FIFA arrests: it’s all kicked off, but what’s next? A legal perspectiveMichael O’Kane, Jasvinder Nakhwal
27 May 2015: a date that will now live in infamy for those in the footballing world. Following what appears to be a lengthy investigation, the US Department of Justice announced1 that nine FIFA Officials and five executives from sports marketing and broadcasting corporates have been indicted on charges for offences that include racketeering, wire fraud, and money laundering conspiracies in relation to the corrupt allocation of media, marketing and sponsorship rights for football (soccer) tournaments.
Seven of the FIFA officials were arrested in Switzerland by the Swiss authorities2 in the early hours of 27 May and detained pending extradition to the United States and simultaneously a search warrant was executed at the headquarters of CONCACAF in Miami, Florida. If all of that was not enough for the global football community, the Swiss authorities announced that they too had opened a separate set of criminal proceedings against individuals on suspicion of mismanagement and money laundering relating to the award of rights to host the 2018 and 2022 FIFA World Cups in Russia and Qatar.
Although this appears a bolt out of the blue for the media and those unconnected to the investigation, the DOJ revealed that four individuals and two corporate defendants had already pleaded guilty to various charges in the case, three of whom had entered guilty pleas as early as July 20133: clearly some have been able to engage with the DOJ behind the scenes for some time. Others have not been so fortunate and their arrests; the 27 May marked the start of an extensive international legal process, the results of which may have pervasive ramifications for the way in which football is marketed, sponsored and managed and may even challenge the legitimacy of the next two major global footballing tournaments.
What is going to happen next for those that have pleaded guilty?
For those who have pleaded guilty, the road will have been a long and turbulent one and is certainly not over yet. As part of their plea agreements with the DOJ, the corporate defendants face fines of $500,000 and one year of probation: the individual defendants have already forfeited millions of dollars between them (José Hawilla has agreed to forfeit over $151m) and have agreed to pay further amounts upon sentencing.4 It is likely that part of their plea bargain will be a reduced or lesser sentence and it appears that some of the individuals pleaded guilty to a reduced number of counts and/or lesser charges, compared to perhaps the individuals named on the 47 count indictment unsealed on 27 May. It is likely that some, if not all, of those who have pleaded guilty have provided significant information not only about their own conduct but also the conduct of others involved in the alleged conspiracy, which will probably mean that as part of their plea bargain they will have to cooperate fully with the investigation into and eventual trial of other individuals, if it were to get to that stage. Given that the DOJ has sought the arrest and extradition of such a significant number of senior officials and executives, it is highly likely that the DOJ is in an advanced – if not final – stage of its investigation, meaning that trials could commence within a matter of months following extradition of those individuals.
What’s going to happen to the Officials arrested in Switzerland?
For the seven FIFA Officials who were arrested in Switzerland, the next stage of the process will be extradition proceedings pursuant to the 1990 bilateral Extradition Treaty between the US and Switzerland.5
Article 1 of the Treaty obliges both jurisdictions to extradite individuals to the requesting party, if they have been charged with an extraditable offence, defined in Article 2 as punishable under the laws of both the US and Switzerland (i.e. there is dual criminality) by deprivation of liberty for more than one year.
From media reports, it appears that the individuals have been provisionally arrested pending a full request for extradition by the US together6 with relevant supporting documentation regarding the identity of the individual, the crimes he is alleged to have committed together with an outline of the facts of the case. This full request is required within 40 days after the apprehension of the individual (which according to Article 13(4) of the Treaty can be extended by 20 days upon application, and does not prevent re arrest if the US authorities submit the relevant documentation after this time). The arrested individuals can either consent to or object to extradition,7 the former permitting Switzerland to extradite the individuals to the US under simplified extradition proceedings. For those who object (as it appears the majority of those arrested have decided to do8), pursuant to Articles 52 and 55 of the Swiss Federal Law on International Mutual Legal Assistance in Criminal Matters of 1981 (‘IMAC’)9 the Extraditions Unit at the Federal Office of Justice (‘FOJ’) in Switzerland will issue an extradition warrant and give the person concerned a legal hearing determined on paper to respond to the extradition request.10 The FOJ will then take an extradition decision based on this hearing and any statement made by the wanted person’s lawyer, examining whether or not the formal and material conditions for extradition are fulfilled and will clarify whether the offence that the request alleges has been committed would also be punishable under Swiss law. This decision can be appealed to the Federal Criminal Court (Article 56 IMAC) and there is further right of appeal to the Federal Supreme Court in certain limited circumstances. According to the Federal Department of Justice & Police, regular extradition proceedings may take up to a year or more, especially in complex cases and when all possible channels of appeal are exhausted, but in practice due to the tight timescales to which the requesting state must adhere it is likely that this process will be completed within a matter of months.
What happens if the Officials are successfully extradited?
Once extradited, the individuals will have to apply for bail which may not be granted if the US authorities consider the individual to be a serious flight risk.11 The DOJ will also place a considerable amount of pressure on those individuals to enter into a plea bargain, which will not be as favourable as the early whistleblowers plea bargains – but in order to try to avoid a lengthy trial process that would otherwise be protracted and expensive. Nevertheless, a small proportion of those charged will no doubt continue to maintain their innocence, which will force the matter to trial. FIFA’s Zurich based jurisdiction is unlikely to provide significant protection for the federation and its officers, given the wide jurisdictional reach the US is in the process of trying to enforce.
What does this means for other affected parties?
If the allegations are proved to be true either in the US or following the Swiss investigation into the legitimacy of the World Cup awards in Russia and Qatar, the lateral proceedings that will result could be wide ranging and expensive for FIFA. Rival sponsorship, media and marketing companies who competed for the relevant contracts and commercial rights at issue in the US proceedings might seek to commence civil proceedings, for example, in the commercial court against the companies accused of wrongdoing, for damages due to the unfair bidding process and lost opportunity. The bidders who lost out on the awarding of a World Cup, may wish to issue civil claims for damages against FIFA if the successful country’s World Cup bid is deemed to have been awarded the hosting rights as a result of the payment of bribes and corrupt practices (some entities – such as Australia’s Football Federation had already threatened to do so previously,12 and may revisit this in light of recent developments.).
How will this change how football rights are tendered for and negotiated?
It is likely that the case in the US will change the way in which sponsorship, media and marketing contracts are tendered and negotiated for professional football rights (and perhaps in other sports), and will lead to more intense scrutiny from legal authorities around the globe in order to ensure fairness, legitimacy and transparency in all commercial dealings aligned to the sport.
For the fans of sport, transparency cannot come soon enough. FIFA has continuously courted controversy over its management of global football and its distribution of rights and accusations of bribery and corruption are ubiquitous. These proceedings were perhaps inevitable, but the extent of the allegations – both temporal and spatial – is astonishing: the newly appointed Attorney General, Loretta Lynch, described it as “corruption that is rampant, systemic, and deep rooted both abroad and…in the US”,13 spanning at least two generations of football officials over 24 years who, it is alleged, abused their positions of trust to acquire millions of dollars in bribes and kickbacks. Perhaps, however, the date of 27 May 2015 is the start of a new beginning: a development that fans have been crying out for.
*The authors thank Associate Charlotte Tregunna for her assistance.
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- Tags: Anti-Corruption | Criminal Law | Extradition Treaty between The Government of the United States of America and The Government of Switzerland Confederation 1990 | FIFA | Football | Governance | International Mutual Legal Assistance in Criminal Matters of 1981 | Regulation
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About the Author
Michael O’Kane is a Partner and Head of the Peters and Peters Business Crime team. As a former senior prosecutor, he had responsibility for the prosecution of a number of high profile complex cases, including the Stansted Hijacking and the Paul Burrell, former butler to Princess Diana.