For the Love of the Game: Corruption and Sports NGOs

Photo - Sports NGOs & Corruption Sport is now the dominating source of entertainment worldwide. Just under the surface though, is a darker, shadier world where corruption (usually in the form of bribery, match-fixing, extortion, doping and money laundering) is common place.  Sports NGOs are particularly vulnerable to these activities, with this article exploring why – and what can be done about it – in more detail.

Sports NGOs and ‘Corruption as usual’

It seems that barely a month passes without yet another report of corruption in sports being splashed across newspaper headlines. In relation to large sports NGOs, these have included: members of FIFA’s executive committee accepting bribes, a former president of CONCACAF being charged with fraud and money laundering, hosting nations paying bribes to win Olympic hosting rights, match-fixing, and the IAAF’s involvement in corruption and cover ups.

This phenomenon isn’t just limited to football and athletics however, as corruption is far more widespread, as shown by the following examples:

  • Cricket has witnessed allegations of both spot-fixing and match-fixing involving players from Pakistan, England, New Zealand, IndiaSouth Africa, Sir Lanka and Kenya.  There have also been constant match-fixing allegations in relation to the Indian Premier League (the most lucrative cricket event in the world), with two of the league’s eight teams recently suspended for two years over a corruption scandal;
  • Tennis is currently undergoing a crisis as allegations of match-fixing engulf the sport;
  • Cycling has for many years been dogged with allegations of illegal doping, with the issue only coming to a head when the International Cycling Union was accused of knowingly protecting Lance Armstrong – cycling’s long time poster boy – against doping allegations; and
  • Badminton, boxing, handball and other sports, including US collegiate sports, have all suffered from similar credibility gaps

It is clear from this that there are serious underlying issues that sports NGOs need to address in order to clean up their respective sports.  But given its nature – and the amount of global revenue involved  (estimated to be $145 billion as at 2015) – how can they combat the risk of corruption? Are they able to recover from the repercussions of fraudulent activities that have already occurred? And, is it possible for them to regain the public’s trust in spite of the sector’s terrible track record of dealing with the issue?

Let’s begin tackling these questions by exploring in greater detail, examples of the types of corruption that have occurred in sports NGOs.

Fraudulence in FIFA: A Decade of Bribes

Allegations of corruption regarding football’s world governing body, FIFA (The Fédération Internationale de Football Association) have been swirling around for decades.  In 2015 however, a multi-jurisdictional investigation into current and former FIFA executives, unearthed long buried cases of corruption and unethical behaviour.  While still on going, 16 FIFA official and senior executives have now been indicted on various corruption related charges (see the following timeline).

Within two days of the first round of arrests, Sepp Blatter, FIFA’s long time president, was re-elected unopposed by FIFA’s 209 members.  Despite protestations of his innocence, Blatter and his heir apparent, UEFA’s president Michel Platini, were subsequently found guilty of corrupt dealings, involving a $2 million (£1.3 million) “disloyal payment” made to Platini in 2011, and banned from all football related activities for eights years by their own ethics committee.  Blatter is now being investigated, by the FBI, for his role in a bribery scandal where $100 million was paid to FIFA officials.

At the heart of the initial investigation was former general secretary of CONCACAF (the Confederation of North, Central American and Caribbean Association Football) Charles Blazer – known as  ‘Mr Ten Percent’ – whose statements shed light on just how corrupt the organisation was.  Amongst other things, Blazer revealed that he and other members of the FIFA executive committee accepted bribes in exchange for the selection of South Africa as the host of the 2010 World Cup (money which FIFA is now trying to claw back).  He also admitted that bribes were taken in relation to the CONCACAF Gold Cup Tournaments in 1996, 1998, 2000, 2002, and 2003 (see below).

Not surprisingly, these allegations have brought into question the legitimacy of the decision to award the next two World Cups to Russia and Qatar respectively. In the case of Qatar, the decision was particularly controversial, not only due to the country’s lack of any football pedigree, but more importantly over the intense heat a summer World Cup would bring (an issue which an official FIFA bid evaluation at the time labelled as “a potential health risk”).  The award was subsequently mired in numerous allegations of bribery, and both Qatar’s and Russia’s bids are now being formally investigated.

While the original US investigation is still on-going, it’s not FIFA’s only headache, as Australia, Colombia, Costa Rica, Germany and Switzerland have all opened (or intensified) separate criminal investigations into FIFA corruption.  If this isn’t enough, FIFA’s current President, Gianni Infantino, has since been drawn into the infamous ‘Panama Papers‘ scandal, when (yesterday) Swiss police raided the European soccer body UEFA to seize documents related to a contract he signed when he was UEFA‘s director of legal services.

CONCACAF: Caught Up in the Corruption of FIFA

Following in the seemingly fraudulent footsteps of FIFA, leading members of CONCACAF have faced charges of corrupt activities in recent months.  They include former presidents Jeffrey Webb and Jack Warner, and interim president Alfredo Hawit.

Prosecutors have claimed that Hawit (who is also a FIFA vice president) and other senior members, accepted hundreds of thousands of dollars in bribes in exchange for awarding marketing rights to the Gold Cup and other events.  While initially claiming to be innocent, Webb has pled guilty to charges of racketeering, wire fraud, and money laundering, and agreed to forfeit of $6.7 million.

Illicit Activities in IAAF: Bribes, Doping, and Cover Ups

The story of corruption in the IAAF (International Association of Athletics Federation) is long and complex, but at the heart of it is doping, involving the winner of the 2010 London Marathon, and second fastest female marathon runner in history: Liliya Shobukhova.

Details were revealed by the Russian sports agent Andrey Baranov, that violations in Shobukhova’s athlete biological passport were covered up in exchange for a £335,000 bribe  (paid to senior Russian officials). This allowed her to compete when she should have been banned for the use of illegal substances.

It was also revealed that IAAF officials were involved in extortion. In exchange for accepting a suspension, Shobukhova was given a €300,000 ‘refund’, paid to her husband’s bank account from a company linked to a senior member of the IAAF, Papa Diack.

Shobukhova broke her silence on the matter, and while her story was ‘entirely consistent’, the accounts of those involved in the cover up – including Papa Diack – were ‘riddled with implausibilities, inconsistencies, transparent lies and dubious documents.’

In a twist to the story, Papa Diack is the son of Lamine Diack, the former president of the IAAF, who was subsequently found in a damning World Anti-Doping Agency report, to have blackmailed athletes and covered up organised doping (while senior officials within the sports body looked the other way).

IOC: Buttered Up during the Bidding Process

FIFA’s illicit activities also appear to be a clone of the IOC’s (International Olympic Committee’s) bidding process for the 2002 Winter Olympics, with the Salt Lake Organising Committee (SLOC) found to have given gifts and bribes to IOC members in an attempt to influence their vote.

After revelations that SLOC had paid $108,350 in tuition fees for an IOC member’s child, more details of corruption began to surface.  In total over $1m was spent on 24 of the 114 IOC members, in Utah’s efforts to ‘secure’ the games.

Six IOC members were subsequently expelled when an investigation found them to have received money from SLOC in the form of direct payments, land purchase agreements, tuition assistance, political campaign donations, and charitable donations.

While the ensuing scandal resulted in a major re-writing of the Olympic Charter, it was unfortunately not an isolated incident, but a long standing catalogue of errors of judgement, as evidenced by the revelations exposed in Andrew Jennings’ 1996 book The New Lords of the Rings: Olympic Corruption and How to Buy Gold Medals’.

For those interested in a more in-depth analysis of the SLOC affair, the ISOH has released an excellent article titled ‘The Olympic Bribery Scandal’, which is well worth reading.

So why are sports NGOs so prone to corruption?

For many years, sport’s bodies have been left to police themselves.  In many cases vested interests have been allowed to take absolute and unfettered control, leading to unethical and questionable behaviour.

The consequence of this has been a huge accountability and governance vacuum within the sector. For example, whilst FIFA are officially governed by Swiss law, until recently, very little has been done by Swiss authorities to prevent the scurrilous goings on behind the scenes.

While major sports NGOs such as FIFA, the ICC, and IAAF are not for-profit organisations, they accrue billions of dollars a year in television rights and sponsorships, making it extremely lucrative for those involved in the decision making process (e.g. FIFA made a $2.6 billion net profit on the 2014 Football World Cup alone).  This, a one-member-one-vote system, and the fact that those in control are also responsible for deciding which member countries receive funding for ‘development projects’, encourages ‘loyalty’ to the leadership and increases the chances of patronage and bribery being used to influence decisions.

As long as these (usually entrenched) vested interests are free to continue spreading largesse amongst individual member, there is little political will – or incentive – for sports NGOs to actively tackle the issue, as it remains more lucrative for members to maintain the status-quo then to agitate for change.

While at times sports NGOs appear to be tackling the issue, their actions don’t always stand-up to scrutiny. For example, despite the recent scandal involving alleged match-fixing in tennis, the Tennis Integrity Unit (TIU) admitted that it only had six staff and an annual budget of just $2 million, making it highly dependent on tip-offs from betting companies and players. This ‘fig-leaf’ funding begs the question as to whether the sport is genuine about tackling corruption, with the head of the TIU recently admitting to the UK’s culture, media and sport select committee hearing that he had no idea who the 16 players alluded to in the BBC and BuzzFeed articles (that first uncovered the issue), actually were.

Sports NGOs are also vulnerable because of the way they are set up and overseen.  The cases highlighted above reveal that much of the corruption stretches right to the top: they involve senior members of the organisations. Because sports NGOs tend to be federations governed by their own membership, there is a lack of external oversight to enforce regulations and ensure integrity is maintained .  NGOs rely on their own control frameworks, which at times gives members free reign to run the organisation as they see fit. This means morally questionable and outright unlawful strategies for securing ‘victory’, are not out of the realms of possibility.

In such an environment, it should come as no surprise that engaging in illicit activities becomes the modus-operandi, as it would be relatively easy for a person’s own moral bounds to be lowered by influence until it’s seen as “the way things are”; creating a vicious cycle of corruption.   All it takes is for one or two leading member’s to have skewed moral perceptions to affect an organisation’s practices, and the rest may simply follow suit.

Can corruption in sports NGOs be combatted?

While a good start, it would be idealistic to simply suggest that putting in a whistleblowing regime and educating members about corruption would be the best way to combat it. The sad fact is that many organisations have had procedures in place that have been either ineffective, or blatantly ignored.

Sebastian Coe (president of the IAAF) when asked if athletics will ever be clean stated:

“No, the practicality is there will always be a few people who try to step beyond the moral boundaries. It is our responsibility to make sure the right systems are in place and the right people [are in place] to uphold these systems.”

In other words, no matter how dedicated your organisation is to combatting corruption, some individuals will still be tempted to engage in unlawful activities, as it’s a short, fast, and profitable route to victory. Given the amounts of money involved, this is particularly true in the case of the sporting industry.

While organisations can put processes in place to reduce the chance of corruption occurring at the start, it is not always enough, with many anti-corruption programmes failing before they even get of the ground.  In the case of sports NGOs, an effective tool that will help counter current corrupt practices is increased transparency.

Sports NGOs and the need for transparency

Shining the light on corrupt or illicit activities (when they happen) is one strategy for preventing corruption from taking place.  While regaining public trust after a corruption case is reported will never be straightforward, it is crucial that an organisation shows it has the political-will to actively address, and learn from, the issue.

Humanitarian director Lisa Henry of DanChurchAid (DCA), a large Danish NGO, strongly advocates this approach. Their organisation has been publishing an annual corruption report every year since 2008.  She stated that:

“The most effective way to fight corruption is to expose it. We carefully publish our findings with an emphasis on ‘lessons learned’ and we use them as active learning cases, and don’t sit and wait passively for the next case to surprise us.”

Doing this will not only help build a stronger anti-corruption culture, but show that that the NGO is actually living a ‘zero-tolerance’ approach.  If sports NGOs show they are not afraid to confront their shortcomings and learn from their mistakes, they will – only then – be in a position to win back the trust of their fans and the public in general.

But is it possible for sports NGOs to put this principle into practice?

But do Sports NGOs really want to make changes?

What can be done to change the murky nature that currently exists?

One such proposal is to root out vested interests by changing the body’s executive boards. Cricket writer Scyld Berry proposed that the ICC have a nominations committee made up of people of integrity (without vested interests), who should select the body’s executive board. This would ensure accountability from the very top.

Another idea is to encourage governments and sports NGOs to work together, as without some form of national or international governance, sports NGOs may continue turning a blind eye to the current issue. A good example of this is WADA (the World Anti-Doping Agency), which was formed through the support of 120 governments around the world. It was WADA who uncovered the IAAF corruption example referred to earlier in this article.

But would all this work?

So what can be done to make sports NGOs take corruption seriously?  There is a growing feeling amongst many that this will only happen if it impacts their hip pockets.  If correct, then at the heart of this dilemma, is for sponsors or members to have sufficient political will to simply walk away.

While in the past this would be unthinkable, there are signs that it may be changing.  While in many cases sponsors are still reluctant to walk away from major sporting tournaments, a number of companies have stopped sponsoring FIFA since the bribery scandals engulfed the organisation.  That being said, their refusal to publicly criticise what took place, has meant that the positive impact of their departure was lost.

Whilst some subtle wording in statements from major sponsors have suggested unhappiness with the governing of FIFA, the financial worth of an existing sponsorship deal has meant that companies – and television broadcasters – simply can’t afford to walk away. An example of this is Adidas, whose World Cup sponsorship is said to generate billions of dollars in profits for them.  Given this – and the fact that Adidas have publicly advised that the FIFA scandal has had no negative impact on their brand, is it realistic to expect a sponsor to cut ties and simply walk away?  Unfortunately the issue is best summed up by comments made by Andrew Woodward, the former head of communications for Visa’s global sponsorship, who claimed that sponsors would be mad to dump their deals. “The FIFA World Cup is the most popular sporting event in the world,” he wrote  “People love it. They don’t care about the corruption.”

What about the role of a sports NGO’s member? Imagine a World Cup without Germany, Italy, Argentina or Brazil?  The loss of these, or other major teams, would certainly force a change in the way FIFA behaves. As is the case for sponsors though, how easy would it be for national associations to tell their sports stars – or a country’s fans – that they, or their team, will not be allowed to perform at the highest level of competition?

Sporting fans hold the key to change

In light of all of the vested interests involved, in the short-term, real and meaningful change is unlikely.  Given this, maybe the only way to set the necessary wheels in motion to force a change in the governance of sports NGOs, is for fans to vote with their feet.  A boycott of World Cups in 2018 and 2022, would be the ultimate signal that fans are fed up with the status quo, and that corruption in sports must stop. It is only by hitting sports NGOs (and the sponsors who fund them) where it hurts most – their wallets – that we would quickly see the necessary motivation needed to start genuinely tackling corruption in sports.

About the authors:

Jeremy Sandbrook is the Founder and Chief Executive of Integritas360, a global social enterprise that helps charities and NGOs/NFPs ‘corruption-proof’ themselves.  An internationally recognised anti-corruption expert, he has spent the last decade working in the international development sector, predominantly in Africa, Europe and Australasia. Jeremy also lectures on the topic at the University of Sydney’s Centre for Continuing Education.

Liz Burton is a Content Author at High Speed Training: a UK-based online learning provider that offer business-related training courses, including Anti-Bribery and Anti-Money Laundering (AML) and Financial Crime. Liz has authored a variety of courses and regularly writes informative, business-related articles for their blog, the Hub.