The recently-concluded FIFA World Cup in Qatar has served as yet another reminder of the corruption that seems to accompany the awarding of hosting rights for major international sporting events. According to the U.S. Department of Justice (DOJ), in 2010 representatives of Qatar bribed three South American FIFA officials to win the run-off vote against the United States to host the 2022 World Cup. And this came after two members of the FIFA selection committee had already been barred from voting after they had been caught agreeing to sell their votes. This was not an isolated incident. The DOJ also alleged that Russia bribed FIFA officials to host the 2018 World Cup, and indeed more than half of those FIFA officials involved in the 2018 and 2022 host country votes—including FIFA’s then-president Sepp Blatter—have been accused of improper behavior. Nor has this sort of behavior been limited to FIFA. The International Olympic Committee (IOC) has had numerous similar scandals. The IOC has launched an investigation into nine members who were bribed to vote for granting Brazil the hosting rights for the 2016 Olympic Games; Sérgio Cabral, the former governor of Rio de Janeiro, admitted to paying $2 million to the former president of the International Amateur Athletic Federation (IAAF) to buy votes to select Rio as the 2016 Olympic host city, and the head of Brazil’s Olympic committee, Carols Nuzman, was sentenced to over 30 years in prison as a result. And when Russia secured the 2014 Winter Olympics bid, it did so with the assistance of the then-vice president of the Olympic Council of Asia, Gafur Rakhimov, an organized crime leader and heroin kingpin.
Why is the process of selecting host cities and countries for major international sporting events so constantly captured by bribery and corruption? There are several inter-related reasons for this ongoing problem:
- First, hosting a major international sporting event is very expensive for the local taxpayers, and the benefits are largely reaped not by the local communities but by the organizers and a narrower set of businesses in the host cities, such as local construction companies, consultants, media companies, investors, and entertainment groups. (For example, the 2014 World Cup cost Brazil $15 billion to host, and the country was returned a mere net of $100 million by FIFA; meanwhile, FIFA made $4.8 billion in revenue compared to $2.2 billion in expenses.) As a result, many well-functioning democracies have simply lost interest in hosting these events, despite the publicity and tourism they generate. Autocracies and corrupt quasi-democracies, by contrast, are more interested in hosting international sports competitions for a variety of reasons—including the desire to win favor or popularity on the global stage, the utility of such hosting for domestic propaganda efforts, or the desire to funnel money to well-connected private interests, even at the expense of the citizenry at large.
- Second, as noted above, because hosting sporting mega-events, though bad for the host economy overall, does generate massive windfalls for certain firms and sectors, and those business interests therefore have a very strong incentive to grease the palms of those facilitating host country selection. In countries where there is already a well-entrenched system of corruption in the distribution of government contracts to private businesses, this can be particularly problematic in the awarding of Olympic and World Cup bids.
- Third, the organizations that run these events and select the hosts (FIFA and the IOC, in the case of the World Cup and the Olympics respectively) have a kind of monopoly power and are therefore able, according to Professor Andrew Zimbalist, to “extract enormous rents out of the bidding process.” While some of these rents may take the form of problematic but lawful concessions made directly to the organizations, the officials at these organizations also have strong temptations to use their power over valuable hosting rights to extract substantial kickbacks. After all, IOC members are unpaid, and FIFA executive committee members make less than a first-year associate at a law firm (though the work is part time). They are instead compensated by perks (such as lavish expense accounts and deluxe travel, accommodation, and entertainment in the world’s chicest cities). Bribes help add to the cushy lifestyle they enjoy.
Recently, both the IOC and FIFA have begun to implement some reforms. In 2017, the IOC revised its model host city contract to include human rights and anticorruption provisions. (Notably, China’s 2022 Winter Olympics was the last not to include these provisions; since the adoption of the model contract reforms, the Olympics have been awarded to France, Italy, the United States, and Australia.) Nevertheless, there are reasons to doubt the effectiveness of these model contract revisions, as the revised model contract still does not require independent oversight and lacks an enforcement mechanism for violations of the agreement. As for FIFA, the organization’s Code of Ethics gives FIFA the authority to remove anyone for Code infractions (including corruption), and may also impose a fine of CHF 100,000 and a five-year ban on football-related activity. FIFA has more recently taken additional steps to address corruption within the organization, including hiring a Chief Compliance Officer, disclosing compensation of senior management, and appointed PWC as auditor. Yet corruption remains a serious problem, and many FIFA officials who have been credibly accused of corrupt conduct remain in positions of power.
It is therefore vital that the IOC and FIFA take firmer action to stamp out corruption. There are two main things these organizations can and should do:
- First, and most straightforwardly, FIFA and the IOC need to substantially increase the penalties they impose on those of officials who engage in corrupt conduct—including much steeper fines and lifetime bans for serious violations—and should rigorously enforce anticorruption rules. Only substantial expected penalties will deter the wealthy and well-connected individuals that dominate the leadership of international sports organizations.
- Second, the process for selecting host countries should be professionalized, and run by well-paid, full-time staff members—akin to the front office or league office of major professional sports teams—rather than letting well-connected and powerful semi-retired individuals serve in these roles, as is currently customary. A professional staff member might be more reluctant to taking a bribe if this could mean losing a well-paid, stable, and esteemed career; by contrast, under the current system, where participation in the host selection committee is a kind of semi-retirement bonus position that comes with cushy perks, the people entrusted with this power are more likely to try to make a quick buck by selling their votes.
Though may be impossible to root out all corruption in the process of awarding host cities for international sporting events, taking these steps would build on progress that FIFA and the IOC have already made, and will help to ensure that the spirit of fair play and competition is reflected not only on the field, but also in the boardroom.
Phenomenal post, Catherine! Sportswashing and corruption in FIFA is a longstanding issue and your post captures the urgency of making change. I do wonder, however, whether paid professionals would truly address the problem. Gulf countries have inordinate wealth that could easily lure someone into early retirement. Either way, thanks for writing!
Timely post, thanks for sharing!
Thank you for your post Catherine! I think another vital factor is the voting system that Fifa utilizes for selecting host countries. Each country – regardless of size, population, or relevance on the global soccer stage – has one vote. That means small countries have the same power power as Brazil or Argentina. As a result, these smaller countries have been able to coalesce and create voting blocs. Democratizing the election process can and should involve balancing the voting power more equitably.
Great post! You make a really interesting point about how the net negative economic effect of hosting pushes away more democratic countries, leaving autocratic countries that may have other, non-financial reasons for wanting to host. I wonder if you know of any proposal for making these events more economically attractive, and if so, whether that may also be a path towards rooting out corruption.