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Foul Play

The first installment of this two-part series summarizes the Garcia Report’s findings of misconduct. Author Brandon Fox also focuses on the difficulties investigators faced as a result of leaders failing to cooperate and contrasts the misconduct and lack of cooperation to the U.S. Soccer Federation’s behavior.

In late June, the world’s governing soccer organization released the “Garcia Report,” which contained more than 400 pages chronicling the extensive corruption and conflicts of interest that occurred in FIFA’s awarding of the men’s 2018 and 2022 World Cup venues.[1] The report, authored in 2014, concluded that there was prima facie evidence that a dozen then-current or former executive committee members committed ethical violations. The publication of the Garcia Report came after other scandals by FIFA officials, including the prosecutions of high-ranking officials in the Eastern District of New York for corruption and fraud.

The Awarding of the World Cup Venues for 2018 and 2022

The World Cup is the world’s most prestigious and widely viewed soccer tournament. Countries compete in qualifying tournaments to make the 32-team championship tournament, which is played every four years at locations selected by FIFA’s governing body.

In 2010, FIFA was to choose the hosts of the 2018 and 2022 World Cup tournaments. Although it was unusual for FIFA to pick hosts for two championships at the same time, the selection process otherwise was supposed to occur in the ordinary manner. This meant that countries seeking to host a tournament would submit their proposals and be evaluated. Then, the 22 members of FIFA’s top committee – the executive committee – would choose the tournament’s host through a majority vote. The vote often took place over several rounds and involved a winnowing process.  Initially, each member voted for one of all eligible bids. If no bid received a majority, the proposal with the fewest number of votes would be eliminated. The process was repeated until one bid received a majority of the votes.

Several countries bid to be the hosts for 2018 and/or 2022. FIFA’s executive committee ultimately selected Russia to host the 2018 World Cup and Qatar to host the 2022 event. The Garcia Report, however, found the vote was tarnished by extensive corruption and collusion by executive committee members.

That the selection process was tainted is not surprising, as the executive committee appeared to overlook obvious problems with the winning bids. For example, human rights issues clearly did not receive priority with either selection. Additionally, the selection of Qatar in 2022 immediately left many wondering how a country with average temperatures greater than 100 degrees Fahrenheit in the summer (when the World Cup takes place) could win the bid. While high temperatures are an obvious safety concern for players, coaches and fans attending the games, the Garcia Report found that the executive committee simply “fail[ed] to consider the issue of the temperature in Qatar.” Even a physician who served on the executive committee did not raise concerns about the extreme heat during deliberations, according to the Garcia Report. Given the physician’s silence, it should not come as a surprise that the Garcia Report found that he had at least two conflicts of interest: First, the physician’s son received a job at a hospital affiliated with Qatar’s training academy. Second, his close friend’s son received a “business opportunity” from Qatar’s bid team.  But this was just one of a dozen examples of executive committee members having conflicts of interest, and some were much more egregious illustrations of graft.

The Garcia Report Finds the Executive Committee Acted with Impunity

Many executive committee members were easy targets to corrupt. The Garcia Report found that the executive committee had a “culture of expectation and entitlement.” This was not because of a lack of rules governing members’ conduct. Instead, the Garcia Report found that many executive committee members displayed “a disregard for ethic guidelines and an attitude that the rules do not apply to them.”

Third-Party Beneficiaries

The Garcia Report detailed several occasions when executive committee members sought or were offered benefits for family members and close associates. These benefits came in many forms, including jobs, consulting fees and sponsorship money. For example, Australia 2022 hired a consultant who was a close associate of an executive committee member. The Garcia Report concluded that Australia 2022 tried to disguise its relationship to the consultant’s relationship by having a company hire him as a subcontractor to “create appearance of distance.” Australia 2022 also omitted specific language that would have bound the consultant to FIFA’s rules. As a result, the consultant did not have to report his contacts with any executive committee member or cooperate with the investigation into misconduct, unlike those governed by FIFA’s rules.

Some of the benefits given to influence executive committee members were highly lucrative. The Garcia Report discussed how an official connected to Qatar 2022 provided millions of dollars to the daughter of the president of the Brazilian Football Confederation. Qatar 2022 also promised to provide $1 million to sponsor an event that the son of an executive committee member was hosting. Qatar 2022 ultimately withdrew its support for the project after receiving advice from counsel.

In addition to the executive committee members, the Garcia Report found that other high-ranking soccer officials abused their positions by seeking benefits for third parties. Notably, the Garcia Report found a prima facie case of ethical violations by the chairman of the group that evaluated bids before they came up for vote. According to the Garcia Report, the chairman, at the time of the evaluations, was trying to convince a Qatar training academy affiliated with the country’s bid to hire the chairman’s son and to find his brother-in-law a position as a tennis coach.  Ironically, the chairman of the evaluation group announced at the end of the process, “we have accomplished our work in the spirit of integrity, objectiveness and transparency.” As a result of the chairman’s attempt to obtain personal favors, the Garcia Report found that his evaluation of Qatar’s bid (the winning 2022 bid) was “tainted.”

Side Deals and Hidden Interests

The Garcia Report discussed side deals between associations intended to influence the bid process.  For example, the report concluded that Australia provided more than $6 million to the Oceania Football Confederation in exchange for its support. Australia also sent and promised about $4 million to benefit a sports facility in Trinidad and Tobago.  That money really went to executive committee member Jack Warner, who allegedly commingled and embezzled it. Warner was able to do this because he secretly owned parcels of land where the facility was built and falsely represented to people that the facility was owned by the soccer organization that governs North America and Central America.

Additionally, bid countries paid for executive committee members’ soccer clubs to travel to tournaments and friendly matches (i.e., exhibition games). While some of this was done in the ordinary course, not every deal was a legitimate transaction. Instead, some were much more lucrative than the executive committee members’ clubs could have obtained under normal circumstances. One official stated that he viewed the arrangement of a friendly match as a “quid pro quo” for the member’s vote. Not only could these matches be windfalls for the members’ countries, but individuals who were close to the members also received commissions for setting up these matches.

Personal Benefits

Bidding countries often paid for the travel of executive committee members and their families. The payments could be astounding. For example, one country paid $5,500 a night for an executive committee member’s hotel room. This was in addition to providing the executive committee member with a dedicated driver and other services. In contrast, soccer’s biggest stars, including Lionel Messi, stayed in rooms that were less than $300 a night.

Not every benefit was monetary. For example, England was asked to bestow an honorary knighthood on one South American soccer official.

All told, the Garcia Report concluded that there were prima facie cases of ethical violations by 12 then-current or former executive committee members. To put this number in perspective, FIFA only has 22 executive committee members sitting at a time.

Executive Committee Members’ Reactions to the Investigation

According to the findings, executive committee members’ acceptance and solicitation of personal benefits was only the beginning of their wrongdoing.  The Garcia Report found that leaders of FIFA felt the rules did not apply to them during the investigative process either.  When investigators sought to interview members about the allegations, many showed disdain for the process by acting “belligerent” toward investigators, according to the report.

The report discussed how two executive committee members initially refused to cooperate in the investigation.  One demanded to know who had initiated the investigation and tried to insist on having the lead investigator recuse himself.  The member then refused to answer questions in a live interview.  Only later did the member agree to answer questions, and then only in writing.

Another member showed hostility toward the investigators, stating it was “probably one of the few cases where the boss is being investigated by the employee.” As the Garcia Report noted, this was the wrong reading of the situation: FIFA’s investigative body was independent and did not answer to the executive committee.

The lack of cooperation was not limited to the sitting executive committee members. One former member initially ignored investigator’s requests. The former member then had another person act as a liaison to the investigative body and demanded that all questions be addressed to both the liaison and the official so they could jointly respond. This odd request was even more unusual because the proposed liaison was also a subject of the investigation. The former member then made public declarations in which he said that he had no intention of cooperating, overstated the number of questions posed to him in writing and falsely claimed investigators only submitted questions in English and not in his native language. After FIFA levied a provisional ban for his lack of cooperation, the former official submitted written answers to questions. This shows that the provisional ban was somewhat effective, in that the former member did answer some questions. But the provisional ban was not forceful enough, because the former member still refused to answer other questions, such as how he voted to award the 2018 and 2022 World Cups.

While investigators were able to obtain some information from this former member, they were only able to do so because the individual was still a soccer official bound by FIFA’s rules of mandatory cooperation. Many other former executive committee members refused to cooperate, and FIFA could take no measures to force their cooperation because they were no longer soccer officials in any other capacity. Out of 11 former members approached by investigators, only five agreed to be interviewed or to provide written answers.

These reactions show how some in positions of power can respond to being questioned and how essential it is to have independent investigations when dealing with allegations of corruption among executives. The inability of investigators to obtain voluntary cooperation shows how important it is for an organization to have a broad policy regarding who must assist investigators and how they must assist.

The United States’ Bid

While the reports were disheartening in many respects, there was one silver lining: United States officials were not part of the problem. Indeed, the report found U.S. officials neither colluded in the awarding of bids nor gave any executive committee members inappropriate gifts. Instead, the U.S. officials were aware of the rules and actively took steps to ensure that they were in compliance with the rules.

With respect to gifts to soccer officials, evidence showed that the USA Bid Committee did an appropriate analysis in trying to find a gift that met the monetary threshold under FIFA’s rules and would also be viewed as “nice and relevant to our bid.” The report found that the USA Bid Committee did not give anything of value “with an aim to influence” the bidding process.

The U.S.’s friendly matches also were arms-length transactions free of corruption.  The Garcia Report found that the U.S.’s exhibition matches had commercial terms that were “in line with the standard fees paid for such competitions” and did not serve as a way for the USA Bid Committee to make indirect contributions to third parties to influence the bidding process.

Additionally, one problem the Garcia Report found with many countries is that they gave funds to executive committee members’ countries to help soccer development when they were bidding on the World Cup. But as soon as the venue was selected, the bidding countries would stop giving those countries’ development funds. This made it at least appear as though the payments were not intended to boost the sport’s development in the country, but instead were to influence the votes.  Once again, the U.S. was different.  The report found that there were no material changes to the U.S. Soccer Federation’s development projects before and after the bidding process, which showed that the U.S. did not launch development projects with a view of influencing the bidding process.

Accordingly, if any country was the victim of the corruption, it was the U.S., which initially bid on both years and received neither.

The U.S. Soccer Federation’s behavior was different even with respect to its reaction to the FIFA investigation. Leaders actively cooperated in the investigation and replied to all requests by the investigatory body. According to the report, the U.S. Soccer Federation also provided helpful recommendations on how to reform the bidding process and mitigate the risk of misconduct in the future.

Even in the aftermath of the scandal, the football world cannot expect its officials to toe the line. Part 2 will discuss how better leadership, stronger rules, a targeted compliance program, periodic monitoring and a strengthened investigatory function can mitigate the risks of misconduct and ensure cooperation of FIFA’s officials. It will also discuss how these same steps and safeguards can be applied within any organization to ensure compliance and minimize issues in the event of an outside investigation.

[1] The most detailed and extensive report was authored by Michael Garcia. Because Mr. Garcia was recused from conducting portions of the investigation that related to United States and Russia, there were reports authored by other investigators that were also released at the same time as Mr. Garcia’s report. Many news articles, however, referred to the reports collectively as the “Garcia Report.” To be consistent, if not entirely accurate, this article does the same.

Read Part 2.

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Brandon Fox

Brandon Fox is a partner in Jenner & Block’s Investigations, Compliance and Defense Practice. Before joining the firm in 2017, he served as an Assistant United States Attorney for the Central District of California and, earlier, for the Northern District of Illinois. He served as chief of the Public Corruption and Civil Rights Section in Los Angeles from 2015 to 2017, and deputy chief of that section from 2013 to 2015.  Mr. Fox’s experience includes spearheading high-stakes and impactful cases involving public figures and conducting complex investigations of large organizations.  He has led dozens of successful federal trials through his strong cross-examinations and arguments to juries.

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