The fallout from the FIFA corruption scandal continues, literally across the globe. Some of it is predictable; other fallout, while appearing ancillary on the surface, demonstrates the cost of not only bribery and corruption, but also the perception of bribery and corruption.
The predictable expansion of the investigation: Swiss authorities are taking a more active role in developing evidence, which led to the organization suspending its former Number 2, Jerome Valcke, the (former) next in line to embattled President Sepp Blatter.
Next was the removal from FIFA’s audit and compliance committee of member Canover Watson, who is a director of the Cayman Islands Stock Exchange and treasurer of the country’s football federation. He was arrested by authorities who accused him of corruption and money-laundering in a case reportedly involving supplying public hospitals with swipe-card billing technology. In a press release, FIFA said, “The chairman has decided to temporarily relieve until further notice Canover Watson, to whom the presumption of innocence applies, of his duties on the FIFA audit and compliance committee. This should not be regarded as routine procedure, because cases like this or of this nature must always be assessed on their individual merits.”
Finally came the announcement that U.S. soccer might well withdraw as the host for the 2016 Copa America Centernario tournament. This tournament is designed to celebrate the 100th anniversary of the Copa América, which is South America’s most prestigious regional tournament; six teams from CONCACAF (the North American soccer federation) would also participate. This would have included the U.S. and Mexico national teams as well.
The United States has pulled out because of potential legal exposure around some of the marketing contracts for the tournament, as well as potential legal issues around holding the tournament itself. This development demonstrates how far down corruption can go into an industry. Now even soccer federations are asking questions about how contracts were awarded, because if they accede to such contracts, they may put themselves on the radar screen of regulators.
Finally, sponsors, such as Visa and Coca-Cola have been asking pointed questions about when and how FIFA will clean up its act. This last response is the one which will probably be the most significant at the end of the day. If sponsor money dries up, FIFA may have little room to maneuver. Real change occurs when entities develop a business solution to a legal problem, and that is where the FIFA scandal may be ultimately heading.