FIFA Corruption Scandal
Public Relations Cases Background
-FIFA is an international soccer league in Zurich, Switzerland and has 6 districts.
-This league was founded in 1904 and has 209 members in its organization.
-Negative implications for this organization began in 2002.
● Michel Zen-Ruffinen, former General Secretary, submitted a dossier (collection of relevant
documents) to Swiss authority on behalf of committee members (NY Times, 2015).
-Jack Warner, The President of Trinidad and Tobago soccer federation, was charged for fraud in 2006 (NY Times, 2015). Main Issue Main Issue
-14 FIFA Officials were indicted with racketeering, wire fraud and money laundering conspiracies, along with several other wrongdoings, May 2015 (justice.gov, 2015).
-The Department of Justice explains that the defendants “agreed to pay more than $150 million in bribes and kickbacks and was done to obtain profitable media and marketing rights to international soccer tournaments” (justice,gov, 2015).
-FIFA’s President, Sepp Blatter declared his resignation on June 2nd, 2015. continued...
Blatter informed the public about the organization's efforts in finding new leadership. According to an article entitled, the Rise and Fall of Sepp Blatter from
NY Times, Blatter later had accusations of “suspicion of criminal mismanagement and misappropriation against him” (NY Times.com). Key Players Key Players
● FIFA President: Sepp Blatter ● Original Indicted FIFA Officials May 27th, 2015 ● United States Department of Justice/ Government -Jeffrey Webb: Current FIFA vice president and executive committee member
-Eduardo Li: Current FIFA executive committee member-elect
-Julio Rocha: Current FIFA development officer.
-Costas Takkas: Current attaché to the CONCACAF president.
-Jack Warner: Former FIFA vice president and executive committee member continued...
Eugenio Figueredo: Current FIFA vice president and executive committee member.
Rafael Esquivel: Current CONMEBOL executive committee member and Venezuelan soccer federation (FVF) president.
José Maria Marin: Current member of the FIFA organizing committee for the
Olympic football tournaments.
Nicolás Leoz: Former FIFA executive committee member and CONMEBOL president. continued...
Four of the defendants were sports marketing executives:
Alejandro Burzaco: Controlling principal of Torneos y Competencias S.A., a sports marketing business based in Argentina, and its affiliates.
Aaron Davidson: President of Traffic Sports USA Inc.
Hugo and Mariano Jinkis: Controlling principals of Full Play Group S.A., a sports marketing business based in Argentina, and its affiliates. Convicted Individuals and Corporations
José Margulies: Principal of Valente Corp. and Somerton Ltd.
Daryll Warner, son of defendant Jack Warner and a former FIFA development officer
Charles Blazer, the former CONCACAF general secretary and a former FIFA executive committee member
José Hawilla, the owner and founder of the Traffic Group, the Brazilian sports marketing conglomerate
Daryan Warner FIFA Code of Ethics Analysis and Timeline
● One of the key defendants charged in the indictment, Chuck Blazer, had a significant impact on the initial investigation that unveiled this extensive scam.
● In the late 80’s, Blazer tried putting together a 10-team soccer league, until “executives discovered that Blazer spent their startup capital on luxury hotels and other lavish expenses” (Assael & Forrest, 2016). - This already violates key code values such as honesty and loyalty.
● In 1990, Blazer went to south to Guatemala to join CONCACAF, scheming to nominate Jack Warner for organization’s presidency to ensure his own success. Analysis and Timeline Continued...
● Warner later rewarded him with a seat in the 24-member executive committee, FIFA’s most highly regarded decision makers.
- “Using his accounting degree, Blazer sent millions of dollars in CONCACAF revenue through a maze of shell companies to offshore accounts in the Cayman Islands and the Bahamas, where he owned a condo at the Atlantis resort. He also looked the other way as Warner stole millions in FIFA grants that were meant for a sports center he was building in Port of Spain” (Assael & Forrest, 2016). - Blazer not being truthful to who he represents and, as a “higher-up” in the executive committee, he undermined the responsibility of his professional duties. - Blazer also failed to disclose information and the financial interest to the public. - Blazer also misused his expertise, which in this case is his accounting degree, in order to illegally wire money for his own financial gain Analysis and Timeline Continued...
● Early 2010: After hearing a string of rumors about Eastern Europe’s political corruption, Jared Randall and Michael Gaeta pieced together a potential conclusion that Russia was bribing its way to host the 2018 World Cup (“ESPN,” 2016).
● December 2010, the FBI agents became even more suspicious after Sepp Blatter announced that Qatar won over the votes to host the 2022 World Cup. -- John Buretta pursues investigation into FIFA (“ESPN,” 2016).
- “Randall and Gaeta began looking into the six regional confederations that administer FIFA's 209 members. The more they looked, the more they found a system of bribery and embezzlement in which billions of dollars in broadcasting, marketing and other fees made a global journey into the pockets of a privileged FIFA few” (Assael & Forrest, 2016). Analysis and Timeline Continued...
- This highlights FIFA’s improper conduct that resulted in dishonest representation and a conflict of interest between the organization and the public’s regard. ● (According to ESPN’s timeline breakdown) - In Spring of 2011: Mohamed bin Hammam, FIFA's vice president, announced his candidacy for presidency. Three weeks before election, Warner invites him a luncheon in Trinidad. ● After the luncheon, Warner brought delegates to another area where they each found an envelope containing $40,000 in cash, which was claimed to be from bin Hammam when he traveled over (2016). Analysis and Timeline Continued...
- Bribing as a political elite is (obviously) a blatant form of public distrust.
- Breaches foundations of loyalty, fairness, conflicts of interest, and disclosure of information.
- Hand in hand with unfair competition for other candidates running for presidency, as well as for the people who vote.
● This apparent bribery made Blazer LIVID and puts big dent in his partnership! Analysis and Timeline Continued...
● Blazer then called John Collins, a lawyer for CONCACAF, to inform him of the luncheon corruption that had occurred in Trinidad.
● This report was released eight days later which led bin Hammam to drop out of the race.
● According to sources from FOX, “He was banned for life in July 2011, but that was lifted a years later by the Court of Arbitration for Sport. He denied any wrongdoing, claiming the FIFA investigations were politically motivated to protect Blatter” (2012). Analysis and Timeline Continued...
- Along with violating provisions like fair competition and conflicts of interest,
- Hammam also evaded responsibility in response to the ban by denying involvement and even shifted the blame on FIFA, accusing them of being favorable towards Blatter.
● In same period, Warner was forced to resign after a video leaked that showed him endorsing bribery. The BBC investigation that followed discovered three wire transfers made in 2008 from FIFA to Warner that added up to $10 million. Analysis and Timeline Continued...
● This was allegedly South Africa's way of bribing their way to host the 2010 World Cup.
● Ed Thomas from the same BBC source reported that, “The 72-year-old [Warner], who has been indicted by the US FBI for corruption, denies all claims of wrongdoing” (2015).
- Warner used tactics of simple denial and blame shifting, where he accused Blazer of embezzling licensing and marketing money in response to the accusations.
- As a result, it gradually steered the investigation toward Chuck Blazer. Analysis and Timeline Continued...
● Throughout Summer of 2011 - Steve Berryman, a veteran IRS agent, wanted to join in on the investigation after seeing Blazer wasn’t paying his personal income tax returns (Apuzzo, 2015).
● Berryman discovered that Blazer had embezzled millions of dollars from FIFA over the last 20 years, along with illegal wire transfers sent from two separate shell companies dating back to 1999 (as previously mentioned) - One was a $200,000 wire, and the other was a $600,000 wire.
● ESPN’s timeline breakdown states that in November 2010, Jared Randall and Berryman devised a plan to confront Blazer without the risk of him avoiding interrogation (2016). Analysis and Timeline Continued...
● When Blazer returned to his office, the agents were there waiting - Presented the evidence that confirmed Blazer’s wire fraud conspiracy and income tax evasion (2016).
● Given the allegations against him, Blazer immediately agreed to cooperate as an informant.
- This would provide Blazer a potential step out of this fire.
- Ironic he breached the loyalty and conflict of interest values in the start of his corrupt schemes, and then violated those same values. Analysis and Timeline Continued...
- According to court documents obtained by ESPN, Blazer met with the government 19 times between Dec. 11, 2011, and Nov. 13, 2013.
● Near the end of 2013, the FBI were finally able to attain enough incriminating evidence from Blazer’s recordings to expand their list of targets.
● According to BBC, Blazer had later admitted that: “Between 2004 and 2011: - He and others on the Fifa ex-co agreed to accept bribes in connection with the selection of South Africa as the host of the 2010 World Cup, - and accepted bribes in connection with broadcast and other rights to the Concacaf Gold Cup tournament in 1996, 1998, 2000, 2002 and 2003” (2016). Analysis and Timeline Continued...
Grouped from ESPN’s timeline breakdown:
● On May 27, 2015 - 14 defendants were announced in the indictment (2016). ● The same week, Swiss police and U.S. federal agents arrived at FIFA headquarters with a search warrant (2016). ● On December 3 that year, 16 new indictments were revealed, though none against Blatter (2016). ● On Dec. 21, FIFA's ethics committee bans Blatter from soccer for eight years (2016). ● This is still an ongoing investigation and prosecutors say they still may need Blatter to testify in court, despite his bedridden illness (2016). Key Messages: Prosecution
Federal Bureau of Investigation: U.S. Attorney General Loretta Lynch - spoke on behalf of the investigative units as well as the prosecution who would oversee the hearings of the FIFA executives being charged. During a video posted online by C-SPAN, Attorney General Loretta Lynch stated: “These individuals were expected to uphold the rules, keep soccer honest, and to protect the integrity of the game. Instead they corrupted the business of worldwide soccer to serve their interest and enrich themselves.”
“The 47 count indictment against these individuals includes charges of racketeering, wire fraud and money laundering conspiracy, spanning two decades.”
“In short these individuals through these organizations engaged in bribery to decide who would televise games, where the games would be held and who would run the organization overseeing organized soccer worldwide.” Key Messages Continued...
FIFA: Chose not to launch an internal investigation. "We are pleased to see that the investigation is being energetically pursued for the good of football, and believe that it will help to reinforce measures that FIFA has already taken." (“FIFA corruption crisis: Key questions answered” on BBC.)
FIFA Independent Ethics Committee: Banned Sepp Blatter - “In consequence, Mr Blatter has been banned for eight years from all football related activities and fined CHF 50,000.” (FIFA.com)
FIFA independent Ethics Committee: UEFA President Michael Platini - “In consequence, Mr Platini has been banned for eight years from all football related activities and fined CHF 80,000.” (FIFA.com) -corrective action Key Messages Continued...
Blatter’s Response: “This committee has no right to go against the president of Fifa. The president can only be removed by the congress. Even suspended, I am still the president. I regret, but I am not ashamed. I’m really sorry. I’m sorry that I am still somewhere a punching ball. As president of Fifa, I’m still this punching ball. I’m sorry for Fifa. I’m sorry for football. I’m also sorry about me. How I am treated in this world. Human beings needs to be respected. It has created a lot of collateral damage in the families. My family was mocked. I regret I am this punching bag. Fifa is still working well, I congratulate Barcelona to winning the Club World Cup. I am a man of principles. These principles are: never take money that is not earned. Secondly, pay your debts. I’ll be back” -mortification (TheGuardian.com). Blatter also announced he would take his case to the court of arbitration for sport. Key Messages Continued...
Platini’s response: “A true mockery. It was orchestrated to tarnish my reputation. I’m convinced that my fate was decided before the December 18 hearing and that this decision is just a pathetic manoeuvre to hide a true will of taking me out of the football world.” (TheGuardian.com) -simple denial https://www.youtube.com/watch?v=KXGtktZr__0 (1:10) Lynch http://www.theguardian.com/football/2015/dec/21/sepp-blatter-fifa-president-r egret-not-ashamed-eight-year-ban - Blatter Media Coverage
● This case was unique because had many different dynamics. It was an international issue
that took precedence in both governmental news as well as sports and economic news. The
case was an interesting topic to a large spectrum of audiences. Because of this, the media
coverage for the topic was just as broad.
● The case was broadcasted on news channels, sports channels as well as late night
television. Print media included articles magazines and newspapers with genras verrying
from sports to business.
● Social media also played a role in the coverage of this case. Broadcast Media
● CNN Broadcasted live coverage of U.S. Attorney General Loretta Lynch as she spoke about the specific details regarding the indictment. ● President Obama also spoke about the scandal at the 2015 G7 Summit, an annual event in which 7 countries meet to discuss topics of global economics and international security. ● Obama Talks FIFA Scandal at G7 Summit Broadcast Media
Sports Illustrated Interviews: While the magazine released printed articles discussing the scandal, online forums included interviews with affected players such as Zlatan Ibrahimovic of Sweden.
Late Night Television: Not all coverage of the scandal was strictly business. Well known late night television hosts Jimmy Fallon, John Oliver and Larry Wilmore put their own satirical twist on the issue.
Late Night Laughs: FIFA Edition Print Media
● Headlines of major publications both in print and online articles. These publications include the
New York Times and ESPN. Forbes magazine also posted several online articles related to the
scandal including the scandals impact on the popular FIFA Soccer video game.
● Due to the scandals affect on dozens of other countries, international publications also published
print media highlighting the scandal. Each countries discussion of the scandal varied.
*include media headlines in US magazines/newspapers. Print Media:
Internationally: While the United States emphasized their dedication to hold FIFA to the standards of a clean and fair organization, countries such as Russia and China bashed the FBI for their involvement in the investigations. Twitter
● Twitter played a key role in the social media coverage of the scandal. ● Users were able to connect with others discussing the scandal with hashtags including #fifascandal and #fifacorruption. ● Accounts were even created such as changeFIFA and Fifa and Corruption for fans to follow to provide them a singular outlet updating them on the scandal as it unfolded through the eyes of an account concerned about the corruption. ● NYT Sports Tweet's About Arrests Conclusion
Overall, we’ve learned that even prestigious corporations can have severe implications such as FIFA did. We believe if FIFA would have followed the PRSA
Code of Ethics thoroughly, this situation wouldn’t have gotten as bad as it did.
FIFA’s executives were accused with bribery and money laundering which goes against the codes of honesty, advocacy, fairness, and loyalty. Continued
The organization used a few image repairing strategies, but solely the negative ones. Case in point, President Blatter both apologized and shifted blame when accused of negative allegations. His denial did not aid the situation and in fact, added to this organization’s dismantle. Continued
Currently, FIFA is still under investigation, being that the organization’s new
President, Gianni Infantino’s office was raided after he was exposed of being involved with offshore banking arrangements (Uefa offices raided by police after
Gianni Infantino named in Panama Papers, The Guardian.com). Being that this case is contemporary, it is still an open case in which more information will continue to be revealed overtime. Discussion Questions:
1. How was FIFA’s reputation tarnished by the scandal and in what ways could the organization regain the public’s trust? 2. What factors of this case lead to such significant amounts of media coverage? Works Cited
Apuzzo, M. “A U.S. Tax Investigation Snowballed to Stun the Soccer World.” ESPN. (2015, May 29). Retrieved from http://www.nytimes.com/2015/05/30/sports/soccer/more-indictments-expecte d-in-fifa-case-irs-official-says.html?_r=0
Assael, S., & Forrest, B. (2016, February 16). Retrieved April 11, 2016, from http://espn.go.com/espn/feature/story/_/id/14767250/the-exclusive-story-how- feds-took-fifa
"FIFA and Corruption." Twitter. @Is_FIFA_Corrupt, June 2009. Web. "FIFA Scandal: Global Media Outlets Offer Divergent Views." The Hollywood Reporter. TRH Staff, 10 June 2015. Web. 11 Apr. 2016.
Fontevecchia, Agustino. "http://www.forbes.com/sites/afontevecchia/2015/05/29/fifa-scandal- follow-the-money-to-qatar/#10d194c02e44." Forbes. Forbes Magazine, 29 May 2015. Web. 11 Apr. 2016.
Herndon, Neil. "How Will The FIFA Scandal Impact The World's Most Popular Video Game?” Forbes. Forbes Magazine, 6 June 2015. Web. 11 Apr. 2016. "Late-night Laughs: FIFA Edition." Washington Post. The Washington Post, 4 June 2016. Web. 11 Apr. 2016.
Laub, Zachary, and James McBride. "The Group of Seven (G7)." Council on Foreign Relations. Council on Foreign Relations, 2 June 2015. Web. 11 Apr. 2016.
“Mohamed bin Hammam resigns from all football-related positions, banned for life.” FOX News. (2012, December 17). Retrieved from http://www.foxnews.com/world/2012/12/17/mohamed-bin-hammam-resigns-fr om-all-football-related-positions-banned-for-life.html Munson, Lester. "FIFA Investigation Massive; Will Be Very Difficult to Overcome." ESPN. ESPN Internet Ventures, 27 May 2015. Web. 11 Apr. 2016.
McCalmont, Lucy. “FIFA Officials Arrested And Indicted For Corruption.” The Huffington Post. 27 May 2015. Web. 9 Apr. 2016.
Video, Telegraph. "Barack Obama: 'Fifa Needs to Operate with Integrity'" The Telegraph. Telegraph Media Group, 8 June 2015. Web. 11 Apr. 2016. Webb, Jonathan. "Why Fans Are Falling Out Of Love With Football: Corrupt FIFA Unprepared To Change."Forbes. Forbes Magazine, 24 Feb. 2016. Web. 11 Apr. 2016.
"Justice News." Nine FIFA Officials and Five Corporate Executives Indicted for Racketeering Conspiracy and Corruption. Department of Justice, 27 May 2015. Web. 11 Apr. 2016.
Ruiz, Rebecca R., Matt Apuzzo, and Sam Borden. "FIFA Corruption: Top Officials Arrested in Pre-Dawn Raid at Zurich Hotel." The New York Times. The New York Times, 02 Dec. 2015. Web. 11 Apr. 2016. Ruiz, Rebecca R., and Victor Mather. "The FIFA Scandal: What’s Happened, and What’s to Come." The New York Times. The New York Times, 25 Sept. 2015. Web. 11 Apr. 2016.
"The Rise and Fall of Sepp Blatter." The New York Times. The New York Times, 26 May 2015. Web. 11 Apr. 2016.