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FIFA executives will lose power… but keep the perks

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New reforms are designed to strip FIFA’s executive committee of most of its power, but they won’t scrap the long list of benefits enjoyed for years.

When Domenico Scala, the chief auditor of soccer’s world governing body, unveiled a series of sweeping reform proposals this month, he took aim squarely at FIFA’s executive committee. His changes are designed to strip the body of most of its power, remove its responsibilities in the day-to-day running of FIFA and subject it to increased internal and external scrutiny.

What the reforms won’t do is scrap the long list of perks executive committee members have enjoyed for years.

The custom-tailored suits for members will stay, along with an annual stipend in the region of $300,000, according to people familiar with FIFA compensation.

They will still fly to FIFA headquarters in Zurich with a pair of free first-class tickets and sleep there in world-class hotels. They will continue accessing caches of complimentary tickets to the sport’s biggest matches.

FIFA declined to comment on the perks received by its Executive Committee members, referring instead to a note on compensation published in its 2014 financial report. FIFA said it commissioned an outside analysis of its executives’ pay, which found that it was “within the range” for compensation at organizations with similar reach and turnover.

All for a job that involves attending around five meetings a year. The next one begins on Thursday. And the attitude inside the underground committee chamber, some FIFA officials say, breeds a culture where gifts are offered and expected. FIFA reformers, including Scala, believe that the same culture contributed to the actions of the 14 soccer officials and executives who were indicted on charges of corruption in May.

So as the executive committee prepares to gather again in Zurich on Sept. 24, it finds itself in the crosshairs of those in charge of repairing FIFA. In the four months since the disclosure of U.S. and Swiss investigations into corruption at the top levels of the game, everyone from departing FIFA president Sepp Blatter to the U.S. Department of Justice has cited the committee as a source of trouble. Blatter is expected to address the media on Friday.

“To change immediately something, you need a shock,” said one FIFA insider. “Now some people are shocked. Others are not.”

Six of the 14 people arrested on U.S. warrants in May were current or former members of the committee and one was two days from being elevated to it. One of those was also among at least six people who have stepped down from the committee under suspicion of impropriety from FIFA’s Ethics Committee since Dec. 2. 2010—the date is etched in FIFA history for the Executive Committee’s decision to award hosting rights for the 2018 and 2022 World Cups to Russia and Qatar, respectively.

The room this week will also be down at least one regular attendee: Jerome Valcke, the FIFA Secretary General. Valcke was suspended indefinitely by the organization last Thursday after allegations that he agreed to a scheme to sell from his personal cache of World Cup tickets for personal enrichment. He denied all wrongdoing.

Marco Polo del Nero of Brazil, the Executive Committee member who abruptly left Switzerland the night before the May election, could also be missing in Zurich (though he wasn’t named in either investigation). Del Nero has skipped the past two Executive Committee meetings and is under such intense media scrutiny in Brazil that he denied that he was stepping down from the Brazilian federation presidency last week.

“I despair at what’s happening at FIFA,” Jim Boyce, who served as a FIFA vice-president and Executive Committee member until his term ended in May, said over the summer.

Now the Executive Committee will be asked, in effect, to torpedo its modern incarnation. Scala will ask it to vote on most of the reforms this week.

“The greatest current risk in/for FIFA is the present institutional position and structure of the FIFA Executive Committee and the conduct of some of its members,” Scala wrote in a memo published this month.

The most significant change involves snatching back all non-soccer related functions from the committee. The day-to-day running of FIFA, a non-profit organization with cash reserves of $1.52 billion, would be handed to a permanent management board. The executive committee, meanwhile, would become a governing body charged with strategic matters and supervision.

Furthermore, the members of the governing body would be subject to increased supervision and, for the first time, a limit of three four-year terms. The reforms would also force committee members to disclose all of their income to FIFA and reveal their FIFA salaries to the public. At the moment, those are kept secret. But FIFA said that it is “based on comparable compensation for the supervisory boards of other major companies.”

In 2014, FIFA spent $88.6 million to its 474 employees, for an average of $186,833, according to its most recent financial results. Of course, its upper management receives far above that average. And, until the past two years, executive committee members also earned bonuses. That practice ended on Scala’s recommendation.

“A supervisory body such as the Executive Committee is not directly tasked with managing the organization, and as such has no contractually defined targets on which to base bonus payments,” Scala wrote at the time.

None of this includes the perks. In 2014, FIFA spent $35.5 million to organize its various committees and its congress in Sao Paulo. This includes meetings of its 26 standing committees, plus “the cost for travel and accommodation of the committee members as well as of the official delegates of the 209 member associations, the six confederations and guests for the FIFA Congress.”

That translates to accommodation at luxury hotels around the world and two first-class plane tickets for all executive committee member trips on FIFA business, a person familiar with FIFA compensation said. Over the past 18 months, they have stayed at five-star hotels on Copacabana in Rio de Janeiro; the Hotel Mamounia in Marrakech, Morocco, which was a favorite hangout of Winston Churchill’s; and several times at the ritzy Baur au Lac in Zurich, where arrests were made at dawn on May 27.

FIFA does not discuss the lifestyle of its top officials. But it caught the attention of former federal prosecutor Michael J. Garcia, who was hired to investigate the bidding process for the 2018 and 2022 World Cup.

In scathing sections of his confidential report, he directly highlighted the committee’s “culture of entitlement,” a person familiar with the report said. The person added that the report also described an “attitude that the rules don’t apply to the executive committee” and “a failure to properly consider their obligations to the organization.” FIFA declined to comment on the Garcia report.

Those sections were excised from the only published version of the report in November 2014, a summary by FIFA ethics judge Hans-Joachim Eckert. Garcia appealed against that version of the report, but his appeal was denied by FIFA. Garcia resigned in protest last December.

Another person, also familiar with the report, said that the practice among executive committee members of “giving and receiving [favors], it has to stop.

As things stand, executive Committee spots are allocated by the six regional confederations, which act independently of FIFA without its supervision. They are seen by FIFA insiders and the DOJ as the primary breeding grounds for corruption. (None of them, Blatter likes to point out, currently has an ethics committee.)

“The Executive Committee includes representatives of confederations over whom we have no control, but for whose actions FIFA is held responsible,” Blatter said in his June 2 speech.

Each confederation is allocated a certain number of members and vice-presidents with Oceania receiving the fewest (one) and Europe exercising the most power (five members plus three vice-presidents), according to the 2015 FIFA statutes. On top of those 23, the committee also counts the FIFA president and the so-called “female member,” who are both elected by the 209 members of the FIFA congress.

Over the years, the committee has elevated administrators from countries that barely appear on the map of global soccer. The likes of England, Brazil and Germany tend to be well represented, but many smaller nations are given equal say because of the political abilities of their association presidents.

Take Jeffrey Webb of the Cayman Islands. A charismatic former banker, Webb entered the FIFA orbit when he became head of the Cayman Islands soccer association in 1991. The country has never qualified for a World Cup and, since 1999, has received at least $4.8 million in development funds and financial assistance from FIFA to grow domestic soccer. It is currently ranked 187th of 209 countries in the FIFA rankings.

Riding the coattails of Jack Warner, a former FIFA vice-president from Trinidad and Tobago who is currently fighting extradition to the U.S. on charges of bribery and racketeering, Webb rose through the Caribbean Football Union in the mid-1990s. Throughout the 2000s, he built his reputation within FIFA by serving on a host of committees and, by 2012, he became president of Concacaf, which earned him a seat on the executive committee.

He was so highly regarded at FIFA that whispers began mentioning him as a possible candidate for the presidency. Instead, he was arrested in the May raid on charges of corruption. He has since agreed to be extradited to the U.S., where he posted a $10 million bond in Brooklyn federal court in July. He has denied all wrongdoing and, through his lawyer, has repeatedly declined to comment.

Webb’s case is hardly seen as unique. And Scala believes many of his alleged abuses could have been prevented if FIFA officials were banned from holding several roles at the same time. Webb, for instance, held three as head of the Cayman Islands federation, president of Concacaf and vice-president of FIFA—on top of his roles on nine different committees.

“Under these circumstances,” Scala wrote in his memo, “the misconduct of some, even it if it happens ‘only’ at Confederation/national association level, has a tremendous impact on FIFA itself or as a whole.”

© 2015 The Wall Street Journal | This article was written by Joshua Robinson and first originally appeared in The Wall Street Journal on 22nd September 2015.

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