Switzerland Plans to Close Loopholes that Let International Sporting Organizations Be Above the Law

Switzerland is not a stranger to scandals – its banks have long been embroiled in money laundering and tax evasion. Now, the international football organization headquartered in this Alpine nation is in turmoil as well.

The arrest on Wednesday of seven FIFA officials on charges of corruption involving more than $150 million in bribes and kickbacks has plunged the soccer’s controversial governing body into crisis.

Swiss police confiscated documents and electronic data after raiding FIFA’s Zurich headquarters on Wednesday as part of an on-going investigation into money laundering and fraud that came to light after the organization awarded the 2018 and 2022 World Cups to Russia and Qatar respectively.

As the detained officials are holed up in a luxury Zurich hotel awaiting extradition to the U.S to face criminal corruption charges, some politicians here claim that the abuses went unnoticed because the organization had not been sufficiently scrutinized. “FIFA likes being based in Switzerland because it enjoys very loose governmental and financial oversight,” right-wing parliamentarian, Roland Buechel, writes on his website.

However, it may soon become more difficult for sports organizations to engage in illegal activities. Last December, the parliament passed a law spearheaded by Buechel that would increase the government oversight of FIFA and other sporting bodies based in Switzerland, which have had little scrutiny.

Currently, FIFA, along with about 60 other Switzerland-based sporting bodies – including the International Olympic Committee (IOC) – operates under an “association” status, which means it is exempt from Swiss anti-corruption laws that govern all businesses. Or, as Buechel notes, “FIFA is organized like a small yodeling association in a mountain village. They should be structured like a proper company.”

Perhaps because of the lack of stricter oversight, other Switzerland-based sporting bodies had also been at times embroiled in controversy – in 1998, for instance, several IOC members were charged with taking bribes worth millions of dollars from the Salt Lake City Bid Committee. In 2009, FIFA’s sister organization, The Union of European Football Associations, was involved in a betting scandal, when it tried to influence the outcome of soccer games. And a couple of years ago, the International Cycling Federation faced heavy criticism in the wake of doping scandals like that of the former professional racing cyclist, Lance Armstrong.

The proposed law would designate top executives of sports organizations like FIFA’s Sepp Blatter or IOC’s head Thomas Bach as “politically exposed persons,” which means that their bank accounts would be carefully monitored for suspicious activities.

This legislation is scheduled to be debated in parliament next week, but, due to the notoriously slow nature of the country’s legislative process, may not be enacted until 2017.

In the meantime, Buechel and other lawmakers who are working on the new legislation are hoping that, from now on, the only kickbacks in the sports industry will happen on the soccer field.

Stunning similarities of the 2014 World Cup