Concacaf Outlines Reform Plans After Corruption Crisis

Soccer’s governing body for North and Central America -- one of the associations worst affected by the leadership scandal at the sport’s global organization -- is proposing far-reaching rule changes to stop more violations.

Concacaf, which oversees the Caribbean as well, will consider term limits, publication of financial statements and executive pay as well as independent oversight. The changes before the group’s board would be the most radical governance reforms passed by any of soccer’s six regional federations.

The group has been in crisis since President Jeffrey Webb was arrested with six other FIFA officials in Zurich in May. The U.S. Department of Justice said its investigation into the global body found more than two decades of “rampant” corruption. Enrique Sanz, Concacaf’s top administrator, was banned after being revealed as a co-conspirator in the indictments.

“We’ve got a lot accomplished and we’re starting to impose processes to try to root out corruption but this is a first step,” said Samir Gandhi, an attorney at Sidley Austin LLP, which is working with a three-person panel, including U.S. soccer head Sunil Gulati, to find ways to reform the federation.

Many of the changes will have to be approved by Concacaf’s 41 member associations at a special meeting that has yet to be scheduled. Webb had taken over the leadership post at Concacaf in 2012, after his predecessor Jack Warner, a Trinidad politician, was caught up in an earlier investigation. Warner is fighting extradition after being included in the U.S. indictment.

Skepticism is likely to remain. Gulati, who has been pushing for greater transparency in soccer for several years, worked alongside Concacaf’s former general secretary Chuck Blazer. Blazer pleaded guilty to 10 crimes including bribery and tax evasion. Horace Burrell, a Concacaf vice president, was close to both Warner and Webb, with whom he shared business interests.

Gandhi said the current leadership knows that it must find ways to tighten oversight at Concacaf.

“This is a third chance right?,” he said. “Not too many people get third chances I think people have to see what we do as opposed to what we say.”

Some of the reform plans like term limits and pay disclosures are also being discussed at FIFA. Its President Sepp Blatter said he would be quitting just four days after winning a fifth term amid an outcry from sponsors, the media and soccer fans following the U.S. charges. FIFA’s board will meet July 20 to set a date for new elections.

Warner, Concacaf’s former head, quit amid an investigation that he helped arrange a meeting for a FIFA presidential hopeful where envelopes stuffed with cash were handed out to voters.

Webb promised Concacaf would be a “case study” in rooting out corruption. Instead he’s alleged to have continued to accept payments from marketing companies in exchange for broadcast and sponsorship contracts.

“We’ve got to a create a process that’s immune from a new person coming in,” Gandhi said in an interview. He said process and structures should were more vital than personnel changes.

Concacaf is reviewing its process for contract agreements and plans to new compliance and legal departments. The U.S. alleges some of its contracts were signed in exchange for kickbacks. Concacaf, remains under an IRS probe over several years of unpaid taxes, and hasn’t published annual results since Webb took over.

Today’s announcement comes a day before Concacaf’s biggest event, the 12-nation Gold Cup that kicks off in Frisco, Texas on Tuesday. Gandhi says all prize money and income has been guaranteed and the tournament might be the most-successful yet.

Concacaf’s main sponsor, Canada-based Bank of Nova Scotia, has been kept “in the loop” over the reform programs after expressing concerns about damage to its reputation, Gandhi said.

“If we do not have our sponsors we do not have an organization,” he said, adding the Gold Cup had lost “a minor” sponsor because of the crisis.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE