Critics say reforms at football’s international governing body don’t go far enough, after years of scandal and shadowy dealings
It was, said world football supremo Joseph “Sepp” Blatter, a “historic” decision. At its 2013 Congress, held in May in Mauritius, the 209 member associations of the Fédération Internationale de Football Association – better known as Fifa – voted overwhelmingly for a change to the organisation’s statutes, thereby implementing a significant governance reform.
Blatter highlighted in particular that the revised statutes add for the first time a female member to Fifa’s all-powerful executive committee. Other updates include integrity checks for executive committee members, a strengthened ethics code, and the removal from the executive committee of the right to decide on World Cup venues.
For critics of Fifa – and there are many – the reform effort, which began in 2011, has been a long time coming. It might have taken even longer were it not for two sets of events that effectively made reform unavoidable.
The first was an investigation by Swiss prosecutors that established that Blatter’s mentor and predecessor as Fifa president, the Brazilian João Havelange, took bribes throughout the 1990s related to the granting of World Cup broadcast rights.
Havelange escaped prosecution, as commercial bribery was not a crime in Switzerland at the time. But Fifa could not escape the charge of institutionalised corruption, and Blatter, who was Fifa secretary-general under Havelange, was tainted by the scandal.
The second was controversy about vote-buying surrounding decisions taken in 2010 to award the 2018 and 2022 World Cups to Russia and Qatar respectively. The choices were made by Fifa’s executive committee. Even before the committee voted on the venues, two of its members were suspended for alleged solicitation of cash for their votes, and media reports raised similar questions about other executive committee members.
In addition, some executive committee members were implicated in the 1990s broadcasting rights bribery scandal. Ricardo Teixeira, the former Brazilian Football Confederation chief (and Havelange’s former son-in-law), and Paraguay’s Nicolas Leoz, ultimately stepped down from the executive committee. Teixeira went in March 2012. Leoz managed to hang on until April 2013.
Reforms in the net
When governance reform could no longer be put off, Blatter tasked an independent governance committee (IGC) with the job of drawing up recommendations. The IGC is based in the Basel Institute on Governance, a non-profit anti-corruption organisation.
The IGC took the view that Fifa should conform to the standards of governance and accountability seen in the corporate world or in public institutions. Though Fifa is in principle responsible only to its member associations, the IGC noted that Fifa’s accountability should extend to “millions and millions of fans and the public at large”, and that its decisions have significant social and political implications – such as decisions to award World Cups to less-than-democratic regimes.
In addition, Fifa carries out clearly commercial activities, such as the sale of broadcast rights, and takes decisions that affect companies, in particular to limit competition at World Cup venues, for example by permitting only certain brands of beer to be advertised and sold. And Fifa gets its revenues tax-free.
Alexandra Wrage, president of Trace International, an anti-bribery association for multinational companies, and a former member of the IGC, points out that this means Fifa is “in effect subsidised by the public. The leadership should be more willing than for-profit companies to embrace best practices and to demonstrate that the organisation merits that privileged financial status.”
The IGC has published two sets of recommendations to Fifa. The main changes that the organisation has made in response are to strengthen its ethics committee so it is more able to investigate alleged breaches, and to require top officials, such as the president and executive committee members, to undergo integrity checks before their election or re-election. Fifa has also reconstituted its audit committee into an audit and compliance committee, with more power to check Fifa’s financial accounting.
Fifa has also taken decisions on World Cup hosts out of the hands of its executive committee. The committee will still play a role by drawing up a shortlist of three candidates, but the final decision will be taken by a vote of the Fifa congress. Future World Cup decisions will be taken one at a time, unlike in 2010, when the Russia and Qatar decisions were made simultaneously.
In a statement to Ethical Corporation, Fifa says the organisation “will continue adjusting its governance in the future, but overall the reform process has already greatly reinforced Fifa’s ethics and transparency”.
Reforms red-carded
However, Fifa has declined to enact a number of the IGC’s suggested reforms. Fifa’s governance, and the degree of transparency it offers, remain out of step with standards in the corporate world.
Alexandra Wrage, who resigned from the IGC in April 2013 because she believed its proposals were being undermined, says Blatter’s reform process “has resulted in a number of improvements, but some of the most important steps – the steps that would do the most to restore public confidence – have been ignored or set aside. In the end, that detracts from the progress made and it breeds cynicism.”
Among the list of changes that Fifa has not made are term and age limits for the senior leadership (Blatter is 77 and in his fourth term as president), though Fifa says it may decide on these at a future congress. Fifa has also decided to remain opaque on remuneration for the president and executives, a long-running sore point for critics who have been unable to pin down the rewards enjoyed by Blatter and other high-level personnel (see box on Fifa’s finances).
Fifa has only partially implemented an IGC recommendation that nominees for the Fifa executive committee should have their integrity checks carried out by the Fifa ethics committee. The ethics committee will carry out the checks on the Fifa president, but executive committee members will be vouched for by the confederations that nominate them. The confederations, arguing that centralised integrity checks were an unnecessary duplication, vetoed any change in this respect.
This, according to Wrage, is a failure of the reform process. She says that “embedding [of] independent oversight of the executive committee in the statutes”, is one of the major reforms that Fifa should still make.
However, in a statement to Ethical Corporation, the IGC says the non-centralised integrity checks on executive committee members could work. The integrity check system “will be developed with the support of professional due diligence experts” and “can be effective if implemented correctly”, the IGC says.
Despite the reforms, overall power at Fifa remains highly centralised, in the hands of the president. It is almost impossible to remove the president outside the four-yearly elections by the Fifa congress. Fifa has no equivalent of non-executive directors to provide input on the performance of senior management, and no formal involvement of groups that are affected by its decisions, such as sponsors or supporters.
Daniela Wurbs, coordinator of fans’ group Football Supporters Europe, says there is almost no contact between supporters and Fifa. There is “no proactive interest on the part of Fifa to seek dialogue with supporters”, she says. “We feel that the influence fans can have in terms of structural change is limited.” Supporters want “much more substantial” reform, and until it happens, Fifa will continue to be “largely perceived as non-transparent, corrupt and not well governed”.
Little pressure to go further
Fifa’s reforms will be tested when high-profile decisions have to be made, such as the venue for the 2026 World Cup. Fifa says it has not yet decided when this decision will be taken. It adds that “requirements for the bidding and hosting as well as criteria for selecting the host of the event are still being finalised for the next Fifa World Cup bidding process”.
In the meantime, organisations and groups that could bring pressure to bear on Fifa to reform further are saying little. Fifa’s sponsors make up one such group. Alexandra Wrage says: “I am not aware of any organised effort by sponsors to encourage reform at Fifa and I believe companies could be a powerful voice. They have an incentive, too, to ensure that their marketing dollars are associated with positive, inclusive international events.”
Fifa has long-standing relationships with six “partners”, and has a number of sponsors and national commercial backers for World Cups. Its partners are Adidas, Coca-Cola, Emirates, Hyundai, Sony and Visa.
Adidas says: “Our relationship with Fifa dates back to 1970 and they continue to enjoy our full support … we do not comment on speculation or conjecture and are not in a position to comment on internal reforms within the Fifa organisation”.
A Visa spokesman says: “Matters of Fifa operations and governance are most appropriately addressed by Fifa and not by their sponsors. We value our relationship with Fifa as it is based on our shared equities of market leadership, global ubiquity, acceptance and public awareness. As a Fifa partner, our focus is on planning for the upcoming Fifa World Cup in Brazil.”
Emirates and Coca-Cola declined to comment, and Hyundai and Sony did not respond to requests for comment.
England’s Football Association takes a similar line to the sponsors. In a statement, the FA says: “We welcome the recent efforts to governance reform [sic] and believe that they represent good progress. The changes agreed will increase both openness and accountability within Fifa. The FA will be working through its confederation Uefa to consider any further proposals on Fifa governance reform to be brought forward in the upcoming season.”
Qatar controversy
However, Fifa might not necessarily have the luxury of deciding on further governance reform at its own pace. Its lack of decision-making transparency is likely to be in the spotlight again as it tackles the legacy of its choice of Qatar as the host of the 2022 World Cup.
A decision is pending about the suitability of Qatar as the venue for a summer tournament. Blatter has said he will ask the Fifa executive committee to switch the 2022 World Cup to the winter, to avoid the desert state’s searing summer heat. Greg Dyke, the incoming chairman of the English FA agrees, saying in early August that he thought a summer tournament in Qatar would be “impossible” for the fans.
A winter World Cup could trigger challenges from European football associations, which do not want their seasons disrupted, and could lead to calls to switch the venue. One Fifa executive committee member, Theo Zwanziger, who joined the committee after the Russia and Qatar decisions, broke ranks at the end of July and called the choice of Qatar a “blatant mistake”.
Speaking to Germany’s Sport Bild newspaper, Zwanziger also said the decision on Qatar had violated fair procedures. This might give grounds to re-examine the decision.
For Blatter, this could be the worst-case scenario. He hoped to reassure the world of football about Fifa’s probity with the 2011-13 reform process. A reopening of the 2022 World Cup award decision could bring the issue – and Blatter’s own position – back to the fore again.
Fifa’s finances
Fifa is notoriously opaque about its finances, especially the pay of executives and senior staff. The information that it does disclose suggests that Fifa is a very rewarding place to work. Its latest annual report notes that its 2012 personnel costs were $91m for about 400 staff, or about $220,000 (£142,000) per head. It spent an additional $32m maintaining its committees, including the 24-member executive committee.
Mohamed bin Hammam, an executive committee member until his suspension in a spat with Blatter, has disclosed that he received €200,000 for committee work in 2010 – the executive committee might only meet twice a year. Blatter’s remuneration is not publicly known, and Fifa has no equivalent of a corporation’s remuneration committee that sets out the remuneration framework.
Fifa’s social and political clout greatly outweighs its economic size. Compared with major corporations, it is a minnow, with revenues of $1.17bn in 2012. Fifa also sits on a $1.4bn cash reserve, which it says it needs to protect it “against risks and unforeseen events, in particular in relation to the Fifa World Cup”.
A murky world
January 15 2009: Fifa invites applications from potential hosts for the 2018 and 2022 World Cup finals.
October 20 2010: Fifa ethics committee suspends two Fifa executive committee members, Amos Adamu (Nigeria) and Reynald Temarii (Tahiti) over allegations that they offered to sell their votes on the 2018 and 2022 decisions.
December 2 2010: Fifa executive committee decides to award the 2018 World Cup to Russia, and the 2022 tournament to Qatar. Following the decisions, allegations about high-level corruption within Fifa continue to be made.
May 10 2011: Lord Triesman, a former chairman of England’s 2018 World Cup bid, tells a British parliamentary enquiry that Fifa executive committee members Nicolas Leoz (Paraguay), Worawi Makudi (Thailand), Ricardo Teixeira (Brazil) and Jack Warner (Trinidad and Tobago) solicited bribes ahead of the 2018 decision.
May 29 2011: Jack Warner and Mohammed bin Hammam (Qatar) suspended from Fifa executive committee over vote-buying. Bin Hammam had challenged Fifa president Sepp Blatter for the organisation’s leadership, but withdrew his bid.
June 1 2011: Blatter starts Fifa governance reform process. Independent governance committee (IGC) set up.
March 12 2012: Ricardo Teixeira resigns from Fifa executive committee, citing poor health.
March 30 2012: IGC submits first report to Fifa. Recommendations include strengthened ethics committee, stronger financial controls, and independent vetting of nominees for senior Fifa positions.
April 22 2012: IGC member Alexandra Wrage resigns because of concerns that IGC recommendations will be undermined.
July 11 2012: Swiss court documents are published showing that former Fifa president João Havelange, and former executive committee member Ricardo Teixeira (who was also head of Brazil’s successful 2014 World Cup bid) took bribes during the 1990s for the granting of broadcast rights.
February 8 2013: IGC publishes a second set of recommendations to Fifa, and says it is “disappointed” at the watering down of some of the reforms, such as independent integrity checks for Fifa executive committee members.
April 24 2013: Fifa executive committee member Nicolas Leoz resigns.
April 30 2013: Fifa ethics committee publishes report on bribery for broadcast rights under Havelange, concluding that “it is certain that not inconsiderable amounts were channelled” to Havelange, Leoz and Teixeira.
May 31 2013: Fifa amends statutes and says that governance reform has been largely completed.
corporate standards fifa football governance IGC Stephen Gardner transparency