News Release

FIFA and the “New Corruption”

unaccountable_bookERIC LeCOMPTE, via Sophia Har, sophia at jubileeusa.org, @jubileeusa
LeCompte is executive director of the development coalition, Jubilee USA Network. The group just put out the statement: “FIFA Scandal Highlights Corruption in Global Financial System.”

JANINE WEDEL, jwedel at gmu.edu
Wedel, an anthropologist, is university professor at the School of Policy, Government, and International Affairs, George Mason University. She is author of the recently-released book Unaccountable: How Elite Power Brokers Corrupt our Finances, Freedom and Security.

She said today: “What do you think of when you hear the word ‘corruption?’ If your answer is FIFA, you’re not alone. Google the words FIFA and corruption and you’ll find nearly 60 million hits. I wouldn’t be surprised if someone like Ben Affleck was right now adapting it for the screen. It has all the elements of a great thriller: a shadowy, international clique in control of the world’s most popular sport; allegations of widespread bribery in far-flung spots across the globe; an early morning bust at a legendary five-star Zurich hotel; the feckless defense by one of the accused, in which he plucks an approving quote about FIFA from the Onion, unaware that the Onion is a … satirical publication.

“If FIFA executives are indeed guilty, this is no doubt serious corruption, with many poor countries submitting to extravagant FIFA demands for souped-up stadiums, draining resources and creating risky working conditions in which vulnerable workers have died.

“But this is also a conventional corruption story, accusations of clearly illegal activity. The corruption I investigate is fully legal, underreported, and often vastly damaging to the public trust.”

Wedel cites the recent disclosures around the Clinton Foundation as a small window on this “new corruption.”

She wrote in her piece “Beyond Bribery” for Foreign Policy: “The essence of this new (legal) corruption — the violation of public trust — harks back to ancient notions of corruption. Yet its practitioners follow a thoroughly 21st-century playbook, written over the past few decades as privatization, deregulation, the end of the Cold War, and the advent of the digital age have transformed the world. These developments have broken down barriers and created new openings for elites to exercise their power and influence in a system that is more complex and opaque than ever, enabling them to use the levers of power to their own advantage while, at the same time, denying responsibility. (Many bankers, for example, trade in derivatives so complex that even they can plausibly deny understanding them.)

“Practitioners of the new corruption assume a tangle of roles that fuses state and private sectors. They abrogate public trust by working on behalf of their own, instead of those on whose behalf they purport to act. Just think of Goldman Sachs, often derided as “Government Sachs” for its seamless enmeshing of Wall Street and Washington. In the years leading up to the financial crash of 2008, Goldman routinely pushed the envelope — such as the notorious ABACUS case, in which the bank sold investments it knew were bad to one client at the behest of another. Yet the company apparently broke few or no laws along the way. Goldman also famously helpedGreece (and possibly other struggling European countries) hide debt in the early 2000s. When the day of reckoning came for Greece, it wasn’t Goldman Sachs, elite insiders, or national leaders who paid the price of slashing austerity measures.

“That the system is rigged in new ways resounds worldwide, even in the West. There’s a documented loss of confidence in formal institutions: governments, parliaments, courts, banks, corporations, the media. A 2014 research project attempted to quantify how gamed the system is in the United States. Two political scientists looked at 1,779 policy issues hashed out from 1981 to 2002 and found that policies widely supported by economically elite Americans were adopted about 45 percent of the time. If these same privileged Americans didn’t support particular policies, then their rate of acceptance dropped to 18 percent. The scholars write: “The central point that emerges from our research is that economic elites… have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence.”

See also her pieces “Forget the McDonnells. We’re ignoring bigger, more pernicious corruption right under our noses” for the Washington Post and “The Petraeus wrist-slap” for USA Today.