Trade Compliance

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What Businesses Can Learn from the FIFA Corruption Case

Posted May 30, 2015


Earlier this week, the U.S. Department of Justice announced a 47-count indictment charging 14 defendants including several high-ranking officials of the Fédération Internationale de Football Association (FIFA) in connection with their participation in a 24-year scheme to enrich themselves through the corruption of international football.

While there may not strictly speaking be any direct enforcement connection (at least not presently) to the Foreign Corrupt Practices Act (FCPA) given that FIFA, the organization responsible for the regulation and promotion of football worldwide, is a non-U.S., Non-Governmental Organization not “designated by Executive Order pursuant to section 1 of the International Organizations Immunities Act (22 U.S.C. § 288); or any other international organization that is designated by the President by Executive order,” there is still an association between the FIFA takedown and the FCPA in a broader sense.

Writing on The FCPA Blog several days ago, Richard Bistrong, the CEO of Front-Line Anti-Bribery LLC pointed out some “interesting similarities” between the FIFA case and his own experience as a former sales executive of Armor Holdings, a publicly traded manufacturer of police and military equipment now owned by BAE Systems, who ran afoul of the law and became a cooperating witness for the FBI in a sting operation involving a fake deal to sell controlled items to an African government. He pled guilty in 2009 and served over a year in prison for conspiring to violate the FCPA’s anti-bribery provisions (among other things).

Bistrong suggests by way of a “respectful reminder” that companies consider drawing the following compliance lessons from the FIFA case:

International business personnel usually aren’t lawyers, auditors, or investigators. They’re salespeople, tasked and compensated to grow and develop business. They often work in “frontier markets,” where both growth opportunities and huge compliance risks abound.

Salespeople have a larger appetite for risk than other workers. So in the “frontier markets” there are concentrations of employees with high-risk profiles, exposed to high-risk and low-integrity environments.

That encapsulates much of my own experience. And I can say with personal perspective that although “tone at the top” and “should compliance report to legal” are great and needed debates, they aren’t all always immediately helpful to those who confront corruption on the front-lines of international business.

On an amusing side note, only one of the defendants in the FIFA case is a U.S. citizen, the “corrupt and corpulent” Chuck Blazer, who was also a cooperating witness for U.S. government.  As luridly detailed by the Daily News back in 2014, Blazer was alleged to have raked in “untold millions” during his 20-year stint as head of the FIFA affiliated Confederation of North, Central American and Caribbean Association Football, “running up a staggering $29 million in credit card charges to help fuel his extravagant lifestyle,” which included a pricey $18,000-per-month apartment on the 49th floor of the Trump Tower overlooking Central Park along with an adjoining $6,000 suite “largely for his unruly cats,” according to the New York tabloid.