Russia and Qatar: losers in the FIFA scandal
Soccer has now firmly moved into the realm of Realpolitik.
The Baur au Lac hotel is an old Zürich favorite. Its central location, Lake Zürich views, wood-paneled interior and reputation for discretion, make it a regular haunt for statesmen, billionaires, princes and, for the past couple decades, executives from global soccer’s governing body, FIFA.
FIFA is known for its wealth — the last World Cup cycle grossed some $6 billion — and for its largess when it comes to expenses. Baur au Lac’s opulent surroundings fit FIFA’s importance, too. Their executives have been courted by the likes of the British Royal Family and American presidents past and present, especially when important decisions, like which country should host the World Cup finals, is imminent.
But the hotel’s discretion flew out of the window around 6 am Wednesday morning, when a posse of Swiss law enforcement officers strolled into the lobby with a list of FIFA officials and demanded their room numbers.
Seven leading FIFA figures were arrested.
The arrests came at the behest of the US Justice Department (DOJ), which, a few hours later, unsealed a 47-count indictment that charged 14 people with “racketeering, wire fraud and money laundering conspiracies … in a 24 year scheme to enrich themselves through the corruption of international soccer.”
The bribes, according to the USJD, amounted to $100 million. Nine of the 14 arrested were current FIFA employees, including Jeffrey Webb, a FIFA vice president who had been seen as a future leader. When it was time to announce the indictment to the press, FBI director James Comey, US attorney general Loretta Lynch, and the IRS’ chief of criminal investigation Richard Weber took turns answering questions, showing how seriously corruption within world soccer is being taken.
The timing of the arrests couldn’t have been worse for FIFA, an organization that has been dogged by corruption allegations for close to 20 years. On Friday, it is due to vote on whether Sepp Blatter, the pugnacious 79 year old president who has so far escaped arrest and who is currently not connected with the investigation, will be re-elected for a fifth term at the organization’s annual congress. It was, until Wednesday’s dawn raid, expected to be a cakewalk.
Yet something interesting — aside from the arrests, the global nature of the indictments, the fact that the FBI and the US Justice Department were so fervent in their hunting down wrongdoing involving FIFA — was happening in the Middle East at the same time. On the announcement of the arrests, Al Arabiya reported, the Qatar stock index fell by 2.6 percent.
A few hours after the Bau aux Lac raid, the Swiss authorities announced that it was opening a separate criminal investigation into allegations of corruption surrounding the bids for the 2018 and 2022 World Cup finals. It is clear that more allegations of wrongdoing will emerge, with huge potential political significance.
Russia and Qatar controversially won those bids, Russia in 2018, Qatar in 2022, but each has been dogged by a variety of allegations ever since. For Qatar, whose royal family heavily backed the project, it was accusations that it leveraged its huge gas wealth to effectively “buy” — as FIFA general secretary Jerome Valcke had called it in one unusually off guard moment — the right to host tournament.
They have also been the target of a concerted campaign to reform the kafala system, a form of employer sponsorship that human rights groups says traps hundreds of hundreds of thousands of men — mainly construction workers from South East Asia — into a lifetime of what is effectively indentured slavery. Other rights groups have pointed out that thousands are likely to die building the tournament’s infrastructure in heats that can top 50 degrees Celsius in the summer.
Russia, meanwhile, has faced growing calls from politicians in the US and Europe to be stripped of the 2018 World Cup finals over its involvement in Eastern Ukraine. In response to the FIFA allegations, Russian President Vladimir Putin accused the US of overstepping its legal bounds. “This is yet another blatant attempt [by the US] to extend its jurisdiction to other states,” Putin said Thursday. There have been concerns too, about the roll back of rights and freedoms in Russia, as well as the conditions of Russian workers who will build the World Cup. Only this week, Russian lawmakers proposed cutting the cost of building World Cup stadiums by employing vast amounts of prison labor.
Blatter has regularly met with Putin, who is no fan of soccer, but understands the prestige that the world’s most watched sports event brings to a country under fire. Whether it’s World Cups or Olympic Games, leaders can develop addictions to hosting sporting mega events as a way of presenting a counter narrative of their countries to the world.
FIFA has commissioned an American attorney, Michael Garcia, to investigate wrongdoing in the bidding process. When he delivered his report in September 2014, FIFA said it would not be made public on confidentiality grounds. A summary of the report was, however, released, and gave Qatar and Russia a clean bill of health, despite Russian officials claiming they had few documents to hand over as the computers they used during the bidding process were hired, and later destroyed. Garcia denounced the summary as bearing little relation to his full report and for giving “erroneous representations of the facts and conclusions.” He later resigned. FIFA has since agreed to release a redacted version once ethics proceedings had been heard against several other FIFA figures.
The only thing certain about what’s coming next for the organizations is that it will include more revelations far more explosive than this morning’s news – revelations that might jeopardize the next two World Cup finals, exacerbate the political crisis between east and west, and lead to dozens of potentially ruinous corporate lawsuits. Much of the evidence for the current indictments appear to come from Chuck Blazer, the American former general secretary of CONCACAF — soccer’s governing body for North and Central America — who is current gravely ill with colon cancer in a US hospital.
An explosive New York Daily News investigation claims that Blazer reached a plea bargain with the FBI and IRS and turned super grass over bribery allegations as well as unpaid taxes on $11 million of undeclared income. He was sent to the 2012 London Olympics with a wire, where he recorded dozens of conversations, including those with leading Russian sports officials. It has already been announced that Vitaly Mutko, Russia’s sports minister, who is also a member of FIFA’s powerful executive committee, will be questioned by Swiss prosecutors over allegations linked to the 2018 and 2022 World Cup bids. He denies Russia was involved in any wrongdoing.
Even before the raid, Congress was braced to vote on whether Israel should be suspended from FIFA over continued movement restrictions and arrests of Palestine players (since 1998, Palestine has been officially recognized by FIFA). The issue was of sufficient seriousness for both the Israeli government and the Palestinian Authority that Blatter held last minute face to face meetings with both Benjamin Netanyahu and Mahmoud Abbas.
Late on Wednesday morning, an embattled FIFA spokesperson gave a press conference confirming that their congress would continue on Friday as planned, meaning that both the presidential vote and the vote on whether Israel is suspended from FIFA will go ahead. If anyone was in doubt before, Wednesday’s events confirm that soccer has now firmly moved into the realm of Realpolitik.
James Montague is a Balkans-based journalist and author who writes for the New York Times, CNN and Delayed Gratification magazine.
This piece has been updated to include remarks by Russian President Vladimir Putin.
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http://www.politico.eu/article/russia-qatar-lose-fifa-scandal/