UK: Lessons To Be Learned From FIFA Failure

Last Updated: 1 June 2015
Article by Peter Swabey

"Some people believe football is a matter of life and death, I am very disappointed with that attitude. I can assure you it is much, much more important than that." – Bill Shankly

"But not as important as cricket." – Peter Swabey

Well it had to come.  There have been rumours and counter-rumours for a number of years about a 'bung culture' in some international sports organisations, usually heightened in the UK press when the UK does not 'win' a bid for a prestigious international tournament, and now it has been reported that six FIFA officials, including one of their vice-presidents have been arrested and criminal proceedings commenced "against persons unknown on suspicion of criminal mismanagement and of money laundering in connection with the allocation of the 2018 and 2022 football World Cups".

Last November, FIFA published a summary of its own report into allegations of corruption amongst the nine teams bidding to win the right to stage the 2018 and 2022 World Cups, voting for which took place in 2010.  Russia beat off bids from England and Belgium/Holland and Spain/Portugal to host the 2018 event, and Qatar won the 2022 finals, beating Australia, Japan, South Korea and the US, following which rather surprising outcome – not least considering summer temperatures in Qatar – there were accusations that FIFA officials had been paid bribes totalling £3m.  The FIFA report cleared both Russia and Qatar of corruption, although did comment that in the case of Qatar there were "certain indications of potentially problematic conduct of specific individuals" and that the Russian bid team had hired computers which were subsequently destroyed and consequently only made "a limited amount of documents available for review".  The report went on to criticise the England bid, for which amongst others the Duke of Cambridge, David Cameron and David Beckham had been rolled out, for flouting bid rules.

The situation then descended into farce.  We might have expected Greg Dyke, as chairman of the English Football Association, to comment that "It's a bit of a joke, the whole process," and that "The whole of the way football operates at that sort of level is suspect and has been for many years. I don't think FIFA is a straight organisation and hasn't been for many years."  What we could not have expected was for Michael Garcia, the US lawyer who produced the report on behalf of FIFA and spent two years investigating the corruption claims, to criticise the 42-page summary report written for FIFA by Hans-Joachim Eckert, a German judge, as containing "numerous materially incomplete and erroneous representations."

It now appears that there was some fire underlying November's smoke and there must be some doubt about the rigour of the report carried out on behalf of the FIFA governing body and the degree of seriousness with which they took the issue.  If the published summary shows material differences from the original report, then questions certainly need to be asked.  What does seem interesting is that these latest claims seem to focus on bribes made by representatives of sports media and sports promotion firms rather than by the bid teams themselves – was the initial report looking at the wrong target?  And why was this? With benefit of hindsight, it does seem remarkable that FIFA did not feel it appropriate to undertake a more comprehensive review, but to some degree this may be attributable to a, perhaps too complacent, assumption that allegations of malfeasance were the product of sour grapes on the part of those who had lost out in the voting process – especially the English. Back in 2011, Lord Triesman, the former Football Association and England 2018 World Cup bid chairman, argued that there had been "improper and unethical behaviour" on the part of FIFA officials, but this was dismissed by Sepp Blatter, then as now the FIFA President, saying that "The British press have always been very critical regarding football and FIFA. It didn't start with me. It's been a long time. There is a sort of stubbornness against football and FIFA."  There will also be an inevitable reluctance to carry out proper investigation of these issues not only by those personally involved, but also by those who are dependent for their positions on the votes of such people and it is important to remember that all the significant players in FIFA are elected to their positions by the members of the FIFA Congress.

Clearly there are useful lessons to be learned here – the need to establish a mechanism for dealing with such allegations, perhaps through an internal audit function – which reports to someone independent of those who are potentially compromised.  ICSA has always been of the view that the company secretary should report to the chairman and that the Head of Internal Audit should report to the chairman of the Audit Committee or, if that is not practicable, to the company secretary.  Perhaps a properly qualified company secretary or governance officer might have helped FIFA avoid these challenges by ensuring that a more rigorous process was undertaken.

ICSA has for a while recognised that the sport sector is one that needs greater support to develop good governance practice. To that end we have been working with both UK Sport and the Sport and Recreation Alliance (SRA) to deliver training and develop a new Sport Governance and Administration qualification, to be launched later in the year.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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