By Daniel Roberts
May 27, 2015

It’s the major global news story of the day: FIFA, the governing body for world soccer, has been slammed with U.S. corruption charges.

For those that don’t know much about the organization beyond the fact that it operates the World Cup every four years, here’s everything you need to know about its recent history, why the charges are coming now, and what the charges could mean for the future of the sport.

What is FIFA, again?

It’s the Fédération Internationale de Football Association, based in Zurich, formed over 100 years ago to handle the organization and promotion of the world’s biggest football tournaments (you may know the sport as “soccer”), including the World Cup and the Women’s World Cup. FIFA does not set the rules of the sport, but it carries out the scheduling and marketing, sets policy, and oversees more than 200 member countries or associations, all of which also belong to one of the six regional confederations (such as UEFA for Europe and CONCACAF for North and Central America). This is huge business: the 2014 World Cup alone brought in an estimated $4 billion for FIFA, mainly from TV rights fees and corporate sponsor fees.

Who runs it?

FIFA’s president is a man named Josef “Sepp” Blatter, who was first elected in 1998 and has since been reelected four times, despite being widely criticized and accused of corruption. He is currently running for a record fifth term and is expected to get it.

Oh, and today Blatter was indicted on corruption charges?

Nope. Blatter was notably not one of the nine FIFA officials (and five sports marketing executives) arrested by Swiss police on Wednesday morning in a fancy (we’re talking $4,000-a-night fancy) hotel in Zurich and indicted on 47 counts including racketeering, wire fraud and money laundering. But those 14 people do include some of the highest-ranking FIFA officials, like former FIFA vice president Jack Warner and current vice president Jeffrey Webb.

Is this the first time there have been allegations of bribery at FIFA?

Certainly not. The organization has been accused of corruption for decades, but the “heat” has risen ever since FIFA awarded the 2018 World Cup to Russia and the 2022 World Cup to Qatar. In June of last year, the (U.K.) Sunday Times reported that Qatari politician Mohamed bin Hammam, a former member of the FIFA executive committee (the “Exco”) paid $5 million in bribes to influential FIFA executives, including Jack Warner, in exchange for World Cup bid votes. (Back in 2011, former FBI director Louis Freeh, now a private investigator, was hired to investigate alleged bribery by the same person, Mohamed bin Hammam, and Freeh’s report, which did find evidence of bribery, led to a lifetime ban; bin Hammam appealed that to the Court of Arbitration for Sport, which overturned it in July 2012, but FIFA banned bin Hammam again in December 2012 on new grounds after further investigation.)

Now Warner is back under fire, along with the other FIFA executives, but not just over the allegations of bribery in the World Cup 2022 bid process. Today’s charges are also about the wide-ranging history of alleged corruption at the organization. U.S. Attorney-General Loretta Lynch said in a statement that the Department of Justice indictment is over “corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States. It spans at least two generations of soccer officials who, as alleged, have abused their positions of trust to acquire millions of dollars in bribes and kickbacks.” Lynch estimates the total amounts of bribes at more than $150 million.

Wait, the charges came in the U.S., but the FIFA folks were arrested in Switzerland?

Indeed. The Swiss police that made the arrests were acting on a request from U.S. officials in New York. According to the DOJ indictment, the FIFA crimes fall under U.S. jurisdiction because they were planned in the U.S. and carried out through U.S. banks. Some could see this as yet another example of the U.S. playing world policeman—attempting to bring to justice an organization that is based outside the U.S. and does most of its business outside the U.S. However, this is one potential overstep that is likely to receive almost global support and praise.

Wow. So, will FIFA pull the 2022 Cup from Qatar?

Don’t bet on it—at least not yet. FIFA spokesman Walter de Gregorio, in response to the arrests, was quick to say that there still would not be a revote for the 2018 and 2022 World Cup bids: “That is what is fact today. I won’t go into speculation on what may happen tomorrow.”

And yet, alleged corruption in the bidding process has hardly been the only problem with the Qatar World Cup plan. First, reports of the intense heat there in the summer months led FIFA to move the schedule for the first time ever: its plan is for the 2022 Cup to be played in the winter months. This led European clubs to react strongly and demand they be compensated for the effect on their normal soccer schedules. FIFA said no. Now there have been reports of worker deaths at the construction sites in Qatar where fields and stadiums are being urgently erected to be ready in time: there have been 1,420 confirmed deaths already, and a new campaign led by the International Trade Union Confederation, a global trade group representing workers’ rights, suggests there will be 62 worker deaths for each World Cup game played in Qatar. As a result, major World Cup sponsors like Visa and Adidas have issued stern statements of concern, but have not pulled their sponsorships. (And today’s indictments do not appear to be focused on the labor conditions.)

What does Qatar say about that?

Qatar’s general attitude can be summed up by the fact that it invited a BBC camera crew to film the conditions for migrant laborers, then arrested and detained the crew for doing just that.

So, what happens next?

Loretta Lynch and FBI officials held a press conference in New York today to expand on the charges. Kelly Currie, acting U.S. Attorney for the Eastern District of New York, said at the event that this is only the beginning of the crackdown on FIFA: “I want to be very clear: this is the beginning of our effort, not the end… as we continue our effort in ridding global soccer of this corruption.” Even FBI director James Comey stepped to the microphone and said, “If you touch our shores with your corrupt enterprise… you will be held accountable for that corruption. Nobody is above or beyond the law. The game was hijacked… That field that is so famously flat was made tilted in favor of those looking to gain at the expense of countries and kids who were enjoying the game of soccer.” (Of course, the very first question asked in a Q&A after the press conference was why Blatter was not indicted; Loretta Lynch would not comment on Blatter.)

Consider the press conference a public display of muscle—one that many were waiting to see for years. But whether the executives will serve time remains to be seen. And most in doubt is the fate of Qatar’s bid. Don’t expect FIFA, and Blatter, to yank the Cup from Qatar without a fight.

Does all of this mess with Blatter, even though he wasn’t indicted?

The arrests come just days before the election for FIFA president—Blatter was expected to win a fifth term. Will these arrests ruin his run? Maybe not in the short term. Most of his opponents, like former Real Madrid star Luis Figo, have already withdrawn, claiming that the process has been rigged in Blatter’s favor. But the DoJ’s trail of bribes and kickbacks goes back 20 years, a time in which Blatter’s control of FIFA has been near-absolute. It’s unlikely that he can disclaim responsibility for everything that’s happened in that time, and it is just as unlikely that none of the accused will prefer a guilty plea implicating Blatter to a lengthy stretch in a U.S. prison.

 

SPONSORED FINANCIAL CONTENT

You May Like

EDIT POST