For years cycling was the whipping boy of sports administration. Turf wars, doping problems and other concerns beset the sport and the UCI’s HQ in Switzerland had a siege mentality. Now it’s the turn of FIFA, soccer’s governing body. There are allegations of cronyism, whistleblowers being blasted, talk of breakaways and a bizarre President who seems impossible to eject. Cycling fans might feel like The Simpson’s Nelson Muntz as they point and laugh at FIFA’s self-inflicted woes. But any amusement is surely born from experience and a sense of nervous relief that another sport is humiliating itself?
The UCI and FIFA are both based in Switzerland, in fact well over half of the governing bodies for Olympic sports are based in Switzerland, a small country of just eight million people. Why? More importantly will they stay as Switzerland looks to place them under greater scrutiny and impose greater transparency?
The UCI was founded in Paris in 1900 but it was in the 1960s that professional cycling broke away to form the Federation Internationale de Cyclisme Professionel, still under the UCI’s tutelage but in a remote office. The amateur and, crucially the Olympic, aspect was under the UCI’s influence and it moved to Geneva in Switzerland. Since then the body has moved first to Lausanne in the 1990s and, a decade later, to Aigle, a small town below the mountains. The course taken by the UCI has seen it move along the shores of Lake Geneva, passing the home of many other sports, from aquatics (FINA in Lausanne) to wrestling (UWW in Corsier-sur-Vevey).
It all began with the International Olympic Committee (IOC). Founded in 1894 by a Frenchman, it held its first committee meeting in Lausanne, Switzerland but IOC opened its permanent headquarters in Paris. However war saw the offices relocated to neutral Switzerland in 1915. Crucially it was a French-speaking area where Baron de Courbertin and others from the Paris Olympic movement felt at home and could do business. Gradually other sports established governing bodies and moved under the umbrella of the IOC, often locating near to the IOC’s headquarters. A few years later the League of Nations, forerunner to today’s United Nations, was founded in Geneva further adding to Switzerland’s repertoire of hosting international bodies.
History can explain why they established themselves within proximity of Lausanne but money helps explains why they stay. Switzerland has a special law on associations which loosely translates as “charities” but encompasses anything from a chess club to FIFA. Any non-profit, non-governmental organisation can be included under these laws. It means tax perks and little requirement for transparency and disclosure: Website swissinfo.ch explains more:
“Switzerland is attractive for many reasons: its geographic location, highly qualified work force, political stability, neutrality, security, quality of life, plus an attractive tax regime and legal code. The Swiss law on associations is extremely simple and hugely flexible. Furthermore, the slowness of the legislative process offers a lot of legal security.”
– Piermarco Zen-Ruffinen, Neuchâtel University
“When the civil code was drawn up in 1912, no-one imagined that there would ever be such huge associations. Fifa is in effect a holding which owns public limited companies, but its statutes are the same as those of a bridge club.”
– Jean-Loup Chappelet, Swiss Graduate School of Public Administration, Lausanne.
Chappelet adds that associations are not obliged to register with the state nor to publish their accounts: in short they can have a lot of secrecy. The UCI does publish its accounts. Switzerland’s status as home to all these governing bodies isn’t a given. Malaysia offers similar tax breaks, in fact in the Badminton World Federation moved to Kuala Lumpur a decade ago after it received a generous incentive. Gulf states are keen to attract governing bodies, Dubai has welcomed the International Cricket Council in recent years despite no tradition of the sport in this country.
Switzerland’s now on a small drive to review the status of sports governing bodies and exploring requirements for greater transparency and accountability, a double motivation with international concern about practices within sport and domestic politicians finding a soft target to demonstrate their will for reform. Whether this encourages sports bodies to open up… or flee to more compliant locations remains to be seen. One proposal on its way to legislation will be the reclassification of senior sports administrators as “Politically Exposed Persons”, a status which means close scrutiny and even their bank accounts will be monitored. Other moves are promised in the wake of a parliamentary report from 2012 including make “private corruption” a criminal offence, eg a corrupt deal between two private parties rather than at least one side being governmental or semi-public. Indeed FIFA’s establishment of an ethics committee is seen by some as a move to front run any changes and ensure legislators don’t get too draconian.
History explains why so many sports governing bodies are based in Switzerland. The IOC fled France and war in 1915 for a neutral, francophone country. Others followed establishing a cluster that continues to grow. These bodies have stayed, encouraged by laws that treat them as charities, enjoying “not for profit” status despite some enjoying incomes that would make Croesus blush. This activity has attracted related work, like the Court of Arbitration for Sport or various marketing and broadcast agencies that operate in the sports sector. The global sports sector estimated to turn over €450 billion a year according to BPI, a French bank.
The Swiss have been happy to host these operations but with more money has come more problems including corruption or simply the self-importance and entitlement of bodies like FIFA and the IOC. The Swiss parliament is updating the regulation of the sports bodies, subjecting them to closer scrutiny and disclosure with “tough new law changes” on their way. Enough? That remains to be seen and sports bodies can shop around for new venues if the heat gets too much. The UCI looks bound to stay but maybe some others will prefer to move.