Editor's note: Prof. Thomas Kruessmann is key expert in the EU Technical Assistant Project "Strengthening Teaching and Research Capacity at ADA University" in Baku (Azerbaijan). At the same time, he is co-ordinator of the Jean-Monnet Network "Developing European Studies in the Caucasus" with Skytte Institute of Political Studies at the University of Tartu (Estonia).

The notion that “fish rots from the head down” is known to many cultures and serves as a practical reminder on what is at stake in the current wave of anti-corruption / integrity and good governance initiatives. The purpose of this blog post is to provide a short update on the recent founding of the International Partnership against Corruption in Sport (IPACS), intermittently known as the International Sports Integrity Partnership (IPAS), and to propose some critical perspectives from a legal scholar’s point of view.

During the past couple of years, the sports world has seen a never-ending wave of corruption allegations, often followed by revelations, incriminations and new allegation. There are ongoing investigations, most notably in the United States where the U.S. Department of Justice has just recently intensified its probe into corruption at the major sports governing bodies (SGBs). By all accounts, we are witnessing only the tip of the iceberg. And after ten years of debate and half-hearted reforms, there is the widespread notion, as expressed by the Council of Europe’s (CoE’s) Parliamentary Assembly (PACE) Resolution 2199/2018 that “the sports movement cannot be left to resolve its failures alone”.

What is IPACS and why has it been created? 

IPACS was founded under the authority of the International Olympic Committee (IOC) as “a cross-sectorial, multi-stakeholder platform to enable a pragmatic partnership allowing the development and implementation of programmes and initiatives by the various partners, to strengthen efforts promoting transparency, integrity and good governance in sports organisations, in particular through education and awareness-raising initiatives.” These words, taken from the Declaration of the Second International Forum for Sports Integrity (IFSI), held in Lausanne on 15 February 2017, provide a summary of the tasks IPACS was agreed to address. Interestingly, later on the official mission statement was significantly watered down: “To bring together international sports organisations, governments, inter-governmental organisations and other relevant stakeholders to strengthen and support efforts to eliminate corruption and promote a culture of good governance in and around sport.” This change mission statement betrays some of the controversies that lie behind the difficult quest for good governance and integrity.

One obvious question is why was it only in 2017 that IPACS was created? The short answer is that IFSI took up an idea that had been put forward at the UK Anti-Corruption Summit one year earlier. However, the real question is, why did this initiative emerge only in 2016/17 after corruption scandals had been hitting SGBs over the entire past decade and had become particularly acute with FIFA around 2010? The reason is that there is a major undercurrent in fighting corruption in SGBs: the doctrine of the autonomy of sports. For historical reasons, most major SGBs have been created as private entities, often associations or non-commercial entities, and are adamant at defending the notion of independence and autonomy of sports. While international anti-corruption conventions by the nature of international law address only states, SGBs are in the fortunate position to have to comply only with the criminal laws of their host state. And despite the fact that the commercialisation of sports has turned SGBs into multi-billion dollar ventures, since their inception their internal structures have resembled “gentlemen’s clubs”. It therefore comes as no surprise that even in the IFSI Declaration of February 2017, participants are eager to refer to the 69^th United Nations General Assembly proclaiming the autonomy of sports and shifting the responsibility in fighting corruption primarily to governments.

This undercurrent explains why the original IPACS mission statement calls for a “pragmatic partnership” and emphasizes education and awareness-raising initiatives. The truth is that even by 2017, many stakeholders (“participants to the IFSI Declaration”) were fighting to protect the independence of SGBs teeth and claw. And that only now a consensus is emerging, as expressed in the CoE PACE Resolution 2199/2018, that “enough is enough” and that SGBs have actually failed in cleaning up their business. Earlier resolutions, e.g. by the 14^th CoE Conference of Ministers responsible for Sport from 22 February 2017, have been more diplomatic in language. But it is clear that IPACS, despite all defensive battles from SGBs, is now representing a change in the tide of governments and anti-corruption related international organisations (such as CoE, OECD and UNODC) finally eager “to talk tough” with SGBs.

Is “talking tough” with SGBs credible? 

Now, even if we assume that the most recent investigations into corruption scandals were the straw that broke the camel’s back, will international anti-corruption organisations and governments be credible in fighting corruption by breaking up the doctrine of sports autonomy? Switzerland has been in the vanguard of national governments extending the offense of corruption in the private sector to NGOs and other non-commercial entities. This new offense (Arts 322^octies – 322^decies Swiss Criminal Code) is innovative because it does no longer require a distortion of the market. GRECO is reported to be preparing a “Typology Study on Private Sector Corruption” which will also cover the sports sector.

International anti-corruption organisations, by contrast, have a more careful line to tread. Arguably, there is a host of integrity-related problems in the world of sports that has been viewed for a long time in a reductionist way. Doping, match-rigging and other kinds of manipulation of sports events have ever too often been seen independently of the governance regimes of SGBs. Looking at them as individual wrongdoing at best supported the argument that SGBs may not have been vigilant enough. But this never came close to insisting that such kinds of wrongdoing are the logical consequence of structural governance defects in these bodies. As IPACS is now marking a shift in the consensus towards a more holistic and interventionist approach, what will this mean for international anti-corruption organisations? The problem is that during the past decade, many of them were only too happy to focus on singular problems while being co-opted by SGBs into “partnerships” to “address” governance issues. Analytically, this can be described as a horizontal legitimacy-building strategy by SGBs. By concluding memoranda of understanding, e.g. between the IOC and the UN or between FIFA and the CoE, SGBs, depending on their level of regional or universal activities, co-opted their potential critics and tried to acquire legitimacy by involving them into so-called reform processes.

Arguably, by being drawn into piecemeal reforms of SGBs over the last decade, international anti-corruption organisations have become part of the problem. The question is, how can they become part of the solution again? This is where IPACS presents an answer: it can be understood as a tacit dissolution of the prevailing partnerships and, depending on style and substance, offering a fresh start for a holistic and thus governance-related approach to establishing integrity. 

How is IPACS going about its work?

As mentioned before, IPACS was created in the wings of the Second IFSI, held on 15 February 2017 in Lausanne, and it will operate within the broader IFSI structure. By 2019 when the Third IFSI is scheduled, IFSI participants will therefore review a progress report on the activities realized which invariably includes any progress made by IPACS.

The work of IPACS itself is structured on three levels. There is a core group in which the most important anti-corruption international organisations are represented, a Working Group which is basically a tripartite structure representing the interests of SGBs, governments and inter-governmental organisations, and topical task forces. Core group members (CoE, IOC, OECD, UNODC and the UK Government) are in charge of preparing and co-ordinating the Working Group meetings. The first Working Group meeting took place at the CoE’s venue on 21 June 2017, the second Working Group meeting was held at the OECD on 14-15 December 2017. The third Working Group meeting is scheduled for June 2018 at the IOC’s headquarters in Lausanne.

So far, three task forces with experts from outside the Working Group have been established:

• Task force 1 (TF1) on reducing the risk of corruption in public procurement;
• Task force 2 (TF2) on ensuring transparency and integrity in the selection of major sport events, with an initial focus on managing conflicts of interest; and
• Task force 3 (TF3) on optimising the processes of compliance with good governance principles to mitigate the risk of corruption.

The expected outputs from these task forces are as follows:

(1) TF1 to develop by the end of 2018 a general mapping of procurement standards to the specific context of sport, possibly complemented by illustrative case studies on how these standards could be applied in practice.

(2) TF2 to define conflict of interest in the specific sports context and undertake a stock-taking exercise of procedures and practices for managing conflict of interest in the specific context of the selection of major sporting events.

(3) TF3 “to aim to”

• map relevant governance standards and their applicability to the sports context;
• consider developing indicators to evaluate compliance with these standards;
• consider means for building capacity to implement good governance standards.

From the wording it appears that from TF1 to TF3, the tasks get ever larger and the commitment ever more unspecific. While TF1 is given a precise task with a definitive deadline, TF3 is asked to “aim to” reach certain goals. But this specific wording is perhaps a correct reflection of the difference in the scope of the problem. Procurement standards can easily be adopted from the corporate world. There is no specific challenge in running procurement for SGBs. Conflicts of interest, in particular when selecting major sports events, are of a different magnitude. Very often, the traditional ways of addressing such conflicts in the corporate setting or in public administration are clear-cut and addressed in a number of regulations. In SGBs which have been traditionally considered as “gentlemen’s clubs”, conflicts of interest run through the entire fabric of the institution. Therefore, the magnitude is much larger. But the real issue is how shall the mandate of TF2 be distinguished from that of TF3? Conflicts of interest and bad governance are twin concepts, and both flourish in the same environment. So, let us now turn to the central question: what can be expected from the most crucial TF3 in the IPACS setting?

Do governance standards finally get applied? 

In its first set of assignments, TF3 is asked to look into “relevant” governance standards, map them and analyse their applicability to the sports context. What sounds like a logical sequence of steps is actually quite muddled. Judging what is relevant and what is not is certainly the task at hand, but if we assume that “relevant standards” have been found, why is it necessary in a second step to “analyse their applicability in the sports context”? Is not applicability in the sports context the key criterion for judging what is relevant and what is not? Or will there first be other criteria for judging relevance outside from applicability in the sports context?

The point here is not to ridicule the language of the task force assignment, but to point to a deeper problem. Over the entire past decade, there have been numerous projects seeking to identify relevant governance standards. Without going into this issue very deeply, let me name just the most important ones:

• IOC Basic Universal Principles of Good Governance of the Olympic and Sports Movement of 11/12 February 2008;
• IOC 2016 Code of Ethics;
• CoE Committee of Ministers Rec(2005)8 “On the Principles of Good Governance in Sport”;
• CoE PACE Resolution 1875 (2012) “Good Governance and Ethics in Sport” with appendix “Guidelines on good governance and ethics in sport”;
• CoE PACE Resolution 2053(2015) “The Reform of Football Governance”;
• CoE PACE Resolution 2199 (2018) “Working Towards a Framework for Modern Sports Governance” plus appendix;
• CoE PACE Resolution 2020 (2018) “Good Football Governance”;
• EPAS Study “A Review of Good Governance Principles and Indicators in Sport” (2016);
• EU Expert Group’s “Principles of Good Governance in Sport”;
• Sport Integrity Global Alliance’s (SIGA’s) “Good Governance Universal Standards Implementation Guidelines”.

In addition, when it comes the second set of assignments to TF3, in particular “developing indicators to evaluate compliance with these standards”, the following benchmarking tools already exist:

• EU’s Sports Governance Observer;
• EU’s “Support the Implementation of Good Governance in Sport” (SIGGS) project;
• and finally, the aforementioned Sport Integrity Global Alliance with a specific three-step benchmarking model.

So all things considered, a large amount of work has already been done to identify relevant standards for SGBs. Would it not simply be enough to take these project results seriously and start implementing them and evaluate their effects? Indeed, from an outside observer’s point of view, it looks as if this entire process is flawed. There is simply no need to go into another round of identifying standards, assessing their relevance and benchmarking them with indicators when all the work has already been done.

One argument to support the TF3 engagement is that there are simply too many different standards, and that, when it comes to governments intervening with SGBs and forcing them to adopt good governance standards, there should be one agreed-upon set of standards for all cases. Likewise, CoE PACE Resolution 2199 (2018) “strongly calls for the development and implementation of a solid set of harmonised good governance criteria” (italics not in the original). And in para 4 of the appendix to this Resolution, PACE even speaks of the necessity of identifying “core criteria” of good governance in sport. While such quest for harmonising and reducing to core elements may be intellectually stimulating, there is doubt whether the sports world can accept another round of soul-searching. The fish has already been rotting for a while, and the same “brave men” (aka experts) who had been dealing with the issue for a decade are now employed again in yet another attempt of the international community to clear up the mess of SGBs. We will eagerly await some results when the IPACS Working Group will convene for its next meeting in June 2018.

Season 2 of #FootballLeaks is now underway since more than a week and already a significant number of episodes (all the articles published can be found on the European Investigative Collaborations’ website) covering various aspect of the (lack of) transnational regulation of football have been released (a short German documentary sums up pretty much the state of play). For me, as a legal scholar, this new series of revelations is an exciting opportunity to discuss in much more detail than usual various questions related to the operation of the transnational private regulations of football imposed by FIFA and UEFA (as we already did during the initial football leaks with our series of blogs on TPO in 2015/2016). Much of what has been unveiled was known or suspected by many, but the scope and precision of the documents published makes a difference. At last, the general public, as well as academics, can have certainty about the nature of various shady practices in the world of football. One key characteristic that explains the lack of information usually available is that football, like many international sports, is actually governed by private administrations (formally Swiss associations), which are not subject to the similar obligations in terms of transparency than public ones (e.g. access to document rules, systematic publication of decisions, etc.). In other words, it’s a total black box! The football leaks are offering a rare sneak peak into that box.

Based on what I have read so far (this blog was written on Friday 9 November), there are three main aspects I find worthy of discussion:

• The (lack of) enforcement of UEFA’s Financial Fair Play (FFP) Regulations
• The European Super League project and EU competition law
• The (lack of) separation of powers inside FIFA and UEFA

I.               The Financial Fair Play and Legal Realism: The (wide) gap between the law in books and the law in action 

In a famous article dating back to 1910, Roscoe Pound coined the distinction between law in books and law in action. It highlighted an obvious (but often underestimated) fact: laws do not speak by themselves. Moreover, laws are never clear, as they must be interpreted in the context of concrete cases. Until now, much of the second season of the football leaks was dedicated to UEFA’s lenient enforcement of its FFP rules against numerous clubs (in particular Manchester City and PSG). In other words, to the (wide) gap between the law in books and the law in action. What becomes clear from the articles devoted to this topic (see here, here and here) is that the UEFA FFP rules are far from clear and that the certain clubs were very creative in devising ways to play with the boundaries of the wording of the rules.

These clubs have used various stratagems (mainly inflated sponsorship agreements, but not only) to try to convince UEFA that they complied with the rules. However, the leaks demonstrate that they did not manage to fool the governing body, which had many reports on its desk identifying the immense gap (1 to 100) between independent valuations of the deals and their face value. In short, UEFA knew it was being played and that in particular PSG and Manchester City were playing with the interpretative frontiers of the FFP rules in order to circumvent them (or at least their spirit) in a not-so-subtle way. Yet, the practical meaning of the law in books always depends on those that guide the law in action, that’s why the independence and transparency of judicial institutions (such as the UEFA Club Financial Control Body (CFCB)) is so important. In the case of UEFA’s CFCB, the football leaks show that the settlements reached with the clubs in spring 2014 were primarily the result of a political decision, driven by the then UEFA Secretary General (Gianni Infantino), who saved PSG and Manchester City by reducing their break-even deficits through a gigantic overvaluing of their sponsorship contracts. Whether this decision is in line with the spirit and objectives of the UEFA CL & FFP Regulations is highly doubtful. Moreover, it seems legitimate for other clubs (such as Galatasaray or Dynamo Moscow), which have faced harsher sanctions, to feel that they have been discriminated against. Until now, due to the lack of detailed information available on the underlying financial situations in specific cases, this was particularly difficult to evidence. The football leaks have brought some transparency and certainty to this matter, and other clubs facing UEFA sanctions on the basis of FFP breaches will certainly rely on it in the future. Hence, these revelations damage UEFA’s reputation as a serious and equitable governing body and its portraying of the FFP rules as a tremendous success.

The football leaks do not, however, touch upon the issue of the legality of the FFP rules, a mechanism that fundamentally aims to restrain the capacity of owners to use financial leverage to boost their clubs. But, why should wealthy owners of PSG and Manchester City not be allowed to use their billions to help their clubs win the Champions League? It might be a bad economic investment or the returns in terms of positive PR might not materialise as expected, but this is rather a problem for the citizens of Qatar and the United Arab Emirates who are burning their oil & gas resources on it. In fact, nobody thinks of stopping Tesla from investing mountains of cash until now at huge loss (the same is true for Uber). Moreover, the FFP rules, if properly enforced, would primarily freeze the existing inequalities and reinforce the grip of a small group of dominant clubs on national and European club competitions. Maybe it is actually a good thing that UEFA is not taking them seriously (here speaks the PSG fan in me). Nonetheless, I (the reasonable academic) personally believe that there is a viable justification for the UEFA FFP rules and it is to protect football (and its adjacent markets) from speculation and to put a brake on the tendency of the owners to irrationally overinvest. In other words, the rules play a necessary counter-cyclical role. Without them the drive for short term success would fuel not only the deregulated transfer market but also put the long-term existence of football clubs at risk (and they are often too popular to fail). However, it must be complemented with other regulatory mechanisms if the widening inequality between clubs in Europe is to be corrected. On this too, the football leaks had very interesting things to show.

II.             The Super League and EU law: Leveraging competition law against free and fair competition

« In view of the considerable social importance of sporting activities and in particular football in the Community, the aims of maintaining a balance between clubs by preserving a certain degree of equality and uncertainty as to results and of encouraging the recruitment and training of young players must be accepted as legitimate. » (Bosman ruling, para. 106)

There is healthy amount of legal irony in the football leaks story (see here) about the projected European ‘Super League’. It seems a group of major clubs have relied on legal advise based on EU competition law to push forward a scheme to breakaway from the football plebs and devise a new, more lucrative, and most importantly exclusive competition. Whether they truly planned to go ahead or needed the plan to look as credible as possible to strengthen their hand in the discussions with UEFA on reshaping the Champions League is moot. The point is that they have in practice leveraged EU competition law to reduce competitive balance and secure their collective dominance vis-à-vis their national/European competitors. Here comes the million-dollar question: How come EU competition law can be exploited to reduce competition?

This is in my view largely due to a widespread misinterpretation of the impact of EU law on SGBs’ regulations. Be it under the free movement or the competition rules, the EU welcomes private regulations through SGBs but exercises a rationality test on them: SGBs must demonstrate that their rules and decisions pursue a legitimate objective (not limited to their economic well-being) and are reasonable (or proportionate) to attain that objective. In other words, they must demonstrate what they often publicly claim, that they are acting for the public good when regulating their sport. In practice, it means that if you threaten a speed-skater with a lifelong ban for participating in non-sanctioned events that do not even conflict with your own competitions, you need to explain why and show that the chosen regulatory option is not too harsh on the speed skater. This is roughly the situation in the ISU case, in which the EC found the ISU eligibility rules to be contrary to EU competition law because of two main reasons. First, the ISU did not provide any convincing justifications for its threat of a lifelong ban on skaters taking part in unsanctioned events. Moreover, and most importantly, the lifelong ban was a disproportionate mean to attain any potentially legitimate aim, e.g. a solidarity contribution or a shorter ban could have constituted less restrictive alternatives. This does not mean, however, that UEFA and FIFA could not for example justify a temporary ban from national teams (and thus from the FIFA World Cup or UEFA European Championship) for players taking part in the Super League or exclude temporarily clubs taking part in the Super League from national competitions and/or fine them. If these measures are necessary to maintain the competitive balance or preserve the solidarity mechanisms inside the football pyramid, they might very well be justified. It is important to remember here that AG Lenz was in §§ 218-234 of his Opinion in the Bosman case advocating redistributive measures (in particular the equal distribution of TV rights) which are extremely restrictive of the economic freedom of the clubs. his proposals were endorsed by the Court of Justice in paragraph 110 of its final Bosman judgment.

In short, it is erroneous to believe (as so many do) that EU law supports and encourages the economically selfish behaviour of the biggest clubs. The opposite is true: EU law recognises the need for competitive balance and redistribution in sport and it is also ready to accept the legitimacy of the SGBs’ regulations. The irony illustrated by the football leaks is that EU law is being invoked by a cartel of powerful clubs to entrench their dominant position in the European football market. Such a twisted use of EU law would not stand the whisper of a chance at the CJEU.

III.           Infantino and the Separation of Power at FIFA and UEFA: The ills of executive dominance in football

Finally, if there is a governance red thread throughout the information published in the framework of the football leaks, it is the extent to which they illustrate the dominance of executives in the governance of football (and sports in general). Both at the UEFA and FIFA, Gianni Infantino, like Blatter a pure product of the football bureaucracy and an impersonation of its profound Swiss roots, routinely intervened in the work of pseudo independent bodies. Thus, as mentioned above, he was personally and directly involved in the negotiations with PSG and Manchester City over their compliance with the UEFA FFP rules. Assuming that the email exchanges reported are true, he is the one who struck a deal with both clubs leading to a settlement of the cases and not the ‘independent’ investigator of the UEFA CFCB. This obviously damages the integrity of the CFCB and hints at the discretionary nature of its decision-making contrary to a basic principle of the rule of law: equality before the law. 

Another example of the lack of separation of powers inside FIFA and UEFA, despite powers being officially separate on paper, is the drafting process of the newly released FIFA Code of Ethics. The Ethics Committee can propose amendments of the Code of Ethics to the FIFA Council (Article 54 FIFA Statutes 2018). The executive bodies of FIFA, which are the prime addressees of the Code, are not supposed to have a say in the substance of these amendments. However, in practice, the emails obtained by the football leaks show that Infantino did not only receive a copy of the draft, but also provided comments and suggestions, which were mostly adopted. Again this process highlights a core governance failure at FIFA, already displayed through its policy of hiring and firing independent ethics staff and the consequent lack of truly independent counter-powers to the massive executive powers of the President. As long as no Chinese wall is erected between the executive bodies of FIFA/UEFA and their judicial bodies (including the CAS), we will continue to see instances of maladministration and abuses of power in football. Their independence must be secured through institutional guarantees such as strict conflict of interests rules and secured term limits, as well as a much greater transparency of the proceedings including the systematic publication of the full disciplinary decisions.

Conclusion: The public virtue of the leak

'Without publicity, no good is permanent; under the auspices of publicity, no evil can continue.' (Jeremy Bentham in Essay of political tactics)

The revelations of the football leaks will not come as a major surprise to those following football. Many suspected that PSG and Manchester City were getting quite a good deal at UEFA’s CFCB, many could well imagine that the big clubs strong-armed UEFA into a new Champions League set-up with a threat of breaking away, and many guessed that Infantino was exercising pressure and influence over ‘independent’ bodies at FIFA and UEFA. Yet, few could prove it. Thus shielding UEFA, FIFA, the major clubs and Infantino from well-deserved public criticisms. Now, the public knows. We (the people of football) can decide how we want football to be regulated and by whom. Miguel Maduro, the ephemeral former head of FIFA’s Governance Committee, who was dismissed after barring Russia’s deputy prime minister, Vitaly Mutko, from taking a position at the FIFA Council, has suggested (in a must-watch talk he gave at the Asser Institute during #ISLJConf17) that we need a specific EU agency to oversee the governance of UEFA and FIFA. It is an idea worth exploring, which will require a lot of political capital and determination to be implemented. This political will can only be marshalled if the public loudly demands change. In this regard, I’m not sure whether this round of football leaks will suffice, but it will highlight again how football is currently run by organisations and people which are disregarding all basic principles of decent governance, often with nothing else in mind than their own economic interests. This is not a natural and permanent state of affairs. It can change. It will change.