A red card for FIFA
30/5/15 00:34![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
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talkpolitics
The arrests of a number of leading FIFA officials have shaken what's one of the largest and most influential organisations in the world - and this, just a couple of days before the summit that was supposed to re-re-re-re-re-elect Sepp Blatter. 7 people, out of them 2 vice-presidents of the organisation, were arrested on Wednesday morning at a hotel in Zurich on charges of money-laundering, corruption and fraud. The US Department of Justice announced the detention of nine top football officials plus 5 other people related to marketing companies. Predictably, Sepp Blatter was not among them.
The Swiss authorities had acted on request from their US colleagues who were conducting a corruption investigation involving illicit arrangement of TV rights worth $150 million. In Miami, the FBI searched the headquarters of CONCACAF, the organisation that governs the game in North America, Central America and the Carribean.
The arrested individuals will be charged in the US with corruption, fraud and money-laundering. Also, Switzerland is conducting two parallel court cases on the same charges, plus corruption in the selection of Russia and Qatar as hosts of the World Cups in 2018 and 2022, respectively. The US Attorney General, Loretta Lynch has said the charges are for corruption, "which is widespread, systematic, and deeply rooted in and outside the US". This corruption has spread through "two generations of football officials, who have used their position of trust to extort millions of dollars in bribery and commissions".
The blow on FIFA's credibility (or what has remained of it, anyway) was particularly severe, due to the fact that there are some key figures in the organisation's top command among the charged. Among them, two acting FIFA VPs (Jeffrey Webb of the Cayman Islands and Eugenio Figueredo of Uruguay). Webb is the CONCACAF president, and an important political figure in world football. His predecessor Jack Warner was also arrested - he became (in)famous for previous scandals of corruption, a transgression that had him kicked out of all positions in world football. Figueredo is a former footballer and chairman of Uruguayan football. One of FIFA's particularities is that the VPs are selected by the summits of their respective continental confederations.
There's also Eduardo Li of Costa Rica, Julio Rocha (the chairman of the Development Department at FIFA), Rafael Esquivel (president of the football federation of Venezuela), Jose Maria Marin (recent president of the Brazilian federation), and Nicholas Leos of Paraguay, former president of CONMEBOL, the organisation that governs the game in South America, and also a long-time key figure in world football.
The arrests happened at a moment when all FIFA leaders were gathered in Zurich for their annual summit. The real thing is scheduled for Friday, when the new/old president is supposed to be (re)elected. In the preceding days, various committees are supposed to convene, plus the executive committee. This was the perfect time to find all suspects in the same place, and arrest them in one package. So now that this is a fact, they can be extradited to the US, where the FBI has been conducting a corruption investigation in world football for years. ESPN recently alleged that this is the reason that Sepp Blatter has refrained from visiting the US in recent times. Blatter himself denies that this is an issue.
Some have asked the question why now - well, that was already cleared out. But there's also the question why exactly the US. Isn't this about the US being butthurt and taking a revenge for being overlooked in favour of Qatar for the World Cup in 2022? Well, the thing is, these crimes fall under US jurisdiction, because they had been planned in the US, and executed through US banks. According to the investigation, $150 million were paid in bribery for the ceding of TV rights. The Department of Justice specifies that the revenue from TV and marketing rights constitutes a significant part of FIFA's income - 70% out of the $5.7 bn they've made between 2011-2014.
The dirty money was passing through a number of large banks, the officials involved have made transactions through PMorgan Chase, Citigroup and HSBC, in order to facilitate the large bank transfers, the prosecution act says. Other banks, whose names are not mentioned in the document but are well-known, are the Bank of America and the Swiss banks UBS and Julius Baer. This underlines the probability that Wall Street was at the bottom of yet another big financial scandal.
According to the prosecutors, there are also a few US marketing companies involved, who've paid bribes for granting TV and marketing rights - mostly in South America. The FBI investigation was launched exactly due to intel on corruption around Russia and Qatar's selection for 2018 and 2022 World Cup hosts. Last November it transpired that the former FIFA executive committee member Chuck Blazer had started collaborating with the investigation - and that's where the knot started to unravel.
FIFA has hastened to assure everybody that they support the investigation, and they've declared their readiness to fully cooperate. "These are difficult times, but FIFA welcomes this trial, and will cooperate completely. This is good, very good. It shows we are on the right track. It is true, it hurts, but this is the right way", FIFA speaker Walter de Gregorio said. The FIFA officials have done their best to present themselves as the victim in the whole situation: "The Swiss authorities became involved because we needed help. We couldn't have handled this on our own, clean ourselves on our own. We are looking forward to the results, because, until they have come out, the rumours will persist. I cannot confirm the names of the arrested, neither how many of them are under investigation", the speaker said.
Although Blatter is not under direct suspicion (for now), the scandal is expected to affect today's FIFA summit very significantly. Blatter is naturally considered the huge front-runner for a fifth consecutive term at the helm of the organisation, but, as the president of the English FA has said the other day, "Last night I thought we were in for a boring summit. Now this is shaping up to be a very lively summit". And French football legend and UEFA president Michel Platini has summoned an urgent meeting of the European associations in Warsaw, where the Europa League final took place on Wednesday evening. And he has outright urged them all to vote for Blatter's only rival in this election, Prince Ali bin al-Hussein of Jordan.
Needless to say, Putin and the Russian football officials have seen a US plot in the whole situation. The chairman of the Russian Anti-Corruption Committee, Kirill Kabanov has said that these arrests are an attack on Russia's host status of the World Cup in 2018. "This situation was played out against Russia and against it hosting the World Cup", he said. Russia does have a reason to be worried, because if there are confessions about taking bribes, Russia could be stripped of the World Cup - which no doubt the Russians would see as yet another part in this new Cold War that the West has been waging against them. Poor them. Who would've thought fraud in gigantic proportions wouldn't pass this time?
But FIFA would really start to hurt (and possibly consider changing its ways) when the sponsors start going away. And the major sponsors were quick to react to the umpteenth corruption scandal in the organisation. After years of staying quiet around each storm at the tops of the world football federation, this sudden operation in Zurich has finally triggered the political, public, and now market reaction it should've fostered a long time ago.
For instance, Visa has directly threatened it could terminate its sponsorship if FIFA doesn't urgently do something to restore its reputation. This is the sharpest position of a sponsor, while the others have so far toned it down to calls for reform and more transparency. Visa's reaction comes as a response to the mounting calls around the social networks to boycott the products of all FIFA-related companies. "Adidas, Visa, Coca Cola, McDonalds, Budweiser, Hyundai: stop supporting corrupt FIFA or I'll stop buying your brands", one Steffan-Joerg Goebbel wrote in Twitter, and his campaign quickly went viral.
Naturally, the sponsors are trying to balance between their clients' growing sensitivity to corruption, the violation of human rights and ecologic issues, and their connections to an organisation that runs some of the most popular and lucrative events in the world, drawing billions of spectators on a regular basis. "We are deeply disappointed and concerned for FIFA, in light of these events. As a sponsor, we expect FIFA to take clear and immediate measures for solving these problems in its organisation", a Visa statement says, and adds that this must be the beginning of a new culture, based on "strong ethical practivces". If FIFA fails to do that, the company would review their sponsorship (the contract lasts until 2022, by the way).
Actually, Visa's introduction as a FIFA sponsor happened through the back door. The football organisation had a contract with MasterCard, which sued them in a US court in 2006 because their right to quit first had been violated. In 2007, the two sides reached a settlement that was worth a $90 million compensation. MasterCard announced they didn't want to hear about FIFA any more.
The Emirates airlines and Sony announced last November they wouldn't be renewing their respective sponsorship contracts with FIFA - that was the time that the first allegations of corruption in Russia and Qatar's selection were made. Reuters sources have revealed that one of the reasons for Sony's withdrawal was indeed the allegations of corruption, but the main reason was actually the super-high expenses. In 2014, a total of six main sponsors had paid $117 million each for sponsorship.
The Institute of CEOs, the leading British organisation for corporate management, has commented that the risks for the sponsors are increasing. These companies have the responsibility to convince their shareholders that their money is going for sports events that have nothing to do with corruption and bribery - and FIFA is fast becoming the exact opposite of that.
In fact, FIFA's longest-time patners are Adidas and Coca Cola. The German sportswear producer made the ball that was used in the 1970 World Cup, and their partnership contract has lasted since then, and is scheduled until 2030. Coca Cola, which places its ads around the World Cup stadiums, has had a contract since 1950 (until 2022). This probably explains why their reaction to the Zurich arrests has been more measured. "this lengthy controversy has tarnished the mission and ideals of the FIFA World Cup and we have repeatedly expressed our concerns about these serious allegations", the Coca Cola statement says. And Adidas has urged FIFA to confirm their intentions to introduce standards for transparent governing. Which virtually constitutes one big Nothing in terms of position.
The last remaining Asian sponsor, Hyunday Motors has announced they are "extremely worried" by what's happening. Anheuser-Busch InBev and McDonald's have said they're "maintaining constant contact" with FIFA (whatever that's supposed to mean). And Russian state gas company Gazprom, the 2018 World Cup general sponsor were the only company to express their unconditional support for FIFA, saying the scandal wouldn't affect their sponsorship status. Which is to be expected.
Rob Prazmark, president of one of the largest agencies selling sports rights, 21 Sports & Entertainment Marketing Group, has said it's unlikely that all the sponsors would suddenly and collectively decide to cancel their contracts with FIFA. "They have invested a lot of money to associate themselves with the World Cup. It would take some time until they put their houses in order", he commented.
Just a week ago Adidas, Visa and Coca Cola demanded from FIFA to seriously address the issue of the human rights of the guest-workers in Qatar who are building the new stadiums for the 2022 World Cup - often living and working in inhuman conditions. "Football is by far the most popular sport in the world, and the World Cup is by far the most popular sports event", the Futures Sport & Entertainment CEO Kevin Alawi told Bloomberg. "Which is why it is so difficult to abandon your connections with it".
And maybe that's the problem. Football has become an enterprise that's "too big to fail" - and that has granted it immunity to any laws and principles of decency. But maybe it's time to start changing that, as hard and painful as that process promises to be for everybody. Or the beautiful game would start dying.
ETA: With 133 vs 73 votes in the first round, Blatter was set to win the 2nd vote - but then prince Ali decided to withdraw and handed the boss another term.
(no subject)
Date: 29/5/15 11:46 (UTC)(no subject)
Date: 29/5/15 11:47 (UTC)Those weird Russians. No arrests, therefore no corruption. "No person - no problem" (a well-known Stalinist principle).
And here I thought that it was the other way around: no corruption, no arrests.
(no subject)
Date: 29/5/15 11:55 (UTC)Basta. Not any more.
If those guys elect him again today, that'd be the ultimate farce. Unfortunately, he has all those claquer from around Asia, Africa, the Americas who'll clap him and vote for him. Europe has proven to be a mere paper tiger. In any law-abiding country or firm, Blatter would've been put behind bars a long time ago, or at least forced to resign. If he had any integrity, he'd have done it voluntarily. But FIFA is not such a firm. I don't know what else has to happen to get rid of this mafia and start cleaning up the whole place. Maybe a revolution that'd topple the whole pyramid?
(no subject)
Date: 29/5/15 14:56 (UTC)Europe's resistance to Blatter is partly because of the fact that they are gradually losing weight in world football affairs.
(no subject)
Date: 29/5/15 15:26 (UTC)The penetration of corruption into all facets of the game, isn't. And those responsible, and the ones shielding them, should go. Blatter sits on top of that scheme, so he should go, too. It's as simple as that.
I'm fine with praising his contribution. What I'm not fine with, is his consistent fostering of corrupt practices, and turning football into a business. A fraudulent business. He should go.
(no subject)
Date: 29/5/15 12:38 (UTC)That said, and if we look beyond these petty rationales, what's going to happen now in FIFA should've happened a long time ago. And it's true that it'll be the financial pressure (mostly from sponsors) that'll ultimately trigger this process. They better figure it's best if they initiate this pressure voluntarily, rather than having to go through all that unpleasantness with customer boycotts and the like.
(no subject)
Date: 29/5/15 15:04 (UTC)(no subject)
Date: 29/5/15 15:28 (UTC)(no subject)
Date: 29/5/15 15:37 (UTC)(no subject)
Date: 29/5/15 15:43 (UTC)(no subject)
Date: 30/5/15 13:43 (UTC)OJ.
/cynicism
(no subject)
Date: 29/5/15 15:54 (UTC)(no subject)
Date: 30/5/15 13:46 (UTC)(no subject)
Date: 30/5/15 14:28 (UTC)(no subject)
Date: 30/5/15 14:43 (UTC)Makes sense, though, they operate like any other caudillo.
(no subject)
Date: 29/5/15 16:02 (UTC)(no subject)
Date: 29/5/15 16:03 (UTC)(no subject)
Date: 29/5/15 16:12 (UTC)(no subject)
Date: 30/5/15 14:05 (UTC)(no subject)
Date: 30/5/15 16:35 (UTC)(no subject)
Date: 30/5/15 19:13 (UTC)(no subject)
Date: 30/5/15 18:09 (UTC)I don't know when you were 12, but I went to private Catholic schools in Virginia, and in the 1970s and 1980s, and soccer was pretty much standard for Catholic schools, since they didn't have the funding for huge football programs that were the standard for public schools (which by the way were also complete with music programs geared solely for supporting the athletic programs*). And our high school used city parks tor practice sessions. Soccer too me at the time certainly didn't seem particularly posh or elite really.
But private schools with their own polo programs (horse or watery variety)? Now that's snooty.
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* Hell, my own school offered NO music program of any variety, money was *that* tight..
(no subject)
Date: 30/5/15 19:09 (UTC)In Delaware almost all private schools had soccer teams while (I think) no public schools did. Catholic schools almost all had both, often some of the best. The reasons for the lack of football in private schools were, as you mentioned, inferstructure and funding, but also sheer size was a factor. A school with fewer than 100 boys, 6-12, can hardly feild a football team, even if the fields, pads and all the rest were provided, gratis. You need a large enough pool of kids to pull from.
I guess it wasn't the soccer itself that was posh, just that it was associated with schools that were on the upper side of the middle class spectrum. The stereotype was, "rich kid dances around in shorts kicking a ball, poor kid plays football like a man."
FWIW, my school happened to have an excellent choral music program, but no other music, arts or theater programs. It was all academics, all the way down.
(no subject)
Date: 29/5/15 15:07 (UTC)Bad luck or shenanigans on the Qatari and Russian timing, but there you go.
(no subject)
Date: 29/5/15 15:24 (UTC)(no subject)
Date: 29/5/15 16:09 (UTC)(no subject)
Date: 29/5/15 16:14 (UTC)(no subject)
Date: 29/5/15 18:14 (UTC)Who knows. It's never the right time to clean the Augean Stables.
(no subject)
Date: 29/5/15 15:32 (UTC)Good overview, overall.
(no subject)
Date: 29/5/15 16:06 (UTC)(no subject)
Date: 29/5/15 17:01 (UTC)Or Jon Stewart, who noted that for a country like Switzerland, which had no compunction being the bankers to the Nazis, very publicly arrested several FIFA officials. (although the white sheet hiding them was a very funny touch) .
(http://www.huffingtonpost.com/2015/05/28/jon-stewart-fifa_n_7460542.html)
(no subject)
Date: 29/5/15 17:14 (UTC)(no subject)
Date: 1/6/15 18:56 (UTC)(no subject)
Date: 29/5/15 19:57 (UTC)(no subject)
Date: 31/5/15 18:15 (UTC)Good times, hey?
(no subject)
Date: 3/6/15 10:27 (UTC)