The indictments of the FIFA leadership provide an interesting global anti-corruption case study complete with sports, pop-culture, international intrigue, corruption at the highest levels, bribery in the millions of dollars, money laundering and racketeering not seen since the mob days of organized crime.
The arrests come from years of investigation and stem from a culture of corruption. How was it possible for FIFA to operate for so long and to involve such large sums of money in their organization?
- Start with the world’s most popular sport – football (or soccer in the United States).
- Marketing potential – FIFA solely controls the rights to distribute media, marketing, and merchandising rights. Advertisers willing to spend millions of dollars to reach the global audience, leading to competition to earn the media rights to televise the games. Merchandising potential to sell fan gear to a global audience to show patriotism for their country and their team.
- Economic development – creating the infrastructure to host games, attracting tourism for events, getting worldwide recognition for your country and city.
FIFA – a single governing body with no external oversight or transparency into its operations, with total control over the media, marketing, and merchandising rights.
- Power tends to corrupt and absolute power corrupts absolutely. –Lord Acton
This absolute power provided the FIFA leadership the opportunity to wield their influence to the tune of millions of dollars.
What are the lessons to be learned from this focus on FIFA?
An investigation initiated in the United States, with international cooperation, can lead to arrests in Switzerland. Leadership cannot hide from the law, no matter how luxurious their surroundings.
Laws written for 1920s era mob culture in the United States are still relevant and can be used against companies and organizations today.
It is important to understand the anti-corruption, bribery, money laundering and racketeering laws in different jurisdictions.
However, this is only one side of the story.
FIFA officials were indicted on allegations of accepting bribes, money laundering and racketeering in connection with those bribes.
The second side of the story has to do with the organizations, companies and people who were giving the bribes.
This investigation will continue through all of the layers of the sponsors, the media, marketing partnerships and governments seeking to have games played in their jurisdiction.
- Tone at the top. Create an ethical culture of doing business within the law within your organization. Ensure your employees understand that while getting the deal is important, maintaining the company’s reputation and integrity in how they get that deal is also important. How can you do that? Say it. Write it. Repeat it. That’s a start.
- Review contracts and 3rd parties. Review your contracts to ensure they have appropriate compliance terms and conditions and continually review new contracts for these terms and conditions. Review 3rd parties to make sure proper due diligence has been conducted and there are no red flags. Train your employees involved in working with 3rd parties on how to conduct due diligence and what red flags to look for.
- Implement an effective training program. Make sure your employees are aware of the laws such as the Foreign Corrupt Practices Act (FCPA), UK Bribery Act and Brazilian Anti-Bribery Act and how they can do their jobs within the law. Employees need to understand who a Foreign Government Official is, and the regulations surrounding doing business with government entities.
- Gifts, Travel and Entertainment. Gifts, travel and entertainment expenses are often used to influence decisions – such expenses are more easily added to reimbursement forms than cash is, so be careful. Review your policies on what are appropriate gifts, travel and entertainment expenses and when they can be used. Train employees on these polices and constantly monitor these expenses for adherence to the policies.
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