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Switzerland, Land of Governing Bodies

Lausanne

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.

Lausanne

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.

Summary
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.

Photo Credits: Lausanne and Lake Geneva by MySwitzerland.com and Olympic Capital sign by Flickr’s Yuri Kiselev

Comments on this entry are closed.

  • Alpen Tuesday, 18 November 2014, 3:37 pm

    You could probably replace ‘international sports organizations’ with ‘private banks’ at every turn in this article and it would be equally accurate. Switzerland has traded on, and benefited from, trading in secrets for years. However, increased demands for transparency from the US and EU are putting a crimp in their traditional trade.

    However, Suisse Romande is an exceptional place to ride a bike.

  • GTGTGT Tuesday, 18 November 2014, 9:12 pm

    For mine, Dubai is an inspired choice for cricket. Other than the West Indies, the main cricketing nations stretch from England in the west and New Zealand in the east.

    Dubai is right in the middle of that geo-zone. Also, it has excellent weatherfor cricket, so makes a perfect neutral venue and warm weather location for training camps etc.

    As for FIFA, the less said the better. What Mr. Blatter has been able to ‘achieve’ in office is truly staggering…..

  • Birillo Tuesday, 18 November 2014, 9:25 pm

    Fascinating.

  • Othersteve Tuesday, 18 November 2014, 9:28 pm

    Taxes, Taxes, Taxes, oh and a little secrecy for good measure.

  • Qwerty Tuesday, 18 November 2014, 9:32 pm

    a lot of parallels between FIFA’s mess and the UCI of the past.

    • The Inner Ring Tuesday, 18 November 2014, 9:50 pm

      It’s awkward to watch FIFA’s troubles now. With the UCI things were on a much smaller scale, the money simply isn’t there. Also FIFA isn’t accountable to anyone while the UCI derives a lot of its legitimacy from the IOC and also WADA, it will bow to them.

      • GTGTGT Tuesday, 18 November 2014, 10:24 pm

        Yes, therein lies the problem. The IOC need FIFA much more than FIFA needs the IOC.

        I read somewhere that about 50% of all Olympic tickets sold in history are for the football tournament.

        There’s nothing that the IOC can do to threaten FIFA. As for WADA, well, when was the last time a footballer went down for a performance enhancing substance?? The top players play in excess of 60 games in a 10 month season…

        • Nina Wednesday, 19 November 2014, 2:45 am

          For the 2014 worldcup the FIFA took in advance blood and urine-samples from over 90% of the players, tested them (no positive ones found) and created a profile for every player. They claim that the rest of the players were then tested during the worldcup. WADA congratulated them for their testingprogram-the first big event where 100% of the players were tested. It all sounds really good, but… the tests are done by the FIFA for the FIFA. Nobody knows exactly what happens, what they are doing or not doing. One should think that if all is so good, then it should be no problem to let someone independent look at the testingprogram and the results?
          Maradona was the last known positive case at a FIFA organized event (men’s worldcup I mean, because there were positive cases in the 2011 women’s worldcup, from Columbia and North- Korea and North-Korea isn’t allowed to take part in the worldcup next year because of this). And of course there are doping offenses and suspensions in football, but at league games, which are not held by the FIFA (in the last few years there were cases in Brazil, in Germany, in Egypt, in Italy, in Great Britain etc. – in (almost) every country). The truth is: The reason most people/fans think there are none is because doping is of no real interest in football/for footballfans. This may change in the future, but I doubt it.

          • Larry T. Wednesday, 19 November 2014, 7:51 am

            FIFA are masters of deception. Who was it who said if all the names of Fuentes’ clients were ever revealed, someone might ask for Spain’s most recent World Cup trophy to be returned? Football fans will say there’s no dope that can help you curve that perfect kick into the goal, but they choose to ignore how much better you might be at that in the 85th minute of the game if you enjoy a lot more oxygen carrying capacity than your competitors. FIFA’s like the NFL, they don’t need the Olympics so have no reason to care what the WADA or IOC have to say about anything.

        • channel_zero Wednesday, 19 November 2014, 5:03 pm

          Uhhh. Not that anyone bothers to look, but, Sepp Blatter is heavily involved in the IOC.

          -Director at the IOC’s timing services organization. A service in use by many sports outside of the Olympics cycle.
          -Director at WADA. He is one of the few making anti-doping policy decisions. That board is stacked with sports federations interested in protecting revenues first, the integrity of sport much later. Pat McQuaid was a former board member too.
          -Blatter’s nephew happens to run a sports media company IOC sports and FIFA uses. http://en.wikipedia.org/wiki/Infront_Sports_%26_Media

          The IOC’s website does a horrible job at describing who does what. You have to go through each of the many of the IOC’s tentacle-organizations and dig for the board of directors to get an idea who does what and then you see the same names popping up over and over again.

          • The Inner Ring Wednesday, 19 November 2014, 10:22 pm

            The UCI have done a deal with Infront, the firm handle’s their TV broadcasts, eg the Worlds, the UCI Youtube channel etc.

          • GTGTGT Thursday, 20 November 2014, 1:54 am

            ‘a horrible job’ is somewhat dependent on your perspective.

            I’ d contend that the IOC probably thinks that these things being difficult to find on their website is an excellent outcome (ie. if people give up looking, all the better).

      • TeamSpy Wednesday, 19 November 2014, 11:57 pm

        True but there is a lot of sponsorship in football and if it starts to get grubby ( even more grubby should I say) those sponsors may distance themselves much as sponsors have in cycling. However, this would be any even bigger problem for FIFA as it is sponsorship by coca cola for example that pays for the World Cup. If coca cola were to pull out there would be big problems. Though I think if it gets to that point even Blatter may be forced to fall on his sword. Having said that I’ve not noticed that Coca Cola has much of a social conscience….a

        • Nina Thursday, 20 November 2014, 12:52 am

          I can imagine absolutely no possible outcome or scandal that would have any impact on the sponsoring. We’re talking football here. Should some really, really big and dirty scandal become public, there may be some hectic action/words from sponsors to make it look as if they care, but no way will this have real or longterm impact on sponsoring.

          • GTGTGT Thursday, 20 November 2014, 1:57 am

            You’re absolutely right Nina.

            Sony have recently announced that they’re not renewing their partnership agreements with FIFA. Some speculate that this is due to the recent issues around the 2018 & 2022 World Cup bidding. FIFA say that this has been known to them for some time.

            Either way, Samsung has stepped up immediately to fill the void. One sponsor leaving is always just going to be an opportunity for another to step in.

      • Dave Friday, 21 November 2014, 10:07 pm

        “FIFA has $1.4 billion cash pile to fall back on”

        http://www.reuters.com/article/2014/03/21/us-soccer-fifa-finances-idUSBREA2K1GO20140321

        Not bad reserves for a “non-profit”…By comparison (the same article says)

        “The International Olympic Committee has generated a reserve of $932 million”

    • davidk Thursday, 20 November 2014, 10:51 am

      The American constitution’s ‘two terms and you’re out’ rule seems to me to be exactly right. Eight to ten years is about the maximum that one person should have in a ‘top dog’ position in public office. History is littered with examples of where people have overrun this and sullied both their own reputations and those of the public bodies that they represent. UCI and FIFA are not immune.

  • Vitus Wednesday, 19 November 2014, 2:37 am

    Switzerland, home of Nazi-gold and every other cruel dictatorships money since ages.
    Making it headquarter for corrupt sport governing bodies is just consistent

    • Gus Wednesday, 19 November 2014, 11:25 am

      +1

  • Anonymous Wednesday, 19 November 2014, 10:57 am

    Switzerland is a crazily expensive country. Prices are simply out of proportion with the rest of the world. It therefore makes no economic sense, for its constituents, to locate their international bodies there, be it the UN, its many agencies and organisations, the WTO, the UCI, the FIFA or the Universal Postal Union or Eurovision or whatever… What they end up paying for local workforce, space or maintenance is so out of proportion with what they would pay anywhere else that it begs the question of why constituents do not demand to move away from Switzerland.

    • Anonymous Saturday, 22 November 2014, 7:48 pm

      because as its said above they save a mulitude of these expenses by paying lower taxes.

  • Alpen Wednesday, 19 November 2014, 6:30 pm

    Not to wander into the forest of economics, Switzerland has only become relatively more expensive due to a massive currency appreciation due to the fact that every other gov’t has blown up their balance sheet while Swiss debt/GDP has even fallen. http://www.tradingeconomics.com/switzerland/government-debt-to-gdp

    • Ferdi Friday, 28 November 2014, 6:05 am

      Typical arrogant and moronic Swiss reaction. “It is not that our economy is overfuelled by dubious cross-border factors, it is the others who are just too poor”. Quite insulting, actually. Of course, protectionism, taxation, and financial regulation account for nothing. Of course, Alberto Contador lives in Switzerland because our country offers him quality of life and excellent weather conditions and we are not depriving his home country of tax revenues it should duly get. Of course, we are smarter, and the rest are stupid. Of course.

  • Dervelo Sunday, 23 November 2014, 10:40 pm

    If its in Switzerland then it dodgy. Cookson & co need to move the uci somewhere “clean”