FIFA’s fouls

June 2, 2014

Soccer’s international governing body had a really bad weekend. Twelve days before FIFA kicks off the world’s largest sporting event in Brazil, the New York Timespublished details of alleged match fixing in the run up to the last World Cup in South Africa. Then the Sunday Times (paywall: see the Guardian) released the latest and most damningly detailed report of corruption in Qatar’s successful bid to host the 2022 World Cup.

The match-fixing report mixes seemingly amatuer criminal techniques with sophistication and global reach emanating from a Singaporean front company. FIFA’s report investigated a total of 15 games, and the report is remarkably blunt in its conclusion: “Were the listed matches fixed? On the balance of probabilities, yes!” For example, the day of a match between South Africa and Guatemala ahead of the 2010 World Cup, a referee for the game deposited $100,000 in $100 bills in a bank in South Africa. According to the NYT’s Declan Hill and Jere Longman, the referee put in a questionable performance: “Even to the casual fan, his calls were suspicious — he called two penalties for hand balls even though the ball went nowhere near the players’ hands”.

The NYT’s report comes on the back of several high-profile reports of match fixing.Earlier this year, a match fixer claimed his financial backing enabled Nigeria and Honduras to qualify for the last World Cup. In 2013, Europol detailed its suspicions regarding more than 380 club matches. Among those were games in the Champions League, the highest level of European club competition.

The Sunday Times’ investigation shows that it isn’t just the games that might be rigged. So are the decisions about their venues. Using millions of documents leaked by a high-ranking FIFA official, the Guardian reports that Qatari construction executive and FIFA executive committee member Mohamed bin Hammam paid a total of $5 million in cash bribes to ensure his country won its bid to host the 2022 World Cup. Soccer is a temperate climate winter sport, so the idea of holding a summer tournament in a location where 120 degree F temperatures are the norm always seemed odd. It now seems like the Qatar World Cup will be in the winter. Or it may simply be moved to another location because of the taint of corruption and oppressive labor conditionsFIFA’s response to the NYT and Guardian is just 52 words long and does not address the substance of the reports.

Soccer is a massive global business. FIFA, which is based in Switzerland, is expected to take in a total of $4 billion this World Cup cycle from TV deals, sponsorships and ticket sales. Club soccer is an even bigger business, with most of it coming from TV rights. And betting on soccer is unknowably large. One estimate puts the total better revenues – legal and illegal – at between $500 billion and $700 billion a year. The incentives are simply too skewed to end in good governance. With that much money in play and little oversight or accountability, bad behavior shouldn’t be too surprising. —Ben Walsh

On to today’s links:

Remembrance of Time Past
America’s history of industrial espionage – James Surowiecki

“These days stay-at-home moms … are not able to make enough money for working to even be worthwhile” – Pacific Standard

Data Points
Not one person has died on a Citi bike – Slate

The HELOC market is making a comeback – Marketplace
The effects of housing vouchers are “always much smaller than those from recent studies of cash transfers” – NBER

Things that probably aren’t true: Society is biased in favor of male hurricane names –Ed Yong

Goldman Touts Invisible Victories Over Wall Street Rivals – John Carney

Go ahead, be a banker – Josh Barro

Big Brother
“What does the lived reality of big data feel like?” – The New Inquiry

Primary Sources
The full report on global “vox populi” political risk – Citi

Everything – which is not very much – we know about the Icahn/Mickelson/Waters investigation – Myles Udland

On the Internet
John Oliver explains net neutrality – Last Week Tonight

Niche Markets
Quebec has a thriving black market for foraged ramps – Modern Farmer

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