Just over one year ago, in June 2019, Ahmad Ahmad, the president of the Confederation of African Football (CAF) and a Vice President of FIFA (international soccer’s governing body), who had long been dogged by reports of corruption, was detained by French police at a luxury hotel in Paris. Eight months later, in February 2020, the accounting firm PwC released an audit of CAF’s finances, documenting scores of financial irregularities by Ahmad and his colleagues, including an alleged kickback scheme involving a company run by a friend of Ahmad that did business with CAF.
CAF is just the latest in a long line of international soccer organizations beset by corruption scandals. Corruption in international soccer, long the subject of rumor and speculation, first made mainstream headlines back in 2015, when the U.S. Department of Justice unsealed a series of indictments against officials in FIFA and the regional soccer federations for North and South American (CONCACAF and CONMEBOL, respectively). Those indictments—and the resulting public outcry—forced FIFA, CONCACAF, and CONMEBOL to adopt a series of structural anticorruption measures, such as publicizing financial statements and creating independent audit committees.
Unfortunately, those reforms are not enough. The alleged corruption by Ahmad and his CAF colleagues is not anomalous, but rather symptomatic of two important factors that will continue to contribute to corruption in international soccer, notwithstanding the reforms implemented by FIFA and a few other federations in the aftermath of the 2015 indictments.
- First, despite sitting at the top of the international soccer hierarchy, FIFA cannot directly impose governance changes on the smaller entities that oversee the daily operations of the sport around the globe. FIFA is essentially an umbrella organization that manages certain components of international soccer, most notably the World Cup and major licensing rights. But the day-to-day governance of the sport is spread out across six regional and 211 national federations. Each of these bodies is an independent entity, and any governance reforms or other structural changes must be initiated and approved by the parliamentary-style bodies of those organizations. (This is how the reforms of FIFA, CONMEBOL, and CONCACAF were all accomplished.)
- Second, the regional and national federations are responsible for distributing the substantial funds they receive from FIFA. In 2018, FIFA reported more than $4.6 billion in yearly revenue, close to $1 billion of which it distributed to regional and national federations. These funds are broadly earmarked for the creation of youth academies, building stadiums, and other investments in regional soccer programs, but they are not closely supervised, and in practice the regional and national federations distribute these funds as they see fit, often with little oversight. The PwC audit of CAF is illustrative: Of 40 separate payments totaling $10 million from CAF to various vendors, PwC found that only five, adding up to $1.6 million, were sufficiently documented. For the rest, it was impossible for the auditors to determine the recipients, let alone whether the payments themselves were legitimate. Moreover, PwC concluded that several of the existing records were “manually adjusted,” indicating tampering by some members of CAF and rendering those documents unreliable.
Despite the decentralized nature of international soccer’s governance system, however, FIFA is far from powerless. Indeed, if FIFA is serious about cleaning up the sport, there are at least three things it could do to crack down on the most egregious forms of wrongdoing:
- First, Articles 27 and 28 of FIFA’s Code of Ethics gives FIFA the authority to ban or expel anyone bound by that Code for infractions, including taking bribes or misappropriating official funds. FIFA invoked that authority in 2019 when it punished the former general secretary of the Oceania Football Confederation, Tai Nicholas, for the misappropriation of funds. Nicholas received a ban of eight years and a fine of 50,000 Swiss Francs ($49,554). Yet FIFA’s sanction of Nicholas is an outlier. Most senior soccer federation officials accused of corruption have escaped punishment by FIFA. Perhaps the most notorious example is Sheikh Ahmad al-Fahad al-Sabah of Kuwait, who was identified as the source of bribes by a witness in one of the trials resulting from the 2015 DOJ indictments. Although Ahmad resigned from his official FIFA position, he still wields substantial power within the Asian Football Confederation (AFC) and has never been formally suspended from the game. Banning Sheikh Ahmad and other officials like him would send the message that FIFA is serious about combatting corruption and would prevent the worst actors from further tainting the sport.
- Second, FIFA can ban club and national teams of a specific country from international competitions if that country’s home federation has been involved in corruption. FIFA most recently used that power against Guatemala after the leader of the country’s soccer federation was implicated in the 2015 DOJ indictments. Yet FIFA uses this power extremely rarely, perhaps because of concerns that banning national teams for the misdeeds of their governing federations would unfairly punish players and fans. FIFA could, however, mitigate this concern by letting players who have not been implicated in any scandals play in tournaments but not in their country’s uniform. The International Olympic Committee did exactly that when it allowed certain Russian athletes to compete in the 2018 Winter Olympics, albeit not under their national flag, after widespread doping allegations against the Russian sports federation. Such a compromise punishes corrupt national federations without unduly penalizing athletes.
- Third, FIFA could condition its continued disbursement of payments to regional and national federations on those federations’ adoption of meaningful anticorruption reforms along the lines of those already undertaken by CONMEBOL and CONCACAF. Payments from FIFA are a major source of income for many regional and national federations, so the potential loss of funding could spur those bodies into reforms they otherwise would have no appetite to adopt. This course of action raises the specter of a Western-based international organization imposing its will on weaker bodies in developing nations, but FIFA could blunt that criticism by strictly limiting its use of conditionality to anticorruption reforms, rather than imposing structural changes that are more political in nature, such as reorganizing the federations’ parliamentary bodies or mandating specific spending priorities.
Corruption in international soccer is far-reaching, but these measures would be substantial steps to curb misconduct enabled by the autonomy and unsupervised spending power of regional and national soccer federations.
Great post, Eric. I haven’t been following FIFA in recent years so am interested by your findings (particularly with respect to the PwC audit, something I wrote about as a reason for hope that the organization was on the right path).
One area of interest for me is around match-fixing (or spot fixing). Did you research reveal any improvements in those areas in FIFA? Particularly regarding its relationship with Sportradar and its Fraud Detection System?