Shortly after Swiss police raided the posh, five-star Baur al Lac hotel in downtown Zurich on May 27, 2015 and arrested numerous FIFA executives, the US Department of Justice revealed a multi-year criminal corruption probe. Many people, including FIFA's then President Sepp Blatter, were puzzled. Many asked: how could the US arrest so many foreign nationals for white collar crimes in another country? And, more importantly, why was the US stepping in to arrest and prosecute the FIFA cabal?
After pouring over the unsealed court filings and submitting numerous FOIA requests, I started to ask a different question: where? As in, where will the money seized by the US government as part of these prosecutions end up?
The answer shouldn't surprise you.
United States Attorney General Loretta Lynch recently boasted on national television that she is the "FIFA slayer," but is that really true? Thus far, 25 FIFA officials and five marketing executives have been charged with various white collar crimes ranging from money laundering to racketeering. Twelve defendants have already pleaded guilty and forfeited around $193 million dollars—plus all funds in Luis Bedoya's Swiss bank account, Sergio Jadue's US bank account, and all proceeds from Jose Hawilla's sale of the TV marketing rights to the Copa Centenario owned by Traffic Sports. All that's missing is a partridge in a pear tree.
That's a lot of cash, and it doesn't even include the huge bonds paid by the several defendants out on bail and awaiting trial. A week ago, many folks raised their eyebrows (and chuckled) when FIFA itself asked for a slice of that money. Yes, FIFA's request was premature— there's no order of restitution from a Judge yet—but it was technically possible because the DOJ decided to paint FIFA, the organization, as a victim of its own executives. The DOJ's theory of the case is that the executives' graft skimmed off FIFA-related contracts and tickets was akin to lost profits.
Yet how is the US squeezing so much money from these defendants? The DOJ (technically the US Attorney's Office) alleges that all assets seized are the fruits of the crime because the FIFA executives used dirty money to buy real estate and expensive big ticket items like cars and watches. This is known as "civil asset forfeiture." So the US busts FIFA and makes a buck. High fives all around and a big W for the good guys, right?
Not so fast.
"Since 2001, annual federal forfeiture revenue has increased from less than $500 million to more than $5 billion in 2014—a tenfold increase in just 14 years," according to a report from the Institute for Justice, a public interest law firm. The American Civil Liberties Union has noted serious problems with the explosion of civil asset forfeiture in the United States. The problem is that in order to convict a defendant and toss him or her in jail, the government needs to prove guilt beyond a reasonable doubt. However, to seize and ultimately keep items related to the crime—such as cars, cash, and jewelry—the burden of proof is only a preponderance of evidence: in normal parlance, "more likely than not", or 51 percent. Loretta Lynch, head of the DOJ, has a reputation for aggressively pursuing civil asset forfeiture and has been criticized for it, mostly from the right.
It's really tough to feel sorry for white collar criminal defendants such as Chuck "my cats have an apartment in Manhattan" Blazer, who has laundered more money than we'll ever see in our lifetime. However, when the same aggressive tactics are used against low-income communities, everybody cries foul. Shouldn't all individuals enjoy their constitutional right to property? The ACLU's' biggest problem with asset forfeiture is that it creates perverse incentives for law enforcement to stretch the law and search for an easy payday. In legal reformist parlance, this is known as "for-profit policing." Basically, the cops and prosecutors stop seeing criminals, and start seeing dollar signs.
With the above in mind, return to our first question: how can foreign executives fall under the jurisdiction of US law? As detailed brilliantly in The Economist, the DOJ brought charges based on the Travel Act, a law which bars foreign travel, using the mail (including email), and/or using an instrument of travel to do something illegal like, say, bribe or be bribed. Beyond that, FIFA executives allegedly (for those who plead not guilty, that is) used American banks to launder money (and did so, as VICE Sports writer Aaron Gordon has explained, rather poorly.)
Does it look, or at least feel, like the US was grasping at straws? How, exactly, did the FIFA crimes hurt ordinary US citizens? Again, remember how "for-profit policing" can distort priorities. When you and I saw FIFA's World Cup bid antics, we rolled our eyes. However, FIFA was simply too appetizing a target for the DOJ to pass up, even if the investigation took years longer than usual.
Once you accept the possibility that this bust was for profit, not just for justice, then suddenly the unsealed court files can look like MTV Cribs: Shakedown Edition. For example, a bond order for FIFA Defendant Jeffrey Webb dated July 22, 2015, notes that in order for him to secure a ten million dollar bond, he had to hand thirteen designer watches, a diamond bracelet, a pair of diamond earrings, pearl earrings, and a diamond and pearl necklace to US Marshals.
Remember when your mom had to co-sign those Sallie Mae student loans? FIFA Defendant Daryan Warner's mother co-signed his $1.2 million dollar bond and, on February 11, 2016, he asked the Court to swap real estate holdings for cash in a deal that would be co-guaranteed by his son. The asset forfeitures that are part of the guilty pleas also contain shady aspects. When you get a home living room sofa set at Sears, you don't have to pay it all right away. The US federal government also believes in payment plans. Both Daryan Warner and another defendant, Jose Hawilla, had to make payments on "Forfeiture Money Judgments" in installments.
Only two FIFA officials are actually behind bars: all the rest have paid a bond and been released on house arrest. The suspicion is that these two individuals lack the cash to barter for freedom, not that they are particularly more guilty than the rest. Of course, prosecutors and defense attorneys will tell you that white collar prosecutions rarely result in hard time for the guilty. The FIFA case has followed that predictable pattern—at least up to now. No FIFA official who has pleaded guilty has been sentenced yet. On November 6, 2015, Chuck Blazer's sentencing was continued for a year because it was anticipated he may need to testify at other trials. In September of last year, Jose Hawilla's sentencing date was continued until April 8, 2016.
Could they possibly do time? Maybe. But at the guilty plea hearing for Daryan Warner on October 28, 2013, the prosecutor stated: "[t]he Office will not recommend to the Court a specific sentence to be imposed." That's a subtle way of saying "we won't push for a jail term." Since the US Supreme Court ruled the Federal Sentencing Guidelines were permissive, there is no longer any mandatory minimum for any of these crimes. In the Hawilla and Daryan Warner guilty plea hearings, both Judge Kuntz and Judge Dearie explained to the defendants that, as permanent residents and not citizens, they were pleading guilty to crimes that could result in their deportation. However, in the Warner hearing, the US Attorney dangled a carrot: the defendant signed a "Cooperation Agreement", so they agreed to delay sentencing because presumably, like Blazer, Warner may need to testify at a trial for another Defendant. They also agreed to recommend to the DOJ that Warner get an S visa, colorfully described to me by a defense attorney as "the Snitch visa."
Most of the defendants who plead out will not end up behind bars. Those who sing may even get to stay in the US. But what happens to that nine-figure stack of cash? I asked the Attorney's Office for the Eastern District of New York about victim restitution and asset forfeiture, and they politely declined to comment. However, at the end of the guilty plea hearing for Jose Hawilla, the US Attorney claimed that "because this is a sealed proceeding, and not a public proceeding, no victim notification has been required under the Justice For All Act." In the all FIFA-related court records that are available, I saw a single victim notice—in the Jeffrey Webb file—that linked to a bland website. The US Attorneys don't seem particularly eager to hand over funds to FIFA. I also zipped off FOIA requests to the State Department to see if there was any deal to split the FIFA spoils with other countries, but they've failed to turn over documents in anything resembling a timely fashion.
If the victims don't get funds, and other governments don't grab that green, then who's left with that pot of gold? Uncle Sam. As a matter of fact, the feds recently stopped sharing seized assets with local and state police to keep a bigger slice of the pie. At first, reformers were excited by that change in policy, because state police had used federal equitable sharing to get around state laws recently enacted to stymie "for-profit policing." Yet nobody stopped to ask: what about the feds themselves?
I get that the DOJ has been de-funded by a GOP Congress and the FIFA-funds could patch that budget hole. And yes, in the short term, these convictions will scar these guys' professional and personal lives and, as a result of the negative press, FIFA can't find new sponsors (aside from China). However, in taking down FIFA and pushing hard to squeeze a buck, the US just may lose the moral high ground. A few dozen bad people are poorer and sitting around mansions on house arrest, but it looks like the US government is playing by FIFA's rules; as in, cash rules. Under the umbrella of law and order, taxpayer-funded officers eagerly clasp at the luxury watches FIFA used to give away without a thought.
In the best light, the US government had the courage to fill a glaring gap in international law enforcement: no other country had the gumption or resources to tackle the cronyism rampant at FIFA. However, in the worst light, the FIFA crackdown is for-profit policing gone wild. The feds stretched the notion of jurisdiction to shake down white collar criminals from abroad for millions, few perpetrators will do any serious jail time, the alleged victim—FIFA—probably will get minimal if any compensation, and FIFA will remain a laughable cesspool of excess (as evidenced by the recent election).
Yes, things could change. Sentencing is pending. But right now, we're only winning if you're keeping score in dollars and cents. FIFA hasn't been slayed, but the US sure seems to be getting paid.