Reviews

FIFA Scandal: Here’s How to Get Rid of Blatter, Finally

5/29/2015

Warren, that stuff is bad for you. So is FIFA

Follow the money. It was memorable advice from Deep Throat in the Watergate movie “All the President’s Men” (but not in real life.)

The advice also works in the belated investigation into the snake pit known as FIFA.

Sepp Blatter was always going to win re-election as FIFA president, which he did on Friday. Many of the voting delegates have been receiving lavish expense accounts, to say nothing of favors that made them look like big men back home, plus packets of bills, preferably US dollars, when they followed orders.

Now there is another pile of money to be followed as the world deals with the reek emanating from FIFA and Zurich. The money is from corporate sponsors – the multinationals with United States bases, Coca-Cola and Visa and the television networks, which do business with world soccer.

The corporate bosses in the States, who never wanted to know, have been forced to recognize, in public, that FIFA is dirty. American stockholders, with all our proclamations about religion and citizenship and saving the world, are facing the fact that a very foreign-sounding federation (and a still foreign-appearing sport) just plain stinks.

What is needed right now is a corporate leader like David D’Alessandro, who was running John Hancock in the late 20th Century when it became known that Salt Lake City had broken rules preparing for the 2002 Winter Olympics. D’Alessandro went public that the Olympics were not a good buy for his company, and he forced the International Olympic Committee to change the leadership in Salt Lake City, to bring in Mitt Romney. I’d love to see D’Alessandro address the obvious scandal in Zurich.

That leads us to Warren Buffett, who swigs ruinous black sugar water as if it were actually good for his stomach and his teeth. Buffett also buys copious amounts of Coca-Cola stock. He must now admit that he and Coca-Cola have been subsidizing a highly corrupt organization.

FIFA has gotten away with its crooked ways in part because the U.S. has been leery of soccer, except for the quadrennial World Cup and more recently the glut of Champions League and powerful European leagues. Corporate leaders – including from networks like ESPN and Fox -- must now publicly acknowledge that their partner is a devious burgher from Switzerland, the land of know-nothing banks.

One sign of progress is that Sunil Gulati, the president of the United States Soccer Federation and a member of FIFA’s executive committee, announced Thursday that he would vote against Blatter in Friday’s election.

Was Gulati voting from his conscience? Was he voting from the roars of corporate leaders back home who are shocked, shocked, to discover FIFA is crooked? Or is it some potent mixture of conscience and pressure? Almost doesn’t matter.

According to the admirable new Attorney General, Loretta Lynch, major crimes have been committed in the name of FIFA in American jurisdiction. This is Sepp Blatter’s nightmare. He always loved to belly up to the trough that is America, but he always seemed nervous because he knew American business is relatively (I said relatively) more transparent than in most major countries.

As rogues often do, Blatter committed a Nixonian gaffe. He hired Michael Garcia, a New York prosecutor with a great reputation, now in private practice, to investigate FIFA. When Blatter declined to release Garcia’s 450-page report, Garcia quit in disgust…and came home…to New York…where he has connections to FBI director James Comey and Lynch, the former leader of the Eastern District court.

Now we follow the money, right back to Omaha and Atlanta and Beaverton, Ore. and Foster City, Cal, and Bristol, Conn., and Los Angeles, all those corporate homes, the source of those American dollars.

Will the indictment of underlings affect the host countries for the 2018 and 2022 World Cups? Russia, putting current world politics aside, has a reasonable soccer tradition and centuries of history, plus it was a great host for the 1986 Goodwill Games. (I was there.)

Qatar is another case, with its lack of soccer history and its current reliance on near-slave labor. However, Qatar does have huge amounts of oil money, which it spends extravagantly in countries like France, which caved to Qatar in the vote for 2022. However, taking away a World Cup from a Muslim country may not be a good idea.

Then there is 2026. Gulati was the first person I ever heard talking about a North American World Cup, ranging from Toronto through the US to Mexico City. When it is time to pick a host for 2026, FIFA must be a totally different outfit.

I bet corporate sponsors have some kind of discretionary escape clause in case of scandal. Whatever it takes. Follow the money.

(Your comments are always welcome.)

Sunil, just look out for poisoned umbrellas.

John McDermott

5/29/2015 10:06:11 am

It would be nice if the sponsor had that kind of courage. But all of the big FIFA sponsors know that if, for example, adidas were to withdraw, the very next day Nike would arrive to take their place at the FIFA table. Same for Coke and Pepsi, Visa and Mastercard, and so on. None of them will want to give up their World Cup marketing opportunities, even if the association with FIFA brings them some negative publicity. So it isn't going to happen. But why can't they band together as a group and deliver an ultimatum to Blatter, a statement of "no-confidence" that they will make public if he does not "retire" by a fixed date in the very near future? You mentioned Nixon, and this would almost be a Nixonian solution. "Sir, your position here is no longer tenable and we are offering you a dignified exit, a glorious abdication instead of a humiliating defenestration." As for Sunil, voting his conscience would be nice, admirable even. But that's not his job. I think he was inclined to vote for Blatter as the only way not to harm the best interests of US Soccer(given that antagonizing the FIFA President would almost certainly guarantee some form of eventual retribution). But after the events of this week it is clear the USA will not be on the receiving end of FIFA's largesse for a long time. So why not vote on principle and make a statement? Good for Sunil. As for the next two World Cups, I think Russia will weather whatever controversies may arise. I'm not so sure about Qatar at this point. Time is not on Qatar's side at this point.

John McDermott

5/29/2015 10:12:42 am

I meant to say that both time, and increasingly, world public opinion, are not on Qatar's side. And George, if it's important to have a muslim country as host there is a perfectly lovely country called Morocco which would be eager to host and would also do, in my opinion, a very good job. I for one am hoping they find the smoking gun(s) that will justify a change of venue for 2022.

Brian Savin

5/29/2015 02:15:01 pm

Kudos. A goddam brilliant set of insights and challenges. I couldn't agree more that Warren Buffett can help and needs to put his money and influence where his mouth is. He takes the high road as a matter of personal pride. He once put our country in very simple personal terms, saying, if you're born in this country you already won the lottery. Well, Warren, such gifts engender a responsibility to give something back to the world into which you were put in advantageous position. You, Warren, can do something concrete and possibly dispositive to clean up the one organization that unites so many of the world's citizens in common interest and shared excitement. Do it, Warren. Insist that Coke leave this farce as long as it is poison and define that poison explicitly as the current leadership.

George Vecsey

5/30/2015 01:09:17 am

John and Brian, and everybody who responded on the previous FIFA posting, thank you all. John is right, that a unified vote-of-no-confidence could push Blatter to go away. They would want some corporations outside the USA, but the fact is, payments (bribes) are a way of life in some parts of the world -- not even lip service to integrity like our corporations do here, at least until ignitions stop working, or something like that. We are talking pragmatism here, not integrity. Blatter is now Bad For Business. GV

Brian Savin

5/30/2015 06:04:37 am

Coke's statement on Bladder's re-election implies continued support for him and assumes his interest and ability to clean up his cesspool. Hopefully, this idiotic statement angers Buffett enough to crush his Coke can:

"FIFA must now seize the opportunity to begin winning back the trust it has lost. We urge FIFA to take concrete actions to fully address all of the issues that have been raised, in a swift and transparent manner."

Brian Savin

5/30/2015 02:33:24 pm

The farce gets more bizzare by the hour. I just caught up with Sepp "Blather's" rant today about American and British jealousies and conspiracies against him and FIFA. I hope Mr. Buffett is paying close attention inasmuch as his faith in Coke is looking more and more misplaced.

From William Birdthistle, Professor of Law

5/31/2015 01:29:43 am

Yet another re-election and a night's sleep uninterrupted by arrests has done wonders for Sepp Blatter's virility. He emerged this morning in a defiant mood, sprinkling his press conference with accusations of his own about why America brought charges this week.
In the world according to Sepp, America was attempting to support its client state, Jordan, by placing Prince Ali atop FIFA. Not sure whether that betrays a greater ignorance about how little America cares about Jordan or how little America cares about FIFA. But the idea that Loretta Lynch was inspired by tired proxy maneuvers from the cold-war playbook seems about as ludicrous as a kleptocratic octogenarian breathing integrity into FIFA.
Several of the most prominent U.S. decisions so far appear to have plausibly pedestrian motivations, often connected to the nuts and bolts of extradition. Why arrest people this week? Because they were all gathered in one country with a friendly extradition treaty. Much easier than having to coordinate extraditions from several different jurisdictions.
Why not indict Blatter? The Department of Justice may not have the evidence it wants yet, though several ExCo vice-presidents facing serious years in U.S. prisons may soon change that. But also, Article 8 of the U.S. extradition treaty with Switzerland treats Swiss "nationals" differently -- more protectively -- than citizens of other countries who happen to be on Swiss soil.
http://www.mcnabbassociates.com/Switzerland%20International%20Extradition%20Treaty%20with%20the%20United%20States.pdf
A carve-out like this makes sense in an extradition treaty, since countries are generally more concerned about dispatching their own citizens than they are about passing along foreigners. Indeed, some nations flatly refuse to extradite their own citizens under any circumstances. None of the people arrested in Zurich last week was a Swiss citizen, so they might eventually be extradited to the United States. Sepp, who is Swiss, might not have been. And perhaps that explains his pugnacious insouciance: "I have especially no concerns about my person," he declared today.
Perhaps, too, he has consulted the lawyers Roman Polanski used to fight extradition to the United States successfully. But Sepp ought to bear in mind two differences. First, the Swiss authorities themselves are now investigating FIFA and they certainly do have the power to jail him. Second, Roman Polanski was prosecuted by the State of California, not the United States of America. With respect to international dealings, there's certainly a difference. In any event, Polanski has spent the last forty years defending himself in judicial proceedings and traveling with a Fodor's in one hand and a compendium of extradition treaties in the other -- which doesn't really sound very much like success. # # #
"And we'll soon have an interesting test to see whether Blatter is as confident as he is cocky: will he be coming to our friendly northern neighbor for the Women's World Cup in Canada next week?"
(William Birdthistle is a professor of law, IIT Chicago –Kent College of Law.)

Brian Savin

5/31/2015 01:59:03 am

Wonderful post, Professor! It gave me the vision of Sepp "Don Pacifico" Blatter proclaiming in his best nineteenth century fashion, "Civis Suiss sum!" ......But how many gunboats have the Swiss?

Another thought pops up: The indictments are being brought under the RICO (racketeering) laws. It seems to me that the big sponsors should be evaluating whether their payments are enablers and accessories to the crimes.

Rich

5/31/2015 06:54:14 am

Re: the corporate sponsors..

No doubt some high level ad meetings are going about. I sure would be curious as to how the sponsors will manage this storm.

Thing is they are paying out much moolah for advertising and raking in some significant dollars on the back end because of ratings revenue. We all know how sports contributes greatly to their bottom lines. Like shooting fish in a barrel, eh?

I'm not too sure those guys want to give up the lucre so easily notwithstanding all this corruption that has been now brought out in the open. These are times which will try corporate sponsor souls. Question is will we see their Tommy Paines?

Right now we see Mr. Blatter happily ensconced in the FIFA fiefdom's
chair for four more years. I'm getting the impression he's like a piece of jello that's impossible to nail on that wall of corruption. He appears to be smug in his defiance that he has nothing to do with all the 'funny stuff'. He seems to be like his pal Vlad who also seems to be riding that fine line of corruption and malfeasance with the 'law' at high levels of major enterprises.

John McDermott

5/31/2015 08:27:31 am

I have the sense that things are changing in Switzerland, that the Swiss are weary of being viewed as enablers of drug lords, corrupt dictators and mafia chieftains. They are beginning to feel embarrassed about it, and that's a good thing. There is also a perception among many Swiss I know that FIFA and other tax-exempt organizations based in Switzerland have been abusing that status and taking Switzerland for a ride, and that perhaps it should be reconsidered. Good point by the professor on extradition from Switzerland. It will take a very strong case. Sepp, I predict, won't be stopping in the USA anytime soon. But he shouldn't assume he's out of the woods with the Swiss authorities. On the contrary, they've only just begun to look seriously...stay tuned.

George Vecsey

5/31/2015 09:16:45 am

John, As we say in New York, your lips to G-d's ears.
GV

William Birdthistle

5/31/2015 10:17:29 am

In other farcical developments today, South Africa admitted to making the $10m payment to CONCACAF officials in 2008 (after a week of denials and with assurances that the money had nothing, nothing to do with voting on the 2010 World Cup); and Jack Warner cited the Onion in defense of his actions. If nothing else comes of this scandal, watching FIFA fall all over itself running away from these accusations might atone in small part for their buffoonish villainy.

Andy Tansey

6/1/2015 12:32:13 am

http://mobile.nytimes.com/2015/06/01/world/americas/ex-fifa-official-jack-warner-cites-onion-article-in-defense.html?referrer=&_r=0

Here's an article about Warner vs. Onion.

John McDermott

6/1/2015 05:06:52 am

One of the most absurd, and frankly offensive, statements I've heard on this subject was the explanation that the payment from South Africa was to "support the African Diaspora". Well, perhaps one very, very tiny and greedy part of it. It is amazing to me the extent to which all this money "donated" for "development" by countries seeking to host the World Cup(including Germany, by the way) went disproportionately for supposed projects in Trinidad & Tobago, coincidentally the home of Jack Warner.

Ed Martin

5/31/2015 04:05:43 pm

GV, saw some suggestions today that Europe, US. and others decline going to Russia and to have an alternative event. Probably not realistic, but what are your thoughts, and the GV Gang?

Andy Tansey

6/1/2015 12:09:39 am

I'd been thinking that, if Russia is shown to have been corrupt in the awarding of 2018, I have a moral obligation to boycott in my own small way (no TV, etc.) and spread the word - act locally. However, for the national federations and teams to boycott would inevitably be viewed as political acts on the larger world stage (like the Olympics during the First Cold War) as opposed to targeting FIFA's corruption.

As George and others have stated, corruption is just a way of doing business elsewhere. As Dr. Gulati said in a talk I heard, when US get on our high horse and criticize the abuses in Qatar, we'll just hear back about Gitmo, NSA and Baltimore (or Ferguson, or Staten Island, or . . .). Working within the system may be the most effective way of reforming it.

At this time, however, the system has me so depressed that my conscience bothers me when I turn on my favorite TV shows, all of which run for 45 minutes segments without commercial breaks.

George Vecsey

6/1/2015 12:54:10 am

If we went back over the World Cups that were purchased, bartered, we'd have to erase history. Sports boycotts can work -- South Africa came around faster than it would have without the sports boycotts. But the Olympic boycotts were childish. I say Russia has the priority to hold a World Cup. Gulati is very smart about geopolitics. Qatar does not have much -- except oil money and perhaps leverage to dare FIFA to take away the World Cup. John McDermott's point about Morocco is fine. But the first step would be for the world multinationals to walk Blatter out the door. Nobody in FIFA today could run a respectable organization. I have never met a high FIFA official with any gravitas. Platini? He sabotaged the US for 2022. Jowly opportunist. Clean sweep., That's it for now. GV

Josh

6/1/2015 04:23:45 am

To pick up on an earlier thread, I had two reactions to Gulati's vote (based on nothing more than what I read here and in the news). One is that the vote was a calculation, but a good one. There are presumably no fences to mend with Blatter, so nothing to be gained by voting for him. So the vote was a marker towards a Blatter-free future. Good that we put ourselves at the frontline of this movement. A related point is that perhaps the vote is another step in the quest to be seen as a European-style soccer power , on and off the field (it's another discussion how much is lost on the field by ignoring the full mix of our ethnic heritages and resources in forging an identity and style for the national team). Gulati voted with the big boys, sending a message that we see ourselves as among the caretakers of the sport, not the on-the-takers. This isn't exactly altruism, nor need it be. But it is consistent with George's point about the need for the big money to take a walk unless there are radical changes.

William Birdthistle

6/1/2015 05:47:48 am

FIFA's infusions of lucre come in two primary streams: sponsors and broadcasters. We've been talking mainly about the sponsors, but I wonder how much mileage can be had by applying pressure there. For every McDonald's, there's a Burger King or KFC or a score of regional food chains. For every Budweiser, there's an ocean of local elixirs. Damming those leaks seems extremely difficult, since FIFA can simply siphon sponsorships from an army of smaller businesses, if it must.

Broadcasters, on the other hand, both provide larger dollars to FIFA and are far less replaceable. (In the DoJ indictment, the big money kickbacks related to broadcasting.) So perhaps broadcasters offer the better pressure point. If NBC, ABC, CBS, and ESPN all declined to broadcast a tournament, FIFA would lose serious dollars in the United States, and also lose large numbers of viewers (which would in turn hamper their ability to generate advertising revenue). Of course, broadcasters can dress their participation up in the First Amendment, and getting them all to refrain would be difficult, especially in an era of growing online viewership. Plus, with scores of different broadcasters across the most populous countries, this target could be another hydra in need of guillotining.

George Vecsey

6/1/2015 06:42:25 am

Fox and Telemundo have the USA rights for 2018-22, which shocked ESPN/Univision.
I think ESPN might have cared about the bad publicity liable to ensue from these legal cases (although only if sponsors backed off).
GV

Brian Savin

6/2/2015 02:11:49 am

The corpse did it! As the FIFA thugs work their way through the indictment papers, their story takes amoeba-like shape. Now they tell us that Valcke did not authorize the $10 million payments from FIFA coffers to Warner's accounts. No, it was another guy, who is dead. Valcke knows nothing. Blatter knows nothing. Nothing! Reminds me of "Colonel Klink." https://www.youtube.com/watch?v=34ag4nkSh7Q

I also note that because South Africa couldn't come up with the $10 million bribe, it was paid out of FIFA coffers and deducted from future support payments to South Africa. The sponsors, who created the coffer, need to take heed. They are on notice now. Are you paying attention, Warren?

George Vecsey

6/2/2015 02:39:48 am

This is getting dodgy because for the first time in this investigation I have seen the name of somebody I like -- Danny Jordaan of South Africa. He was one of Mandela's young supporters who kept the movement going while Madiba was in jail. First time he ever voted, he himself was being elected to parliament.
Jordaan had a good cadre during the 2010 World Cup and was a good spokesman for his country and his continent. It may be impossible to be part of FIFA and not be dirty. That's what I take out of this. GV

Brian Savin

6/3/2015 02:02:57 am

Every charismatic leader is prone to attract a complicated Judas or two. They are ever present characters in the human drama and it's important to think about them, too, I think.

Woke up in my Boston hotel this morning and opened the Globe and saw this news buried in the lower corner of the sports page for the first time. I quickly got better coverage in the Times, but even more meaty and thoughtful coverage by the comments on this site.

John McDermott

6/2/2015 08:21:47 am

Well...that was quicker than anyone expected. I suspect the sponsors and a few really big names in the sport offered Blatter the choice of a dignified exit or a humiliating declaration from them of no confidence. Now, what about Valcke? As for Danny Jordaan, maybe you're right George. Maybe, like in our politics, it's impossible for anyone to be truly clean and straight. One of the worst things done by Jack Warner, as bad as all his thievery, was how he manipulated and abused Nelson Mandela, withholding his support until the ill Mandela made the journey to Trinidad to kiss Jack's ring. Danny should have put his foot down with Jack on that one. But everyone caved in to Jack...then.

Alan Rubin link

6/2/2015 10:06:37 am

What a difference a day makes!!

Blatter resigned before this was completed, so my suggestions on how to remove him no longer apply. Since FIFA is in need of a “top to bottom” reform, only the first part of their crisis has been resolved.

One need not be a rocket scientist to realize that FIFA is in dire need of crisis management.

Rahm Emanuel’s November 19, 2008 comments on not wasting a serious crisis are applicable to dealing with FIFA today:

“You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things that you think you could not do before. I think America as a whole in 1973 and 1974, and not just my view but obviously the administration’s, missed the opportunity to deal with the energy crisis that was before us. For a long time our entire energy policy came down to cheap oil. This is an opportunity, what used to be long-term problems, be they in the health care area, energy area, education area, fiscal area, tax area, regulatory reform area, things that we have postponed for too long, that were long-term, are nor immediate and must be dealt with. This crisis provides the opportunity, for us, as I would say; the opportunity to do things that you could not do before. The good news, I suppose, if you want to see a silver lining, is the problems are big enough that they lend themselves to ideas from both parties for the solution.”

My experience with “not wasting a crisis” occurred when one of my appliance stores on Manhattan’s Upper West Side was looted during the 1977 NYC blackout, which enabled me to save the business. Although there were many factors in play, Rahm Emanuel’s comment, “And what I mean by that is an opportunity to do things that you think you could not do before” was key.

FIFA’s corruption scandal is worthy of a 10 on the Richter Scale. The damage is so severe and far reaching that the concept of “doing things that you could not do before” should be the rallying cry of all those who want to FIFA become the organization that soccer deserves.

So, what should we wish for and how can it be achieved. The many valid comments and suggestions in this blog are an excellent starting point.

Some of the primary goals should be transparency and new, responsive leadership. However, a total house cleaning cannot be accomplished overnight, nor should it be.

FIFA needs to be changed from within and pressure should be put on from all quarters to do so. (I believe that Blatter’s resignation indicates that this may have already begun).

One of FIFA’s missions is to promote soccer worldwide. This should not change, but controlling how their money is used to accomplish this must be open and transparent.

The Cayman Islands' of world soccer should still receive support to help local programs. A reorganized FIFA should have a mechanism to evaluate requests from any member and approve or modify valid ones. All funds must be earmarked for specific projects and monitored for compliance. The problem has not been the awarding of money, but who received and controlled it. Any member nation diverting funds or gaming the system should be expelled for a period of time, depending upon the seriousness of the violation, and be made to correct the problem.

The list of positives that can result from a truly reformed FIFA can truly be long. The pressure of all the money brokers; powerful leagues, advertisers, sponsors, communication industry, etc. can be a positive force in the restructuring of FIFA.

Blatter may be gone, but he was only the head of a very large leach. They all must go so that others who will work in the best interests of world soccer can start the rebuilding process.

It will not be easy or quick, but people can be patient and understanding if there is progress.

Attorney General Loretta Lynch has clearly and forcefully declared her department’s goals; rid FIFA of corruption. I fully expect her, and the other agencies that she is working with, to be successful. It will not be easy, and it will take time, but it will happen.

We should each do whatever we can to let all those with a stake in reorganizing FIFA know that meaningful change is necessary for the long term health of soccer.

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FIFA Scandal: Here’s How to Get Rid of Blatter, Finally

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