When it comes to tackling corruption in sport, the real action starts behind the lines
Sport is in disharmony. Barely a month goes by without a new scandal. Soccer, cricket, cycling – all have been sullied by allegations of unethical behaviour, from doping and match-fixing to bribes for the awarding of media and hosting rights for large sports events. Worse, it is not just a few rogue individuals in the crosshairs, but sport’s highest institutions that are under fire.
The fact is sport has become big business. There is money – lots of money – to be made in the organising, broadcasting, hosting and merchandising major sporting fixtures, not to mention the gambling that accompanies them. Revenue flowing to the world soccer authority Fifa (Fédération Internationale de Football Association) from sports sponsorships, broadcast and licensing deals for the 2014 World Cup alone will be about $4.5bn. Some $400m of this will be redistributed among the 32 national federations taking part in the tournament: proud winner Germany pockets $35m, while its players have each been promised a $408,000 bonus for the win. To be a part of all this, Fifa’s major partners, Adidas, Coca-Cola, Emirates, Hyundai Motor Group, Sony and Visa, reportedly pay $25-50m a year each, while World Cup sponsors such as Budweiser, Castrol, Continental, Johnson & Johnson and McDonald’s pay around $10-25m each. It’s a far cry from Fifa’s origins as a voluntary organisation.
Governance and oversight have simply not kept pace with the growing power such sporting organisations wield. And the world’s major sporting bodies have been slow –reluctant even – to take decisive action.
Take Fifa. Founded in 1904 to guide and oversee rules and regulations in soccer, it is today a global enterprise of more than 200 National Associations with reserves of $1.4bn. It is a de facto multinational corporation, yet remains a largely self-regulated, independent body. In recent years, Fifa has been embroiled in allegations of bribes paid to its officials by media company ISMM/ISL, failure to properly investigate accusations of match-fixing, and accusations of improper influence over the bidding process for the right to host World Cups.
Jens Sejer Andersen, International Director of Play the Game, an initiative to strengthen sports’ ethical foundations, says that pressure for better sports governance surfaced in the 1990s, but organisations such as Fifa and the International Olympic Committee (IOC) have been adept at deflecting scandal: “The magicians of sports made the biggest corruption scandals disappear,” he says. The watershed came in 2010: in October, the UK’s Sunday Times broke a story about Fifa’s alleged selling of votes for the location of the 2018 and 2022 World Cup tournaments. Since then, Andersen notes, calls for reform have snowballed.
Fifa and IOC come of age
The chief concern has been Fifa’s response. It initially dragged its feet, failing to investigate proactively, resulting in growing suspicion and questioning of its commitment to transparency and accountability. In fact the organisation has begun a governance reform process. But it has struggled to come to terms with the scale of global concern about governance and compliance, raising questions over its leadership values and culture. Its own Independent Governance Committee (IGC) wrote in a 2014 report on governance reform: “Fifa’s challenge is to adapt its governance structure to its economic growth and its political and social significance.”
To address gaps, a Fifa spokesman says, “a vast majority of recommendations by the IGC have been implemented”. Fifa has put in place a new system of vetting appointments to the Executive Committee; a new Code of Conduct; Code of Ethics; Audit and Compliance Committee; independent internal justice system; and a whistleblower hotline.
This is progress, certainly, and the IGC concedes that Fifa has reached some important milestones, but it was disappointed to find its proposals “diluted” and not adopted in full, underlining that “reforming governance and creating a sustainable compliance culture are long-term projects, especially in a complex organisation like Fifa.” For instance, Fifa has rejected recommendations for age and term limits, independent external Executive Committee members, and public disclosure of management pay. It was recently announced that Fifa’s own report into World Cup bids by Qatar and Russia has been delayed until September 2014. It will be interesting to see the findings – and, even more, the response.
Fifa is not the only sporting organisation suffering from poor practices: the past five years have shown a need to improve sports governance across the board. Jaimie Fuller, chairman of sports clothing company Skins, is an outspoken critic of the leadership of Union Cycliste Internationale (UCI), the world governing body for sports cycling, which he describes as “self-feeding, self-serving and self-electing”. He unequivocally condemns the organisation’s failure to deal effectively with doping. To counter this, Skins has launched #ChooseTheRightTrack, a campaign to create an Athlete’s Support Council, complete with awareness-raising, truth and reconciliation, and better resourcing for the World Anti-Doping Agency (WADA). “Nobody wants to cheer for a contest tainted by bribery and corruption, witness violence and aggression or applaud victories won by doping,” Skins states. “When honesty and integrity break down, it affects us all – it destroys sport.”
Fuller is encouraged by early signs of change at the IOC, which is putting in place a 2020 roadmap, measures to embed good governance at the heart of the Olympic Charter, and zero tolerance on doping, judging, refereeing and irregular betting. Earlier this year it signed a Memorandum of Understanding with Interpol, and established the “Integrity Betting, Intelligence System” (Ibis) to collate alerts and information on manipulation through betting – operational for the first time at the Sochi 2014 Olympic Winter Games. Significantly, under new IOC President Thomas Bach, a $10m fund has been created to fund new anti-doping research, with a further $10m earmarked to support and protect clean athletes from manipulation and related corruption – a move Fuller welcomes.
Andersen believes reforms at Fifa and the IOC will trickle down to other sports organisations, provided public pressure is maintained. He also asserts the IOC should push harder for reform within the “largely passive” federations. The holding-back of Olympic grants to boxing and wrestling until internal governance reforms happened was a positive example of what is possible. “I’m no blue-eyed optimist, but I do think we have something to build on,” says Anderson.
Illegal betting
Perhaps an even bigger challenge lies in tackling the unregulated sports gambling market that has become the main driver of match-fixing worldwide. Centred on Malaysia and Singapore, according to journalist and author Declan Hill, an expert in this area, this is a massive, global problem: European private bookmakers estimate its value at $323bn, while Interpol puts it closer to $500bn. It flies below the radar of tools such as Fifa’s Early Warning System, which monitors gambling markets for unusual patterns that could indicate a fixed match, because many bets take place in the invisible illegal market.
Telling if a soccer game has been fixed isn’t easy. In a recent match-fixing investigation into a single gambling network, Europol’s Operation Veto investigated 425 suspects across 15 countries to prove that 380 professional football matches had been fixed. Regions where players and officials are poorly paid, or associations are struggling financially, are especially at risk, as are particular players – namely goal keepers, central defenders and referees. A story in German newspaper Der Spiegel recently alleged that notorious match-fixer Wilson Raj Perumal had rigged the Cameroon-Croatia World Cup group stage match, but nothing has been proven. Jens Sejer Andersen says he is encouraged that European gambling companies are now exchanging information to detect suspicious betting patterns. He says: “They understood that it doesn’t take many incidents of suspected fraudulent betting before there are strong reactions in the market that could really harm their business.”
United front
Over and above the stiff penalties handed down to individuals for on-field misconduct – like international cricketer Lou Vincent’s high-profile lifetime ban from the England and Wales Cricket Board for match-fixing – there are signs that integrated, global approaches to tackling corruption in sport are taking hold. Terry Steans, Fifa’s former Global Investigation Coordinator, has called for an International Sporting Integrity Unit to centralise knowledge, collate information and intelligence and provide independent, open and transparent investigation.
On 9 July 2014, 47 member states of the Council of Europe adopted a new convention on the manipulation of sports competitions. Its aim is to prevent, detect and punish and manipulation of sports competitions through exchange of information and national and international cooperation between public authorities, sports organisations and sports betting operators. “This really is a breakthrough,” says Andersen, “as it permits countries to harmonise and co-ordinate their efforts against match-fixing.”
Play the Game also has a new tool in its anti-corruption arsenal – the Action for Good Governance in International Sports Organisations (Aggis) Sports Governance Observer. Developed in co-operation with six European universities and the European Journalism Centre, it provides a checklist of good governance indicators for sports organisations across four dimensions: transparency and public communication; cemocratic process; checks and balances; and solidarity.
With the Swiss Parliament currently debating changes to both the Unfair Competition Act and the Swiss Criminal Code to make corruption in international sports organisations a criminal offence, it seems the net may really be closing on bad governance. Fifa, IOC and the UCI are all headquartered in Switzerland.
So can we look forward to a corruption-free 2015? The odds are certainly shortening.
Andrea Spencer-Cooke is a partner at One Stone Advisors. A certified B-Corporation, One Stone has a global team offering sustainability consultancy and communications expertise, based in Stockholm, Edinburgh, Sydney, Portland and Washington DC.
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