In the manner of Casablanca’s Captain Renault, most anyone who follows the beautiful game must have been shocked — shocked! — to discover that Sepp Blatter’s FIFA-dom was a cesspit. It is so seldom that people with power to bestow highly valued favours seize the opportunity for self-enrichment when they have the discretion to do so. Why, just look at the reproachless governance of contemporary South Africa.
More genuinely novel was how the US Justice Department found a legal path to the indictment it handed down last week on 14 members of what it calls “the enterprise” — FIFA, its confederations, their federations and the marketing companies that feed on and off them. The dodgy dealings alleged in the 163-page charging document occurred only very tangentially in American territory and in many instances long after the statute of limitations would normally have expired.
Read the document closely with a copy of the US Code to hand and you will find that the case against Jack Warner, the Trinidadian alleged to have made a bundle fixing SA’s 2010 bid, and the rest of his fellow “conspirators” hinges, on their having engaged in “a scheme or artifice to deprive another of the intangible right to honest services”.
In this instance “another” is “the enterprise”. Technically, the enterprisers’ alleged crime is not bribery and kickbacks, though the words appear frequently in the indictment, but betrayal of fiduciary duty to FIFA and the other foreign bodies they variously represented.
The indictment specifically states FIFA and its confederations were kept in the dark, “including without limitation…their respective executive committees, congresses (and) constituent organisations.” Absent that proviso, some might well have thought that FIFA’s right to honest services had been supplanted by the code of honour among thieves.
If, in committing “honest services” fraud, as it is commonly known, the defendants caused dishonestly acquired funds to be transferred electronically via American banks as charged, it follows, under US law, that they committed “wire fraud”. That, in turn, is defined by the Racketeer Influenced and Corrupt Organisations Act (RICO), as a “racketeering activity”. If done more than once within 10 years, it becomes a “pattern of racketeering activity” and subject to the full RICO treatment.
RICO is a legal sledge hammer originally enacted to smash the Mafia. It has since been found useful in many other kinds of prosecution. Here it has allowed the state to lump into one a slew of cases that would otherwise have had to be tried separately. It has rendered the statute of limitations moot. And, more debatably, it has given the Justice Department the extraterritorial reach it needs to charge foreigners (mostly) for misbehaving in foreign parts.
The Supreme Court, in a securities fraud case involving an Australian defendant, ruled in 2010 that unless Congress stipulated otherwise, the laws it passed could only interpreted as applying on US soil.
That judgement notwithstanding, the federal appeals court for the Second Circuit — the jurisdiction where the FIFA 14 are notionally to be tried — decided last year that RICO could be used to go after money laundering in Europe by Russian and Colombian syndicates. The ruling was far from unanimous, with five of the 13 member bench dissenting vigorously. The United States of America vs. Jack Warner et al. looks to be a long drawn out affair, possibly reaching the Supremes before it’s over.
The crime of “honest services” deprivation, which Congress added to the wire fraud statute in 1988, also has a vexed history. Both Conrad Black, the newspaper magnate, and Jeffrey Skilling, the former Enron CEO, were convicted of it, and both successfully appealed to the Supreme Court which ruled unanimously in their favour (though their convictions on other counts stood).
“Honest services” fraud was too vague to constitute a crime, the Court found, unless “bribes or kickbacks” were involved. Hence the frequency of those terms in the present indictment. The Black/Skilling line of appeal seems closed to the defendants should things get that far.
A word, to close, in defense of the South African bid committee. The $10 million paid by FIFA to Mr Warner “on the back end” (as opposed to up front and directly by the SA taxpayer) and the wodges of greenbacks allegedly handed over to his son in Paris hotel, these were not bribes but payments to a extortionist. The 2010 World Cup was South Africa’s baby. As much as cynics may cavil about the cost and the white elephant stadia, the good those glorious weeks did us was incalculable, and worth every penny.
What’s $10 million these days? A firepool, an amphitheatre, a cattle kraal, and a hen house with a view to keep the presidential chickens setting off alarms?