Michael Hershman’s professional record speaks to a long history of fighting corruption in the halls of government and on the fields of international development.
His journey started with roles at both the New York City Department of Investigation and the New York State Special Corruption Prosecutor’s office looking into crooked police, judges, and corrections officers. After that, he worked as an assistant general counsel for the Senate Watergate Committee investigating corruption in the highest office of the land, as well as in campaign finance. After that, he became the chief investigator for the Federal Election Commission, but that is where his domestic anti-corruption work ended and where the next phase of his career, his international phase, began.
At what point did your career shift to an international fight against corruption?
About Michael Hershman
Title: CEO, International Centre for Sport Security
About ICSS: The ICSS handles security for large sporting events and is also dedicated to increasing the levels of honesty and transparency within professional sports.
Years of experience: 45
Areas of expertise: Governmental and organizational fraud and corruption
Quote: “The worst phrase that has been invented in compliance is ‘tone from the top.’ Every top executive understands what he or she must say to give a good impression of transparency and accountability. But it’s not about tone from the top. It’s about actions from the top.”
It changed when I accepted the positon as the deputy inspector general at the Agency for International Development, in charge of investigations, audits, and security. That opened a whole new world of awareness on my part to the international problems of corruption. This was at the time of the passage of the Foreign Corrupt Practices Act, so I was in government talking to the people in Congress while they were formulating the FCPA while at the same time, I was traveling around the world and looking at development projects and noticing that much of the money that was going toward development was being diverted into the hands of crooked politicians and government officials. The system was contaminated by corporations that wouldn’t think twice about bribing to get a foreign construction or telecommunications contract. It really was an eye-opening experience for me because for the first time, I witnessed the devastating impact of this type of corruption on the daily lives of people in desperate need of health services, education, and jobs. These were folks that often were never getting the benefit of economic development funds from the United States, United Kingdom, Japan, and elsewhere. Millions of dollars would be spent to build a hospital somewhere, and I would go there and find a hole in the ground.
Was the level of corruption you witnessed internationally something you expected, or did it come as a surprise?
I had been through the Watergate affair as well as a House investigation, which became known as Koreagate. So, it’s not like I was naïve. But what really blew me away was the impact it had on the everyday lives of people who were very unfortunate in terms of their standard of living. At that point I decided to see if I could improve the fight against corruption from the outside. So, I formed a company called the Fairfax Group that consulted with governments and businesses on compliance and governance.
But that still wasn’t enough, so I came together with a group of friends from around the world and, in 1993, we formed Transparency International, which has become one of the leading NGOs on issues related to anti-corruption, transparency, accountability, governance, and compliance, with more than 100 chapters around the world.
I got into a cycle where I spent half my time on commercial work—working with governments and businesses on issues related to transparency, accountability and anti-corruption—and half my time on NGO activities. But I had never worked in the area of sports. In fact, I didn’t even think about the possibility of corruption in sports. Of course, I had read stories about individual sports figures getting in trouble, but I never really looked at sports as big business.
When I was asked to join the independent governance committee at FIFA [the Fédération Internationale de Football Association] in 2012, I figured, I’ll go in and help reform FIFA as I did with other organizations. But much to my surprise, I ran into a bit of a brick wall, because here was a multibillion organization with no incentive to reform.
It seemed like at that time, FIFA had become so used to bribery as a business model that it didn’t even think it was doing anything wrong.
Sports organizations in general regard autonomy as their most precious possession. And they are very reluctant to take advice from outsiders. The other thing I began to realize working at FIFA is that sports is a trillion-dollar industry and, in many instances, sports organizations have no oversight and very few regulations governing their operations or behavior. FIFA’s scandals really led them to circle the wagons and say look, we can self-regulate and reform ourselves. That was so atypical of the organizations I’d worked for in the past. They did not have the technical expertise nor the willingness to reform. And so, after two years, our committee simply dissolved itself. Of course, the following year, over 40 [bribery] indictments came down. But this is what opened my eyes to the world of sports, and I decided then and there to bring a greater degree of transparency and accountability to sports.
Which brings us to your role now at the ICSS.
After my experience at FIFA, I was asked to join the advisory board of the International Center for Sports Security. They were doing a lot of work on safeguarding major sporting events, but because of the evolving scandal, they wanted me to help devise a program to improve honesty within sports—match fixing, doping, a series of ills that are infecting the sports community. I recommended that they create the set of global principles and standards that is now called the Sports Integrity Global Alliance. That is an independent, non-profit that has its own board of directors and over 80 members, including sponsors like MasterCard, Dow Jones, and the Commonwealth Games. Last year, after serving for two years on the board of advisers, the founder of ICSS asked me if I would step in to the role of global CEO.
Does the unique relationship between people and sports make it more challenging to promote ethics, transparency, and accountability within sports itself?
The largest constituency in the sports industry are the fans. Fans need sports. They love sports. In many respects, they live for sports. Unlike in a typical corporation where you have stakeholders that can choose whether to buy your product based on if they think you are a good corporate citizen, you don’t see a lot of fans turning the television set off because they read in the headlines about the latest match-fixing scandal or administrative corruption. They might find themselves a bit disillusioned, but it doesn’t really stop them from enjoying the sport or from supporting their favorite athletes
Here’s why it’s critically important. Look, I played sports as a kid, and sports helped me develop a set of values: teamwork, fair play, not always about winning and losing. The world of sports has changed through commercialization. We’re not going to be able to take the money out of sports. But I’d like to see a little bit of those values, and the purity of sports, be brought back into the game. I’m finding it to be an uphill battle, but one that I’ve dedicated myself to.
Do some sports have a more inherently honest culture than others?
Let me reverse that question. The sports where I see the biggest problems are the ones where I see the biggest money. Football (soccer), cricket, basketball, baseball, football. The sports that are most influenced by big money are the ones that seem to have lost the greatest amount of purity or have a broken ethical compass. Sports like running, it’s not like they’ve been immune to controversy. There’s been doping and cheating in major races, but by and large, it’s not one of the big money sports.
I was at Rio for the Olympics. I’ll never, ever, ever forget the scene where the two women runners collided. A New Zealand runner and an American runner, and the New Zealand runner stopped to pick up the American runner and help her. That’s what sports are supposed to be about. Neither one of them could make it to the finish line in time to qualify, but it was such a stunning moment, they were both allowed to advance to the finals. That scene will remain in my mind forever.
A lot of ethics and compliance officers fight their own uphill battles within their organization or their industry. What would you say to them?
There is hope, but let me give you an illustration of where we have been our own worst enemy. The worst phrase that has been invented in compliance, in my judgment, is “tone from the top.” Every top executive understands what he or she must say to give a good impression of transparency and accountability. But it’s not about tone from the top. It’s about actions from the top. Because to say the right words and to turn around and do the wrong thing is a catastrophe when you’re trying to change or promote a certain culture within a corporate environment.
Where do I see us as having success? There is a new breed of corporate executives coming up that wants to do the right thing not because they’re afraid of the FCPA or the SEC, but because it’s the right thing to do. And you can tell by looking at not only the support for their compliance programs, but the support for their corporate social responsibility programs, which are run professionally and independently, without influence from senior managers. You know you’re dealing with companies that really do care.
Also, I see a lot of college students [at speaking engagements] around the country. Ten years ago, when I and saw students getting ready to graduate, they would come up to me asking if they could send me their résumé; they’re looking for a job on Wall Street, they spent a lot of money on school, and it’s time for a little payback. Now, when I go up to the same students, they ask me how can they can be assured that the company they work for has the same high standards and values that they hold dear. That is a sea change in attitude.
At what point can the presence of big money in sports actually help to make things more honest?
I think that in general, sponsors have a critical role to play to promote integrity, transparency, and honesty in sporting organizations, whether it be FIFA, the IOC, the NFL, the MBA, etc. If the sponsor has a relationship with an athlete like Tiger Woods or Lance Armstrong, and they go wrong, the first thing they do is pull their contract under a general morality clause. But if FIFA goes wrong, where are the voices of the sponsors? Let’s not forget, all of these sponsors—Coca-Cola, Nike, and so on—have these wonderful compliance programs that make sure their partners uphold the same level of standards. But because of the huge economic gains [of major sporting events], they’ve been reluctant to put pressure on the sports federations, teams, and associations.
The sponsors need to come together in a collective fashion, because they’re always more powerful in a group than alone. And that’s what we’re doing with the Sports Integrity Global Alliance: bringing together all stakeholders, including the sponsors, to agree to a global set of principles and to use their influence on sports organizations to promote and implement those principles.
Still, that can’t be easy. Nobody likes calling out their favorite sport for being dishonest.
The work that we do in anti-corruption is lonely work. No one wants to be our friend. I understand and realize that there can be huge frustrations, and that people in this industry can get a feeling of hopelessness. The support circle surrounding our anti-corruption community has been growing steadily, though. Talk to your colleagues. Find out what they do to move the ball forward (no pun intended). But don’t ever expect that the work you do will make you the most popular person in the company.
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