That impossible goal.

Photographer: Matthew Lewis/Getty Images

Reform FIFA From the Bottom

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
Read More.
a | A

Now FIFA's Sepp Blatter era is over, the governing body of global soccer has the chance to reform itself so that fair play applies to the game off, as well as on the pitch. My colleague Mark Gilbert has proposed turning FIFA into a public company and I have advocated auctioning the status of World Cup host nation, but for now at least, such radical changes are unlikely.

So what might plausibly be done to make this not-for-profit organization more accountable and less corrupt, as it continues to control a large portion of revenues from the world's most popular sport?

Experts have been trying to answer that question for years, as scandal after scandal rocked FIFA. For example, in 2011, the Swiss corruption expert, Basel University professor Mark Pieth, wrote up his suggestions for improving FIFA's governance. Pieth may have been paid for the work by FIFA, but his recommendations, never fully implemented and reiterated in a 2014 IGC report, are still worthy of consideration. So are those of University of Colorado's Roger Pielke, made in a paper published in the journal Sport Management Review in 2013.

When Blatter said last week he had been fighting "for the last three or four years against all the corruption" at FIFA, he may have been referring to implementation of the least effective part of Pieth's proposals. FIFA formed a number of committees that had "ethics," "audit" and "independent governance" in their names. Such structures, of course, can only serve their purpose in an organization that isn't fundamentally corrupt, which FIFA is.

The proposals Pieth made that haven't been implemented would be more meaningful, including age and term limits for top FIFA officials and the addition of independent members to the organization's executive committee. These ideas got no backing from FIFA's leaders or its general membership -- and that last point is essential. 

FIFA's biggest corruption-perpetuating problem lies in its structure. The 209 member associations -- the bodies that run soccer in all the world's countries and territories -- all get to choose their FIFA representatives and all have equal voting power in the FIFA congress, the organization's "legislative branch." They are also members of six regional confederations, which form the executive committee. The corruption begins at the national association level, which results in negative selection: Only those most gifted at corruption make it to the top of the regional associations and then to the top of FIFA. This rotten pyramid will be choosing Blatter's successor and it's hardly encouraging that they re-elected Blatter after news of the U.S. corruption case broke. He's only getting replaced because he resigned.

Fifa's statutes perpetuate this situation by threatening sanctions against member associations if they submit to "third party influence," primarily from governments. State meddling generally is bad for non-profit organizations, and no doubt that's the case for soccer, especially in countries where the sport is politically important (which includes most of them).

FIFA, though, has been exercised by a different kind of government interference. In 2001, for example, the government of Belize in Central America told the head of the local soccer federation, who had steadfastly refused to publish the group's accounts or to allow competitive elections for his post, that he could no longer represent the nation. FIFA promptly suspended Belize from international competition.

It is just such "third party influence" that has brought about Blatter's downfall. The current U.S. investigation, which resulted in the indictment of nine current and former FIFA executives, centered on CONCACAF, the Miami-based North-and Central-American regional confederation, of which the U.S. is a member. I suspect it would have been easier to conduct the investigation had CONCACAF not been in the Cayman Islands, and had it not been incorporated as a non-profit company in the Bahamas. As Pielke wrote in his paper:

Domestic governments have no formal mechanism to directly sanction FIFA for any cause. The only exception is the Swiss government under whose laws FIFA is incorporated. Experience to date suggests that such a direct legal supervision necessarily focuses on very narrow issues of Swiss law, and even then, little actual supervision of FIFA has been exercised.

FIFA member associations and regional confederations need tighter government supervision in their home countries. Their statutes and governance practices must be reconsidered by every state that's interested in the development of soccer. Once that happens, the soccer associations will be only as corrupt as the countries in which they operate, which will probably make the organization as a whole less corrupt.

Any truly reform-minded FIFA leadership would turn a blind eye to "third party interference" for a while, encouraging greater scrutiny by governments. It would also make sure the regional confederations are re-incorporated in the least corruption-friendly jurisdictions, where investigations like the U.S. one would be easiest. The first step would be to get FIFA itself out of Switzerland and move it, say, to the U.K., the birthplace of soccer, whose association has been calling for reform for years.

Soon, a bigger part of FIFA's membership would be interested in maximizing FIFA's income from international events and their shares of that income, not their own kickbacks from all sort of corrupt schemes. More members would also wonder whether they really need a superstructure that, in 2011-2014, spent $1 billion (or 20 percent of its total expenses) on itself. A bottom-up reform could ultimately shrink FIFA and perhaps make ideas such as replacing it with a public corporation, or auctioning host city rights, feasible.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor on this story:
Marc Champion at mchampion7@bloomberg.net