7 Min Read
NEW YORK (Reuters) - U.S. prosecutors could eventually try to impose a court-appointed monitor on FIFA to ensure that soccer's corruption-hit governance body cleans up its act, according to attorneys who have helped troubled companies and other entities to reform.
FIFA's decision last week to establish its own task force to propose reforms has been blasted by critics who say the organization has shown over many years it is incapable of transforming from within.
Leading FIFA sponsors Coca-Cola Co and Visa Inc have joined labor union and anti-corruption groups in demanding FIFA agree to the establishment of a fully independent reform commission. Visa CEO Charlie Scharf said on Thursday that FIFA's response to corruption allegations were "wholly inadequate" and showed a lack of awareness of the need for change.
But there is little sign that Zurich-based FIFA will voluntarily heed calls for an independent commission or major change.
Another path to reform could emerge out of the ongoing U.S. court case against nine current and former soccer officials from FIFA and related groups, plus five company executives. They were all charged in May with bribery-related crimes. And prosecutors say the investigation is far from over.
Legal experts say that in many other cases outside monitors have been installed by U.S. prosecutors to clean up corruption or other bad behavior in organizations as diverse as major banks and labor unions.
Michael Cherkasky, who is now serving as the monitor in global banking group HSBC after it settled money laundering allegations with U.S. authorities in 2012, said prosecutors could choose to take the FIFA case beyond individual prosecutions and turn to broader reform.
"What we've found is putting someone in jail doesn't change the culture of an organization," said Cherkasky, a former prosecutor who has also been a monitor in the Los Angeles Police Department and in the Teamsters union. "If you have a structural-cultural problem where there is enormous ability for the people in power to create great wealth and act corruptly, then the next person frequently takes advantage of that structure," he said.
The U.S. Department of Justice has given no indication it plans on going down the monitor path, and has currently tagged FIFA and related bodies as victims of officials trying to profit off of the sport for their own gain. Prosecutors in the case declined to comment on whether monitors could be considered.
Monitors can be installed as a result of an out-of-court settlement, as part of a plea deal after an indictment, or imposed by a judge during a case.
The monitors can wield broad powers depending on how their mandate is designed, Cherkasky said. They can monitor the bank accounts, emails, and business transactions and make recommendations to the leadership of an entity. They can also coordinate with international authorities.
"A monitor's job is to enforce compliance, to report to the government and make sure everything is proceeding smoothly. I could envision something like that in a case like this," said Gil Soffer, an attorney at law firm Katten in Chicago and a former prosecutor who helped draft DOJ guidelines for corporate monitorships.
Still, there are key steps that would have to happen for a monitor to be imposed on FIFA or on regional soccer federations at the center of the scandal.
Either FIFA itself would have to be named as a defendant and monitorship could be negotiated or imposed by a judge as a result, or the organization could agree to outside scrutiny as part of a settlement to avoid prosecution.
It is also unclear how any U.S. action would mesh with a separate probe by Swiss authorities into how FIFA awarded the 2018 World Cup hosting rights to Russia and the 2022 rights to Qatar.
A person familiar with FIFA's thinking said that the soccer body does not anticipate it will be necessary to have a monitor once all of its own reforms are in place. And even if a monitor was an option it wouldn't happen until the U.S. legal proceedings are resolved, which would be next year at the earliest, this person said.
A FIFA spokeswoman said: "FIFA is cooperating with the ongoing investigations by U.S. and Swiss authorities and is not going to comment or speculate on the outcome of those investigations."
Some experts doubt the DOJ will pursue the monitor option. "I am not sure I can see the DOJ imposing one," said attorney Alexandra Wrage, an anti-corruption expert who resigned in frustration in 2013 from an Independent Governance Committee set up by FIFA in a previous reform effort.
Wrage said she didn't think FIFA would voluntarily agree to a monitor, or an independent commission.
U.S. jurisdiction in principle should not be a problem as the indictment makes it clear that much of the allegedly dirty money traveled through U.S. bank accounts.
Most of the alleged bribes involved regional soccer confederations in the Americas or marketing companies and their principals. One transaction that has been closely scrutinized is a $10 million payment by FIFA on behalf of South Africa to Jack Warner - former head of the regional confederation for North and Central America and the Caribbean - that passed through a New York account.
In practice there are some delicate political questions if the U.S. takes on FIFA directly. It has 209 member countries and territories, and says it needs to operate autonomously from national interests to preserve neutrality in sport. There is a possibility of a backlash from some FIFA members who could see U.S. steps to reform FIFA as a form of American imperialism.
The actions of FIFA's two top officials, President Sepp Blatter, who plans to step down next February, and its Secretary General Jerome Valcke, are being examined as part of the probe, sources said. Neither has been accused of wrongdoing by U.S. authorities.
A number of people have reached plea deals with U.S. prosecutors in the case and have been cooperating with authorities. As their number increases, the strength of the U.S. case could build.
"U.S. authorities scoop up the little fish and then they use what they can obtain in court or by way of settlement plea bargain to get up to the leadership of whatever the conspiracy may be," said Canadian lawyer Dick Pound, who headed the investigation to clean up the International Olympic Committee after the 2002 Salt Lake City winter games corruption scandal. "I expect there are daily negotiations going on."
Reporting by Mica Rosenberg in New York; Additional reporting by Simon Evans in Zurich and David Ingram in New York; Editing by Martin Howell