FIFA, the DOJ and the Global Fight Against Corruption

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The Department of Justice (DOJ) gave the global fight against anti-corruption a huge boost last week when it announced it was bringing charges against 14 members or persons associated with Fédération Internationale de Football Association (FIFA). To say that the scope and breadth of the charges were breathtaking really does not capture this moment in history for the anti-corruption advocates around the globe. FIFA had held itself above the law for so long, that it finally took the DOJ to start the process of rooting out the corruption that appears to have been endemic in the organization.

My FCPA Blog contributor colleagues Mike Scher and Alistair Craig, both writing in the FCPA Blog, respectively asked why we in the compliance community had not protested against FIFA corruption louder and what took the DOJ so long to prosecute? I have to disagree with both positions. The compliance community had worked to be a part of the solution at FIFA for some time. Both Transparency International and Alexandra Wrage at TRACE International worked to help bring transparency and accountability to FIFA. Both were summarily shown the door by FIFA and specifically Sepp Blatter. Just as an alcoholic cannot get sober until they become ready and willing, FIFA has not, until very recently, been willing or able to face its issues of corruption.

Moreover, even when FIFA gave the appearance about somehow even being remotely concerned about bribery and corruption, it was all for show. It asked former federal prosecutor Michael Garcia to internally investigate allegations of bribery and corruption around the awarding of the 2018 World Cup to Russia and the 2022 World Cup to Qatar, then summarily obstructed his investigation. Finally when Garcia did produce a report, FIFA shelved it and released a sham summary that Garcia promptly disavowed. Garcia resigned from FIFA due to the organization’s conduct over his report and its burial.

Even when national governments tried to do something about the bribery and corruption endemic in FIFA, they were stymied. Nigeria (of all places) tried to investigate allegations of match fixing around its national soccer federation. FIFA’s response? It decreed that Nigeria could face the ultimate sanction of being expelled from FIFA if the organization determined there had been unacceptable government interference. How’s that for playing ball?

Clearly FIFA demonstrated it was an organization that was unable to replace an institutional structure that fostered bribery and corruption when it re-elected Blatter last Friday for yet another five-year term as President. Yet Blatter resigned this week. Why did he do so? In an article in the BBC online it reported that Blatter said the mandate he was given at the time of his re-election (last Friday) no longer “seemed to be supported by everyone in the world of football.” He was reported to have said the organization need “profound restructuring.” Time was much blunter when it said, in an article entitled “FIFA’s Sepp Blatter Is Under Investigation for Corruption, Reports Say, that “FIFA president Sepp Blatter is himself in the crosshairs of the corruption investigation that saw several of the organization’s top brass indicted over the past week, with U.S. officials reportedly saying that he was a target of their probe into world soccer’s governing body. The New York Times says that it was told by officials, speaking on condition of anonymity, that investigators hoped to work their way up to Blatter with the cooperation of the FIFA officials already taken into custody.”

On NPR’s All Things Considered, there was a report that senior FIFA officials were no longer gong to attend this month’s Women’s World Cup in Canada for fear of being arrested and extradited immediately to the US. Does that sound like a group of men who have nothing to hide? I am reminded of the 1960s magazine article and movie Suppose They Gave a War and Nobody Came? Truly the inmates are running the asylum.

What about the companies that sponsor FIFA, regional soccer federations and national soccer organizations and their role in all of this? In another BBC article, entitled “Fifa sponsors welcome Sepp Blatter’s resignation”, Emily Young reported that “both Visa and Coca-Cola repeated warnings that they expected a swift overhaul at Fifa. And McDonald’s said it hoped this would be the first step towards “gaining back trust from fans worldwide.”” I found this response by sponsors to be a key part in the international fight against bribery and corruption. Moreover, it demonstrated the role of all parties in fighting bribery and corruption.

Clearly it is not in the interest of any multi-national to be associated with a corrupt entity such as FIFA from a reputational perspective. But more than simply self-interest to protect their own brand name, companies have a role in the fight directly. This can be summed up by Scott Killingsworth in his writings on ‘private-to-private’ (P2P) solutions to the US Foreign Corrupt Practices Act (FCPA) or what I call a business solution to a legal problem. If you want to do business with a company, you should contractually mandate that company has an anti-corruption compliance program under the FCPA, UK Bribery Act or other recognized international standard.

The FIFA international bribery scandal and criminal enforcement action will be around for quite sometime to come. For the Chief Compliance Officer (CCO) or compliance practitioner in a US company there will be many lessons to be learned going forward, even if the initial criminal charges are against the bribe-takers for violations of Racketeer Influenced and Corrupt Organizations Act (RICO), money-laundering laws and tax evasion. Many of these lessons will be applicable to a FCPA or UK Bribery Act based best practices anti-corruption compliance program.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2015

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