August 07, 2016

Panelists say international sports governance needs an overhaul, as Rio Olympics begin

Corruption in the governance of international sports organizations has been around for a long time. But since 1984, when the Summer Olympics in Los Angeles launched a new era in massive revenues from major sports events, the scandals and embarrassments have multiplied.

The causes, dangers and possible solutions to this problem was discussed at the Aug. 4 panel “Corruption’s New Arena: International Sports in a Post-FIFA World” during the 2016 ABA Annual Meeting in San Francisco sponsored by the ABA Criminal Justice Section.

Gareth Sweeny of Transparency International, an organization dedicated to exposing and ending corruption throughout the world, said that the corruption that plagues international sports today goes back to the origin, when sports started governing themselves. This he explained, came about out of necessity. International sports needed autonomy from political interference.

The problems really were magnified when “massive commercialization of sport coupled with the failure to modernize the governing system,” Sweeny said.

David Larkin, an international law attorney on the panel based in Washington, D.C., agreed that the lack of accountability was the cause. He pointed out that the various levels of Olympic governing bodies, from the International Olympic Committee to National Olympic committees to individual sports federations all police themselves.

But the international nature of international sports is part of the issue. Michael Kuh, an attorney with Latham & Watkins LLP in New York, said that trying to govern sports that are in “different countries with different laws and different business cultures in difficult.”

In fact, in Switzerland, where the vast majority of international sports associations, including the International Olympic Committee and FIFA, world soccer’s governing body, are based, bribery was not outlawed until 2001 and is still, in some cases, tax deductible.

In addition to the criminal activity of some of these organizations, Larkin pointed out that the corruption in sport can be used for geopolitical gain. He said the major powers – China, Russia and the United States – do this but also warned that Qatar, which has been accused of manipulating votes to secure the 2022 World Cup bid, has become a force in this arena.

Larkin also pointed out the rigged system of justice when a grievance is filed in these sports. He called the Court of Arbitration for Sport “unbelievably broken” and rife with conflicts. He said the system lacks due process and is particularly unfair to poorer countries. We must fix the system so Third World countries can get justice,” Larkin said.

Identifying the problem is easy as scandals involving Olympic and World Cup bids have proliferated and FIFA and Olympic officials have been indicted. Solving the problem is more complicated. Usually good governance cases are determined by figuring out who are the stakeholders and how do they get treated equitably.

But as Kuh points out, “It is not clear who the stakeholders are in sports. Athletes, fans, host cities, host countries, sponsors and broadcasters all have an interest.” And in most cases a large financial interest. Kuh also pointed out that sports is uniquely susceptible to corruption give its access to tickets to major events, high-profile athletes and government leaders.

While some on the panel believed that governance of international sports was improving citing the recent FIFA case, all agreed there was a long road ahead.

Preston Pugh of Pugh, Jones & Johnson, P.C., in Chicago, a former federal prosecutor who now represents clients in highly regulated industries, believes that the use of an Independent Private Sector Inspector General or IPSIG would help. He said that the IPSIG would provide external accountability but would also be focused on working with the organization as a monitor.

All agreed that international sports need to be better governed and that fairness -- for fans, athletes, countries – needs to be achieved and that these organizing committees needs to be more about the game itself. Because currently, as Larkin pointed out, “Sport, at its highest levels, has nothing to do with sports.”