Blog

World Cup of Fraud: FIFA Under Fire for Bribery

Sports is a business.

Now it turns out that it is Big Business.

While the People who treat politics as a contact sport made Lorretta Lynch wait too long to be confirmed as the New Attorney General, it seems she and the Department were ready to announce some big cases the minute she got in the office.

Unless you have been reading only the Style section lately, you know that FIFA, the international board which “governs” the sport of soccer/football, has been hit with many indictments.  The phrase “world cup of fraud” was flying all over the news yesterday and from my narrow perspective as a sport fan and lawyer, it made me wonder about a lot of different things all at once.

First of all, does anyone want to tell me that Tom Brady allegedly having an ounce of air removed from a football is a big deal now?

They were marching people out of fancy Zurich hotels to be extradited to the United States!  Bribes, big bribes, are alleged to have been paid. One hundred and fifty million dollars of bribes in 24 years? That’s how much the bribes were sports fans, so how much was the revenue? To give all of us an idea of how messed up this all is, the man in charge of FIFA wants to get re-elected to his job in the middle of all this even as calls for his resignation grow louder.

Update 1:03, May 29th: Shortly after publication of this blog Sepp Blatter was re-elected.

Update 5:07, June 2nd:
Since the last update, Sepp Blatter has resigned from his position as President of FIFA after confirmation from law enforcement officials that he is the focus of a federal investigation. Blatter will remain at the helm for 4 more months until a special meeting can be held to elect a new President. 
According to the New York Times, Blatter has yet to be implicated by an investigation. However, law enforcement is attempting to use FIFA officials already under indictment to gain evidence against Blatter. This would have been Blatter’s 5th term as President.

 

What’s the big lesson here for those of us who are sports fans and pay for our Nationals Tickets by working on cases involving fraud?

The lesson is that cases involving allegations of fraud, brought under U.S. law, are not restricted to the borders of the United States of America. You can look it up, qui tam and whistleblower fans.  Not only does the Defense Department spend money overseas, and the State Department too, bringing those contracts under the jurisdiction of the False Claims Act, but also every whistleblower lawyer out there is looking at laws and international conduct that may violate the Securities and Exchange Act.  If a company engages in activity bribes to get business in violation of the Foreign Corrupt Practices Act that could be a matter to report to the SEC whistleblower office.

The U.S. government has the power and the ability to crack down on wrongdoing when it really wants to do so. You may question why it considers FIFA to be the worst thing in the world. After all, international soccer is still only a game.  It’s not like anyone is going to die if fraud and bribery were committed to throw the site of a match to Qatar over the United States.

If you are a qui tam Relator with a meritorious claim that the Department of Justice does not have the resources to go after, I feel your pain.  Still, a huge cartel involved in bribery and throwing matches and fixing business is something the Justice Department should go after.  If the allegations are true, the people involved all had no reason to do this but to profit off of sport and play the rest of us for fools. Now they are in the kind of trouble you don’t get out of by sitting out half a game.

Updated 3:17 pm:

I’m indebted to my colleague Kaveh Miremadi who is a big fan and an outstanding attorney. Kaveh found the following picture showing the board room of FIFA, which hardly makes the organization look like a small non-profit sporting enterprise:

Photo Credit: Luca Zanier via Yahoo Sports

Photo Credit: Luca Zanier via Yahoo Sports

 

No wonder the board members want to stay in power.

The United States Government is doing what it can to enforce the rule of law. However, they will have to fight the same leadership of FIFA going forward.