The growing U.S. market for soccer, which is so evident in Atlanta that soon will have its own professional team to be called Atlanta United, is partially responsible for the U.S. Justice Department’s involvement in the probe of financial corruption against FIFA officials begun in Switzerland last month.
FBI veteran Joseph W. Koletar, now an independent forensic investigator and consultant who has held senior positions at Ernst & Young and Deloitte in the firms’ forensic and investigative practices, told Global Atlanta that “the inquiry into the international governing body of soccer is probably the largest sports scandal of all time.”
He cited the scandal’s bribery and kickbacks allegations to the tune of $150 million over 20 years, its international reach, its involvement with leaders of sovereign governments and its importance to sponsors as unprecedented.
“From the NCAA, to major league sports teams in the U.S., etc., it is the biggest,” he added. “Reforms are needed, but only public pressure is likely to produce them.”
Jeffrey Webb, a high-ranking FIFA official who has lived in Atlanta, has been extradited to the U.S. with six other FIFA officials to face racketeering and bribery charges.
U.S. Attorney Loretta Lynch has said that the officials of soccer’s global governing body facing the charges have been indicted in the U.S. because they allegedly used the U.S. banking system and planned their crimes in the country.
They also planned to profit through schemes that targeted the “growing U.S. market for soccer,” she told CNN.
On Wednesday morning (July 15), the U.S. Senate subcommittee overseeing consumer protection, is to begin a hearing exploring whether the depth of knowledge United States Soccer Federation officials already knew about the allegations facing FIFA, and, if so, what actions they ought to have taken based ontheir knowledge.
Dr. Koletar, who was a key member of the Deloitte team planning and beefing up security arrangements surrounding the 1996 Atlanta Olympics, said that he considers the Senate a favorable venue for the hearing because its findings will be extensively covered and will have widespread international reach because of the U.S. Mutual Legal Assistance Treaties with a large number of soccer-playing countries.
He is co-author of “A.B.C.’s of Behavioral Forensics,” an in-depth study of the application of psychology to financial fraud prevention and detection published by John Wiley & Sons. Sridhar Ramamoorti, director of the of the Corporate Governance Center at Kennesaw State University and a forensic accounting expert, is its lead author.
David E. Morrison, a clinical assistant professor of psychiatry and behavioral sciences at Chicago Medical School, and Kelly Pope, an associate professor in the School of Accountancy at DePaul University in Chicago, also co-authored the book that examines the motivations prompting fraud and corruption and its consequences.
The book includes analysis of the circumstances surrounding high-profile cases such as Lance Armstrong’s doping allegations, the bankruptcy of the energy, commodities and services company Enron Corp., the HealthSouth accounting fraud, the LIBOR and forex rate rigging scandals, and the conviction of the financial swindler Bernie Madoff, among others.
A major focus of the FIFA investigation is to ascertain to what extent a “culture of corruption and greed” was suffused throughout FIFA’s activities. Richard Weber, chief of IRS criminal investigations, has gone so far as to call the investigation against the FIFA officials the “World Cup of Fraud.”
“Culture influences thinking as well as behavior,” Dr. Morrison said in an email to Global Atlanta. “We act differently at a rock concert than we do the next day in church. The culture of FIFA was one steeped in cronyism and clear to anyone that with enough money not only selection committee members but also referees of FIFA could be persuaded to give a desired outcome: i.e.., they can be bought.
“Trust in the fairness of decisions is essential for any institution to maintain its image and credibility in the long run. Without fairness there are coups and revolutions. In this case, FIFA has consistently had signs of a problematic culture. As the organization grew it became more at risk of becoming a victim of corruption.”
Dr. Morrison said that the main impediment to the growth of “rotten” cultures is the development of “leaders with strong morals.”
“The key to stopping a culture that is at risk of going bad and becoming rotten is having leaders with strong morals. Predators seek out weak leaders to be puppets to their schemes,” he added and then referred specifically to Sepp Blatter, the former president of FIFA who served since 1998 until recently stepping down.
“It is fairly obvious that Sepp Blatter was such a weak leader given the fact that all of his committee were hauled away in the early stages of the prosecution. He either was aware and was too weak to stop (or was part of it) or he was unaware. Either option is a sign of weak morale leadership.”
In the FIFA case, an independent committee recommended that it implement a number of policies to curb against opportunities for corruption such as having independent members on the economic committee, having term limits and having transparency in compensation.
Michael Hershman, president and chief executive of the Fairfax Group, who served on the advisory committee in years past, told the New York Times that all the recommendations were disregarded.
Dr. Koletar isn’t surprised. “The lack of independence among executive committee members is hardly rare,” he said. “They tend not to recruit ‘lone wolves,’ who may not be willing to accept the rules of the game. Those that do are usually ignored or marginalized to the point of ineffectiveness. Their only recourse it to resign and ‘go public,’ but it is somewhat rare, and usually ineffective, despite their good intentions.”
He is equally skeptical about term limits. “…the results are scant. Those who can change the rules are the very ones who have been in office long enough to accumulate enough power to change things, should they desire,” he said.
Whether the current scandal will provide a change of culture remains questionable. “The stage is set, but to effect change in dozens of sports in over a hundred countries is no small task,” said Dr. Koletar.
“The only long-term solution is unending public pressure, but will this be seen as a crisis that eventually will pass? A wise man once wrote, ‘The tendency of nature is toward the wilderness.’ Sports, like gardens, will require constant attention to deal with weeds.”
Dr. Morrison also seems somewhat skeptical about the outcome. “I do think that we have crossed a threshold with what happened here. The scale of it, the false promises to poor countries, the obscene indulgence of wealth is discouraging.”
The Senate subcommittee is to address concerns about the labor conditions of workers in Qatar preparing for the 2022 World Cup there.
Dr. Morrison forwarded a graphic which compares death toll of workers in preparation of major athletic events that cites several established British and U.S. newspapers and trade associations:
The 2012 London Olympics allegedly claimed one death; the 2010 Vancouver, Canada, Olympics, one death; the 2010 South Africa World Cup, two deaths; the 2014 Brazil World Cup, 10 deaths; the 2008 Beijing Olympics, six deaths; the 2014 Sochi Olympics, 60 deaths and the 2022 World Cup (so far) in Qatar, 1,200 deaths.