FBI's FIFA investigation, indictment spawns new slew of questions
The United States hoped to be the center of the soccer universe in 2022. It’s now, thanks to Wednesday morning’s stunning turn of events, seven years ahead of schedule.
FIFA’s membership, stakeholders and corporate backers have lacked the conscience, the will or the tools to do anything about the widespread corruption now synonymous with soccer’s governing body. The U.S. government, however, harbored no such inhibitions.
FBI finally gets FIFA, but where does the investigation go from here?
On Wednesday morning, U.S. Attorney General Loretta Lynch, along with representatives from the FBI and IRS, announced the indictment of nine FIFA officials and five businessmen with connections to FIFA on racketeering, fraud and corruption charges. The Department of Justice also made public the convictions (and assumed cooperation) of four more individuals, including American Chuck Blazer, the long-time FIFA Executive Committee member and CONCACAF secretary general.
The depth of the graft (more than $150 million) was stunning, even though it merely confirmed what many suspected. The audaciousness of authorities’ response also left the head spinning.
All those named on Wednesday are from North or South America, and most did business in the U.S. or with companies based there (including CONCACAF, which is headquartered in Miami). That not only gave the DOJ jurisdiction, it was a reminder that the U.S. is far from a peripheral player in world soccer. The size of the market, the banks and business climate and soccer’s New World potential already mattered to those in power.
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Now, thanks to the government’s effort and ambition, the soccer spotlight is shining on the U.S. like never before. Much of the praise or outrage resulting from Wednesday’s events will be directed here. There’s an enormous amount to digest, and as U.S. attorney Kelly Currie said Wednesday, “This is the beginning of our effort, not the end.”
The indicted may turn on others; unnamed, unindicted co-conspirators may face charges and many more dominos might fall.
Wednesday’s answers raised further questions. FIFA faces a crossroads, and American soccer is at the heart of it.
Here’s what we’re wondering as we try to digest Wednesday’s seismic news.
Will Sepp Blatter be re-elected on Friday?
Ever the survivor, sports’ Teflon Don escaped indictment on Wednesday. It’s quite possible he’s guilty only of spending too much time with dictators, saying terrible things about women’s soccer and creating a culture of amoral permissiveness that enriches those who, in turn, keep him in power.
Blatter’s tolerance for corruption and his ability to funnel profit toward FIFA’s constituent national federations likely will be enough to secure a fifth term. Two challengers already have bowed out and a third, Jordan’s Ali Bin Al Hussein, a prince and FIFA VP, is a long shot. While the U.S. Soccer Federation backed Blatter in the past, or at least didn’t overtly oppose him, it’s thrown its support behind Al Hussein this time around (along with England, Jordan, Belarus, Malta and Georgia, all of which nominated the 39-year-old).
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Blatter released a statement designed to make us believe FIFA “Welcome[s] the actions and the investigations by the US and Swiss authorities,” and that it “set in motion” Wednesday’s events “when we submitted a dossier to the Swiss authorities late last year.”
If so (we’re betting against it, but let’s go with it for argument’s sake) Blatter may not hold Lynch’s zealousness against U.S. Soccer, especially if he remains unscathed.
But will he forgive the federation for backing a potential presidential rival? That remains to be seen.
To its credit, UEFA isn’t worried about reprisal. The European governing body, whose president, Michel Platini, backed Qatar’s World Cup bid, issued a statement calling for a postponement to Friday’s election.
“Today's events are a disaster for FIFA and tarnish the image of football as a whole,” it said, adding that members will meet Thursday to decide whether to boycott this week’s congress.
Will there be reprisals against the U.S.?
Russia’s successful bid for the 2018 World Cup hasn’t come under the same scrutiny as Qatar’s, but that didn’t stop it from taking offense.
“Once again we are calling on Washington to stop attempts to make justice far beyond its borders using its legal norms and to follow the generally accepted international legal procedures,” the Ministry of Foreign Affairs said on its website, calling the indictments “another case of illegal exterritorial use of U.S. law.”
Lynch won’t be greeted as a liberator in many corners of FIFA’s world. There are fiefdoms and slush funds to protect, and plenty of places may be sensitive to increasing U.S. influence. As a result, the USSF may find it has fewer friends than before.
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FIFA routinely warns and even suspends members when it detects governmental interference in soccer affairs.
That’s partly how corrupt national officials, the ones who benefit from the culture of corruption and vote to maintain the status quo, keep their positions. When a government steps in to try to regulate matters, FIFA simply bans that country from international competition.
Are there FIFA members who will argue that Wednesday’s indictments constitute governmental interference? It’s doubtful there would be a sufficient number of believers to create an issue, but it speaks to FIFA’s reputation that the question even arises.
USSF president Sunil Gulati, a member of FIFA’s Executive Committee, is in Switzerland but hasn’t commented publicly. There’s no evidence he’s under investigation, even though he worked with most of the indicted. U.S. Soccer released a statement saying, “The United States Soccer Federation firmly believes there is no higher priority, and nothing more important, than protecting the integrity of our game. We are committed to the highest ethical standards and business practices, and we will continue to encourage CONCACAF and FIFA to promote the same values.”
It may be doing so to its own detriment. But that’s laudable, nevertheless.
Will there be an impact on U.S. fields?
MLS may have needed FIFA’s blessing at the beginning thanks to experiments like the shootout and rising scoreboard clock, but those days are gone. The league operates as it sees fit and likely won’t face any hurdles as a result of the DOJ’s efforts. Its Soccer United Marketing arm wasn’t referenced in the DOJ indictment.
NASL suspends ties with Davidson, Traffic Sports after FIFA probe
The NASL, however, has issues. Traffic Sports, a company based in Brazil but involved heavily in the U.S. market, features heavily in Wednesday’s indictments and is responsible for millions of dollars in bribes and kickbacks paid to CONCACAF and CONMEBOL for the marketing rights to various tournaments, including the Copa América and Gold Cup.
Traffic played a critical role in launching the NASL in 2011.
It owned several teams at the outset and it still controls the Carolina Railhawks. Traffic Sports USA president Aaron Davidson was chairman of the NASL’s board of governors until Wednesday. The Philadelphia Inquirer reported last month that Traffic owned a majority of the NASL’s Class A shares.
The NASL suspended Davidson and “all business activities between the league and traffic sports, effective immediately.” Commissioner Bill Peterson is acting chairman and the Railhawks “will continue to operate in the ordinary course of business,” the league said.
It’s unknown whether severing its relationship with Traffic will have an adverse economic impact, but it now seems that bringing aboard additional investors—the league recently announced a Miami expansion team—is more critical than ever.
Former FIFA, CONCACAF executive Jack Warner maintains his innocence
Meanwhile, despite the indictment of president and self-professed reformer Jeffrey Webb and the apparent role of general secretary Enrique Sanz as an unindicted “co-conspirator,” CONCACAF will move forward with this summer’s Gold Cup. It’s been reported that Alfredo Hawit, the head of the Honduran soccer federation and a senior member of CONCACAF’s executive committee, will lead the confederation on an interim basis.
“CONCACAF continues to operate in the ordinary course of business, hosting all of its upcoming tournaments in a successful and timely manner, including the 2015 CONCACAF Gold Cup,” it said in a Wednesday statement. It’s unknown whether the 2016 Copa América Centenario, scheduled for the U.S., will be impacted by Wednesday’s news. Traffic allegedly conspired with indicted individuals and companies from South America to pay $110 million in bribes to secure the commercial rights for the 2015, 2016, 2019 and 2023 Copa América tournaments.
Could Qatar lose the 2022 World Cup?
FIFA has said repeatedly that it has no intention of moving the 2022 tournament. Even Blatter, who reportedly supported the U.S. bid, has committed to Qatar. But what if U.S. and Swiss authorities uncover irrefutable evidence that the games were ill-gotten?
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It may not change much. A significant portion of the 24-man executive committee that cast the fateful vote in December 2010 has either moved on (through suspension or retirement) or now is under investigation. But that hasn’t been enough to prompt a rethink—FIFA wouldn’t even release U.S. attorney Michael Garcia’s full report on the 2018 and 2022 bid process. It would take a new FIFA president and a massive ExCo overhaul to prompt another vote.
Even if the will was there, the politics may prove untenable. It’s hard to argue against moving the World Cup around the world, even if money is greasing the skids. Telling Qatar–and the Arab world–that it won’t host its first World Cup would require a lot of backbone, and would be considered unfair in certain circles. Even a reformed FIFA may find it’s not worth the trouble. While Qatar’s labor and human rights abuses are shameful, using the World Cup as leverage to affect change also might be in the planet’s interest.
As of now, the only real threat to Qatar 2022 might be a significant boycott by sponsors or participants. But there’s been no evidence that FIFA’s bigger nations—the ones whose absence from a World Cup would be the most keenly felt—would consider taking their players off the field.
And what about those sponsors?
It appears the pressure finally is on the companies who fill FIFA’s coffers.
Sony and Emirates jumped ship at the end of 2014, and now FIFA’s remaining “partners”—at the highest level of corporate sponsorship—are being forced to explain their alignment with an organization that has an approval rating lower than the stomach flu.
World Cup sponsors Visa, Coke comment on Qatar work conditions
FIFA’s five remaining partners are Visa, Coca-Cola, Adidas, Hyundai and Gazprom. The first two, of course, are U.S. based while Adidas, which hails from Germany, does business out of Portland, Oregon. Those partnerships cost about $30 million annually, according to FIFA financial statements cited by the Associated Press. In addition, Budweiser and McDonald’s are World Cup sponsors.
In 2011, as bribery accusations related to the World Cups and presidential re-election wracked FIFA, the U.S. companies paid little heed to the problem.
“We do not play any role in the management of FIFA or the process for the selection of host countries. We have full confidence in FIFA's management and the long-term positive benefits of bringing the excitement of the sport of football to people around the world,” Coke said four years ago.
“As a sponsor, we are not involved in the bidding process or other administrative issues faced by the governing body. This matter does not concern or impact our sponsorship right,” Visa said.
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They’re singing a different tune now. But will action follow?
"We continue to be troubled by the reports coming out of Qatar related to the World Cup and migrant worker conditions," Visa said in a statement quoted by the AP. "We have expressed our grave concern to FIFA, and urge them to take all necessary actions to work with the appropriate authorities and organizations to remedy this situation and ensure the health and safety of all involved."
Adidas said, “There have been significant improvements and these efforts are ongoing, but everyone recognizes that more needs to be done in a collective effort with all stakeholders involved.”
Coke said, “We expect FIFA to continue taking these matters seriously and to work toward further progress. We welcome constructive dialogue on human rights issues, and we will continue to work with many individuals, human rights organizations, sports groups, government officials and others to develop solutions and foster greater respect for human rights in sports and elsewhere."
McDonald’s said, “McDonald’s takes matters of ethics and corruption very seriously and the news from the U.S. Department of Justice is extremely concerning. We are in contact with FIFA on this matter. We will continue to monitor the situation very closely.”
Concern, dialogue, efforts—but no threats. Change may come if those companies are held to account by customers and colleagues, but there’s no indication of that now. Several FIFA sponsors overlap with U.S. Soccer and Major League Soccer, such as Anheuser-Busch (USSF), Adidas (MLS) and Coke (both). There’s no evidence that either USSF or MLS has reconsidered its relationship with those who support FIFA. And there's no tangible sign that FIFA's American sponsors are reconsidering their priorities.