charges against the suspects is because the plots were allegedly hatched on American soil. “According to U.S. request, these crimes were agreed and prepared in the U.S., and payments were carried out via U.S. banks,” the Swiss Office of Justice said.
As noted, a separate Swiss investigation is underway looking into the Russia and Qatar bids. The two governments are cooperating.

Wipe out corruption ... long live soccer!

Indicted FIFA execs, BBC News

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