Out-Law News | 28 May 2015 | 2:54 pm | 3 min. read
Sports law specialist Trevor Watkins of Pinsent Masons, the law firm behind Out-Law.com, said such a move would "cause immense issues" for football governance across the world and undermine "the commercial rationale for FIFA's existence".
Watkins was commenting after US and Swiss authorities both launched legal proceedings in relation to alleged corruption involving FIFA.
US law enforcement agencies have accused nine FIFA officials of a range of offences, including racketeering, wire fraud, and money laundering. The US Federal Bureau of Investigation (FBI) said four other people and two companies have already admitted to engaging in corrupt activities and have made "related guilty pleas" as part of the ongoing investigation. US sports marketing executives are also accused of wrongdoing in relation to dealings with FIFA business, it said.
"The defendants fostered a culture of corruption and greed that created an uneven playing field for the biggest sport in the world,” FBI director James Comey said in a statement. "Undisclosed and illegal payments, kickbacks, and bribes became a way of doing business at FIFA."
The Office of the Attorney General of Switzerland said it has separately opened criminal proceedings against individuals it suspects have been involved in criminal mismanagement and money laundering activities relating to the awarding of the FIFA World Cups in Russia in 2018 and Qatar in 2022. It seized documents and data stored on FIFA's IT systems as part of its investigations on Wednesday.
FIFA president Sepp Blatter said he welcomed the investigations and that he believes they will "help to reinforce measures that FIFA has already taken to root out any wrongdoing in football".
"Let me be clear: such misconduct has no place in football and we will ensure that those who engage in it are put out of the game," Blatter said.
Watkins said: "If the allegations are substantiated and individual football associations of countries that are members of FIFA or regional governing bodies are not confident that FIFA has sufficiently addressed the concerns, both of perceived and actual failings to clean up its image, then there is the real possibility that dissenters like UEFA and their counterparts in the US could step away from FIFA and create a new order. This would have major implications for world football given FIFA currently sits at the top of the football pyramid and holds the majority of power, albeit only with the authority of all member nations."
"UEFA is just one constituent member of FIFA and its dissenting voice about the way FIFA operates has largely gone ignored to-date," he said. "Even without the backing of the European and US governing bodies, however, FIFA’s current structure retains a large degree of support from an apparent majority of member nations. The threat, however, of any withdrawal by UEFA or the US would in itself signify a considerable undermining of the commercial rationale for FIFA's existence."
"It wouldn’t be a step taken lightly but it is the one most likely to undermine the existing structure and likely result in other nations questioning further how a new governing order should look, potentially ensuring that a breakaway gathers momentum across other continents," Watkins said.
“In reality, however, with such a fast moving situation, FIFA, like the IOC previously, will find itself needing to act decisively and swiftly if it is to preserve the fabric of the modern game – one that ultimately is responsible for some of the most successful and commercially valuable events in the world of sport," Watkins said.
Anti-corruption expert Barry Vitou of Pinsent Masons said businesses with dealings with FIFA cannot ignore the ongoing investigations into FIFA's activities.
"Expect the next chapter of the FIFA scandal to unwind slowly," Vitou said. "Businesses who have negotiated licencing deals with FIFA would be well advised to run some basic checks to confirm their deals are not tainted. Yesterday’s developments focused on alleged bribe recipients. Expect the suspected bribe payers to be targeted next. A head in the sand approach is never the best option."
Major football sponsors, including Coca Cola and Visa, have expressed concern with the allegations facing FIFA.
"This lengthy controversy has tarnished the mission and ideals of the FIFA World Cup and we have repeatedly expressed our concerns about these serious allegations," Coca Cola said in a statement. "We expect FIFA to continue to address these issues thoroughly. FIFA has stated that it is responding to all requests for information and we are confident it will continue to cooperate fully with the authorities."
Visa said it will "reassess" its sponsorship of the FIFA World Cup unless FIFA reforms.
"As a sponsor, we expect FIFA to take swift and immediate steps to address these issues within its organisation," Visa said. "This starts with rebuilding a culture with strong ethical practices in order to restore the reputation of the games for fans everywhere."
"Visa became a sponsor of FIFA because the World Cup is one of the few truly global sporting events with the power to unite people from around the world through a common love of football. Our sponsorship has always focused on supporting the teams, enabling a great fan experience, and inspiring communities to come together and celebrate the spirit of competition and personal achievement – and it is important that FIFA makes changes now, so that the focus remain on these going forward. Should FIFA fail to do so, we have informed them that we will reassess our sponsorship," it said.