Monday, November 3, 2014

Chuck Blazer and the FBI

By now, if you follow FIFA and sports governance you know all about the NY Daily News revelations about the FBI turning Chuck Blazer. The Daily News reports:
a wide-ranging Daily News investigation revealed the feds flipped the 450-pound Blazer, who at the behest of the FBI and IRS discreetly placed his keychain — a tiny microphone embedded in its specially altered fob — on a nearby table as a parade of international figures visited Blazer at various venues, including the London Olympics.
The story is colorful and titillating, but what does the story actually tell us?

We've known for a while, thanks to reporting by Andrew Jennings and others, that the FBI and IRS were hot after Blazer. I discussed these investigations back in 2013 on this blog.  At the time it was unclear how far the investigations were going, or which target(s) was/were the focus of the investigations.

The interest in Blazer is obvious -- he avoided a boatload of taxes and may have engaged in various other crimes. Many details were provided in the 2013 CONCACAF Integrity Report. The NY Daily News tells us that the FBI is looking for bigger fish to fry.

Presumably -- and this is me speculating -- the FBI is looking at crimes committed under the US Foreign Corrupt Practices Act, which is a 1977 law focused on corrupt business practices. But FIFA is headquartered in Switzerland and CONCACAF in the Bahamas, and both are registered as NGOs. So would the FCPA actually apply?

A brief legal note (here in PDF) from Murphy & Gonigle on the FCPA and FIFA suggests maybe not. However, football federations in various countries almost certainly would fall under the provisions of the FCPA, as they are formal instruments of government, if not actual government entities.

If the FCPA is deemed to have jurisdiction over aspects of the Blazer investigation, then the FBI is just one short step away from looking at the role of corporate sponsors in partnering with organizations that are in violation of US law. If so, that could bring enormous pressure upon FIFA.

I discussed this possibility in my 2011 paper on holding FIFA accountable (here in PDF):
The invocation of US anti-corruption legislation was arguably a central factor that motivated reform of the IOC. There is no formal obstacle to a similar strategy being employed in the case of international football. However, it might be difficult to imagine a US member of Congress getting too excited about corruption in FIFA or even CONCACAF, given the relatively low stature of soccer in the United States. Yet, at the same time, the issue of corruption in FIFA and its relation to corporate sponsors who do business in the US has all of the same elements of compelling political theater that were present in the case of the IOC. It is not inconceivable that at some point in the future a member of the US Congress might see some political advantage in taking on FIFA, as a low-risk, high-visibility issue.

In the UK, by contrast, there is no lack of attention or visibility to football. The UK media and politicians have been the most outspoken voices calling for reform of FIFA Damian Collins, UK MP, is perhaps the most prominent (see, e.g., Collins, 2011). But the UK has historically lacked legislation comparable to the US anti-corruption laws, making it extremely difficult to invoke domestic laws as a basis for holding FIFA indirectly accountable. However, this has changed with the implementation of the UK Bribery Act of 2010 in July 2011 (Summers, 2011). The Act is not retrospective, so the act is irrelevant to all of the allegations levied at FIFA prior to its implementation. Future FIFA actions may however fall under the provisions of the Act. Given the attention paid to FIFA by the English Football Association, the UK parliament and prime minister, it is possible that in the future, the Bribery Act may be considered a mechanism for holding FIFA accountable.
Not surprisingly, Damian Collins is in the news today invoking the UK 2010 Bribery Act in response to the Daily News story. Could the new revelations be another domino to fall in a long series?

On the other hand, the FBI and DOJ famously dropped, without explanation, a criminal investigation into Lance Armstrong and the US Postal cycling team. Perhaps the NY Daily News story is the result of internal debate over whether to carry the investigation forward.

What we do know is that we don't know much more than we did before. The FBI is hot on the trail of some football officials. Who exactly is at focus of the investigation, we don't know. Where it leads, we don't know. Whether it continues, we don't know.

Stay tuned.


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