Three years have passed since U.S. federal prosecutors rocked the global sports community by indicting roughly 40 individuals in connection with an investigation into corruption at FIFA. Some preliminary commentary suggested that prosecutors in the FIFA case might bring charges under the Foreign Corrupt Practices Act (FCPA). U.S. prosecutors instead pursued cases under money laundering, racketeering, and fraud charges against the individuals—primarily officials at FIFA and other soccer organizations—who accepted the bribes. In December 2017, for example, prosecutors obtained their first convictions from jury trials in this case, as Juan Ángel Napout (former president of South American football’s governing body) and José Maria Marin (the former president of Brazil’s football federation) were found guilty of racketeering, money laundering, and fraud for accepting large sums of money in exchange for lucrative FIFA media rights deals and influence over FIFA tournament hosting decisions.
The reason that the DOJ has only targeted bribe-taking FIFA officials, and has not used the FCPA to prosecute those who paid those bribes, is that bribes paid to FIFA officials fall outside the FCPA’s scope. But that could, and perhaps should, change.
The 1998 amendments to the FCPA expanded the statute’s scope to cover bribes not just to officials of foreign governments, but to officials of “public international organizations.” An organization may be designated as a public international organization either through an executive order pursuant to an existing statute (the International Organizational Immunities Act), or—importantly for present purposes—“any other international organization that is designated by the President by Executive order[.]” Pursuant to this statutory authority, the President has the power to designate international sports governing bodies like FIFA, the International Olympic Committee (IOC) and others as “public international organizations” for FCPA purposes. (The fact that these sports bodies are nominally private does not prevent this; while most of the roughly 80 public international organizations currently covered by the FCPA are intergovernmental organizations like the World Bank and the International Monetary Fund, the list also includes some private, non-profit organizations, such as the International Fertilizer Development Center.) If the President designated international sports organizations like FIFA or the IOC as “public international organizations” for FCPA purposes, then individuals or firms that bribed officials at those organizations could be prosecuted under the FCPA, so long as the U.S. has jurisdiction over the defendants.
This is not a novel or radical idea. For decades, legislators and activists have clamored for designating sports organizations such as FIFA and the IOC as public international organizations under the FCPA. The discussion first surfaced in 1999, when U.S. Senator George Mitchell requested President Clinton to declare the IOC a public international organization following findings of a bribery-ridden culture in the Olympic movement. Senator John McCain later introduced a bill that would bring the IOC under the definition of public international organization under the FCPA, but the bill never made it out of committee. Although these past efforts proved unsuccessful, the time is ripe for revisiting this idea. Indeed, there are at least two compelling arguments for designating FIFA and the IOC as public international organizations under the FCPA.
- First, FIFA and the IOC, like other public international organizations covered by the FCPA, possess a wide international membership, considerable size, and numerous government-like characteristics. The structure of FIFA is explained in the “FIFA Statutes,” which establish executive, congressional, and judicial branches of FIFA. The FIFA Council consists of 37 members including a President, Vice-Presidents, and other elected members from various countries. The structure for IOC is outlined in the “Olympic Charter.” The IOC is structured through the Olympic Congress, including 100 active members in different countries, 41 honorary members, and delegates representing International Federations and National Olympic Committees from various countries, among others. FIFA and the IOC insist that they are private, non-governmental bodies as opposed to public international organizations. The IOC, for example, emphasizes that its members are voluntary representatives of the IOC in their respective countries, and not their country’s delegate within the IOC. Even so, members of the IOC and FIFA act much like government officials: the member associations receive funding from their country’s government, and frequently exercise exclusive control over large-scale sporting events in their respective countries. Moreover, there is no one definition of a public international organization. The designated organizations are varied in structure, scope, and subject matter, and share many similar characteristics to FIFA and the IOC.
- Second, designating FIFA and the IOC as public international organizations would provide U.S. prosecutors with an additional and much-needed tool to deter corruption in sports. Under current U.S. law, prosecutors are usually only able to go after the individuals that accept bribes in sports organizations. Even there, the tools at prosecutors’ disposal are limited. For example, prosecutors used the Racketeer Influenced and Corrupt Organizations Act (RICO) to prosecute bribe-taking FIFA officials. While RICO can be a strong weapon against corruption, there is uncertainty in U.S. courts regarding RICO’s application for activity that occurs outside the United States because U.S. courts have required the corrupt activity to have some effect on the United States. Given the international nature of the organizations such as FIFA and the IOC, such limitations constrain prosecutors’ ability to prosecute corrupt actors. By placing FIFA and the IOC under the FCPA, prosecutors would be able to target those who offer bribes to officials in sports organizations, which would more effectively deter such bribery. For example, prosecutors could have prosecuted the unnamed “Sportswear Company A” that appears numerous times throughout the FIFA indictments. The company has since been identified by sources as Nike, Inc. Nike is alleged to have paid at least $40 million in bribes in the 1990s to become the sole provider of uniforms, footwear, accessories, and equipment to the Brazil national team. To date, the Justice Department has not indicted any Nike executive or officials related to this investigation.
If international sports organizations were designated as public international organizations, prosecutors would immediately benefit in a number of additional investigations that are currently ongoing. In January of 2018, U.S. federal prosecutors issued additional subpoenas in January as part of additional investigations into FIFA, the IOC, the U.S. Olympic Committee, and the International Association of Athletics Federations (the world track organization). Without the public international organization designation for FIFA and the IOC, prosecutors in the United States will continue to be limited in their efforts to clean up corruption in sports.
Very interesting, Jimmy. This seems sensible to me, especially considering how widely organizations like FIFA and the IOC operate (not to mention the demonstrated history of corruption). I’m wondering about what might be the potential downside(s) to a broad conception of “Public International Organization.” Is it that it might be harder for organizations to build business partnerships or solicit funding if so designated? (This may be more of a concern for NGOs, rather than organizations like FIFA.) Otherwise, I’m struggling to find the limiting principle here. But, again, your recommendation to include FIFA and the IOC seems practical.
A thought from outside the US. What happens when FIFA and the IOC are declared Public International Organizations and they receive bribes from foreign officials, rather than foreign private interests? This, of course, flips the traditional conception of abuse of public power for private gain. A FIFA or IOC decision to award games to a government that provides the largest bribe is in effect the abuse of private power for public gain (i.e. host rights). It came pretty close to this when the Football Federation of Australia (FFA) was allegedly splashing public money in order to gain votes for the World Cup host rights a few years back (https://www.theguardian.com/sport/2014/nov/14/world-cup-bid-australia-public-money-bribes-fifa).
If public officials made such payments to private actors, would they fall afoul of FCPA if the country had representation in the US? Furthermore, where would diplomatic immunity fit into such a scenario?
I think your call for recognition and FCPA jurisdiction is correct, however complicating factors and international politics remain confounding factors.
The idea is problematic, to say the least… Is it legitimate to relabel an organization following prosecutorial desires? And perhaps more importantly: Shouldn’t this form of corruption be addressed under an international legal regime? Last I saw, the U.S. isn’t a global sheriff…