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Mike Scher on FIFA: We should have been louder

Is this one of the biggest scandals ever, not by money but by scope and the billions of ordinary folk affected all at once? From a quick search of the FCPA Blog archives (see the menu bar above), it looks like it.

What to make of it?

If FIFA had a compliance program, I haven’t yet read about it. Of course, compliance officers are inconvenient for corruption. 

But every organization needs checks and balances and that includes a Compliance 2.0 infrastructure where compliance officers have a voice in the big decisions. Our experience and common sense tells us that without Compliance 2.0 checks and balances and an independent chief compliance officer, scandals are going to happen. Who would invest in a big organization without a chief financial officer? The same should be said for chief compliance officers.

There were so many rumors for years about FIFA. Nothing substantive was done about it. Inaction breeds cynicism. Corruption spreads. Good compliance systems keep that from happening. It’s wrong anywhere to tolerate rumors of graft and the lack of a Compliance 2.0 infrastructure.

The day of reckoning has finally come. Four individual defendants have pleaded guilty and are presumably cooperating with prosecutors. Fourteen others are under indictment (and presumed innocent unless and until found guilty in a court of law).

Why was America positioned to prosecute FIFA when many others could not or would not? It would be good to analyze the factors and try to strengthen prosecutors everywhere. A network of prosecutors is important. We live in a time of civilized networks versus the criminal and terror networks.

We should continue to build stronger international law enforcement alliances. And the compliance community should help educate prosecutors and regulators everywhere about the crucial role compliance programs and COs play in deterrence and detection.

In closing, here’s some criticism for the compliance community. We could have been a lot louder and more persistent with warnings about FIFA. Today most of us are saying we knew it would end badly. But where were we in this long-running drama?

If we had made our voices heard, the public would have thanked us as heroes. Instead we left so much unsaid. Why?

Compliance 2.0 has arrived. We made the jump out of the general counsel’s office into a new, dynamic business system. Now it’s time for us to look at the wider world through our new Compliance 2.0 lens. When we see problems, our voices should be heard. Our opinions matter.

We could have helped put integrity back on the playing field for FIFA and the huge swathe of the business world it was part of. From now on, let’s show the rest of the world what Compliance 2.0 can do for them.

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Michael Scher is a senior editor of the FCPA Blog. He has over three decades of experience as a senior compliance officer and attorney for international transactions. He can be contacted here.

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6 Comments

  1. Given that its own Ethics Committee was discredited it is hardly surprising that FIFA has no compliance program. Such a program would have required commitment from the board – a forlorn hope.
    An interesting documentary was aired on the BBC World Service the day after the indictments were laid in which various members were asked why they would not reveal their earnings as had been recommended by an independent review. The common response was – it is not for me to make the first move on such a crucial matter. The "tone from the top" is missing in FIFA.

  2. Why did the FIFA corruption warning not become the responsibility of the biggest funders, who do (or should) have massive compliance teams, like Coca-Cola, Adidas, VISA, etc.? FIFA would not exist without them. It is their responsibility to their shareholders and regulators to make sure their money is not being used for corruption.

  3. If ever there were a clear example where 'Tone from the Top' is missing, then it is this case of FIFA and Blatter. He may be clean himself (and probably smart enough and well paid enough by FIFA to avoid the dirty work), but his inaction and denial is ethically unacceptable and an example to us all in the compliance community of what NOT to do in our organisations!

    Maybe the Swiss investigation will allow him to be held accountable, but I doubt that there will be strong enough evidence (swiss nationals cannot be extradited under Swiss law).

    The only language that FIFA and Blatter will understand is when money talks. There are two possible ways (which are not mutually exclusive, in fact probably the latter will automatically follow the former:
    1. UEFA (European Football Federation) separates from FIFA; and
    2. sponsors witdraw their support.

    So let's keep the pressure on those two groups! Pressure on Blatter will only lead to more TV interviews with his daughter in which she states that he is being victimised.

  4. Professional sports is totally penetrated by organized crime and drug cartels who launder billions of dollars of ill-derived proceeds, in collusion with corrupt team owners or commissioners, who facilitate the entry of these criminal groups into their sport. There are many clever schemes these white-collar criminals contrive to launder these massive amounts without triggering the scrutiny of regulators.

    Major League Baseball (MLB) is suffering from the same scandal that FIFA is currently under going. Former and current individuals responsible for the oversight and security of the sport have failed to heed the problem and are involved in the cover-up.

    Hopefully the FIFA scandal will result in the MLB wanting to know about the criminal ongoing inside its operations for the sake of the game, its fans or before the Feds knock on their doors.

  5. A board that is serious about compliance should start down the path to Compliance 2.0 before third parties require them to do so. http://www.corpcounsel.com/id=1202727418551/4-Steps-Boards-Should-Take-Toward-Compliance-20#ixzz3bpp9fLxy

    This quote from a current article by two top thought leaders ( Boehme and Volkov) is right on target.. My thanks to readers for pointing out that sponsors and boards are essential driving forces in fighting corruption from the inside by implementing Compliance 2.0. But let's not overlook another "third party" which is public opinion. Like these comments, everyone who loves football and hates corrupted business can weight in and demand change. In this instance, for example, by writing about sponsors and governing bodies and reaching out to encourage others to do the same. Thank you.

  6. The statement that there was no tone from the top at FIFA needs to be corrected.

    There was definitely a tone from the top but it was the wrong one. It said: "if you vote for me, I as President, will help your Federation (and not look too closely how and by whom the money is spent)."

    And it said also: "As long as you support me on the Executive Committee, I will look away if you make arrangements on the way your vote goes when deciding who should get the World Cup". These statements may not have actually been "said" but they were certainly supported by congruent actions (or, more often, omissions). Walk the talk of some sort.

    That Sepp Blatter was never serious about reform, was demonstrated by his first attempt to counter allegations of corruption at FIFA by proposing a "Council of wisdom" with members like Placido Domingo (whose name he had difficulties remembering in a press conference) and Henry Kissinger. Placido Domingo is much to good a singer to be drawn into such a soap opera and Henry Kissinger (88) should be allowed to enjoy a well deserved retirement.

    Sepp Blatter willl now resign but wants to reform FIFA in the 4 months left to him. How much damage will he still cause to this organization?


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