EDITOR: | May 29th, 2015 | 12 Comments

FIFA: Friends in Fraud Always

| May 29, 2015 | 12 Comments
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fifaWednesday’s arrests of high ranking international soccer executives have made front page news around the world. We should be outraged. We should be angry. We should toss our jerseys and refuse to buy any of the sponsors’ products! Burn the evildoers!

And yet, these revelations have sent exactly zero shockwaves through the community. No one is surprised.”Those officials were taking bribes? No! Say it ain’t so!”, said exactly no one. “The idea of being shocked about bribery and racketeering at FIFA is like being shocked about jumping into a pool and finding yourself wet,” said Dave Zirin, sports editor at The Nation magazine.

There are so many offensive parts to this story that it’s hard to know where to begin. Do your own research – you’ll quickly be nauseated by the relentless greed, the disdain for getting caught, the horrific abuses, the dips into your pocket. And it’s been systematically going on for years.

This group became so arrogant, it awarded the 2022 World Cup to Qatar. Qatar. You know, the country with no soccer history, a lack of infrastructure, no stadiums, daytime temperatures of over 50 Celsius. And those problems don’t include the abuse of migrant workers who appear to be dying at the rate of one a day. But what Qatar did have was barrels of money to grease the FIFA wheels.

This is not an attack on Qatar or the Qatari people. It is meant to ask, how did this happen? How could a worldwide organization like FIFA foster such pervasive corruption? And then, what does this mean for your investment portfolio?

The overarching point of last week’s article on the Fraud Triangle is that compliance is up to the leaders. Leaders must lead. And in FIFA, it seems fairly clear that the attitude started at the top with Sepp Blatter, FIFA’s president since 1998. It hasn’t been proven that he was part of any illegal conduct, but when the news of these arrests broke, how did he react and lead his team?

Let’s hear it from Mr. Blatter himself: “Such misconduct has no place in football, and we will ensure that those who engage in it are put out of the game,” Blatter said. “We will continue to work with the relevant authorities and we will work vigorously within FIFA in order to root out any misconduct, to regain your trust and ensure that football worldwide is free from wrongdoing.”

Glaringly absent from any part of his statement is any sense of personal responsibility. He’s been the President of FIFA since 1998. Much of this thievery has thrived under his “leadership”, and yet, none of it appears to be his fault.

I don’t know Mr. Blatter and I’m not saying he’s committed fraud. I have no way of knowing. I am saying that this corrupt environment at FIFA is his fault, and as the leader he must take full responsibility for it. It’s like being the CEO of a public company: even when it’s not your fault, it’s your fault because you’re the CEO.

That’s how the latest FIFA scandal affects your portfolio. The leadership team matters. Find a successful management team, and look at how they have historically carried themselves. There’s a reason people like Paul Colborne have a huge loyal following. Review his history at Startech Energy Inc., Crescent Point Energy Trust, and Star Point Energy Trust, to name a few: he and his team have a history of creating real shareholder value.

Steve Jobs set a tone at Apple. Warren Buffet’s personality is imprinted deep into Berkshire Hathaway. And what did Mr. Blatter do at FIFA?

Start here to get a flavour of the kind of environment he helped create since he became FIFA president.

Then forward to today, with John Whittingdale, England’s Secretary for Culture, Media and Sport, calling for Mr. Blatter’s resignation because the “deeply flawed and corrupt organisation” requires a change of leadership.

Even VISA, long term FIFA sponsor, warned today that FIFA must reform its ways and, “This starts with rebuilding a culture with strong ethical practices…”.

A culture of compliance starts at the top. Don’t risk your money with a leader that thinks otherwise.


Peter Clausi

Editor:

Mr. Clausi is an experienced investment banker, executive and director. A graduate of Osgoode Hall Law School called to Ontario's bar in 1990, Mr. Clausi ... <Read more about Peter Clausi>


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Comments

  • Nick Fuller

    Peter,

    You write a good informative article and clearly as you know and I know where people have a vested interest they don’t want the party or the gravy train to stop, not just in soccer but in every facet of life were money is to be made and morals go by the wayside

    As we all know few few of the “clever crooks” get caught and even if they do friends in high places help them “get off the hook”

    Everyone knew about FIFA corruption and bribes for 2018 and 2022 World Cups why did it take so long

    The following provides further proof and I happy to provide it and expose the corruption and bribes that everyone knew was going on

    Not too long after the vote for the 2018 & 2022 World Cups were awarded to Russia & Qutar two Spanish speaking girls (good friends ) were hired in London by lawyers and sent to Zurich on all expenses paid trip to undertake a very secretive undercover mission staying at Baur au Lac Hotel where all FIFA reps where housed. at that time

    Their secret mission on behalf of _ _ was to find/track down/seduce the Spanish FIFA rep and find out why, “Spain at last minute switched vote having previously indictated they would vote for England

    Their vote switch helped Russia win the 2018 bid against the favourites England

    They succeeded in their goal and got his answer recorded and evidenced “Russia would pay the money, England wouldn’t” Game,set & match

    The evidence is available and can be collaborated by the girls who handed it over to the lawyers who hired them and probably part of the FBI evidence

    Please don’t tell me Slepp & FIFA aren’t corrupt, this is first hand proof that is known to me and everyone else knows it.

    But I guess its better the corrupt devil you know than the devil you don’t as to why Blatter stays in power

    Can’t understand why “The Organisation” who hired my friends didn’t use this information at the time to discredit Slepp but may be as he was re elected as President uncontested at that time they probably felt they would be wasting their time

    Maybe they kept it and handed it over to the US authorities who seem to have more steal in their backbone hence the arrests

    Adding to the above.
    When visiting Zurich on business around the same time I was invited by a friend to be his guest at the prestigious, exclusive FIFA Club, private dining room, top Swiss chef etc.

    Very select only two or three tables but surprisingly next to us, the table was filled with Russians who seemed to have the run of the place.

    I thought at the time, strange what are they doing here and what’s the connection and how come they know everyone

    The Russians also have a big influence in Zurich owning many Hotels and clubs. ???????

    I think we all know why, let’s hope this time justice is done and both Russia and Qatar are stripped of their hosting rights and Blatter is defrocked and exposed

    May 29, 2015 - 11:37 AM

  • Nick Fuller

    Dear Bob,

    On TV they were known as Charlie’s Angels here they were Nick’s Angels
    Interesting enough there engagement in being sent to Zurich was specific, to track down this person and use what ever skills were necessary to complete their task.
    It proved a little difficult as he turned out to be limp wristed and so they had to call up a reinforcement and together they managed to make him “sing like a canary” Russia paid us the money required England wouldn’t

    The evidenced obtained was already suspected but proof so obtained needed by the authority who hired them,
    Someone, although top secret, news leaked out and their home became a magnet for some of the worlds press who wanted to get a story but I am giving it out now as they kept tight lipped at the time
    QED
    Snowndon betrayed secrets about his country, my friends were helping expose hypocrisy,bribery, corruption and deceict

    May 29, 2015 - 2:41 PM

  • Peter Clausi

    Nick, thanks for the input. You’ll understand if all readers are a bit sceptical of your claims, but thrilled if you have that kind of information and can share it with Interpol or the US Justice Dept.

    May 29, 2015 - 3:20 PM

  • Nick Fuller

    Little fish swim in a pond, bigger fish in the oceans

    Lets see what comes out in the trials, what sicks and who goes to jail, in four years a lot of information can be collected and used

    One thing you can be sure of life is always full of surprises

    May 29, 2015 - 5:17 PM

  • Fred

    Nick, the US has a constitution. The NSA wiped their rears with it. Snowden pointed out the brown coloring.

    The NSA’s policy towards the American public is “bend over and spread them”. Many in the US intelligence community, particularly Clapper, belong in jail.

    Snowden is only in Russia because the US government wanted him there. He was changing planes there when the US revoked his traveling credentials. I think it’s funny that the biggest American patriot this side of the Civil War got exiled to Russia.

    May 30, 2015 - 1:07 AM

  • Chris Donaghue

    Peter, this really goes with your previous piece on white collar crime.

    June 2, 2015 - 11:50 AM

  • William

    Let’s hope the door doesn’t hit ol’ Slepp/Sepp too hard you know where on his way out. Did he really resign today? No way. Sadly all this negativity detracts from the ongoing Mens U 21 and pending Women’s World Cup. Has he really resigned? There’s some good follow up to be had Peter. ……..

    June 2, 2015 - 4:36 PM

  • Nick Fuller

    FBI to probe Sepp Blatter as disgraced FIFA chief finally falls on his sword six days after cash scandal that rocked world football.

    A victory for Soccer, football fans and the over whelming evidence of corruption that the authorities could no longer ignore and had the balls to act upon which hopefully will see the main jailed and their ill gotten assets seized

    June 2, 2015 - 7:24 PM

  • Chris Donaghue

    Is it a surprise Sepp Blatter resigned? Maybe he reads InvestorIntel?

    June 3, 2015 - 12:58 PM

  • Peter Clausi

    With enough pressure from a constituency, any leader will resign. We’ve seen the uprisings in Tunisia and Egypt, the shareholder revolts over extravagant pay in public companies, and now FIFA’s constituency finally bringing enough force to bear to squish his out, albeit with seeming threats from international law enforcement hanging over his head.

    Some public companies operate the same murky way, until a light is shone on their dealings and then management, with an enforcement threat hanging over their heads, finally does the right thing.

    June 3, 2015 - 2:55 PM

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  • Peter Clausi

    The foul culture at FIFA has finally run its course. We can hope for your real change with a new leadership team.

    http://www.usatoday.com/story/sports/soccer/2015/12/21/blatter-platini-banned-fifa-eight-years/77685570/

    December 21, 2015 - 10:02 AM

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