International Conference on Sports Integrity: International Cooperation – Opening the Opacity Window to Criminal Investigation
Headquarters, National Judiciary Police, June 6th, 2019, Lisboa Portugal
David M. Luna | President & CEO, Luna Global Networks & Convergence Strategies LLC. Former Chair of the OEDC Task Force on Countering Illicit Trade and Senior Director, US State Department
José Luís Ferreira Trindade | Assistant to Portugal’s member at EUROJUST
Emma McClarkin | Director, Global Sport Policy. Former Member of European Parliament
Moderator: José Tavares | Councillor Judge and Director-General of the Court of Auditors
Prepared Statement of David M. Luna
David M. Luna
President & CEO
Sport Integrity Global Alliance
International Conference on Sport Integrity
June 6, 2019
It is an honor to be invited to be with you this week in Lisbon and to participate in this important international conference on sport integrity hosted by the Sport Integrity Global Alliance (SIGA) in cooperation with the Portugese Judicial and Judiciary Authority, the National Olympic Committee of Portugal (COP), ICSS INSIGHT, and other partners within the Government of Portugal.
Let me also applaud Emanuel Macedo de Medeiros for his energetic and passionate leadership at the helm of SIGAand for his vision on developing important international initiatives to fight the webs of corruption and criminality in sport and helping to promote the sector’s integrity.
It is fantastic news that SIGA today announces its Independent Anti-Corruption Initiative (SIACI) which can play a decisive and game-changing role in the effort to clean up sports globally.
Corruption is not just an American problem nor a European or an Asian one. It is not a problem that is unique to any one region or country, or any one sector. It is a global challenge that impacts us all.
For over 20 years as a former diplomat representing the United States in numerous international organizations, bilateral meetings, and public-private partnerships on fighting corruption and transnational crime, I heard and saw first-hand some of the challenges that societies face related to fighting corruption and promoting good governance across communities.
Among the valuable lessons that I learned in advancing diplomacy around the world is that to make progress on combating corruption, one must have determined leadership, and one must support dedicated public servants and civil society watchdogs.
One also needs adequate authorities, resources, and tools to prevent, investigate, and prosecute corruption.
And we can understand why? (Slide LGN 1)
The infiltration of organized crime in sports continues to be problematic, further enabling corruption. Illicit networks are actively involved in trafficking narcotics, steroids, doping, racketeering, game fixing, money laundering and other illicit activities as a source of profit, but also blackmail that enables them to continue to exploit and compromise officials.
Given that hundreds of billions of dollars in illegally-concealed proceeds are moving through our financial system and our economy across numerous industries, the enforcement challenge is monumental.
We must empower our law enforcement to target organized criminals, kleptocrats, and illicit syndicates who infiltrate sports and exploit our laws and corrupt our institutions, markets, and communities, hide their criminally-derived assets, and use their dirty money to finance even more security threats.
And yes, international cooperation and public-private partnerships are indispensable for collective action.
An effective anti-corruption strategy must include:
2. accountability: oversight, monitoring, and compliance measures;
3. independent investigations, robust enforcement, and effective sanctioning;
4. building resiliency and “cultures of integrity”; and
5. educational awareness campaigns on the harms of corruption
But make no mistake: Corruption was always one of the most difficult areas of my diplomatic work. Why? Because while many government officials would certainly say the right things about how they were against corruption;
Or comment on how they were committed to fight it, or even that they understood how pernicious the threat could be to their own economic development and security agendas;
When it came to actually implementing the necessary reforms and enforcing the laws necessary to eradicate it, more often than not, anti-corruption commitments often languished until the next election or new leaders gave it renewed attention.
What has always stuck in my mind is what a passionate anti-corruption champion from a civil society organization once asked me: How effectively can the corrupt truly fight corruption?
You need sunlight to disinfect corruption and accountability to hold officials accountable.
But sometimes the opacity window is firmly closed or the entrenched corruption is difficult to pry open because of indifference, complicity, complacency, lack of real leadership, or the outright greed and kleptocracy that have been the enemies of reform to advance strong anti-corruption efforts around the world.
However, there have been some openings and “windows of opportunity” that have enabled progress in some parts of the world and that have allowed for criminal investigations to make a discernible difference including, for example, in Colombia, Chile, Singapore, and Hong Kong.
But for real and enduring progress, people need to see the culture of corruption change over time. Otherwise, they quickly grow disillusioned that government cannot eradicate corruption, and that government can do no good nor help them.
Corruption Erodes Public Trust
While it is true that fighting corruption is quite difficult, to do nothing about it is not, of course, the answer.
Because inaction after all compounds even more ills facing a community that aspires to greater integrity, democracy, economic development, the rule of law, the stability of political systems, and brighter futures for its children and for shared prosperity across communities.
Corruption saps vital energies from efforts to promote innovation, entrepreneurship, and competitiveness while impeding economic growth and foreign investment.
It acts as a barrier to advancing greater equality, social justice, and public sector modernization.
It siphons the sustainable future of citizens across many parts of the global economy, including the masses who aspire to better access to quality water and food, sanitation, education, healthcare and housing.
When kleptocrats line their own pockets for themselves, they squander their responsibility to invest in the futures of their people.
Finally, corruption facilitates transnational crime and terrorism, casts dark shadows of lawlessness that destabilize communities, and erodes the rule of law.
These are today’s realities in too many places in our world.
Corruption Erodes Integrity in Sport
The webs of corruption and criminality similarly impact sport like all other sectors, economies, markets, and industries.
The governance and security challenges and impacts facing sport globally today are in many ways no different than those related to public sector corruption that I have just described.
Yes, corruption in both sectors is equally profound and complex.
Indeed, in recent years corruption and criminal scandals such as those involving sporting bodies, have reminded us of their adverse harms to the integrity and credibility of sport.
And like so many other instances in other sectors, the power brokers expediently clamor to clean up corruption, make some loud pronouncements for more integrity in sport, and unveil measures that they say manifest real reform.
But again, unless sport leaders’ commitments get tested and show results – and those who have broken the law get prosecuted, especially both the recipient and the giver of bribes – real reform will not occur.
Without holding sport federations, team owners, players, agents, sponsors, and their facilitators to higher accountability, there will not be the requisite strong dis-incentives to change behaviors.
In the United States, over the years, athletes have become criminals themselves across sports, compromising the integrity of competition. For example, Pete Rose who was engaged in sports betting and gambling on games that he managed as a coach.
Others have tarnished the game by injecting performance-enhancing steroids or drugs that have resulted in numerous records broken in baseball being designated with asterisks, or medals being taken away at the Olympics.
Referees too have been found to have corrupted the game by game fixing and gambling on games that they officially refereed.
In more recent years, from the FIFA corruption prosecutions to serious sexual violence against young athletes in American women’s gymnastics and college football to the bribery of college coaches by desperate parents wanting to get their children into elite schools through fraud, there is no shortage of the ills that infect sport communities.
For example, in the past several years, U.S. prosecutors have indicted numerous college officials and coaches with fraud and corruption for receiving bribes in several recruiting schemes with star recruits and their families that also involved payments by a sportwear company, financial advisors, and sport agents.
The criminal conspiracy included encouraging these recruits to sign with certain colleges where the defendants had existing business relationships and where their investments would lead to further lucrative contracts and endorsement deals when some of these athletes eventually played in the National Basketball Association (NBA).
More globally, in the past few months, we can see that corruption and bribery in sport continued unabated:
• A major Qatari international sports broadcasting company is charged in France with suspected bribery related to track and field’s world championships.
• In Afghanistan, the New York Times reported last week, numerous officials from the national soccer federation were suspended in 2018 after public allegations that they had sexually abused female players.
• Cases of corruption and bribery have surfaced in cricket, rugby, boxing, sumo wrestling, and other sports.
The infiltration of organized crime in sports continues to be problematic, further enabling corruption. Illicit networks are actively involved in trafficking narcotics, steroids, doping, racketeering, game fixing, money laundering and other illicit activities as a source of profit, but also blackmail that enables them to continue to exploit once compromised officials.
The OECD Task Force on Countering Illicit Trade (TFCIT), which I have chaired for the first 6 years, continues to partner with SIGA and others to address the economic crimes and manipulative influences of organized criminal syndicates in sport.
Action to Restore Integrity in Sport: Opening the Opacity Window to Criminal Investigation
Ladies and gentlemen: There is too much corruption in sport.
Fans deserve better, they deserve fair play in sport.
Moreover, corruption in sport when it converges with other forms of corruption in our societies, begins to decay the pillars of integrity across our communities.
We need immediate, direct, and coordinated action across borders: kinetic, operational, and enduring actions that can help to convert our political will to clean up sport and to reform it.
This is why SIGA’s anti-corruption initiative and your leadership are vital first steps needed to elevate our collective efforts to ensure a lasting culture of integrity in sport though the new SIGA Independent Anti-Corruption Initiative.
While I will not go through all of the SIGA core principles on sport integrity, I do want to highlight the following important standards that can strengthen law enforcement cooperation and investigations:
• the conduct and operation of sport must always take place within the boundaries of all applicable laws and regulations, and in conformity with the good governance principles of democracy, transparency, accountability and meaningful stakeholder representation across the sporting community;
• uphold and respect the universal principles of sports ethics such as fair play, solidarity, respect for human rights, dignity, integrity and diversity, and rejection of any form of discrimination;
• monitoring of potential conflicts of interest, risk management procedures, gender equality at the board level, independent directors, meaningful stakeholder representation in the decision-making organs, transparent and accountable financial management, and proper oversight;
• a zero-tolerance policy towards all forms of corruption, bribery and illegal financial dealings, including, but not limited to, the implementation of adequate criteria and transparent bidding processes for the organization of major sports events, selling of broadcasting rights, sponsorship deals and other commercial arrangements;
• maintain the highest standards in terms of financial integrity and transparency across the sports sector, including the implementation of club licensing systems both at national and international level, with appropriate financial criteria, due diligence and effective supervision mechanisms;
• establish international financial integrity standards, appropriate financial reporting, audit and compliance practices, and a strong “culture of compliance” and full transparency in the allocation, distribution, use and scrutiny of sports development and solidarity funds;
• build core financial capacity throughout the networks of clubs, federations, leagues, athletes’ unions and other organizations to ensure adoption of universally recognized principles for accounting and finance and issuance of regular annual reports;
• assess existing club ownership regulatory frameworks and develop fit and proper club owners and directors tests, to ensure that those who own and administer sports organizations enjoy appropriate moral and professional credentials and prevent the risks of potential criminal infiltration, conflicts of interests and other detrimental consequences;
• support the establishment of independent monitoring, audit and oversight in relation to all sports related development programs and financial transactions, including, but not limited to, athletes’ transfer fees, agents and other third party commissions, sale of commercial and sponsorship rights, acquisition of sports clubs and offshore vehicles and transactions, through the establishment of a clearing house or similar system, at both national and international levels; and
• promote the adequate regulation of the sports betting market worldwide and commit to prevent and combat all forms of illegal sports betting in order to eradicate sports betting fraud and match-fixing, while recognizing sports competitions organizers’ rights and safeguarding the integrity of sports competitions and the economic viability and social role of sport;
• encourage governments and sports bodies to enact the necessary laws and regulations, and their harmonized development and concerted implementation and monitoring, including the establishment of national integrity units, codes of conduct on sports betting integrity and robust prevention/ education policies targeting all key participants in sport, in particular the most vulnerable ones, young people; and
• support the establishment of an independent betting monitoring platform, capable of providing sport integrity intelligence alerts to sporting, law enforcement, betting regulators and operators and government stakeholders to assure early warning advice on corrupt practices, potential manipulation of sports competitions and/or illicit methodologies and criminal networks activities, as well as to ensure the basis for adequate cooperation and information sharing providing reliable, accurate and independent data for sports disciplinary procedures and evidence for criminal prosecution.
Sport Ethics and Anti-Corruption Measures
Distilling these SIGA principles further: I also believe that based on my experience in strengthening international cooperation to fight corruption over twenty years that the prevention and detection of corruption in sport is the first line of defense.
By focusing attention and resources on programs promoting a robust system of checks and balances, transparency, and accountability, we can make it more difficult for corrupt practices and undue influence to occur and easier to detect.
Particularly important aspects of prevention include the transparency of financial reporting by senior federation and league officials, referees, athletes, and other officials involved in the management and administration of games to disclose their financial assets, monitor potential conflicts of interest, and trigger red flags for game fixing or corruption.
Preventive measures and internal controls can also detect the hiding of illicit or bribe payments in company accounts, corporate fraud, and other crimes.
Whistleblowing protections and access to information issues should also be underscored.
Complementing these prevention programs are significant enforceable procedural systems promoting consistency and transparency:
Within sport entities, these include general requirements for sanctioning corruption and imposing costs on bad behavior including fines, criminal referrals, suspension, and termination.
It is a fact that across sport, executives, managers, and athletes are typically rewarded for performance, and not ethical behavior.
We must provide the incentives for all stakeholders in the sport sector to similarly be rewarded for reporting bad behavior including mis-governance, or drug-enhancing performance, corrupt practices, and other criminality.
Among the factors that can contribute positively to the success of fighting corruption is that internationally accepted norms relating to corruption can help shape an excellent framework for action from the SIGA good governance principles in sport, to provisions found in the United Nations Convention against Corruption to the OECD Anti-Bribery Convention.
Such principles modeled after “lessons-learned” in numerous countries go beyond simply exhorting governments to criminalize various corrupt actions.
They recognize that certain impartial investigatory, prosecutorial, and judicial powers are key to effectively uncover and prosecute public corruption.
These principles also help assist governments to establish criminal laws and sanctions that are effective to prohibit bribery, and abuse of public office for personal gain.
Another common feature of these agreements helps guarantee that the words of these documents will be translated into actions, and this is, the creation of mutual evaluation mechanisms to monitor implementation.
Mutual evaluation mechanisms force countries to expose their norms, structures and actions to peer review and accountability.
They facilitate international cooperation and technical assistance to address weaknesses.
Internationalizing Partnerships and Cooperation Against Corruption and Criminality
At the U.S. Department of State, Sports Diplomacy has emerged as an integral part of efforts to build ever-strengthening relations between the United States and other nations. Sports diplomacy uses “the universal passion for sports as a way to transcend linguistic and socio-cultural differences and bring people together. Participation in sports teaches leadership, teamwork, and communication skills that help young people succeed in all areas of their lives.”
At the State Department, we were also committed to support our law enforcement agencies to vigorously investigate and prosecute foreign corruption offenses.
We were engaged internationally to protect the financial system from abuse by those who would launder the proceeds of foreign official corruption and to identify, trace, freeze, recover, and repatriate such illicitly acquired assets. and forfeiting illicitly acquired assets.
We continued to take and promote measures to press our international partners to deny entry to corrupt foreign officials; increase transparency in budgeting, concession-letting, and procurement; improve governance and accountability; investigate and prosecute their nationals and companies that bribe or promise to bribe foreign public and political party officials; and strengthen anti-bribery and accountability disciplines on export credits and official development assistance.
For example, our law enforcement agencies were also aggressively investigating those U.S. companies and individuals engaged in bribing and otherwise corrupting foreign government officials.
The Foreign Corrupt Practices Act (FCPA) makes it a serious federal crime to bribe foreign government officials for the purpose of obtaining or retaining business. Enforcing the FCPA is a major priority for the United States.
The OECD Anti-Bribery Convention and the OECD Working Group on Bribery provides important avenues for the United States to also cooperate with counterparts outside the US to combat bribery in international business transactions.
Combating money laundering and the web of corruption related to it must also be a top priority as is the corruption-crime nexus.
During my tenure, the United States worked with other international partners to identify, interdict, block, and cut off the financial pipelines to all corrupt individuals, criminal organizations, and illicit networks through the Financial Action Task Force (FATF) and other diplomatic and enforcement avenues.
The UN Convention Against Corruption (UNCAC) also offers a good tool and opportunity to strengthen international cooperation. The Convention is the most ambitious international anti-corruption effort to date.
It includes fundamental principles that are crucial in the fight against corruption. Those principles include requiring or recommending criminalization of certain corrupt behavior, and requiring international cooperation on anti-corruption efforts. It also calls for governance improvements that will help prevent corrupt acts from occurring.
Additionally, the Convention establishes the first ever comprehensive framework for recovery of illicit assets sent or taken abroad by corrupt officials. Many countries saw the problem of corrupt officials acquiring assets illicitly and hiding those assets in foreign safe havens as the core problem that the Convention should address.
Fighting Networks with Networks: Anti-corruption Capacity Building
International cooperation and intelligence- and information sharing across borders on enforcement are also important.
One of the most effective weapons against crime is cooperation. With the evolution of the threat and security landscape, no single defender will be able to defend against all threats alone. One piece of information (“actionable intelligence”) from another agency or another government has the potential to crack open a case, to confiscate criminally-derived assets, and dismantle cross-border illicit threat networks.
The U.S. continues to help other governments to prevent corruption and increase transparency, improve good governance, combat money laundering, and prosecute transnational crime by providing technical assistance and training, and strengthening criminal justice systems and capacities of law enforcement agencies.
Such assistance helps to enhance the ability of foreign governments to enhance public administration and to address their own crime challenges before these threats extend across international borders.
During my years working for the State Department’s Bureau for International Narcotics and Law Enforcement (INL) Affairs, we would help support capacity-building and training for police, investigators, prosecutors, judges, ethics offices, auditors, inspectors general, and other oversight, regulatory and law enforcement systems at the national and local levels of government. INL’s International Law Enforcement Academies (ILEAs) around the world also helped to provide targeted training on various anti-crime areas.
INL also helps to support the U.S. Department of Justice’s Office of Overseas Prosecutorial Development, Assistance and Training (OPDAT) which provides assistance to strengthen criminal justice institutions in other nations and enhancing the administration of justice abroad and the International Criminal Investigative Training Assistance Program (ICITAP) which provides assistance to police forces in developing countries through the world to strengthen police investigative capacities.
Conclusion: International Cooperation is Critical
In closing, we must continue to increase international cooperation to investigate and prosecute the webs of corruption and criminality in sport; identify and prevent access by kleptocrats and criminals to financial systems; deny safe haven to criminals and corrupt officials; identify, recover and return proceeds of their criminality; and provide anti-crime assistance for capacity and training to strengthen critical law enforcement and rule of law systems.
Finally, fighting corruption and crime is an ongoing and deliberate process.
Working together through synergies and partnerships, we can lead, through a network of networks, to set an international model here in Portugal with our partners here at the conference this week and help the international community to promote the highest standards and values of honest governance and a “vision of a fair and clean future for sport”.
The purity in sport and the fair play in the administration of sport are noble ideals that should not be corrupted or tainted by criminal influences.
Safeguarding the integrity of sport against corruption and criminality is our noble mission.