Matt Scott: FIFA’S tangled web looks like a snare from which there is no escape

“O what a tangled web we weave, When first we practise to deceive!” Sir Walter Scott, Marmion

Sir Walter Scott’s Lord Marmion was a much dislikeable character. Having taken a nun for his mistress Marmion confected a tale of treason to have a man exiled so that he could make a play for his betrothed. Upon doing so he discarded the nun to her fate, which was to be bricked up alive in her convent cell for breaking her vows. Marmion’s death at the Battle of Flodden Field was, frankly, comeuppance.

His first instinct was for deception, to serve neither his master nor his mistress but his own duplicitous ends. With every new allegation emerging from the US Department of Justice investigation, it seems to me that such a nasty little man would not have been out of place in the FIFA executive committee.

The most recent, 236-page indictment of the US DoJ is a depressing read indeed. Much of what it contains was already expressed in a previous indictment unsealed in May. But there is also a good deal of new information in there that I want to go over, and to triangulate it with other water that has passed under the FIFA bridge in recent months.

The DoJ describes a 25-year period of corruption “involving the agreement to pay and receive well over $200 million in bribes and kickbacks”. This is a staggering sum of money and it is worth recalling at all times that this related only to the CONCACAF and CONMEBOL regions of the six-confederation FIFA ‘family’. Reading it, it is impossible to banish the thought that the corruption of the football enterprise is very likely to have stretched far beyond the Americas to Europe, Asia, Africa and Oceania.

I have read through the full 236 pages and made a note of every single payment therein described as a bribe. Though the DoJ is careful to point out those “bribes” it enumerates are far from an exhaustive list, there are fully 53 different instances involving more than two dozen individuals. Several of the payments made to the highest-ranking FIFA dignitaries effectively became annual stipends, often for in excess of $1,000,000 at a time. The highest single transfer was for $7,784,000, paid to the former FIFA vice-president Jack Warner on March 7, 2008 by FIFA on behalf of the South Africa 2010 organising committee. The payment was allegedly promised in return for his vote for the tournament-hosting rights. All parties concerned deny it was improper.

Yet others of the payments, meticulously detailed by the DoJ, were for comparatively small amounts: four- and five-figure transfers. This is an important fact because it takes an awful lot of them to add up to $200 million. Moreover, this week the Financial Times reported that US law enforcement has begun to take an interest in the banks who facilitated the wire transfers. There were 30 different banks involved in the few dozen payments the DoJ exposes. Thirty, none of whom reported the payments as potentially suspicious despite the long-term suspicions surrounding FIFA and its officials.

It all rather suggests that what the DoJ has described in the indictment as “endemic” was exactly that. But what the allegations depict was also brazen. Jeffrey Webb, a man once described by Sepp Blatter as a potential “future FIFA president” is the first name among those indicted. He denies any wrongdoing and formally entered a not-guilty plea – he has now swapped that to a guilt plea. If he had stuck with the not-guilty plea what his lawyers would have had to argue away in court are DoJ allegations that upon replacing Warner as CONCACAF president, “Almost immediately after taking office, [he] resumed [his] involvement in criminal schemes.”

In one of those “schemes” described, the sports-marketing firm Traffic allegedly promised Webb a $3 million payment for the contract for the exclusive worldwide commercial rights to 2018 and 2022 World Cup qualifying matches involving Caribbean Football Union nations. That contract overall was only worth $23 million, meaning that if the DoJ allegations are true, a sum equivalent to 13% of the entire contract value was given to the man who negotiated the rights in bribes.

Bribe-paying sports-marketing firms like Traffic have not done so out of charity or goodwill. They have done so because the business of being the middleman in rights deals between football federations and licensee commercial suppliers and broadcasters is very lucrative indeed. It is all the more so if the first instinct of the federation’s designated negotiator is his own kickback.

If the arrangements were corrupt, it is highly unlikely that the rights were sold at fair value. What might have been the amount paid to the CFU if they had been? This is the overwhelming feeling that arises when reading the indictment. How much money has been lost to football development as a result of the venality of the FIFA untouchables. How many pitches might the $200 million they allegedly took have paid for? How many coaches might have been hired if the cash the sports-marketing firms had paid was at fair value?

Webb is far from alone. There were 11 FIFA vice-presidents or members of its ruling executive committee named in the indictment as allegedly having taken bribes, several of them far in excess of what Webb is accused of. A 12th, Eduardo Li, was arrested on the day he was due to take up his ex-co post and so never occupied it.

The corruption, if proved, stabs at the very heart of the FIFA organisation. This is very important. Two weeks ago, shortly before the DoJ unsealed its superseding indictment, I wrote here that it is within the power of the Swiss courts to just shut down FIFA altogether if it is proved that its objects were unlawful or unethical [see first related article below]. Mine was a point taken up in the Swiss parliament this week, when the MP Thomas de Courten asked if state intervention was planned [see second related article below] (the answer was “currently not”, which is far from definitive).

It is very well known that FIFA was aware of the past corrupt practices of certain of the individuals who are under investigation by the US authorities. Nicolás Leoz, the former president of CONMEBOL, was forced to resign from all his football posts after he and Ricardo Teixeira were found by the ethics committee to have taken tens of millions of dollars in bribes as part of the ISL scandal (in which, to a much lesser degree, the current acting FIFA president, Issa Hayatou was also implicated).

But both he and Teixeira had been permitted to keep on working at FIFA, Confederation and national-association level long after Blatter and others at FIFA had been made aware of them. Indeed, FIFA suppressed these facts, fighting an expensive legal battle to prevent the details of the ISL collapse ever being made public.

This brings me to arguably the most important point. What is less well known than the ISL history these days is how the various offices of FIFA such as the executive committee and World Cup organising committee introduced measures that would make the money-laundering activities associated with their bribe-taking entirely legal. In the most recently run bidding process for a World Cup, for the 2018 and 2022 iterations that went to Russia and Qatar respectively, bidding governments were forced to sign away a very large and important buttress against fraud.

FIFA World Cup Government Guarantee 5.B. stipulated as follows (and what is contained in italics below is a verbatim quote from the official FIFA documents):

“Foreign Exchange Undertakings

The unrestricted import and export of all foreign currencies to and from [the bidding nation], as well as unrestricted exchange and conversion of these currencies into US dollars, Euros or Swiss francs for the following entities and individuals in relation to Competitions and/or Events related financial transactions and activities:

i. FIFA/FIFA Subsidiaries staff and officials and members of the FIFA delegation, including match officials;

ii. FIFA Confederations staff and officials and FIFA Member Associations staff and officials;

iii. Hosting Association and LOC staff and officials;

iv. FIFA Service Providers staff and officials;

v. FIFA Host Broadcaster, FIFA Commercial Affiliates and FIFA Contractors staff and officials;

vi. FIFA Listed Individuals

vii. other FIFA partners and their staff whose activities, services or deliveries are important for the organisation, staging, administering, marketing, rights implementation etc, in connection with the Competitions and/or Events, and

viii. Hospitality customers and spectators of the Competitions and/or Events, and all individuals who can demonstrate any involvement in the Competitions and/or Events.

[The bidding nation] represents and guarantees to FIFA that exchange of different currencies shall also be possible within [the bidding nation] at the conditions prevailing on the international foreign exchange market.

[The bidding nation] represents and guarantees to FIFA and will ensure that all special laws, regulations and ordinances necessary to establish the conditions required for organising and staging the Competitions, in particular those required for complying with this Guarantee shall be enacted and enter into force not later than 1 June 2013.”

In short, FIFA demanded a five-year carve-out from all anti-money-laundering laws for anyone – anyone – who could demonstrate they had any involvement in the World Cup, however remote. If you were an official or the employee of a national football association, you would legally have to be waved through Customs if you were carrying two suitcases full of cash. A World Cup host would legally become an enormous sink for washing any amount of dirty cash in. In these days of heightened terrorist activity, that is a truly terrifying thought.

FIFA claims it is the Confederations that have been at fault but these are despicable, inexplicable demands that were made of sovereign nations by FIFA itself. Whatever the ostensible football imperative over its flagship tournament, in the context of the allegedly routine bribery in the activities and operations of its most senior officials, it is impossible for me to see how the true objects of FIFA’s most senior officials were anything but unlawful or unethical.

FIFA needs to prove to the world and to the Swiss courts that its first practice was not to deceive. But I just cannot see how it gets out of this tangled web it has woven for itself.

First related article:

Second related article:

Journalist and broadcaster Matt Scott wrote the Digger column for The Guardian newspaper for five years and is now a columnist for Insideworldfootball. Contact him at moc.l1521427613labto1521427613ofdlr1521427613owedi1521427613sni@t1521427613tocs.1521427613ttam1521427613.