·  Legal News, Analysis, & Commentary


‘World Cup of Fraud’

— May 28, 2015


In what looks to be the most widespread and lucrative corruption scandal in the global history of sport, the U.S. Justice Department has unsealed a 47-count indictment against 14 executives of the worldwide soccer governing body, FIFA. The executives are being charged with racketeering, wire fraud, and money laundering. The Justice Department alleges that the executives ran a huge-scale bribery and kickback scheme in order to assign marketing and venue rights over a 24-year period amounting to over $150 million. The charges come after a widespread investigation, coordinated with Swiss authorities and now spearheaded by incoming Attorney General, Loretta Lynch, who said the executives were turning the sport “into a criminal enterprise.” Switzerland had also launched an investigation into FIFA’s awarding of the 2018 World Cup to Russia and the 2022 Cup to Qatar. Lynch was accompanied in Wednesday’s announcement to the press in federal court in Brooklyn by FBI Director James Comey and Richard Weber, IRS Criminal Investigation director. Weber called the criminal activity “the World Cup of fraud,” saying that “today we are issuing FIFA a red card.”

Although the investigation was a global effort, the U.S.’s lead role, and its use of antiterrorism and racketeering (RICO) laws was the pivotal factor in its success, according to ESPN legal expert, Lester Munson. The investigation covered a multitude of issues, including the awarding of the 2004 world cup to South Africa, a sponsorship of the Brazilian National team in 2011 by a “major U.S. sportswear company,” as well as charges of kickbacks for broadcasting rights. Lynch said that Swiss authorities arrested 7 of the officials at the FIFA headquarters in Zurich, although Swiss reports indicate only 6 arrests were made. Swiss authorities have claimed that they seized a considerable amount of electronic evidence from the organization’s Headquarters. Among the arrested includes FIFA Vice-President, Jeffery Webb, who also heads of the North American and Caribbean soccer governing body, CONCACAF. Disgraced former CONCACAF head, Jack Warner along with Caribbean sports marketing executives and even a broadcaster were also arrested. Additionally, three Argentines were arrested by authorities following a detention order from the U.S. Embassy. U.S. authorities also executed a search warrant at CONCACAF’s Florida headquarters. The U.S. will now begin extradition proceedings with the coordinating countries. Lynch said the charges could bring as much as 20 years in prison for some of the accused.

4-term FIFA president, Sepp Blatter faces re-election under heavy condemnation as early as Friday Photo courtesy of Sputniktilt, Wikimedia Commons
4-term FIFA president, Sepp Blatter faces re-election under heavy condemnation as early as Friday
Photo courtesy of Sputniktilt, Wikimedia Commons

Suspicion of corruption is nothing new for FIFA or director, Sepp Blatter, as the organization has been able to use its vast financial resources to defend it against decades of corruption allegations.  As sports editor for The Nation magazine, Dave Zirin noted however, “What makes this particularly different is the fact that this time it looks like the charges have real teeth. I mean, coming from the U.S. Department of Justice, that’s a first. That’s never happened before.” Although Blatter was not among the 14 people indicted, officials indicated that the investigation is ongoing with Weber hinting that “The IRS will follow the money wherever it may lead around the world.” Blatter is attempting to be elected to his 5th term as FIFA director, with elections beginning as soon as Friday. The charges will no doubt affect the elections in some degree however; Blatter has already been under heavy scrutiny for awarding the 2022 World Cup to Quatar, an event that critics say would take place in blazing heat in a country accused of multiple human rights violations.

The investigation and subsequent charges puts the future of FIFA, Blatter, and Quatar’s 2022 World Cup into a state of major flux. Although FIFA will likely be able to withstand any punishment given to it, as it has over $1.5 billion in cash reserves, its leadership will be significantly altered. Blatter, in a statement, said that he was receptive to the investigation and that, “such misconduct has no place in football, and we will ensure that those who engage in it are put out of the game.” Shortly after Lynch’s appearance, FIFA announced that it has banned 11 people from “football related activities.” FIFA’s ethics committee, however, cleared itself from corruption charges in December, following an internal investigation into the awarding of the 2018 and 2022 World Cups. The 2010 Qatar approval brought an exceptional amount of global condemnation, with critics noting that the top Qatari FIFA executive, bin Hammam was banned for life in 2012. Blatter has rebuffed a multitude of calls to resign his post.

Blatter has promised repeatedly that the Qatar bid will not be withdrawn under any circumstances however; his and Qatar’s fate may be joined. Although both the 2018 and 2022 World Cups are scheduled to continue as planned, questions regarding sponsorships and broadcasting rights may arise in light of the charges. It is likely to late to change plans for the 2018 Cup, but if new leadership is elected, they may seek a re-vote for 2022 to eliminate the controversy and specter of corruption as a fresh start. U.S. authorities are being praised worldwide for their efforts and legal might, with star U.K. journalist Heidi Blake summarizing many people’s thoughts, tweeting, “US really earning its spurs as world’s policeman today after utter failure by any other authority to get FIFA’s rampant corruption in check.” Retired footballer Stan Collymore concurred, tweeting, “The United States is the only nation who can tackle FIFA. Well done Attorney General and DOJ!”



CNBC – Leslie Shaffer

CNN – Eliott C. McLaughlin and Greg Botelho

ESPN – Lester Munson




Join the conversation!