Soccer Prosecutions

The Swiss Attack

Source: pressefoto Ulmer/ Bilderberg [M]
Mr. Blatter may wish he'd run for the hills before the Swiss pounced.
  • Why it matters

    Why it matters

    If the U.S. and Swiss authorities cooperate, they have a better chance of successfully prosecuting corrupt FIFA officials.

  • Facts

    Facts

    • The Swiss parliament voted this week for legislation that made it possible to launch corruption probes against FIFA and other international sporting federations within Switzerland.
    • In December, Switzerland ruled that leaders of sports organizations could be classed as Politically Exposed Persons and subject to investigation.
    • The U.S. is using the Politically Exposed Persons act, the Foreign Corrupt Practices Act and the Racketeer Influenced and Corrupt Organizations Act to come after FIFA.
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    Audio

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The question is: Why now? Why, after years of wire-tapping soccer officials, following paper trails around the world and prosecuting minor players, have the U.S. authorities finally launched their huge sting operation into the most powerful sporting body in the world?

It is not just about the fact that the new U.S. attorney general Loretta Lynch wanted to make a high profile debut or that whistleblower Chuck Blazer had delivered up proof that FIFA officials accepted bribes over the World Cup tournaments.

The American investigation into FIFA was able to coalesce because Switzerland, where FIFA is based, changed its laws. The country’s legal framework had been designed to protect the rich and powerful, but in recent years it has tried to become more open.

In December, the country changed its laws, and ruled that the heads of sports organizations based in Switzerland, could be designated as “Politically Exposed Persons” and subject to corruption investigations.

And Wednesday, just a day after FIFA’s president Sepp Blatter unexpectedly announced his resignation, the Swiss parliament voted in favor of another set of legislation that makes it possible to launch corruption probes against FIFA and other international sporting federations within Switzerland.

Until now, the only way to attack corruption in Switzerland was through anti-competition laws.

“The U.S. may well have decided to wait until Switzerland beefed up its legislation, so it could help in this investigation,” Donald Rebovitch, a New York-based specialist in economic crimes told Handelsblatt Global Edition. “It certainly helps the U.S. to have the cooperation of the Swiss police here.”

The reforms are part of a wider set of anti-money laundering laws Switzerland introduced after being criticized heavily for operating an opaque and closed financial system that made it easy for criminals to launder money.

The timing of this week’s parliamentary vote was scheduled long ago, and Swiss authorities insist that the fact that it came a day after Mr. Blatter’s resignation is a coincidence, but the laws will nonetheless be a valuable tool in the prosecution.

The new laws recognise that an international organization like FIFA can be at least as powerful as a national government, and should be monitored accordingly.

“PEP has basically redefined the definition of a politician” said Mr. Rebovich. “It recognizes a leader of something like FIFA is corruptible.”

The Swiss have not gone as far as many would like. Lawmakers voted to add in a provision that any investigators have to prove that a sporting federation’s actions are “a threat to the public interest” before they investigate – critics point out that it will be quite easy to prove that Swiss public interests are not threatened by corruption within a sports organization.

There are 65 international sports federations in Switzerland including UEFA, the International Olympic Committee and indeed a clever lawyer could argue that the Swiss interest is best serviced if they are allowed to continue operating as they do now.

But the overall trend in Switzerland has been to at least appear to open up its financial systems.

Christian Levrat, a parliamentarian with the Socialist party, said in the debate ahead of Wednesday’s vote said politicians must “ensure that Switzerland is not a haven for associations intent on carrying out illicit practices.”

The reforms are part of a wider set of anti-money laundering laws Switzerland introduced after being criticized heavily for operating an opaque and closed financial system that made it easy for criminals to launder money.

This in turn has encouraged foreign prosecutors to bring their investigations into Switzerland, as they are now more confident in getting results.

This international cooperation was very visible just over a week ago, when Swiss police launched a dawn raid, at the request of U.S. authorities, at the five star hotel in Zurich where FIFA officials were staying ahead of their annual congress and arrested seven senior officials. A few hours later, the U.S. released an indictment of 14 soccer officials on corruption charges as Swiss investigators launched another raid, this time on FIFA’s Zurich headquarters.

In the United States, three big pieces of legislation are being used to come after FIFA; the Politically Exposed Persons, the Foreign Corrupt Practices Act and the Racketeer Influenced and Corrupt Organizations Act.

“RICO was really set up to help investigators come after mafia bosses,” said Mr. Rebovich. “If a certain Mafia boss gives orders but does not actually commit a crime himself, a prosecutor can get him on RICO offenses.”

RICO carries heavy penalties and is often used as a plea bargaining tool: prosecutors threaten to charge suspects with it unless they agree to plead guilty to a lesser charge.

Soccer is growing in importance in the US. There are now professional games that are being televised. The World Cup was hugely popular, not least due to the United States’ unexpected success.

Loretta Lynch, who is keen to build her reputation as an aggressive, fearless attorney general, decided to use the United States formidable legislation to attack corruption in the sport before it grows overwhelming.

Meera Selva is an editor at Handelsblatt Global edition. To contact the author: selva@handelsblatt.com

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