Once again it is the Americans who are acting as the world’s police. They have led the charge in punishing misbehaving banks and bankers in the wake of the financial crisis and now they have turned their sights on Fifa – this morning six officials from football’s governing body were arrested in Zurich on suspicion of corruption at the US Department of Justice’s request.
The whiff of corruption has hung around Fifa for years (not least thanks tothe Telegraph‘s own investigation into the bidding process for the 2022 Qatar World Cup in March). And yet most countries appeared powerless to do anything about it, perhaps, as Simon Kuper wrote in theFinancial Times this weekend, because they weren’t prepared to make the necessary sacrifices for their principles.
But now the US Justice Department and the FBI have rushed in where others feared to tread. What makes America different?
The exact details of this case are yet to emerge but a number of conclusions can be drawn from the vigour with which US regulators have pursued errant banks (not least because, as The New York Times notes, Fifa has $1.5bn in reserves and is as much a financial conglomerate as it is a sports organisation).
First, Americans have a deep-seated and historical abhorrence of white collar crime. There are few fully-satisfactory explanations for this. Some have suggested that it offends the sense of fairness that underpins the American Dream.
But, whatever the reason, the upshot is that, if you are found guilty of a white-collar crime in the US, they throw away the key. Federal prosecutors can, for example, count every email a criminal sends in the course of committing their offence as a separate case of wire fraud – and each count will carry a maximum sentence of 20 years.
Second, the path from law school, to legal firm, to the district attorney’s office or other regulators, and then on to political office is well-trodden in the States. This means that US regulators are staffed by bright, ambitious people who actively go hunting for big scalps.
Jack Warner is among those arrested for alleged corruption
Third, US law gives its agencies a great deal of lateral in prosecuting foreign nationals and companies. If an organisation stores its emails on a US server or uses an American bank account, it’s fair game.
Which brings us to the fourth and most powerful weapon that America has in its fight against tax evasion, money laundering, fraud and other financial crimes – the mighty dollar. US regulators are able to effectively force foreign banks to aid their investigations. How? If the banks don’t comply, the US authorities will hit them where it hurts by shutting them out of the largest financial market in the world.
In his book Treasury’s War, Juan Zarate details how US Treasury and White House officials, of whom the author was one, began to realise that the “centrality of American financial power and influence” meant that money had become America’s “greatest asset”.
Zarate describes how the US has developed and deployed a variety of financial techniques against terrorist groups, organised criminals and enemy states such as Syria, North Korea and Iran.
You can now add Fifa to the list.