On Brazil 2014, FIFA and The Founding of Corruption

The English Ramblers were an early challenger and loser to the entity known as "Fifa."

Editor’s note: This is the 2nd piece for The Shin Guardian from Joshua Wells. Josh is broadly looking at the administrative side of soccer from legality through business practice here at TSG

Over the course of history, repressive governments tend to have common characteristics that define their operations and their impact on the world. If I asked you to list them, you could probably tick most of them off in short order.

One-party rule, a closed judicial system that metes out punishment without public explanation, the taking or use of private property without compensation, reliance on tradition, religion and nationalism to cow the public, suppression of the press, and the concentration of power in one man or small group of men are all common elements of a repressive regime.

It does not take Inspectors Lewis and Hathaway (yes, I’m a BBC dork, and I’m betting many of you are as well) to winnow out why every repressive government bears these characteristics. All governments, in some form or fashion, represent the rule of the few over the many. By the same token, if the many unite and oppose the few, then regime change will most certainly happen. The key to getting the many to unite is a shared knowledge of injustice and the potential for correcting it. This is why repressive regimes go to such great lengths to isolate and alienate their citizens from the outside world.

Fifa's above-ground lair

In many ways, FIFA is just such an organization.

FIFA was founded on May 21, 1904 following a match played in Paris between France and Belgium. The first members of the organization were France, Belgium, Sweden, Spain, Switzerland, the Netherlands, and Denmark, with Germany joining almost immediately thereafter. The goal was to provide an organizational body to oversee international competition between the various Football Associations that had sprung up all across Europe based on the British model and rules established in 1863.

From practically any perspective, FIFA is a unique organization in the world of sport, but especially to those of us who grew up in the United States’ tradition of sport. FIFA does not so much oversee the organization of football, as it controls, or attempts to control, every aspect of it on a global scale. FIFA has had this goal in mind since its inception. For example, in 1905, a group of English footballers named themselves the English Ramblers and decided to tour the continent playing matches against European teams. FIFA put its collective foot down, banning any teams associated with its member associations from playing matches against the Ramblers.

From that day forward, FIFA has dominated the sport of football, ostensibly governing every level of the game, from the World Cup down to the Blue Square Premier League and beyond. It controls the rules, the equipment, and even who is allowed to coach the sport. FIFA is not so much a champion of the sport of football, as much as it is a champion of FIFA football.

The sun that holds the footballing universe in orbit is the World Cup. It is at one and the same, a reward for those who are friendly to FIFA and a cudgel with which to beat those who challenge it. In a repressive regime, the military typically acts as both a symbol of pride and achievement, as well as a reminder to those who would oppose the regime of the might of those who wield power. If you have ever seen pictures of a 1950’s May Day parade in the old Soviet Union, you know exactly what I am talking about. Even as an American, I cannot help but feel a tinge of awe at the demonstration of human achievement and organization as I look at those missiles, tanks and soldiers in neat infinite rows, while at the same time knowing what that military might truly represented. The World Cup is FIFA’s military might, and until its power is somehow restrained, no meaningful change can ever take place at FIFA. As long as Sepp Blatter and his cronies control the sport through this event, corruption will reign supreme.

The Marcana: The stadium jewel of Brazil 2014...

For this reason, I am watching with extreme interest the recent events taking place in regard to 2014 World Cup scheduled to be held in Brazil. Brazil currently has leverage over FIFA that no other nation has held so far as I know, and will likely never have again.

Early in FIFA’s history, the awarding of World Cups was highly controversial because of the difficulty of travel. The two continental pillars of world football, South America and Europe, were a three week journey by boat apart, causing massive logistical headaches. The first World Cup held in 1930 took place in Uruguay and was only attended by four European nations. The 1934 World Cup was held in Europe. When it was decided that the 1938 World Cup would also be held in Europe, the South American nations were incensed as they had been led to believe that the tournament would rotate between continents. As a result, both Argentina and Uruguay boycotted the 1938 tournament.

Following World War II, FIFA implemented a pattern of alternation between the Americas and Europe which lasted until the 2002 World Cup. Beginning with the 2004 World Cup, FIFA announced a plan to rotate the tournament between continents, with South America’s World Cup falling in 2014. The 2014 World Cup is the last that will be subject to the rotation policy, with future World Cups being doled out to whoever can secretly pass FIFA committee members the largest stacks of unmarked bills (I’m joking…sort of).

———

More from TSG on Brazil 2014 corruption:

The Bastardization of Brazil 2014

Brazil 2014: Proposing Alternatives

Brazil 2014: “Stadium Budgets that Border On Complete Fiction

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Initially, Colombia, Chile, Argentina, and Brazil all showed interest in hosting the 2014 tournament, but Colombia bowed out early while Chile and Argentina left the bidding after FIFA decided to disallow joint bids between nations. Brazil was the proverbial last man standing, and the World Cup was awarded by default.

FIFA would have you believe that the World Cup is an engine for positive change wherever it is held.

While the truth of that sentiment can be debated, FIFA does very literally change everything about where the World Cup is held. Even better, the full scale of the concessions required from a government hosting the World Cup is supposed to be kept secret from the public. When a BBC reporter asked a representative for England’s 2018 World Cup bid what concessions FIFA required, the response given was, “I’m not able to tell you. FIFA requires it [the technical bid documents] to remain confidential.” The representative went on to say, “It is not a selective confidentiality.” In other words, the veil of secrecy applies to all concessions required by FIFA for hosting a World Cup, including those which apply to visas, security, currency, commercial rights, and broadcasting.

When asked a similar question, Gerry Sutcliffe, England’s former sports minister stated, “FIFA require that details of the guarantees not be made public,” before stating, “If I did that it would damage the bid and I am not prepared to do that.”

While the English would not reveal FIFA’s demands, through a little internet digging I was able to uncover the eight “governmental guarantees” FIFA requires World Cup host nations to secretly pledge before a bid is awarded. The guarantees fell into eight categories: (1) Visa and Entry Procedures; (2) Work Permits; (3) Tax Exemption; (4) Safety and Security; (5) Bank and Foreign Exchange Operations; (6) Protection and Exploitation of Commercial Rights; (7) Telecommunication, Information Technology; and (8) Legal Issues and Indemnifications.

Some of the issues the guarantees address are perfectly reasonable and necessary for the purpose of holding an international tournament. For example, it is reasonable for some exemptions to be made for visas and work permits so that players and other personnel can gain entry into the host nation and participate in the tournament. On the other hand, some of FIFA’s demands are stunning in scope.

For example, FIFA requires full tax exemption for itself, any of its subsidiary organizations, service providers, broadcasters, employees of FIFA, employees of FIFA member associations, and independent contractors hired by FIFA. In other words, FIFA is a huge black hole for a host government in economic terms. When FIFA comes to town, it will certainly spend and be paid hundreds of millions of dollars, but not a dime of it will find its way into local or national government pockets to defray the costs of building new stadiums, transportation systems, infrastructure, or pay additional security (which is also required by FIFA) and waste disposal personnel.

FIFA further requires that a host nation enact what are essentially new laws to protect its corporate partners. For example, the registration of domain names containing FIFA trademarks must be banned by law. Marketing by non-FIFA partners in public areas related to the World Cup must be banned. In fact, advertising by non-FIFA corporate entities must be banned from within 2 kilometers (1.2 miles) of all stadia or site hosting World Cup events. All public viewings not held by FIFA must be banned. The use of World Cup related tickets as promotional items must be banned. In addition, FIFA requires that the legal procedures addressing these issues be expedited. In other words, not only does the host nation have to change its laws for FIFA, but it must change how and when it enforces its laws for FIFA.

Lastly, a host nation must agree to indemnify FIFA for any liability that accrues to it through the implementation and enforcement of the guarantees. In other words, FIFA gets a get out of jail free card if the governmental guarantees it requires from a host nation infringe upon the legal rights of any individual or corporate entity.

Ricardo Texiera: Questionable at best...

FIFA’s demands have caused an uproar in Brazil. Because FIFA has committed itself to holding the tournament in South America, and because it is the only nation willing and able to host the tournament in South America, Brazil finds itself in a unique position to challenge FIFA’s comprehensive intrusions into Brazilian law. In addition, Brazil holds a unique place in FIFA as one of its most decorated and powerful associations.

A bill is currently before the Brazilian Congress which would grant the governmental guarantees that FIFA requires from host nations, but some of Brazil’s politicians are bucking FIFA’s yoke. Leading the charge is none other than the formerly brilliant Brazilian striker Romario, who is now a congressman. Speaking out against the bill, Romario was quoted as saying, “If FIFA is not put in its rightful place it will soon have more power than our president.” He went even further on his Twitter account stating, “Brazil needs to stop this business of becoming a slave to FIFA. The sovereignty of the country must be respected.”

In contention are several issues. Brazilian law requires half-priced tickets to public events be made available for senior citizens and students. Some Brazilian states also ban the sale of alcoholic beverages at sporting events. In addition, Brazil does not want to change its laws regarding the punishment of individuals guilty of infringing copyrighted materials or merchandise. So far, FIFA has been uncompromising on any of these issues, and there have been rumors, denied publicly, that FIFA has threatened to take away the 2014 World Cup from Brazil.

With consistent delays and costs spiraling out of control for preparations, the 2014 World Cup and FIFA are increasingly becoming unpopular amongst Brazil’s massive population, making it a major political issue. This is true especially among the poor as stories emerge of favelas being destroyed to build stadia and infrastructure. Urban transportation projects which were to be part of the World Cup preparations, and would most benefit the average Brazilian citizen, have been cut or curtailed due to rising costs only adding heat to the simmering anger of the populace.

The entire World Cup preparations have been seen as a failure in Brazil. It probably does not help that the Brazilian FA’s president, Ricardo Teixeira, is under a criminal investigation for money laundering. Find me a FIFA member that is not run by a crook and I’ll…well, you can fill in the blanks with your own jokes.

All the pieces seem to be in place for Brazil to strike a blow against FIFA and its military might, the World Cup. Whether Romario can spearhead the attack in politics as well as he did on the 1994 World Cup remains to be seen, but for those of us who care about corruption in the beautiful game, this is an important story to remain apprised of.

More from Wells at TSG

You Know Fifa? Duh. Uefa? Check. What About The ECA?</

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26 responses to this post.

  1. Posted by GeorgeCross on 2011/10/18 at 6:56 AM

    Another fantastic piece Joshua, great stuff.

    Quick question: I thought Uraguay declined to defend their title in 34 because of the snub that they received from the Europeans in 30?

    Also to annex one of your points, I remember Treisman saying something regarding FIFA wouldn’t allow any financial auditing.

    I wish some of the bigger footballing nations would collectively stand up against Blatter & Co. – seriously, if they threaten to boycott the competition, then the credibility will diminish. Yes, I know I am being unrealistic, but…

    Reply

  2. That’s true. Uruguay didn’t travel to Italy in 1934 because so many European nations refused to come to South America. Brazil and Argentina were the only two South American nations to participate. In 1938, Uruguay and Argentina boycotted, while Brazil still went to France.

    Reply

  3. Posted by Jim on 2011/10/18 at 7:37 AM

    LIke any organization or country, FIFA tries to protect itself and their cash flow. FIFA isn’t AYSO. It has much influence, power, money, and oversee the most popular sport. So of course people always point fingers.

    Does FIFA need to be more open: yes! But be careful what we ask for. Killing FIFA is not right choice. Having politicians step in is awful idea (they too are corrupt). The devil you know may be less evil than devil you don’t.

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    • I’m not sure what you mean by having politicians “step in.” For one, I would argue that politicians have already stepped in. What is FIFA but a large bureaucracy? Two, I’m not saying that government politicians should step into the inner workings of FIFA and correct the problems that are there. I am saying that any outside organization, which at this time would almost have to be a government or a cabal of the game’s largest clubs, which is interested in seeing change in FIFA, can’t subject themselves willy nilly to all of Blatter’s and FIFA’s demands. Certainly Brazil has a greater interest in the Brazil World Cup than FIFA has. After all, they have to deal with the consequences of the tournament, while FIFA just walks away with the check. Hopefully some of Brazil’s politicians are willing to stand up to the organization to protect the interest of their people, since the Brazilian FA, and really any FA including the United States’, appears unwilling to stand for real change and an end to the graft that is harming FIFA.

      Reply

    • Posted by Jared on 2011/10/18 at 9:14 AM

      Politicians are more corrupt than FIFA? I guess that depends on what country’s politicians you are referring to considering that FIFA is probably the most corrupt organization in the world. Even the whistleblowers are corrupt (see Chuck Blazer and the investigations into his offshore bank accounts).

      Also, what do we know about FIFA? Pretty much nothing considering they won’t release any information about virtually anything. Even guys like Warner and Bin Hamamm that get the boot from FIFA won’t release any of the information that they have.

      Reply

      • Posted by Jim on 2011/10/18 at 12:31 PM

        Jared, I think FIFA is as (not more or less) corrupt as politicians (including USA politicians). Agree we don’t know much about FIFA (too secretive). And that’s why so much allegatoin and bribery. But as I said, be careful what you ask for. I think FIFA can and should change. Making them more open will shed the veil. Only problem is, that can only come from pressure. Intense pressure!

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        • To you’re point Jim. I certainly do not want FIFA to collapse. I believe an autonomous governing body for the sport is best. Unfortunately, it was initially set up (as most orgs were at the time) and is being run as an ol’ boys institution, and that has to change for the good of the sport. FIFA is such a massive entity, I only see three ways pressure can be exerted on the mostly white dudes who’ve been running the sport since its inception: the clubs, the FAs, or government entities.

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  4. Posted by Jared on 2011/10/18 at 9:24 AM

    I feel very badly for Brazil and what they are going through with this process. On last week’s BBC World Football Phone-In, Tim Vickery stated that Texeira is in charge of both the Brazilian FA and the World Cup organizing committee. He has been unchallenged by anyone except for the new president. Texeira refused even to pick the host cities which delayed the process even further in terms of infrastructure development. It will end up that the government is forced to pay for the stadium upgrades without any private money.

    At this point, the only countries that should host the World Cup (in terms of stadiums and transportation infrastructure) are the US, Japan/Korea, England/UK, Germany, France, Italy and any other country that has oil/mineral cash to burn (which obviously have their own issues as Qatar will find out). Otherwise it is a huge detriment to the government and the population who will spend tons of money and see nothing in return.

    US Soccer should be ashamed of themselves for not standing up with England during the last vote and refusing to back Blatter. They were hoodwinked in terms of the bidding and then still turned around to vote for the guy who hoodwinked them. Nothing has happened to England and nothing would have happened to the US either.

    Reply

    • Posted by GeorgeCross on 2011/10/18 at 10:57 AM

      Re. Your last paragraph, I glad you mentioned this. Coming from an Englishman would have been a little “arrogant”. Last November, I always felt that the other FAs kept schtum for their own good rather than the greater good. Even after 2nd December, Gulati was scared of getting a hernia when climbing down from that fence. And where was the normally fair minded and socialist Platini? Oh, he is also keeping quiet because he wants the FIFA presidency…

      Reply

      • I’m in total agreement. I was very frustrated with Gulati for not standing with England on the Blatter issue. It was weak, but not surprising. Gulati seems to be a man with his heart in the right place, but too weak to make the right decisions until he is absolutely forced to.

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        • Posted by matthewsf on 2011/10/18 at 2:45 PM

          I would say Gulati is an operator–and I think he’s somewhat bound as well by Dan Flynn, Robert Kraft, AEG etc.

          That said, I think it was “unAmerican” to not stand up against Blatter. Hell the English did. Here’s the thing — if you’re going to develop and promote and “honest bid” than you *should* speak up when it was clear the bids were evaluated honestly — not to rehash.

          BTW, I don’t think it’s any mere coincidence that since Sepp Blatter has presided over the bidding process that the World Cup has gone to:
          a) countries without strong press
          b) countries that hardly frown upon bribery/politics

          1994 – USA
          1998 – France
          2002 – Kor/Jap

          2006 Germany — But get this, something went wrong in the voting process and *this* World Cup was supposed to go to…dun.dun.dun…SOUTH AFRICA!
          2010 South Africa
          2014 Brazil
          2018 Russia
          2022 Qatar

          Worse than Enron.

          Reply

      • Posted by Jared on 2011/10/18 at 11:15 AM

        Absolutely, the leaders of the individual FAs only care about what happens during their run in charge. They have absolutely no concern for the greater good.

        Platini is just as bad as the rest of them if not worse because of all that he’s trying to do on the club level. It just goes to show you that even if he’s not corrupt, the organization is so corrupt that he can’t take on the leader without ruining any chance he has of the FIFA presidency. The truly hilarious part of all this is that I’d be willing to bet that he has no chance of winning and it will go to one of Sepp’s assistant henchmen. If Warner had played his cards better and stuck with Sepp this time around he probably would have been high on the list next time considering the amount of votes he can garner from Concacaf and the ease with which he’d be able to pay off other smaller countries.

        Reply

      • Posted by GeorgeCross on 2011/10/18 at 3:58 PM

        And the other thing [England included] was the fact that they all turned a blind eye to the corruption, because they all thought that they were in with a shout of getting the World Cup. Since when is this acceptable?

        It was BBC’s Panorama and The Times that broke the stories -which goes back to Matt’s point about having a strong media.

        I keep hearing about the IOC / Salt Lake City debacle and the root and branch clean out.

        I fear that if there was a ‘clean out’ within FIFA, it would not be done with a clean brush. That would be asking for too much.

        Reply

    • Posted by Jeff on 2011/10/19 at 1:25 AM

      “US Soccer should be ashamed of themselves for not standing up with England during the last vote and refusing to back Blatter. They were hoodwinked in terms of the bidding and then still turned around to vote for the guy who hoodwinked them.”

      England, sure, but how exactly did Blatter hoodwink the US? He is one man, he cannot guarantee which way the vote will go. All evidence points to Blatter supporting the US bid and voting for it. And let’s remember the US reached the final vote, so clearly many of the people who said they would support the bid actually did, unlike with England who really did get screwed.

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      • Posted by GeorgeCross on 2011/10/19 at 6:51 AM

        If FIFA were honest / transparent and made it clear that taking the World Cup to a ‘new territory’ was high on their priorities, then perhaps certain countries would not have put a bid forward, as they would not have met this important criteria. But FIFA ExCo members have an ego and like to be worshipped and treated like royalty, travelling around the world First Class, being put up in the most expensive hotels etc etc etc.

        Reply

  5. Ok, so let’s say Brazil stands up for themselves and says “No, we’re not doing all of this crap.” and FIFA pulls the world cup from them (from the sounds of it Brazil would be better off if this happened). Where does it go then? Is there a new bidding process? Does FIFA just pick? Does the US swing in and save the day like it did in 2003 for the Women’s world cup?

    Reply

    • I don’t think FIFA will pull the World Cup if Brazil stands firm. I think they’ll give in eventually on some issues, and Brazil will have to compromise on others. Contractually, FIFA has the right to pull out until June 2012. The last time this happened was in 1986 when FIFA moved the WC from Colombia to Mexico. The speculation is that since only England and the US are capable of hosting the tournament on such relatively short notice, FIFA would give the tournament to one of them through some kind of abbreviated bidding process.

      Reply

      • Posted by Jared on 2011/10/18 at 10:25 AM

        Well, then it will end up in the US considering that England didn’t vote for Blatter.

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        • Posted by GeorgeCross on 2011/10/18 at 3:59 PM

          As long as Blatter and Texiera have anything to do with FIFA, England will never host the World Cup.

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  6. great artcle Josh. a couple of comments on the transport. You say: “Urban transportation projects which were to be part of the World Cup preparations, and would most benefit the average Brazilian citizen, have been cut or curtailed due to rising costs only adding heat to the simmering anger of the populace” I have not heard of any major transportation projects being cut and there is also a major question about what benefit those projects were going to bring as they were all developed to link the new five star hotels with stadia and/or were crammed through the respective government hoops without following due democratic process. The situation in Manaus is jmore than depressing and the disappropriations and forced evictions across the country are already into the tens of thousands. People are getting pissed, yes, but it’s also a very passive political moment in Brazil.

    even the most critical people in Brazil are still “for” the Cup (with the exception of Juca Kfuri and Jose Cruz, bless them). There is a fine line between tighter fiscalization which will cause even more delays to the projects that the CBF, the Lula government, and FIFA built into this ridiculous process and letting the thing run on as is. Either way it’s going to be expensive, actually, I’m projecting that it will be more expensive than all of the World Cups ever, combined. It’s a rat’s nest of conflicting interests, corrput politicians and a mind-boggling bureaucracy that complicates and slows everything down.

    Anyway, I’ll get back at TSG with some more updates as soon as I can. In the meantime, I’ve been keeping tabs on this at http://www.geostadia.com

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    • Thanks for the clarification and comments Christopher. I read your earlier article on the 2014 situation and it was fantastic. I did see a couple of reports naming the cutting of urban transportation projects as one of the causes for 2014’s unpopularity, but I am certainly happy to yield to your greater expertise on what is taking place in Brazil. Thanks again.

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  7. Posted by Soccernst on 2011/10/18 at 10:07 AM

    BBC dorks ftw!

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  8. 2004 world cup?

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  9. Posted by Jeff on 2011/10/19 at 1:19 AM

    “and there have been rumors, denied publicly, that FIFA has threatened to take away the 2014 World Cup from Brazil.”

    While, like all decent people, I am opposed to FIFA corruption and cronyism, I am not ashamed to admit that my first reaction to reading this line was based purely on self-interest:

    No country is better prepared to host the World Cup on short notice and have it be a financial success than the USA. We have the stadium and transportation infrastructure necessary to host the World Cup with almost no notice, thanks to the NFL. And we have the large wealthy population with strong ties to every country that will be participating necessary to fill the seats.

    Long term, I hope FIFA’s power is curbed so they can’t abuse it.
    Short term, I hope Gulati, Blatter, Garber, and company are letting Blatter know that if FIFA needs an alternative venue for 2014, the US would be more than happy to host.

    Reply

    • Yeah. To be honest, my feelings are mixed on this as well. At the same time, it kind of proves my point about the power the WC gives to FIFA.

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  10. Posted by s44 on 2011/10/19 at 9:13 AM

    The main problem with FIFA (and the IOC) isn’t how corrupt its officers are or aren’t by nature, but the utter lack of incentives for them to be anything else. All they have to do is put together a marginally competent event every few years so they can bask in the reflected glory of that success. Every last bit of value between the cost of that and the massive revenue of the WC can and likely will be eaten by the FIFA apparat. (And in fact, the Qatar vote seems to indicate that their greed may be biting into even that minimum requirement of arranging an acceptable WC.)

    Because of FIFA’s power over its members, the situation seems more analogous to politics than business — in business, your shareholders can toss you, and you can’t much threaten stuff to prevent them. (If the *fans* could vote Blatter out, that would be something…) In politics, we have opposition party systems to ensure that *somebody* has incentives to dig and scream when the rulers enrich themselves, but there’s no natural split to base that sort of thing on here… Well, there are the clubs etc., but that’s not the sort of split one could institutionalize inside FIFA itself.

    I’m not even sure who could get together and tell FIFA to shape up or else. The sponsors? They’ve got power, but the pool of potential sponsors is huge. The broadcasters? Again, inside the big countries there’s competition that FIFA could go to — but it *would* be funny if all the TV stations got together and demanded better product.

    Reply

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