How can FIFA seek restitution from itself and its member federations?
On Wednesday FIFA announced they were seeking "tens of millions of dollars" in restitution from the named co-conspirators indicted as part of the the Department of Justice investigation into FIFA, CONMEBOL and CONCACAF. We asked ESPN FC's Gab Marcotti to tell how exactly FIFA can get money back from itself and its member confederations.
Q: FIFA embezzles money from football and now they want to get it back? How does that work?
A: Easy there. I know we all talk about FIFA corruption. But FIFA is an organization and those crimes were committed by individuals. As one legal source close to FIFA puts it: "individuals conspired ... organizations cannot conspire." That's FIFA's whole point. They are victims here. The folks named in the indictment weren't allegedly stealing money out of thin air. They were stealing from FIFA. Or, as the restitution request filed with the DOJ reads, they "misappropriated FIFA's resources, its brand and its commercial value to enlarge their own bank accounts." That's how the DOJ sees it as well, which is why they have victim status, at least for now.
Q: But didn't Sepp Blatter keep insisting that this wasn't a FIFA scandal, it was a CONCACAF-CONMEBOL scandal, something to do with the Americas and therefore unconnected to FIFA?
A: Yes, but I wouldn't pay too much attention to what he said, he's out of the picture now and is facing legal issues of his own. But in a sense he was right. Most of the schemes outlined in the indictment concern football officials from North, Central and South America. Some of them were also members of FIFA's executive committee, but they were voted on to the executive committee by their own confederations. It's not as if FIFA chose them.
Q: What sort of stuff did they get up to?
A: Basically, they're accused of taking bribes and kickbacks, mostly in the awarding of broadcast deals, marketing contracts and arranging matches. Our old friends Jack Warner and Chuck Blazer are accused of selling their World Cup votes to the highest bidders for the 1998, 2006 and 2010 World Cups.
Q: So where's the money to pay FIFA back going to come from?
A: Well, the DOJ has already seized more than $190 million in assets that have admitted to forfeiture, including $151,713 million from Jose Hawila, who ran a marketing company called Traffic. He has pleaded guilty, as have Blazer, former CONCACAF boss Jeffrey Webb and Daryan Warner, Jack's son and, according to the filing, "bagman."
Q: What about the ones who haven't pleaded guilty?
A: Some are going to fight it out in court. Others, like Warner, are fighting extradition. If they go to trial and are found guilty, their assets will be seized too. According to legal sources with knowledge of FIFA's strategy, they'll then go after them too. Right now, they can only go after named defendants. And, remember, there are plenty of unnamed co-conspirators in the indictment, so who knows what can happen in the future.
Q: But why does FIFA have a claim here? Weren't the most victimized confederations CONMEBOL and CONCACAF?
A: They were. In fact, so much so that both are in financial difficulty right now, not least because FIFA is withholding payments pending its own internal investigation. Legal sources familiar with FIFA's strategy say they expect CONCACAF and CONMEBOL to file similar claims. And, I'd imagine, they'd have even stronger cases. Ultimately, their leaders are accused of stealing primarily from them. Though, of course, they used their FIFA roles to do so, which is why the organization wants restitution too. They say the FIFA brand was damaged.
Q: Yeah, because FIFA's brand was so well-respected before those guys came along. There wasn't much to damage was there?
A: That's a fair point, though some of these allegations go back nearly 25 years. But it's about more than just money, I think, for FIFA. They want to maintain their victim status. If the DOJ revisited their opinion and indicted them under racketeering statutes, FIFA's own assets could be frozen. They have some $1.4 billion in the bank. I suspect there's also a bit of PR spin going on. FIFA have a new president, Gianni Infantino. He wants to introduce a "new tone from the top" according to legal sources close to FIFA. That means more openness and honesty. Let's see if it lasts.
Q: What will FIFA do with the money?
A: FIFA point out that they redistribute more than half a million dollars a day in development funds and other payments to FAs around the world. The funds will go into that pot and help offset the shortfall in revenue they project over the next four years.
Q: Are they also going after Michel Platini and Blatter himself?
A: No, mainly for two reasons. Neither Platini nor Blatter have been charged with a crime. In fact, Platini isn't even a suspect yet. He's still fighting his ban with the Court of Arbitration for Sport. In any case, Swiss law is different from U.S. law and there isn't a provision for restitution in these cases.
Q: What about Russia 2018 and Qatar 2022? Are they going to move those World Cups?
A: Not as of right now. The DOJ has yet to indict anyone over 2018 and 2022. And FIFA's own internal inquiry, conducted with the help of the U.S. law firm Quinn Emmanuel, has not found wrongdoing -- or, if they have, they haven't yet told us. That could change if new evidence emerges, but right now, legal sources close to FIFA insist that "future World Cups have been awarded and at this stage there is no plan to change that." Let's see if they find the evidence.
Q: Are you buying this? I mean, the World Cup in Russia is just over two years away.
A: I honestly don't know. Obviously it would be a major logistical and legal headache, both for Russia and Qatar. But heck, if those bids were awarded because of corruption and it's proven -- not just by a kangaroo court, but by the DOJ -- I don't see how they can ignore it. The thing to remember here is that it's not just the DOJ and the Swiss courts who are involved, it's FIFA investigating itself too. And not via some committee, but via real, hardcore lawyers with access to all of the organization's records. These guys were brought in to manage the crisis. If they conceal evidence or hide corruption, they won't just hurt their reputation, they'll be in trouble with the DOJ. That's why they say they've been fully cooperating. They have no choice.
Q: But people could have taken bribes in the bid process and found a way to hide it from the U.S. authorities and from FIFA too, right? I mean. there are plenty of off-shore havens in which to stash money. Plus, cash itself is untraceable.
A: Indeed. But there are also defendants who can "flip" and spill the beans in return for more lenient sentences. Still, this is a big step for FIFA. We've never had such levels of openness before. We've got a long way to go, but at least someone is shining a light. It's far from ideal, sure, and they're being forced into this. But, heck, it's a whole lot better than how it was, right?
Gabriele Marcotti is a Senior Writer for ESPN FC. Follow him on Twitter @Marcotti.