Thursday, May 28, 2015

Is anyone other than me rattled by the FIFA arrests?

Soccer (or what most the world calls "football") is barely an American game. None of the FIFA officials arrested are American citizens and none of the alleged crimes involved American citizens.

And yet FIFA officials are subject to American extradition warrants on the basis of American law.

This is from one of the countries that is not a participant in the International Criminal Court and does not like to subject itself to international law.

I have little doubt that FIFA is corrupt. And I don't doubt it deserves to be cleaned up.

But try this scenario. A country (say France) makes it illegal to emit greenhouse gases above a certain quantity in non-compliance with international agreements. US utility executives (who emit huge amounts of greenhouse gas) are travelling in a third country (say Switzerland) and get arrested to be tried in France.

Would you be comfortable?

I would not. But you could reasonably argue that ensuring the planet is not despoiled is more important than cleaning up corruption in football. And you could reasonably argue that emissions in the United States affect France far more than say soccer corruption affects the United States.

This is just anti-democratic. We non-Americans did not vote for the US laws and the US legal system is not responsive to our votes.

But the US system applies to us even when we are not dealing with Americans.

It seems strange to me to explain democracy to Americans - but alas it seems Americans have forgotten the tyranny of foreign laws.




John

Postscript. It seems some of the crimes involved US Citizens and on US soil... but the extraterritorial claim is still made. Some are non US citizens concerning Brazilian tournaments.

Many people commented on extradition treaties requiring the crime be a crime in both jurisdictions... but the arrests took place in a third country - Switzerland - that had tenuous links to the crime.

This editorial is also to the point...

http://www.washingtonpost.com/blogs/monkey-cage/wp/2015/05/27/how-watergate-helps-explain-how-the-u-s-can-prosecute-fifa-officials/?wpisrc=nl_pmpol&wpmm=1

44 comments:

Anonymous said...

Perhaps international criminals should more fastidiously avoid moving their money through the US financial system if they don't want to be subject to US laws.

www.sadtrombone.com

Anonymous said...

Running the world's reserve currency has incredible costs -- you must, essentially, run current account deficits so that other countries can acquire your scrip as reserves. This means you have to net cede domestic demand to the world. The flip side is you must run a capital account surplus, i.e., rack up obligations to the rest of humanity.

But, there is one great compensating factor: you set the rules for any clearing in your own currency. Wanna target Iran you hate? Why, just make it illegal for Iranians to clear in dollars. Want to punish corruption in a sport most of your citizens don't care about? Target corruption if the sports organization cleared bribes in dollars through the NY branches of foreign banks (or, even better, through U.S. banks).

The lesson is rather simple: if you want to be corrupt and stay off the U.S. radar, for god's sake, please pay the bribes in non-U.S. dollars and clear your transaction through non-U.S. banks (or, the NY-branches of foreign banks).

Anonymous said...

I don't think the greenhouse gas analogy is quite accurate, because FIFA undoubtedly broke Swiss laws as well as US laws. The US just took the lead in terms of enforcement.

Robert in Chicago said...

There may be jurisdictional overreach, but not nearly as much as you portray. The indictments focus heavily on FIFA's regional organization for the Americas, the Confederation of North, Central American and Caribbean Association Football (CONCACAF), which is headquartered in the United States. Most of the alleged crimes involved CONCACAF-sanctioned events. The defendants include four U.S. citizens and one U.S. company.

Anonymous said...

You appear to misunderstand the complexity of the situation by intermingling the separate Swiss probe with the American indictments. They are separate investigations alleging separate crimes.

The charges behind the American arrests alleged bribes and money laundering that occurred in North America and Central America. As you probably know, the US regularly assists Central America with enforcement efforts where a join interest exists because of a general lack of trust in Central American judiciaries. There is nothing out of the ordinary about crimes that occurred in US jurisdiction being tried in US jurisdiction.

Anonymous said...

Also, CONCACAF (the North American soccer body) is HQ'ed in Miami which doesn't seem great for the CONCACAF folks who were arrested today.

Anomalous Cowshed said...

To be honest, this probably isn't one of those cases to get concerned about Yankee economic warfare via domestic legal means. Although there are examples.

Mike said...

John,

Pretty sure you can rest easy. The example you give wouldn't happen because the basic tenant of most extradition treaties is "duel criminality" i.e. the request your making is only allowed when there is a similar law in the extraditing country. So for the Swiss to consent to the extradition the individuals in question also have to be shown to have broken Swiss law.

Frederic the Flopper said...

Crude, yet accurate, portrayal of the FIFA facts: http://www.barstoolsports.com/chicago/here-is-your-guide-to-what-happened-to-fifa-today-and-why-they-are-but-arent-fucked-probably/

Anonymous said...

Completely misrepresenting the facts [no US citizens, et al] is not a good look for you, John. People will start to wonder.

A fan,

Anonymous said...

surprised w negative comments. couldn't agree more - press in UK is enthusiastically reporting about this as they hate FIFA and resent the blatant corruption that saw world cup awarded to Qatar and Russia (and not England)

But I think it is scary that the UK press acts as cheerleader here

To the person who mentioned needing to prove 'dual criminality' - that might be true in theory but in practice when the US charges you with conspiracy rather than something more specific, then there is very little one can do to defend oneself.

Anonymous said...

Yes John you are exactly right, what right does the US have for going after FIFA? (other than to expose and embarrass Mrs. Clinton some more)but you are a liberal John and you have said nothing about President Obama's violations of the law for the last 7 years, not a peep about NSA spying, how about rewriting Obamacare on the fly after it passed? nope not a peep, IRS after Conservatives?, go ahead have a field day, overthrowing Libya? Oh he was a bad guy, the liberals in the US have been silent and going along with a ton of unlawful activity because their team is in charge.

Maybe Hillary's weapons sales for money donations to the Clinton Foundation got your attention. Nah, you will just look the other way.

Mr. Gotham said...

I wonder if the US was chosen by default to do this since few here care about soccer and we have never been a real threat to the soccer aristocracy on the field so in effect we don't have a dog in any FIFA brawl. If the Germans or Brazilians or French or (God forbid) Argentines did the prosecuting, I'm sure there would be many claiming there was a sub rosa agenda that in some way enhanced their standing in the sport.

It also fits quite nicely with the fascist tendencies of the Obama administration to expand Federal jurisdiction in ways previously unimagined and to freelance quite aggressively when it comes to the letter of the law. Plus, give the size of the vig that was allegedly paid to the various defendants, the likely penalties and forfeitures have the makings of a not insignificant slush fund that could fund any number of DOJ adventures such as Fast and Furious that would not have to run through the Congressional appropriations process. The US will likely be well paid for draining this particular extraterritorial swamp.


mpr said...

I'm loving this comment section. A patient and informed bunch.

Unknown said...

Given the size of soccer in the USA and its need to be in charge of everything I suspect we're seeing soccer becoming the new "American Football" after all its still a game white kids can play.

Anonymous said...

Good point and the same goes for the comments.

BUT a positive precedent has already been set by the US when they and NOT the Europeans chose to go after cycling star Lance Armstrong. It did change quite a lot.

Adam said...

The other side of the "teeter-totter" though, is how would the world work if it were:
a) illegal to do some thing in America, but
b) ranging from "questionably legal" to "legal" in the rest of the world, and
c) the US were not willing to play it close to the line on extra-territorial prosecutions?
The answer is that there would be a big incentive to locate fraud, corruption or other criminal activity just outside of the reach of the US, right?

So to that end, in adversarial process like we have in common law countries, I think it's quite valuable for some prosecutors some of the time to push a little harder than others. I think we all get huge benefits as a society from having some uncertainty and a range of possible outcomes in prosecutions because it makes "rational" decision-makers stay farther away from gray areas.

Anonymous said...

Better check everything you said about HLF related matters John, or you may find an FBI agent knocking on your door soon. LOL

Anonymous said...


You guys are so going to miss the good ol' U S of A once China has gained a significant portion of the world's wealth and power.


The USA is far from perfect but we are far better off now with them as the only superpower than the other alternatives.

Anonymous said...

I am, never use an American bank or their financial system is the lesson that I have taken.

Anonymous said...

don't think lance armstrong is a good example

he is a US citizen who was riding for a US team which received US federal funding/sponsorship (via us postal service)

Anonymous said...

Also surprised there are negative comments. Completely agree with the original post.

Anonymous said...

Same dudes that think this just John's "liberalism" coming out would be screaming murder if US drone operators were indicted by European courts and requested to be extradited.

Anonymous said...

I completely agree about the U.S. government over-reach problem.

But, your example suggests that the laws were not being broken in the home country. The laws that the FIFA representatives were alleged to have broken are laws in every developed country in the world. It would be easy for everyone to say "not my problem".

At least someone has stood up against it.

Anonymous said...

They used US banks to send and receive bribes, this gives the US jurisdiction over this issue. period, end of story

Anonymous said...

There is another aspect of American extra-territorial (in)justice, that you have not mentioned.

The plea-bargain.

1.) Take one villain guilty or not-guilty, the facts are not of any real importance to a successful prosecution.

2.) Threaten them with a long term in a very unsafe prison, say life....No... lets say 3 life sentences...No...why not 300 years or even 3000 years, if they go to trial

3.) Offer them a reduced sentence, say 15 years and a large fine if they plead guilty. Point out that they are likely to be found guilty because they are {foreign,race,gender,..pick as many as you like}

4.) Leave to stew in a prison for a while

5.) Accept Guilty plea and trumpet successful prosecution/extortion

Somewhere in the order of 95% of trials in the US are plea bargains. Where's the justice in that?

https://www.bja.gov/Publications/PleaBargainingResearchSummary.pdf


martin said...

I'm with the UK press - well done to the FBI for having the balls (sorry to Loretta Lynch) for attacking this one head on. In other cases I too am very unhappy with the extraordinarily long arm of the US law and which doesn't work both ways so I agree with the concerns here on point of principle. But as Mr Gotham pointed out, all other interested countries were too scared to do anything in case FIFA turned against them. The Swiss too were happy to have FIFA on their soil so turned a blind eye.

Perhaps now more people with evidence will come forward and the whole sorry affair will come out into the open. A great day for football.

Anonymous said...

If they'd paid in Argentine Pesos and directed all payments through Argentine channels, there'd be little the US could do.


But they paid in US dollars, used US intermediary banks, etc. It involves US citizens. I don't even see it as real extraterritoriality. The payment stream WASN'T EVEN offshore!

(i.e., it wasn't like payment from a USD account held at BIS to another USD account held at BIS, something about which the US govt cannot see).

If you want to pursue corruption, make sure it does not involve any US persons and does not use US based infrastructure or payment systems. Simple enough.

tigergirl said...

interesting how the govts start enforcing laws (formerly ignored) when govt coffers run dry and audiences' pockets have been picked clean.

Generational Govt Grafters and Govt go after each others' throats - suddenly spouting the law as rule - cause putting John Q Homeless into the pen is an upgrade - time to bring some Lord Lollypops down.

oh well. players play, watchers watch- and generational grafters graft.

First we watch the "football" match. Now we watch the Govt go after FIFA Generational Grafters match. Get the popcorn...



Anonymous said...

"To the person who mentioned needing to prove 'dual criminality' - that might be true in theory but in practice when the US charges you with conspiracy rather than something more specific, then there is very little one can do to defend oneself."

There are plenty of specific charges in the indictment to go along with the RICO conspiracy charge.

Also: according to trusty Wikipedia, it is pretty normal to have international enforcement in a case like this:

"In the overall body of RICO cases that went to trial, at least 50% have had some non-US enforcement component to them. The offshoring of money away from the US finance system as part racketeering (and especially money laundering) is typically a major contributing factor to this."

http://en.wikipedia.org/wiki/Racketeer_Influenced_and_Corrupt_Organizations_Act#International_equivalents_to_RICO

Anonymous said...

It seems to me that the US has clear jurisdiction over all of those arrested and the crimes alleged. The most tenuous - the CBF (Brasil) arrest - appears related to bribes paid by a US company to secure licensing or other rights to CBF business and the crime alleged appears to have occurred in the US. The DOJ appears to have on paper been careful to establish jurisdiction, which may be why it only charged a handful of people this far. This link may be handy in understanding is arguments of jurisdiction. http://www.justice.gov/opa/pr/nine-fifa-officials-and-five-corporate-executives-indicted-racketeering-conspiracy-and

Also, from what i can tell the US isn't alone in investigating FIFA corruption allegations and it has shared a lot of info with Switzerland where FIFA is based. This is likely only the beginning. We'll learn more over the coming weeks about what evidence the US holds, what it learned in its raids of the region offices, and if Switzerland or other countries take additional action.

Anonymous said...

The bigger issue is Foreign Policy; we can't be trusted to abide by international law as the forcing down of Morales plane in pursuit of Snowden and other instances show the world. We need to regain the moral high ground in order to be an effective world leader unless we are intent on waging permanent wars around the world wherever people disagree with our opinions.

Patrick Nicholls said...

Couple hundred million in placing the venue corruption is far eclipsed by the several billions 'earned' in gambling by fixing the games, misdirecting the real problem

Anonymous said...

"With over 13 million Americans playing soccer in the United States, soccer is the third most played team sport in the U.S., behind only basketball and baseball/softball. With an average attendance of over 18,000 per game, MLS has the third highest average attendance of any sports league in the U.S.,[9] and is the seventh highest attended professional soccer league worldwide.--From Wikipedia, the free encyclopedia" Check your sources and your mouth-- stupid hedge fund moron.

Johnny Johnson said...

American soft power influence foreigners living foreign countries because the long are of the law extends beyond the U.S. borders and enforces American values that are anathema to corruption.

Anonymous said...

FIFA should be become a public company, its time to subject that mammoth to some regulation
perhaps an IPO is the first step

Anonymous said...

The attempt to belittle the validity of the indictments because Americans refer to the sport as soccer and not football is beneath this blog.

Look at the steadily growing talent and popularity of the American professional league, the MLS. Look at US results at the World Cup since 1994 (advancing four times to the Round of 16, once to the Quarterfinals). Look at the promise and popularity of the US national team under Jurgen Klinsmann. Finally, stop attempting to distract from the seriousness of the corruption allegations by falling back on outdated stereotypes about Americans not caring about the sport.

Spencer Swartz said...

John Hempton-

I fear for Bronte Capital's clients, if the intellectual weakness and sloppiness you display in arguing the FIFA issue is repeated by you and BC in the decisions you make on where to sink investor capital.

If people are breaking laws in the US by passing bribes through US banks, then they get prosecuted in the US. This is no different if people are breaking Aussie laws through such actions, they get prosecuted in Aussieland; and anywhere else.

Further, Yanks are some of the accused, if you had done some due-dil.

Good day, mate.

Spencer Swartz

Anonymous said...

There has to be some minimal portion of the criminal activity occuring on US soil for the US to exert jurisdiction. I'm sure the defendants' lawyers will exhaustively litigate whether that portion suffices for US jurisdiction.

On a more general point-- IMO intolerance for corruption is one of the things that the US does best in the world. In may instances, international organizations are first brought to shame/trial in the US. Only a few years later does the rest of the world jump on the bandwagon. Examples include not only the obvious like the FCPA (e.g., Siemens), but also the IOC (remmeber what happened after the Utah olympics?) and even the Catholic Church. I can't imagine that the rate of sexual abuse by Catholic priests in Europe was any different from the rate in the US, but the Europeans quietly tolerated it until a decade or two after the US started raising a stink and filing suits.

A lot of outsiders read the US press and conclude that the country is much more corrupt than their homeland. This is simply not the case. Instead, the US is much more open and aggressive about airing and punishing corruption.




Anonymous said...

So say you're an Australian citizen, living in Australia and trading on the NYSE - or "insider trading" on the NYSE in this hypothetical case... wouldn't you agree that it would be reasonable for US authorities to request your extradition if they have a solid case you traded on insider information?

if you read the indictment, there are lots of references to wire fraud and money laundering, which probably involved some US bank / system...

Anonymous said...

Question for all the Merica defenders. If I am non US citizen holding a USD account outside the states does the US have the authority to tax me on those holdings?

Anonymous said...

"Question for all the Merica defenders. If I am non US citizen holding a USD account outside the states does the US have the authority to tax me on those holdings?"

No. But if you try to launder your USD through the American banking system then yes.

Anonymous said...

Is anyone other than me rattled by the FIFA arrests?

-Not at all.

...Soccer (or what most the world calls "football") is barely an American game. None of the FIFA officials arrested are American citizens and none of the alleged crimes involved American citizens.

-But Power is ‘All American’. FIFA unfortunately, tried to get cute with the Israelis. Plus Qatar. Russia maybe? Lies you say?

http://www.haaretz.com/news/diplomacy-defense/.premium-1.659004

http://blogs.rediff.com/mkbhadrakumar/2015/05/29/kerry-left-sochi-laughing-to-himself/

...And yet FIFA officials are subject to American extradition warrants on the basis of American law...

-The phrase ‘American Exceptionalism’ springs to mind.

https://www.youtube.com/watch?v=uviLM7M2d2o

https://www.youtube.com/watch?v=JjG0aaUOhhU

...This is just anti-democratic. We non-Americans did not vote for the US laws and the US legal system is not responsive to our votes. But the US system applies to us even when we are not dealing with Americans...

-AHH! But this is the essence, it epitomises Exceptionalism!

Anonymous said...

They used U.S. banks. Presumably the polluting American utility company is not using French powerplants, so you've used a poor analogy.

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