Why America, not another country, is going after FIFA
Few would take Russia’s counsel on international law, but in this case it is on to something. American prosecutors like Loretta Lynch do indeed reach much farther than their peers elsewhere—sometimes too far.
They can do so partly because of America’s financial pre-eminence and the global status of the greenback. America’s crime-busters claim the right to go after anyone who uses its banking system (including indirectly, using “correspondent” banks to clear payments) or plans an illegal scheme on its soil. Some of the accused FIFA officials and marketing executives allegedly discussed or engaged in palm-greasing while in America. Several banks and branches that handled transactions are American, and some of the implicated associations and marketing companies have offices there.
American prosecutors are also unusually creative, using a different law when the one that appears most relevant lacks teeth. The Department of Justice has not charged anybody at FIFA with bribery: federal bribery laws cover only payments to government officials. Prosecutors have instead alleged racketeering, wire fraud and money-laundering conspiracies under the Racketeer Influenced and Corrupt Organisations (RICO) Act, which was intended for use against the Mafia.
Odder still, officials have been charged with violations of the Travel Act, which says that it is illegal to engage in interstate or foreign travel, or use “any facility in interstate commerce” to carry out an illegal activity (it helps that some states have laws against commercial bribery). Any relevant transaction with an American link can be targeted—such as the one in which an employee of a Bahamas-based bank flew to New York to pick up an alleged bribe of $250,000.
A third explanation for American zeal is the prevalence of plea-bargaining. Prosecutors commonly collar people they suspect of being part of a conspiracy, threaten them with all sorts of charges and decades in prison, then offer them leniency in a plea deal if they testify against others. Chuck Blazer and the sons of another former FIFA official have pleaded guilty and reportedly spilled beans.
In comparison, European judicial systems discourage plea-bargaining because of the risk that suspects will not so much sing as compose, inventing stories that implicate others. Europe is also more wedded to the doctrine of “comity”, which holds that courts should not act in a way that demeans the jurisdiction, laws or judicial decisions of another country. “In practice, this translates into keeping your collective nose out of other nations’ legal affairs, with a few exceptions, such as war crimes,” says Stephen Platt, a barrister and an expert on financial crime.
America has successfully bashed global banks. Last year it wrung $9 billion out of BNP Paribas for knowingly processing through New York transfers that violated sanctions against Iran, Cuba and Sudan. It has clobbered HSBC for its facilitation of Mexican money-laundering. But when it comes to bribery, America has sometimes been too audacious. The recent punishment of BHP Billiton was a legal stretch: the Anglo-Australian mining group was fined $25m for paying for African and Asian officials to attend the 2008 Olympics in Beijing, even though there was no evidence of a specific quid pro quo. Banks complain that regulators have gone too far by suggesting that the hiring of officials’ relatives counts as bribery.
In April, an American court dismissed charges against two Ukrainians, in a case in which the only American link was the tangential involvement of a federal agency. The judge slammed the case as a deeply misguided attempt to turn America into the world’s policeman. Welcome though their assault on corruption in football is, America’s crime-busters cannot hit every ball out of the park.
• Culled from www.economists.com
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