Thomas C. Sima Explains the Russian Reaction to the FIFA Indictments

By Thomas C. Sima

On May 27, the United States Justice Department moved to arrest and indict seven members of FIFA (the Fédération Internationale de Football Association or International Federation of Association Football), which regulates the game of soccer worldwide.  To date, the list of indictments has risen to eighteen.

Russian President Vladimir Putin attacked the actions, saying that it is “at least strange” that the United States of all countries brought the charges against the FIFA officials.  He said that the matter had nothing to do with the United States and accused the US of “seeking to extend its jurisdiction to other countries around the world.” Putin also voiced suspicions that the move was an attempt to get rid of Joseph “Sepp” Blatter and replace him and his people with a new team that would rob Russia of the World Cup in 2018.

My short answer is that I think Putin’s right.

Putin is right - and I doubt the Justice Department would disagree. The US is seeking to exercise criminal jurisdiction far beyond US borders. Congress has passed legislation with the express purpose of extending the international reach of US law. Our securities laws regulate many sales of stock outside our borders; our citizens and permanent residents must declare worldwide income for Federal tax purposes. To catch our own tax cheats, Congress has enacted a highly intrusive tax reporting law known as FATCA (you can read more about it here), which forces sovereign nations and foreign banks to serve US law enforcement. The Foreign Corrupt Practices Act regulates business activities around the globe. Our anti-terrorism and espionage laws punish conduct outside of US borders. No one can seriously question that in recent decades we have extended US law around the globe - which creates conflicts with foreign nations (including Russia) that take seriously their own national sovereignty.

Putin's second allegation, that we want to remove Blatter and deprive Russia of the 2018 World Cup, is probably the truth as well, or at least part of the truth.  Swiss investigators are looking into the conditions that led to Russia being awarded the 2018 World Cup.  Also, the timing of the arrests, less than 48 hours before a vote on whether or not to award Sepp Blatter a second term as FIFA President, was suspicious.  Even though Blatter has not been indicted (yet) there was incredible pressure put on him to resign as a result of the scandal.  If he is indicted as a result of the investigations currently being conducted in Switzerland, the US and elsewhere, a new team will be put in place. 

The Federal government has been clear that it wants to punish Putin beyond the scope of existing sanctions on Russia.  We know that Putin cares deeply about sporting events and sees them as an opportunity to raise Russia’s prestige and showcase his regime.  Taking away the 2018 World Cup would be a personal blow to Putin in a way that the sanctions have not been. 

Even though he may be right, however, Putin’s arguments don’t tell the whole story.

The indictments detail real and tangible connections between the FIFA corruption and the United States.  US banks were involved, meetings were held in New York, cash was handed over in envelopes and even suitcases, and many of the indicted individuals either lived in the US or spent significant time here.  Chuck Blazer, “Mr. Ten Percent”, is a US citizen who resided in New York.

And the 2018 World Cup isn’t the only thing the US is concerned about.  The 2022 World Cup in Qatar has become a nightmare for FIFA.  Originally scheduled to be held in the summer, the games had to be moved to November and December due to the oppressive heat of Qatari summers, and over 1200 workers have died building the stadium and other venue buildings.   Not only that, but the United States wanted to host the 2022 World Cup and lost the bid to Qatar. 

So it’s not all about Putin.  To the extent it is, however, he has to know he’s unpopular right now.

Putin accused the United States of seeking to extend its jurisdiction a little more than one year after Russia annexed the Crimean peninsula and against the backdrop of continuing Russian support for separatists in Eastern Ukraine.  It doesn’t take a genius to notice the irony in that.

Putin’s criticism was made the same week that a bill was passed into law in Russia (Federal Law № 129-ФЗ, dated May 23, 2015 – click here to see the original law in Russian) that allows the government to stop the activities of “unwanted foreign organizations”.  Specifically, the law states:

Деятельность иностранной или международной неправительственной организации, представляющая угрозу основам Конституционного строя Российской Федерации, обороноспособности страны или безопасности государства, может быть признана нежелательной на территории Российской Федерации.

Translated to English:

The activities of foreign or multinational non-state organizations which represent a threat to the principles of the Constitutional order of the Russian Federation, the defense capabilities of the nation or the security of the government may be declared unwanted on the territory of the Russian Federation.

Unwanted organizations are subject to heavy fines and closure of their Russian offices.  Individuals who fail to cease working for such organizations are subject to criminal charges.  At a minimum, this law may discourage foreign corporations from acting as sponsors for the 2018 World Cup or from expanding activities in Russia in preparation of the same.  In other words, Putin just handed FIFA another convenient excuse to revisit its decision regarding the 2018 Games.