Trouble in Switzerland?

I’ve got a lot of US readers these days and one difference between Europe and the US is the popularity of soccer. It’s the biggest sport in Europe and by some way. The other day I scanned the front page of Italian sports daily La Gazzetta Dello Sport and the front page story was the possible transfer of a player called Andrea Pirlo from one club to another. A stage win by Contador in the Giro didn’t merit as much attention, despite the race being owned by the newspaper. In short, the potential recruitment of one player was deemed more newsworthy than a crucial stage of the country’s biggest bike race.

Soccer, or as it’s known here, football, is governed by FIFA. The international body is based in Switzerland, the same country is also home to the International Olympic Committee, as well as the Court of Arbitration for Sport and of course, cycling’s UCI. FIFA has long had, shall we say, a louche reputation. Despite millions and millions of European fans, many of whom live for the sport with a tribal fervour, the governing body has often appeared like a club run for the benefit of its executives who cite “globalisation” and bringing the sport to a wider audience as their noble goal. Sounds a bit familiar, eh?

Now FIFA is in the midst of a very big scandal that’s been front page news from La Gazzetta to L’Equipe to the Financial Times and Süddeutsche Zeitung. To cut a long story short it’s about allegations of corruption and cronyism at the top level. But there’s a backstory to this, the Swiss are getting frustrated with some of the negative publicity associated with the international organisations.

Switzerland is home to 47 sports governing bodies, far more than any other country, with Monaco next with five of them. The history goes back to the 1920s when the League of Nations, the forerunner of the United Nations, was first created. It was based in Geneva, partly thanks to the Swiss tradition of diplomatic neutrality. Another reason is Swiss law, whereby any sporting association has a very simple status. Jean-Loup Chappelet, an expert on the management of sports organisations at the Swiss Graduate School of Public Administration in Lausanne says: “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.”

In addition, Swiss law allows for tax exemptions to be granted to corporate bodies that pursue “public service goals” or are acting “in the public interest”. So even a large quasi-business like FIFA gets big tax breaks. And, without boring on too much detail, even bribery payments can be tax-deductible in Switzerland. The Swiss welcome these organisations, it means international money sloshing into their country, thousands of extra jobs and the prestige of many large organisations. And they justify the tax breaks saying these organisations could move elsewhere. Malaysia for example is trying to court governing bodies, it has actually paid the sport of badminton to move to Kuala Lumpur. The likes of Dubai and Qatar are trying to do the same as well. These are quality jobs and several countries want them.

But now some are getting anxious in Switzerland. In particular, a man called Roland Büchel. He used to work for the Swiss Ski Federation, then moved to a marketing agency called ISL that belongs to FIFA. Here he says ISL was involved in bribery. Today he is a member of the Swiss parliament and has persuaded 60 colleagues to join him in calling for these international bodies to open up a bit. You can read a good summary on cyclingnews.com. He must be doing something right since he has been targeted by FIFA President Joseph “Sepp” Blatter in recent interviews.

We’ll see what this brings. My sense is that a compromise will be found, one that suits international governing bodies as much as it suits politicians. Büchel is no angel, he belongs to a political party that is, to put it mildly, “skeptical” about foreigners. So having a bash at foreigners getting special tax breaks unavailable to most Swiss voters is something right up his street. Populism and opportunism aside, Büchel’s got a point though: these large organisations, including the UCI, are tremendously opaque despite claiming to run various sports in your and my name.

The UCI does publish accounts and I’ve welcomed that but there’s still a long way to go. It’s possible it will award a contract to run the 2015 World Championships… to a company owned by the brother of the UCI President. To many this stinks but my point is that the UCI could fight back if it adopted proper standards of governance, to ensure “related party” deals like this are made conducted in the open, awarded on transparent terms and the deal is verified by independent observers. That way there wouldn’t be a problem, mud simpy could not stick.

Right now FIFA is in the spotlight. Rightly so given the extent of the allegations, the sums of money involved and the popularity of the sport. But it’s time many other sports organisations opened up a bit. After all they are not clubs run for the benefit of their staff but oversee the sport in your name, especially if you are yourself a holder of a competition licence stamped with a UCI code. Transparency and accountability are positive ideas, no?

Summary
Some say it takes a crisis to prompt reform. We saw the IOC shape up after the revelations over Salt Lake City, now maybe FIFA is going to be forced to smarten up too in the light of relentless press coverage, investigations, infighting and infighting. At last many will say.

But the pressure is building in Switzerland too. A small country, it benefits from these organisations but the Swiss are keenly aware that they have a reputation to maintain. Already the banking sector is under question, at times quick to deposit money but at times slow to ask where it comes from. Stories about sports organisations should reflect prestige, that international organisations chose to settle in the country for its stability and quality of life, not because of tax breaks and light-touch laws. So there’s a twin-pronged approach now, from the outside expecting greater transparency and a political pressure from within to open up. Forward-thinking organisations could take the lead. Nobody wants to be bounced into opening up by a politician on the make, better to set the terms yourself.