Monday, 1 June 2015

FIFA scandal explained.


The Fédération Internationale de Football Association (commonly known as FIFA: International Federation of Association Football) is the international governing body of association football (soccer), futsal and beach soccer. (Source: Wikipedia)

Founded in 1904 & currently having a membership of 209 national associations is one of the largest sports bodies in the world. FIFA reported the revenues of over USD 1.3 billion with net profit of USD 72 million. FIFA is responsible for organizing & promoting the game, however it does not govern the rules.

Recent news of an ongoing scandal in such an old organization raised many eyebrows. It was brought into limelight by some investigative journalists of repute. Charges raised include rapaciousness, rigged elections, corruption & bribery. Charges have been pressed against nine of the highly ranked FIFA officials & five other corporate executives by U.S department of justice. It is estimated that FIFA officials have been engaging in malicious activities over past 24 years. Out of these 18 years have been under the leadership of Joseph Blatter. Under his leadership football has increased its popularity many a fold. FIFA also became more successful financially during this tenure. In recent developments, even after the scandal became public he has been re-elected to lead the organization for the 5th consecutive term.

Is FIFA only party to the scandal?

As they say, you cannot clap with just one hand, a scandal will require involvement of atleast two parties. A giver & a receiver. Wait, there will be one more party to it, a middleman since the deal cannot be struck officially there will be an intermediary involved who will facilitate the transactions off the record. With the FIFA, all its associates are likely to be scrutinized for the involvement in corruption. This means two of the world’s largest sportswear & marketing firms Adidas & Nike, football federations of Russia & Qatar, for being awarded the venue for upcoming football world cup.
With time even more companies & federations will come into picture for & play a part in proving corruption & scandals in FIFA.  

What were these people exactly doing?

Justice department has mainly cited deals struck between FIFA, sports marketing firms & broadcast networks for exclusive televisions broadcasting rights for the FIFA events. Justice department has alleged that FIFA officials accepted bribes from marketing firms for exclusive television rights. The amount of money involved is anticipated to be around USD 150 million according to primary analysis.

What is the recipe for perfect corruption?

1.    Red Tape: excessive bureaucracy or adherence to official rules and formalities create the perception that bribes is the only means for getting a job done. Organizations like FIFA have been closed to share any information apart from the revenue & profits. Add to this the confidence in power of position which leads to arrogance in believing that they are untouchables.
2.    Organization culture: in case of FIFA, according to Yenkey, an assistant professor of organizations and strategy at The University of Chicago Booth School of Business corruption was acceptable & nobody felt any evil about it. He cited the example of Chuck Blazer, a former official with FIFA and Concacaf, a governing group that oversees soccer in the North American, Central American and Caribbean region, who pled guilty in 2013 to charges that he engaged in racketeering, wire fraud, money laundering and income tax evasion


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