By Stephen G. Bock, Esq.
This week was supposed to be a triumphant week for Sepp Blatter and his continued reign over FIFA. Blatter was expected to be elected to a fifth term as FIFA President on May 29, 2015. However, two days before the election, 9 current and former FIFA officials, including the President of CONCACAF – the confederation in charge of soccer in the Caribbean and North and Central America – were arrested by the U.S. Department of Justice (“DOJ”) on charges of wire fraud, money laundering, and racketeering allegedly related to bribes to influence the distribution of media and marketing rights for FIFA and CONCACAF competitions. According to the DOJ, this is just the beginning of the investigation. The full DOJ press release on the arrests can be found here: Blatter issued a statement on the arrests, and the FIFA Independent Ethics Committee quickly banned 11 individuals, including the arrested individuals, from conducting international and national soccer activities.
In 2010, Blatter responded to critics by stating, “FIFA is not corrupt.” As recently as December 2014, Blatter claimed that there is “no crisis” related to corruption in FIFA. However, the international press, including a recent E60 piece by Jeremy Schapp on the ESPN, has been delving into alleged corruption in FIFA for years. Several prominent European soccer officials have previously called for Blatter to retire based on corruption allegations stemming from the 2018 and 2022 World Cup bids. Despite the previous allegations of corruption and negative press, Blatter has survived and looked like he would continue as FIFA President until now.
So what do the DOJ arrests mean for Blatter? It is extremely early in the investigation, and more information will come out as the story unfolds and more facts are revealed. Thus, some patience is required when analyzing how these issues may impact Blatter’s future with FIFA.
Blatter was not arrested as part of the DOJ investigation. The DOJ’s jurisdiction is limited to accusations of corruption based on events that occurred on U.S. soil or using U.S. banks. As a Swiss citizen, Blatter would likely not be subject to DOJ’s jurisdiction should its investigation reveal that he had any role in this corruption scandal, unless he was found to have engaged in illegal banking and other transactions in the U.S.
However, Swiss authorities also announced that they are opening a separate criminal investigation against currently unknown individuals on suspicion of criminal mismanagement and money laundering charges related to the 2018 Russia and 2022 Qatar World Cups. The DOJ and the Swiss authorities are coordinating with each other regarding their respective investigations. If one of the arrested individuals “flips” and provides evidence against Blatter, tying him directly to the scandal related to the 2018 and 2022 World Cups, it is possible that Blatter could face Swiss criminal charges.
Appearing on ESPN’s “Outside the Lines” program on May 27, 2015, Jeremy Schapp stated that the people who know Blatter best believe he has no interest in bribes but is merely interested in maintaining his power. Schapp further posited that it is unlikely Blatter will be directly tied to the current bribery allegations based on his discussions with those close to Blatter.
Whatever this incident’s impact on Blatter criminally, it will be extremely interesting to observe the impact the arrests have on the upcoming FIFA presidential election, if any. Before the arrests, Blatter was considered the favorite. Many people who do not follow international soccer closely wonder how Blatter can continue to stay in power given the numerous allegations of FIFA corruption.
Under Blatter’s administration, all 209 member federations of FIFA, from defending World Cup Champions Germany to small federations such as San Marino or Montserrat, receive the same financial payout from the World Cup, even though only 32 member federations currently play in the World Cup tournament. This system of equal payments has benefitted the majority of member federations, which are the smaller federations that do not qualify for the World Cup finals and, thus, are not a part of the tournament that generate FIFA’s massive media and sponsorship revenue. In order to ensure that there is no change to this equal revenue scheme created by Blatter’s administration, these small federations, which make up the majority of 209 member federations, continue to keep Blatter in power because each member federation, regardless of size, has one vote in the presidential election. Thus, through his generous compensation regime, Blatter maintains a strong and loyal voting constituency within the political process of the FIFA presidential election process.
As a result of the May 27 arrests, UEFA – the European soccer confederation ¬and most prominent soccer confederation in the world– originally called to delay the FIFA presidential election for up to six months and threatened to boycott the election if it proceeds as scheduled but has ultimately decided against it. UEFA, which has been an outspoken critic of Blatter, is intent on doing whatever it can to prevent Blatter’s re-election. While the spotlight is firmly on FIFA and its elections given the DOJ arrests, I believe that Blatter will survive this first round of arrests and will be elected FIFA President on May 29, 2015, which is a tragedy for the image and sport of soccer. FIFA could benefit from pressing the re-start button with new leadership but, if that happens, I unfortunately believe that it will come at a later date after the 2015 presidential elections.