Canada: Blame It On Rio: Whistleblowing And World Football's Anti-Corruption Crisis

The two current aspirants to "best player in the world" hail from Argentina and Portugal. But Brazil's Pelé is undisputably the best ever. That's true even for those who call what Pelé called "The Beautiful Game" soccer. Though Sepp Blatter may be the most skilled "player" today on the world stage.

Recent events relating to the Fédération Internationale de Football Association (FIFA) appear to provide a crash course on how not to run an anti-corruption inquiry. On November 13, 2014, FIFA's Chairman of the Adjudicatory Chamber, Herr Hans Joachim Eckert, issued a controversial 42 page Statement. Eckert's document is entitled "Report on the Inquiry into the 2018/2022 FIFA World Cup" Bidding Process". To many, the subtitle might be "It's Just Like Watching Brazil".

The Statement purports to provide a summary of certain matters which have been considered by the FIFA Ethics Committee. In particular, Herr Eckert published remarks and purports to make Findings about tournament bidding and related allegations of corrupt voting processes.

Contested Awards

On December 2, 2010, FIFA's Executive Committee, using what was claimed to be an anonymous voting procedure, determined the hosts for the 2018 (Russia) and 2022 (Qatar) FIFA World Cup" tournaments. Even before the final vote that day in Zurich, Switzerland, a number of disappointed fans, commentators and interested parties have claimed that the award process was corrupt.

In response to lingering concerns, the Investigatory Chamber of FIFA's Ethics Committee determined that it would review the bidding and award process along with certain related specific allegations. The Chamber's investigation has been led by Michael J. Garcia, who is the Chairman of the Chamber. The authority for the inquiry was grounded in the 2012 FIFA Code of Ethics (the "Code") and earlier iterations of the Code.

Alleged Corruption

Just prior to Christmas 2012, the Sunday Times newspaper of London, England published an article alleging that Qatar's bid team paid USD 1 million to the son of a FIFA Executive Committee member from Africa. The Times alleged that the payment, made in the months prior to the Zurich vote, was offered to "sponsor" a dinner in Johannesburg before the 2010 FIFA World Cup" tournament in South Africa. Prior to publication, the Times forwarded certain material in their possession to FIFA, and Mr. Garcia then received relevant documents.

Let's Investigate

The 2018/2022 tournament bidding by nine different teams (from eleven different countries) was formally reviewed by the FIFA Ethics Committee for more than a year. Having regard to the applicable provisions of the Code and his administrative law and professional obligations, Mr. Garcia (a U.S. national) recused himself from any issues concerning the United States bid team. In accordance with the same provisions, he also exercised his discretion to recuse himself from all issues and findings relating to the Russian bid team. This decision was presumably based on a travel ban which the Russian government imposed on Mr. Garcia in April 2013 as a result of his previous sanctions-related work as a prosecuting attorney. The Committee's Deputy Chairman also recused himself on similar grounds from any issues related to Swiss nationals.

The Committee's investigatory team proceeded to travel and conduct interviews in each of the United States, Italy, the Netherlands, Spain, Japan, Australia, the United Kingdom, Malaysia, Switzerland and Oman. Witnesses who could not appear were sent written questions. Follow up questions were also sent. And in one case, an individual eventually responded only after he was threatened with further FIFA Code sanctions for a failure to cooperate. The record in the case consists of approximately 200,000 pages of relevant material.

Mr. Eckert's Findings

The November 2014 Report emerges from FIFA, which describes itself as the world's governing body for organized football. As such, FIFA is a private association under Swiss law, with approximately 209 FIFA member associations around the world. In framing the issues, Herr Eckert highlights the following excerpt from the Bid Registration documents submitted by relevant FIFA Member Associations:

All bidders also submitted written "Declarations of Compliance".

Despite the above, there was no corresponding requirement placed on FIFA Executive Committee members to report gifts from bid teams or their agents.

The registered bidders in the process which culminated in Zurich were as follows:

In May 2010, a delegation from each of the above teams "presented" their bid books to FIFA in a "brief ceremony". Then in June 2010 a "Bidders Exhibition" for FIFA officials took place. With Swiss efficiency and openness, the expo included "one standardized exhibition stand per bidder and an area for socializing."

The Eckert Report reviews in painstaking detail the process which followed leading up to selection of Russia 2018 and Qatar 2022. Herr Eckert then concludes by personally finding that:

1. The evaluation of the 2018/2022 FIFA World Cups" bidding process is closed for the FIFA Ethics Committee;
   
   
2. The investigation into the said bidding process has been conducted in full compliance with the FIFA Code of Ethics;
   
   
3. He supports the recommendations [not particularized] made by the Chairman of the Investigation Chamber in their report on the bidding process; and
   
   
4. The Adjudicatory Chamber of the FIFA Ethics Committee is prepared to examine specific cases if the Investigatory Chamber opens Ethics proceedings against specific officials based on information obtained during the investigation.

Even lawyers who closely follow FIFA and its on-field beautiful product are likely left scratching their heads.

The Fans Go Wild

The Eckert Report has received varied reaction, most of it universally damning. The Toronto Globe & Mail's column headline was "FIFA isn't just a governing body – it's a corporate succubus".

The head of the English Football Association (FA), Greg Dyke, called the Report "pointless and a joke". Mr. Dyke, who is himself a former senior leader with the BBC, said the English and the FA had "nothing to hide". This despite the Report saying that the England 2018 bid team tried to win support of Trinidad's Jack Warner, a former FIFA vice-president who quit in 2011 while mired in bribery allegations. Some have speculated that Qatari officials compensated Mr. Warner in exchange for resigning his FIFA roles (which thus meant he was essentially immune or unconcerned about sanctions under FIFA's aegis).

Mr. Dyke has also called for Mr. Garcia's 400 plus page report to be published in full. It is Mr. Dyke's view, which appears to have been shared by some in the US media, that those who cooperated with FIFA's processes most fully have been subjected to the most criticism.

In a November 14 editorial, the New York Times remarked that "FIFA Looks at Itself and Nods in Approval." The item noted that the Eckert Report did little to dispel persistent criticisms levelled at FIFA President Sepp Blatter, and his role and conduct at "FIFA, the money-printing outfit in Zurich." As but one example, the NY Times noted that the Russian bid team's computers (which had used gmail accounts) had been conveniently destroyed before they could be reviewed by investigators.

Perhaps most intriguing is the reaction of Mr. Garcia, who was quick and emphatic in describing the Report as "erroneous". Coming from a former prosecutor with long experience in managing corruption investigations, these comments deserve close scrutiny. Even before the Report, Mr. Garcia was quoted as saying that "no one is above the ethics code." Many interpreted this as a thinly veiled criticism of Herr Blatter. Some have noted that Mr. Blatter, now 78, continues to seek re-election as FIFA President. In a prior "no contest", a now disgraced Qatari official with links to Mr. Warner had sought to usurp Herr Blatter.

Prior to his role with FIFA, Mr. Garcia was part of the prosecution team which dealt with the 1993 World Trade Centre bombing. Married to an FBI agent, he apparently once told his daughter that his goal was "to punish people who do bad things and break the law."

In response to suggestions that Mr. Garcia's full findings and 400 plus page report be published, FIFA's President has resisted. According to Herr Blatter, full disclosure would be a violation of Swiss law, which supposedly requires every person named in the Report to consent to such publication. Herr Eckert has not yet publicly disclosed whether or not he has obtained Mr. Garcia's informal waiver to produce and publish the November 13 short form Report.

The Forgotten Whistleblower

Amidst all of the above drama, one could easily forget that everything was set in motion by Ms. Phaedra Al-Majid, who originally blew the whistle on what she describes as Qatar and FIFA's "culture of secrecy". Ms. Al-Majid was engaged by the Qatari 2022 bid consortium as an international media officer. She lost that job in 2010. In a November 2014 BBC interview, she said she fears for her safety and will "look over my shoulder for the rest of my life" after making allegations of corruption against Qatar. During FIFA's two-year inquiry, Ms. Al-Majid repeated allegations she made and later retracted in 2011.

Qatar have maintained that they "stand by the integrity of their bid." The Qataris claim that, over a period of years, the allegations have been "investigated, tested, considered and dismissed." Her Blatter and Herr Eckert could not have said it better themselves.

Lessons for Organizations

There are more participating nations in FIFA than in many other prominent international organizations. So this anti-corruption investigation will likely remain topical for many months and years to come. Despite having a code of ethics and much "formal compliance", the FIFA processes all seem rather hollow and insincere. This harkens back to the classic rhetorical question about government oversight, and the important gating issue of "who watches the watchers?" Mr. Garcia is a leading practitioner at a global law firm, who was purportedly brought in to provide objective and disinterested advice and guidance to FIFA in response to critics who alleged corruption at its core. From a compliance standpoint, however, there appear to continue to be rogue operators within FIFA, including at the highest levels. This would give many countries around the world pause. An example might be the Canadian Soccer Association, which is bound both by the FIFA Code of Conduct, and Canada's own Corruption of Foreign Public Officials Act. That observation is of course purely hypothetical. By contrast, the actual events reported earlier this month from FIFA confirm that engaging the right outside advisors is important, but letting them work within their prescribed mandate is perhaps more crucial. Though ethics are inherently relative and contextual, the lack of due process and deference will generally be fatal to efforts to reduce or eliminate the appearance or presence of actual or perceived corruption and flawed procurement processes. And leadership loses any claim to legitimacy or fair play. All of this in an organization whose signature campaign against racism and discrimination is called Kick It Out.

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2014