International corruption and bribery scandal leads to major reputational damage

# I. What happened?

On May 27, 2015 a number of FIFA (Fédération Internationale de Football Association) and CONCACAF (Confederation of North, Central America, and Caribbean Association Football) officials were arrested by Swiss police in Zurich and held for extradition to the US on charges including racketeering, wire fraud, and money laundering conspiracy. The allegations referred to senior executives at FIFA receiving bribes of more than USD 150 million in return for granting “lucrative media and marketing rights” to football tournaments over the previous 24 years.

Just few days later on June 2, 2015, Sepp Blatter stepped down as the President of FIFA after US officials confirmed that he was a target in an ongoing US Justice Department corruption investigation.

# II. Consequences for FIFA

FIFA suffered severe reputational damage as a result of the corruption investigations and subsequent arrests. This scandal cast doubt over the transparency and honesty in the process of allocating World Cup tournaments, electing its president, and the administration of funds, including those earmarked for improving football facilities in some of FIFA’s poorer member associations. As a consequence of the scandal, FIFA’s corporate sponsors stated they were seriously reconsidering their sponsorship of future World Cup competitions. Several, including Coca-Cola, McDonald’s, Sony, and Visa, were the target of a “name and shame” campaign by activists hoping to induce the companies to withdraw their sponsorships.

FIFA also faced a federal class-action lawsuit in the US, which accused the Association of fraudulently overcharging for 2014 World Cup tickets. In February 2016, an extraordinary FIFA Congress elected a new president and passed a major reform package.