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The FIFA headquarters in Zurich. (CHRISTIAN HARTMANN/REUTERS)
The FIFA headquarters in Zurich. (CHRISTIAN HARTMANN/REUTERS)

A World Cup fiasco: FIFA gets a red card Add to ...

With the first whistle of the World Cup in Brazil just days away, the international body that puts on the globe’s biggest soccer tournament is facing perhaps the biggest test of its 110-year history: And it has nothing to do with last-minute work on the unfinished stadium that is due to host the opening match.

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The Swiss-based International Association Football Federation, known by its French initials FIFA, is under siege as it grapples with mounting allegations of bribery and corruption that span the globe and involve millions of dollars.

Over the past decade, allegations that FIFA officials have taken or given bribes or kickbacks have prompted a list of senior soccer figures to resign or be forced out. The U.S. Federal Bureau of Investigation was reportedly investigating some of the allegations. And a high-profile FIFA investigation is under way into allegations that FIFA officials were paid millions of dollars to award the 2022 World Cup to Qatar, something Qatari bid officials deny.

Just in the past week, those allegations once again exploded onto front pages across Europe, after the Sunday Times in London boasted that it had been leaked a “bombshell cache” of millions of e-mails and other documents the newspaper says show a “plot to buy the World Cup.” Prominent figures inside and outside FIFA have said it is time to take the drastic step of throwing out what they say was a tainted vote that gave Qatar the tournament and hold another ballot.

Among them is Alexandra Wrage, a Canadian lawyer and internationally respected anti-corruption expert who last year walked away from her seat on the FIFA governance committee overseeing the soccer body’s cleanup efforts because she believed FIFA, and its powerful president Sepp Blatter, weren’t serious about real changes.

“If they are interested in re-establishing public confidence in the vote [that selected Qatar], there is only one way to do that now,” said Ms. Wrage, head of Trace International, an anti-bribery organization based in Annapolis, Md. “They really must have a new vote. ... I can’t find anybody outside FIFA headquarters that has any confidence in this decision.”

Allegations of bribery

The mess at FIFA, which expects to rake in $4.5-billion (U.S.) in revenue from this year’s World Cup alone, comes as corporations and governments around the world shift their attitudes toward bribery, a practice that until recently was quietly tolerated as the cost of doing business in certain parts of the world.

With aggressive investigations launched in recent years against major multinationals by U.S. officials, a tough new bribery law in Britain with an extraterritorial reach, and even increasing enforcement by the RCMP in Canada, companies around the world have been hiring specialized lawyers and consultants and bringing in internal controls to ensure they do not fall afoul of anti-bribery rules.

But until recently, FIFA – a sprawling global body composed of more than 200 national soccer associations – had done little to keep pace. Indeed, hands-off Switzerland, where FIFA has its imposing angled-glass headquarters in Zurich, had no legislation covering “private sector” bribery until 2006.

In 2012, recurring scandals over alleged kickbacks and bribery during the past decade finally prompted the appointment of a committee to recommend, and then oversee, governance reforms at FIFA. Swiss law professor Mark Pieth, chairman of the Organization for Economic Co-operation and Development’s working group on bribery, was made its head.

And despite Canada’s indifference to its own national soccer team – currently ranked an abysmal 110th in the world – two well-regarded Canadian anti-corruption experts were appointed to the 13-member panel: Ms. Wrage and Toronto lawyer James Klotz, a partner at Miller Thomson LLP. Other seats were taken up by external experts and by prominent soccer figures from around the world.

Mr. Klotz, who had never seen a professional soccer game, and Ms. Wrage, who admits she prefers hockey, joined the committee’s other members in recommending a sweeping set of changes for FIFA’s structure and procedures that are designed to remove the temptations for bribery. The committee released its final report in April, which concluded that more work needed to be done.

FIFA did adopt two key recommendations, naming former New York district attorney Michael Garcia as an independent investigator to look into allegations of bribery, and appointing a German judge and former organized crime prosecutor, Hans-Joachim Eckert, as the chairman of the adjudicatory chamber of FIFA’s ethics committee.

Mr. Garcia – who investigated the 1993 World Trade Center bombing and al-Qaeda’s deadly 1998 attacks on three U.S . African embassies – is currently probing the explosive allegations that bribery handed the 2022 World Cup to Qatar. He met with Qatari bid officials in Oman this week.

Mr. Klotz describes the two appointees as “tough-as-nails,” and praises FIFA for taking the steps to investigate the allegations. He says he believes the world should wait for Mr. Garcia to report and Mr. Erckert to issue a ruling before clamouring for a re-vote on Qatar.

“It’s really a litmus test almost for FIFA, moving forward,” he said.

FIFA ‘impunity’

But even Mr. Garcia’s investigation has attracted doubts. Back in March, reports emerged that at a meeting of FIFA’s powerful executive committee, some members wanted to fire him or block his investigation. And this week, with his probe due to be completed in a few days and a final report to be submitted to Mr. Eckert within six weeks, The Guardian reported that Mr. Garcia is not expected to review the Sunday Times’s massive e-mail and document cache.

This, and the experiences that led her to quit the FIFA governance committee panel last year, have made Ms. Wrage a skeptic: “It has always been a tactic of FIFA to try to ride these scandals out. The reason I don’t think it really matters what that report says in the end, is that it has been widely reported ... that Garcia is not going to look at these e-mails.”

She quit last year, she said, after it became clear to her that FIFA was going to “cherry pick” from the committee’s recommendations. While Prof. Pieth’s report says she left due to “time constraints,” she says the full reason is that the fighting necessary to bring about real change at FIFA would simply take more time than she had.

At one point during her tenure, a “senior FIFA executive,” whom she would not identify, told her that her committee needed to stop suggesting women for appointments to various FIFA posts: “I looked up and I said, ‘Did you really just say that to me?’ ... I thought, that just shows me more than anything else what complete impunity they think they operate with.”

FIFA has avoided some of the panel’s straightforward corporate governance recommendations. Mr. Blatter’s salary, for example, remains a secret. FIFA has balked at including independent directors on its powerful 25-member executive committee, a standard corporate governance practice in the private sector. FIFA also watered down a recommendation for “integrity checks,” police background checks to weed out organized crime links and screening procedures to ensure FIFA executives were not linked to companies that do business with the soccer body. FIFA’s checks will instead be conducted by its regional soccer confederations, not by its head office.

It has also delayed a vote on age and term limits for executive committee members. However, a proposal to bring in age and term limits is on the agenda for delegates from those member associations when FIFA’s congress meets on Wednesday in a Sao Paulo hotel, the day before Brazil takes the pitch against Croatia for the World Cup’s opening match.

Still, with the 78-year-old Mr. Blatter recently reversing previous suggestions that he would not stand for another term as president, Ms. Wrage said even this simple proposal could be rendered impotent with grandfathering clauses for existing members, for example.

“I am confident whatever the decision, Mr. Blatter’s long-term goal will be the result,” she said, recounting that he once told her matter-of-factly that in his powerful post at the top of FIFA, he can hop on a plane to any country in the world and be received by the head to state when he lands.

The man at the centre of the most recent bribery storm, Doha-born Mohamed bin Hammam, 65, has a long history as a senior power figure on FIFA’s executive. In 2011, he initially challenged Mr. Blatter for the presidency – even promising to clean up corruption – but withdrew just before he was suspended for allegedly offering $1-million in bribes to Caribbean soccer officials to vote for him. Banned for life in 2012, his penalty was later reversed by the Court of Arbitration for Sport for insufficient evidence. He later resigned after a FIFA probe found he had violated conflict-of-interest rules. Now, he faces allegations that he paid $5-million in cash or lavish gifts to senior FIFA officials in order to secure the World Cup for Qatar.

Even without the taint of bribery allegations, Qatar has been a controversial choice. The extreme heat of the desert country could force the tournament to be rescheduled for the winter. There are concerns about the deaths of foreign workers in Qatar who face notoriously bad conditions on stadium construction sites, and about the country’s harsh laws against homosexuality.

Changing FIFA’s culture

One of the changes FIFA has approved in the wake of the recent allegations is the removal of the body’s top brass from the final decision on who hosts the World Cup. For the 2026 World Cup bidding process, the entire 209-member FIFA congress will vote to decide the winner, taking the decision out of the hands of the elite 25-member executive and presumably making it much more difficult to win by making bribes. But the executive will still make the shortlist.

Recently, Canadian soccer officials – apparently unfazed by the storm of bribery allegations – announced their intention to prepare a bid on the 2026 World Cup, hoping to build on a successful women’s event going ahead here next year. By contrast, U.S. Soccer Federation president Sunil Gulati has said his country – which finished second to Qatar in the 2010 vote – would not bid on another World Cup until voting reforms that include more transparency and tighter rules are in place.

Victor Montagliani, president of the Canadian Soccer Association and a delegate to FIFA’s congress this week, said the changes FIFA has made have already improved the process. And he said everyone should wait for the results of the investigation into the Qatar allegations before passing judgment.

“Those are allegations. And there’s somebody who’s now in charge of looking into that whole process. And until he comes out with his report, I think it would be irresponsible to comment on that,” Mr. Montagliani said, adding that the officials implicated in previous scandals who were part of the regional soccer federation in which Canada is a member were thrown out.

But he did say that FIFA member associations would find it difficult not to vote to remove the tournament from Qatar if confronted with “hard evidence.”

Mr. Klotz, the Toronto lawyer who recently finished his work on FIFA’s governance committee, says FIFA deserves credit for what it has done. He notes that it has created an independent audit committee to look at its books and pledged to allow the committee’s head to attend executive meetings. But Mr. Klotz, who like Ms. Wrage, advises companies on their anti-bribery procedures, said that all the rules in the world won’t work until an organization changes its culture. Whether FIFA can achieve this, he said, remains to be seen.

“When we decided to crack down on drunk driving ... they increased the penalties for drunk driving, but that did not stop people from driving drunk,” he said. “But as MADD [Mothers Against Drunk Driving] really got their public campaign going and started this shaming process ... the culture has changed.”

Ms. Wrage says that unless Swiss authorities decide to pursue FIFA, the only way the organization will change is if the multinational companies that sponsor the World Cup decide to withhold their millions.

“Every time there’s a new scandal, I say, this is is really going to be the last straw, and then there’s another one,” she said. “... If the sponsors are going to keep paying, and the fans are going to keep attending the games, it does make some sense of FIFA’s sense of perfect impunity. Their apparent belief that they might be untouchable might be accurate.”

At a press conference in Sao Paulo on Thursday, Mr. Blatter would say little about the Qatar investigation.

“I am not a prophet, that’s all,” he told reporters.“We await the results and we’ll see what will happen.”

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