Saturday, July 14, 2012

Two high profile governance scandals - two very different outcomes

In the past week two reports regarding very high profile sports governance scandals have been released and there are some interesting parallels in the offences committed.

First we finally got to see Thomas Hildbrand's report on the ISL bribes scandal, an outrage long known about by close followers of the world game thanks to the work of Andrew Jennings, Jens Weinrich, Jean Fran├žois Tanda and others, but hidden from the public for so long as the result of concerted efforts by FIFA through their highly paid legal team.

And then, a few days later, the report by Louis Freeh on the Jerry Sandusky Child Sex Abuse scandal at Pennsylvania State University, in which he found that four top officials at the University turned a blind eye to the sordid doings of the assistant coach to the highly respected football team, in an attempt to protect the image and standing of the football programme.

It was confirmed that then FIFA President, Joao Havelange, and his then son-in-law Ricardo Teixeira, who was also head of the Brazilian Football Federation and a member of FIFA's powerful Executive Committee, had taken millions in bribes in exchange for awarding ISL lucrative World Cup TV rights contracts. In all probability, the amounts mentioned in the report were much lower than the actual amounts of the bribes. Andrew Jennings believes they are much higher and that there were other FIFA officials who also received financial inducements in exchange for services rendered.

It was also confirmed that the current FIFA President, Sepp Blatter, has known about these bribes for 15 years and, apart from fighting to prevent the Hildbrand report from being released, he did nothing, other than his self-serving claim that he set up the FIFA Ethics Committee in 2006, not only many years too late, but also a body that has proven to be completely useless since its inception.

Compare this to Penn State, where head coach Joe Paterno, then University President Graham Spanier, then Vice-President Gary Schultz and Athletic Director Tim Curley were made aware of Jerry Sandusky's sex abuse of minors on Univerity property, but showed "total and consistent disregard" for his victims by failing to report the incident to the police. As a result Sandusky abused multiple victims over 15 years. It was only after Sandusky's arrest that the university officials showed any empathy for the victims.

So in both cases, the most powerful people in the respective organisations knew of serious wrongdoing by other high ranking people in their organisations, and in both cases nothing was done, reported or said to bring the wrongdoers to justice.

Once the information became public, Sandusky was arrested, convicted and sentenced to what amounts to lifetime imprisonment, Paterno was fired and died two months later, and the other PSU officials are facing court cases for their failure to report what they knew.

Compare this to FIFA. FIFA did all they could to NOT prosecute Havelange and Teixeira by agreeing to negotiate very minimal reparations payments in exchange for the cases being discontinued.

Havelange, now 96, continues to be Honorary President of FIFA. Teixeira only recently resigned from his lucrative Executive Committee position but continues to receive fees as a consultant to the Brazilian Football Federation.

Sepp Blatter admits that he knew of the ISL payments to Havelange and Teixeira but argues, unbelievably, that no offences were actually committed, because it was accepted practice and historical crimes can't be judged using today's standards. He even claims that there were places on tax forms to report such payments. Really? There's a section on the tax forms that says, "Please list all bribe payments you received during the past financial year"?

The Hildbrand report itself notes that crimes of "embezzlement, or alternatively disloyal management" were committed, so it's a bit rich for Blatter to argue that he couldn't "have known about an offence that wasn’t even one."

One of the key tasks of any President or CEO is to set the organisation's culture, and then to communicate what is expected regularly to all the organisation's employees, so that there can be no doubt as to what is acceptable and unacceptable behaviour, both legally and ethically.

In the years Sepp Blatter has been President, he has knowingly withheld information about egregious embezzlement to the tune of at least US$22 million.

He's also awarded the CONCACAF area World Cup rights to Jack Warner for pennies, in exchange for the entire CONCACAF bloc voting for Blatter to be FIFA President. Warner was also involved in a high profile world cup tickets scandal when he profited personally from illegal sales. Furthermore, Warner reneged on giving the Trinidad & Tobago national team players their agreed share of profits from their appearance in the 2006 World Cup Finals, instead taking a huge cut for himself. And of course Warner was finally suspended for his role in handing out envelopes of money to Caribbean Football officials in return for their voting for Mohamed bin Hammam for FIFA President in 2011. (One wonders whether he would have been suspended had he been bribing those same officials to vote for Blatter rather than bin Hammam.)

Numerous other football officials have been suspended due to a variety of transgressions, all of which involve some sort of unethical behaviour over offering or receiving bribes for votes or asking to receive kickbacks in some form or other.

There have been numerous allegations over vote buying in the selection process for the 2018 and 2022 World Cup Finals hosting rights. Cameroon's Issa Hayatou and Jacques Anema from Cote d'Ivoire were alleged to have received bribes in exchange for voting for Qatar.

Meanwhile, Paragauayan Nicolas Leoz reportedly asked for a knighthood in exchange for voting for England, while Argentinian Julio Grondona said he wouldn't consider voting for England unless they gave the Falkland Islands back to Argentina.

I would be remiss not to mention Chuck Blazer, who somehow acted as both CONCACAF's General Secretary and Treasurer at the same time and who hired an expensive suite in Trump Tower for his office. Blazer allegedly used a CONCACAF credit card to pay for expensive nights out for himself and his inner circle, according to former employee Mal Brennan. Blazer is another former Executive Committee member who recently resigned, presumably to avoid investigation by the Ethics Committee.

All of this suggests a culture in FIFA that is rife with illegal and unethical behaviour. Sepp Blatter has been President since 1998, and has apparently been completely ineffective in conveying the type of culture that should exist within the organisation. Unless, of course, everyone is following his lead.

Until very recently, Joe Paterno was a highly respected coach who had overseen great achievements in his chosen profession and done a lot of good for a number of people. Sadly his legacy has now been irreparably tarnished by one terrible misjudgement.

At least he had a legacy to tarnish.

Sepp Blatter's only achievement is to somehow cling to power. His every action and every decision appear to have been made solely for the purpose of strengthening his grip on power.

Herr Blatter, it's time to resign.

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