Corruption in Sport on December

Corruption in Sport

On December 2nd, 2010, it was announced that the 2018 World Cup would go to Russia and the 2022 World Cup would be hosted by Qatar. The sport's governing body, the Federation Internationale de Football Association (FIFA) had made the selections on the basis of votes from its 22-member executive committee (AP, 2010). There had been accusations of corruption leading up to the vote -- most notably in the United Kingdom, which was bidding for 2018 -- and the announcement did nothing to calm the corruption accusations.

Immediately, the corruption accusations grew louder. The selection of Qatar in particular came under immediate fire. The nation had never qualified for a World Cup, all of the stadiums would be within one hour of each as Qatar only has one city, there are reservations about its human rights record including the oppression of women in the Arab state. The heat in Qatar in summer -- upwards of 46C (115F) -- is a health risk to players, prompting such outlandish solutions as splitting games into three thirds (No author, 2011) and the use of outdoor air-conditioning systems and shade panels to keep temperatures at playable levels (AP, 2010).

As the heat increased on FIFA, it conducted an internal investigation. The outcome of that was a finding of corruption for Mohamed bin Hammam, a Qatari FIFA executive and possible challenger to FIFA President Sepp Blatter's leadership. It was found that bin Hammam was found to have tried to buy the votes of Caribbean officials for $40,000 each, and having broken several articles of the FIFA ethics code. The investigation had also targeted other members, including Trinidad's Jack Warner who resigned, effectively ending the investigation against him (Homewood, 2011).

This essay will investigate the FIFA corruption scandal. The timeline of the scandal will first be presented. This will be followed by an outline of the nature of corruption, including how corruption can become ingrained in organizational culture. The specific issues in the FIFA situation will be analyzed in the context of the general framework for understanding corruption. The report will conclude with recommendations to eliminate corruption in FIFA and learning opportunities for sports organizations seeking to elimination corruption in their ranks.

Corruption Timeline

In the run-up to the World Cup vote, a British newspaper made claims that two members of the FIFA executive committee, from Tahiti and Nigeria, offered to sell their votes to undercover newspaper reporters. The two were suspended by FIFA's ethics committee and eventually banned. A further report by the BBC made more accusations of vote-selling/trading. The next month, the UK was eliminated in the first round of voting for the 2018 World Cup. The nation investigated the issue, and uncovered evidence that Qatar paid for two votes from African delegates. Four others were found to have asked for favors in exchange for votes. A presidential leadership vote was scheduled, with Blatter facing Bin Hammam -- the latter stepped down hours before the vote and was eventually banned for life (Homewood & Davis, 2011).

The investigation at FIFA has continued, with an announcement expected in December 2011 on the findings. The organization has set up a number of anti-corruption panels in response to the accusations (PA, 2011). Concerns remain, however, with British politicians calling for European nations to spearhead a full-scale change in FIFA's culture and the Australian government asking FIFA to refund its bid application as it "could not succeed because of corruption within" the organization (Cooper, 2011).

No matter the findings in December, the cloud of corruption will hang over the organization. FIFA still lacks basic accountability, and its leader Sepp Blatter is unwilling to accept any culpability for the corruption issue, or to re-hold the voting for the 2018 and 2022 World Cups. That he presided over this era of endemic corruption is bad enough, but it is reasonable to view with suspicion the manner in which his main rival for leadership of the organization was found guilty of corruption immediately before the leadership vote. The timing of the findings was certainly fortuitous for Mr. Blatter.

The FIFA scandal echoes similar scandals. The 2002 Winter Olympics in Salt Lake City was marred by scandal. Its organizations were accused of spending thousands of dollars on gifts, cash payments, health care benefits and real estate to win the votes of International Olympic Committee members (CNN, 1999). At those games, five figure skating judges were found to have colluded to award the gold medal to a Russian couple, and there is evidence that reforms have failed to curtail these unethical activities (Fisman, 2010). In international sports, vote-buying is a common form of corruption.

The Nature of Corruption

The corruption watchdog group Transparency International defines corruption as "the abuse of entrusted power for private gain." From this simple definition a whole host of activities emerge, including bribery, kickbacks and embezzlement (Transparency International, 2011). In Western nations, which tend to have low levels of corruption and where it is understood that corruption is a drag on economic progress, any indication of corruption in international sport is viewed with revulsion. Yet in other nations, corruption is an ingrained part of life. International bodies like the FIFA and in particular the IOC are based on neoliberal philosophy, arguing that by bringing nations together a common set of cultural values -- positive ones -- can develop. Many aspects to today's international world system derive from this philosophy, including the United Nations, the World Trade Organization and the EU. Liberalism is also congruent with social contract theory, which argues that individuals engage in implicit social contracts that moderate behavior (Gaus & Courtland, 2010). Thus, to participate in an international system one engages not only is explicit contracts such as the FIFA code of ethics but implicit ones as well.

The implicit social contracts that govern one's willingness to engage in corrupt behavior, however, will vary according to one's culture. Connelly and Ones (2008) conducted a study that found a relationship between specific cultural traits using Geert Hofstede's framework and perceived corruption. Influencers included levels of neuroticism, extroversion, wealth, economic conditions and demographic variables. In another study, Seleim and Bontis (2009) found correlation between corruption in a culture and its level of uncertainty avoidance, collectivism/individualism and human orientation practices, also traits described by Hofstede. While these studies do not agree on the markers of corruption, they both identify a link between culture and corruption. Both FIFA and the IOC have similar voting structures, as votes for both are distributed around the world to different nations without bias. If these nations have a culture that is more likely to have corruption based on cultural markers, then this increases the corruption risk for the organization as a whole.

Compounding the problem in both organizations, but with particular attention to the FIFA case, is a lack of transparency and oversight. The external investigations into FIFA's activities were conducted without help from the agency, and generally without access to FIFA internal documents. There is no external watchdog, and the organization has no transparency to the outside world, if it even has any internally. While FIFA has an ethics committee, it was only forced into the first investigation with respect to vote-buying after a British newspaper story uncovered the corruption. The voting process, it can be inferred, is assumed by internal stakeholders to be clean until such time as evidence arises that it is not.

Such an assumption in the case of FIFA would entirely unwarranted. Testimony from former executive committee member Graham Taylor of the UK made the following observations about the executive committee in the 1990s. He noted that corruption was endemic, with committee members claiming tax breaks on benefits they themselves did not pay for, and that he was recommended by another executive committee member to "open up a Swiss bank account…over the years the money will accumulate" (Sharp, 2011).

The above example shows that corruption is something that can become endemic in an organizational culture. If the activities that define corruption become accepted, then there is little incentive on the part of members of the organization to avoid corrupt practices. Again, if there is poor oversight and no transparency within the organization, then corrupt practices can flourish. The pattern of corruption is clear -- the main players implicated are from nations with high levels of corruption -- Africa, the Pacific, the Caribbean and the Middle East. Among the characteristics of these nations are high power distance, high wealth disparity, and a lack of collectivism in their cultures. It may be a broad generalization but these nations also generally lack the same high level of transparency and accountability in their political and economic systems as Western nations. When their delegates enter an international organization, they bring with them those same bad habits. When they find the same lack of transparency and accountability as in their home nations, corrupt practices will follow.

The lack of accountability in international sport, particularly FIFA is at high levels. The organization has significant wealth, with an estimated $1.2 billion in annual television rights and advertising. This wealth, coupled with a lack of accountability to any public body, creates opportunity for corruption to flourish. The instances of corruption surrounding the World Cup bids were not related to the television rights, but once the culture of corruption has become ingrained in the organization, it can seep beyond the boundaries of internal corruption. The World Cup corruption was ultimately both at work -- internal vote-buying from bin Hammam and a susceptibility on the part of other members of the executive committee to seek money for votes from external bodies such as British officials seeking the 2018 World Cup (Sharp, 2011).

Another critical issue that contributes to corruption in international sport is the lack of understanding of how corrupt practice become ingrained in an organization, and either an unwillingness or inability to address the issue. FIFA has an inept ethics committee that must be prodded into action by investigative journalism; its leadership is unfazed by corruption allegations and the organization still lacks transparency. Part of this could be attributed to neoliberal ideals that cause the organization to want its members to be of high ethical standards, and therefore makes the organization reticent to carry out due diligence. The reality, however, is that different cultures are prone to corruption to different levels, and as a result any international organization needs to build safeguards into its system. If the organization is unwilling to have external safeguards -- democracies have the voting process and open media as theirs; corporations have shareholders and external regulators -- then it must have stringent internal controls against corruption.

Outcomes of Corruption in International Sport

The reason controls should be strict is that the outcomes of corruption in sport are far from trivial. The first outcome is that sponsors will be less likely to be involved at the sport. This not only hurts an organization like FIFA, which can withstand the loss of capital, but also smaller, affiliated organizations. In the wake of the recent scandal, Coca-Cola and Adidas both expressed concern about the scandal and cast their long-term relations with the sport in doubt (The Independent, 2011). The withdrawal of funding from FIFA and other soccer organizations hurt poor nations in particular, as they often rely on funding from international bodies for their sporting programs. This is an especially high risk when the scandal is directly tied to such programs. British officials were asked for a bribe for the 2018 bid, with some of that money going to fund a program in Trinidad & Tobago (Sharp, 2011). With a direct tie between work that theoretically benefits athletes in the developing world and corruption, the ability of those athletes to receive funding in the future is put in jeopardy.

Another outcome of corruption in international sport is the waste of money and the mistrust of the process. The nations that applied to host the World Cups did so in good faith, and ultimately their future participation in the program hinges on their ability to interact with FIFA in good faith down the road. The organization relies on ticket sales and television revenues from Western nations primarily, and those are the same nations who lose money bidding on events they have no chance of hosting, and whose publics are offended by the corruption that they see in the organization. FIFA, for example, might be able to bank on Europeans continued support despite the corruption because of the sport's popularity there, but it is unlikely to enjoy continued support in nations that are less fascinated by soccer but are financially important such as the U.S., Australia and Japan. The IOC faced a similar dilemma with respect to the figure skating scandal -- the Winter Olympics relies on television ratings from two major sports -- figure skating and hockey -- to drive rights revenues, and in particular from the U.S. And Canada. The figure skating scandal was a direct threat to the financial viability of the Winter Olympics because it would have reduced the revenue potential of broadcast rights in the key North American market.

A third outcome of corruption in international sport is that it reflects poorly on the nations involved. Corruption is a global problem, with strong negative impacts on economic progress. Negative outcomes associated with high levels of corruption include decreased trade flow, decreased foreign direct investment, lower per capita income (Davis & Ruhe, 2003), lower labor productivity, lower worker compensation levels and lower productivity growth (Soon, 2006). Corruption in sport receives a disproportionate amount of press coverage. The FIFA scandal in particular receives coverage in the UK, the U.S. And Australia, all countries with losing bids. Corruption in sport receives more coverage than incidents of corruption that are country-specific or industry specific, because such stories have a broad public interest and are international in nature. Whereas a nation accused of corruption in, say, a mining contract, will only see its reputation damaged in that industry, a nation involved in corruption in FIFA or the IOC will see its reputation damaged around the world, by a wide swath of potential investors. The corruption reinforces the perceptions that people have of many nations, and can dissuade investment in those nations. For example, Qatar will face scrutiny for its corruption right through the 2022 World Cup event, and if that event is not perfect the nation will spend decades shaking off the impact of such high profile corruption. The problem with corruption in sport is that it has a much broader impact than simply on the organization involved -- the perception of corruption trickles through an entire nation's economy.

Recommendations

There are a number of recommendations that can be made with respect to eliminating corruption from sport in the future. The first is to admit that corruption not only is possible but occurs regularly. The evidence that has emerged in the wake of the FIFA investigations is that corruption is endemic. The IOC has faced corruption scandals more than once, and Fisman (2010) argues that corruption in figure skating still exists despite the best efforts to remove it. Neoliberal ideals argue that multinational organizations will eventually move towards a common set of ethics, and this is true. But it is necessary to recognize as a matter of principle that this common set of ethics will not necessarily be those of the nations with the highest ethical standards. Even the United Nations is not free from bloc voting, and the trading of financial aid for support in its various bodies. It must be recognized from the outset that if the ethical standards are to be those of the nations whose standards are highest, that steps will need to be taken to ensure this happens. Those nations cannot simply, by the fact of their existence or their presence in the room, impose their ethical standards on delegates from nations with vastly different cultures and responses to corruption.

The second recommendation is that organizations adopt higher levels of internal control. FIFA, for example, has an ethics committee, but that committee's executive is comprised of members from countries with terrible ethical records. Whether coincidence or not, the committee has overlooked all questionable ethical practices until tremendous public pressure was brought to bear, primarily by British media outlets. FIFA also has a set of ethics guidelines, and the ethics committee has strong enforcement powers. The guidelines should be clear, and members joining the organization should be given full ethics training so that they are fully aware of the ethical standards to which they will be held to account. In addition, the ethics committee should be comprised of members with impeccable ethics records, even if this means precluding some countries from involvement. Lastly, the organization should have an oversight group with respect to specific processes such as voting. Had there been a more coherent set of criteria on which to base votes for World Cup sites, the members may not have been able to sell their votes so easily. Qatar, for example, could not have won the Cup on account of the searing temperatures to which the players will be exposed.

The third recommendation is that international sporting organizations have greater transparency to external stakeholders. As present, neither the IOC nor FIFA have a high level of accountability to even their constituent bodies, such as national Olympic committees or football association, let alone to media, fans, governments and other external stakeholders. With greater transparency comes greater accountability, especially when coupled with strong enforcement mechanisms and the willingness to use them. It is important that those who would commit corrupt acts realize that their individual actions will be subject to scrutiny -- this may dissuade all but the most corrupt from committing these acts in the first place.

The fourth recommendation is that leadership of international sporting bodies take responsibility for the ethical climate in their organization. At present, there is no accountability among the leadership of FIFA, and very little at the IOC. With leadership relatively unconcerned about corruption, and not subject to any external oversight, the public will remain skeptical about anti-corruption measures in these organizations. Even if the current leadership is not corrupt, the fact that such massive corruption occurred should compel a resignation in order to ensure that external stakeholders will continue to have faith in the organization's anti-corruption processes.

A fifth recommendation is that international sporting bodies need to address corruption at the cultural level. Changing an organization's culture is difficult at the best of times, but international sporting bodies like FIFA need to begin the process. The acculturation process needs to focus on corruption as a serious issue, and there needs to be constant reinforcement of this message, and not just through the investigation mechanisms like the ethics committee. Delegates and members from nations with a high level of corruption in particular should face a strong acculturation process. Although this is not in keeping with neoliberal ideals, and could be construed as targeting certain members unfairly, it is in keeping with the reality that some cultures are more prone to corruption than others.

A sixth recommendation is that the leaders of all nations be made aware of the ramifications to their nations of corruption. Many national leaders seem to be unaware of the negative consequences of corruption, and in particular of the negative consequences of high profile corruption involving officials from their nation. Corruption is, at its root, "the abuse of trusted power for private gain." The official committing these acts are the beneficiaries of the corruption, but it comes at a cost to their nations, which gain international notoriety, and suffer from the reinforcement of stereotypes about developing nations as havens of corruption. If the political leaders of these countries are aware of the negative economic and reputational impacts to their nations as a result of corruption in international sport, they may be more cautious about which officials they send to represent their countries at organizations such as the IOC and FIFA.

These six recommendations, when taken together, can begin to eliminate corruption in international sport. They cover cultural issues and practical issues involving oversight, leadership and transparency. The one major weakness, however, is that these recommendations do not address the money issue. The opportunity for corruption arises because there are considerable financial and prestige benefits associated with hosting high-profile athletic events. The exposure on an international platform, in addition to the capital inflows that host nations and cities enjoy, provide incentive for bidders to offer bribes and otherwise corrupt the voting officials. If there were no gains to be made, there would be no reason to approach officials with offers of bribery or vote-swapping. Ultimately, there is very little that can be done to eliminate this cause of corruption. The only actions that can reasonably be taken are at the organizational level to discourage officials from falling prey to the corruptors.

It is worth considering, however, that in the case of FIFA especially there is an opportunity to eliminate the benefits of corruption at present. The Qatar World Cup was acquired with purchased votes. However, FIFA has not taken action to remove the event from Qatar, or to hold the vote again. While undoubtedly doing so would be a major inconvenience to both Qatar, the other potential hosts and to FIFA, it would also send a message to potential host nations that there is nothing to be gained from corrupting FIFA officials. As it stands, FIFA has not sent this message. Other nations may feel that it is worth the risk to corrupt officials because, if they are awarded the World Cup, they will not have it removed. It is important to remember that most forms of corruption (aside from embezzlement) require two or more parties to occur. If there are no gains for either party, there will be much less likelihood of corruption. In this case, one side still stands to earn substantial gains from corruption. This means that no matter what measures are put in place in the future, and no matter how much the culture at FIFA changes, its voting officials will still be subject to the same attempts at corruption, perhaps even more now that nations are aware of the importance of bribery and vote-swapping in the World Cup bidding process.