FCPA Compliance and Ethics Blog

June 4, 2014

Whither FIFA?

Filed under: FIFA — tfoxlaw @ 12:01 am
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World Cup TrophyOn this day in 1942, the Battle of Midway, one of the most decisive US victories against Japan during World War II, began. During the four-day sea-and-air battle, the outnumbered US Pacific Fleet succeeded in destroying four Japanese aircraft carriers while losing only one of its own, the Yorktown, to the previously invincible Japanese navy. It truly was one of the turning points of the war because the destruction of the Japanese carriers prevented Japan from taking the offense again in the Pacific.

One may have seen such a turning point over the weekend with Fédération Internationale de Football Association (FIFA) and allegations of corruption throughout it in several areas. This was when The Sunday Times rocked the sporting world with its article “Plot to Buy the World Cup” by Jonathan Calvert and Heidi Blake. It the article, they reported that a number of football officials took £3m in return for support of the Qatari bid. The BBC, in an article entitled “Qatar World Cup 2022: Investigator nears probe conclusion”, said that “The Sunday Times claims to have obtained secret documents that implicate the former AFC president in corrupting members of football’s governing body to win the right to stage the 2022 World Cup. The newspaper alleges the documents, seen by BBC sports editor David Bond, show that Qatari Bin Hammam, 65, was lobbying on his country’s behalf at least a year before the decision to award the country hosting rights. They also allegedly show he had made payments into accounts controlled by the presidents of 30 African football associations and accounts controlled by Trinidadian Jack Warner, a former vice-president of Fifa.”

While these allegations are certainly sensational, they are not the first time that questions have been raised as to whether improper payments were made to influence the vote awarding the 2022 World Cup Championship to Qatar. Back in 2010, the New York Times (NYT), in an article entitled “FIFA Suspends Officials in Vote-Selling Scandal”, reported that Reynald Temarii, the Tahitian President of FIFA’s Oceanic regional confederation, reportedly said that he wanted “about $2.3 million to finance a sports academy” in New Zealand. Amos Adamu, the Nigerian representative, was alleged to have requested approximately $790,000 to fund the construction of soccer fields in Nigeria. Mr. Adamu reportedly asked for “cash to be paid into his personal account”. FIFA President Sepp Blatter was quoted as saying that the two men’s actions had “created a very negative impact on FIFA and on the bidding process”. On November 17, 2010, the FIFA Executive Committee did take action as both men were suspended by FIFA for their actions; subsequently both men have recently had the appeals of their suspensions denied by the FIFA appeal committee.

The Wall Street Journal (WSJ) separately raised questions about Qatar spending in a 2011 article, entitled “Qatar’s World Cup Spending Spree”, where reporter Matthew Futterman detailed the “spending spree” of a reported one year amount of $43.3 million by Qatar, which led to its winning World Cup bid. Futterman’s article focused on information derived from the internal documents of Qatar’s bidding committee. Futterman reported that there was no evidence that Qatar violated the rules and regulations of FIFA to secure its winning bid. Rather he reported on how Qatar “worked within FIFA’s broad guidelines” to secure its winning bid.

From the internal bid documents, obtained by the WSJ, Futterman reported that some of the tactics used by Qatar included:

1. Charitable Donations. Commitments were made to establish, build or continue to fund soccer academies, in the home countries in which FIFA executives who would vote on the 2022 site selection, through a Qatar football training academy, Aspire Academy for Sports Excellence, controlled by the Qatar Royal Family. The WSJ article cited examples in Thailand and Nigeria. In Thailand, Futterman reported that Aspire would “build a football academy” and in Nigeria, it would “expand grass-roots training”. These internal documents also revealed that the Aspire Academy also continued to work with three African countries which were home to FIFA executive committee members, who all had a vote on the 2022 site selection.

2. Use of Marketing Agents. The Qatar bid included the hiring of certain well-known celebrities to assist in the effort. In order to “talk up” the Qatar bid to host the 2022 World Cup, the WSJ reported that it hired several international personalities as “Bid Ambassadors” to endorse the Qatar bid. These endorsements were important because they assisted Qatar to “establish its legitimacy within FIFA and connections to executive committee members.” The only Bid Ambassador named in the WSJ article was the former French star Zinedine Zidane. It was reported that Zidane received $3 million for his endorsements of the Qatar bid.

There have been other issues raised regarding Qatar’s bid to host the World Cup. One is its treatment of the workers who are building the stadiums for the event. In an article in the online magazine Slate, entitled “The Qatar World Cup Is a Human Rights Catastrophe. It’s Time to Do Something About It.” Jeremy Stahl reported that the Nepali embassy has said 400 citizens of its country had died during construction in Qatar and India has reported that 500 of its citizens have died. The article quoted Sharan Burrow, the general secretary of the International Trade Union Confederation (ITUC), who said in an ESPN documentary “that at current rates, 4,000 people will die to make the 2022 World Cup a reality.” The ITUC itself had reported in March that there had been 1200 deaths in the construction of the facilities for the World Cup. And what about the heat in Qatar, which can easily reach 45 Celsius in the summer? Even if the stadiums are air conditioned, how are you going to walk to them in that heat?

But the Qatar winning bid is not the only thing that FIFA has to worry about these days. In a stunning two-part series in the NYT over the weekend, entitled “Fixed Soccer Matches Cast Shadow Over World Cup”, reporters Declan Hill and Jeré Longman detailed an extensive corruption scheme where referees were bribed to influence the outcome of certain pre-2010 World Cup ‘Friendly’ or exhibition matches in South Africa. It is the role of the host country to designate referees for such friendlies and apparently through corruption a betting syndicate took over this role. The reporters had reviewed an internal FIFA report that found “It provides extensive details of the clever and brazen ways that fixers apparently manipulated “at least five matches and possibly more” in South Africa ahead of the last World Cup. As many as 15 matches were targets, including a game between the United States and Australia, according to interviews and emails printed in the FIFA report.”

All of these allegations make clear the need for vigilance in all levels of international sporting groups. While these allegations remain unsubstantiated at this point, if they are proven true FIFA may truly be at the same turning point about corruption as the American navy was with its fight against the Japanese navy after the Battle of Midway.

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, 2014

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