Two Crises, One Continent

It was a bizarre accident that started the investigation. On a road in northern Italy a driver fell asleep. No big deal. Except the driver was a soccer player from the local team who could not stay awake, no matter how hard he tried. When the police tested him, they discovered he was not suffering from narcolepsy; but a gambler had drugged him and some of his team-mates to ensure that they played so badly they lost the game, and the gambler won a lot of money betting against them.

If you a reader who has not been following the story, then you may be sitting thinking, ‘What?! Hang on! Car accidents. Drugged players. Gamblers spiking water bottles!?”

Well, this is just one more weird story in an array of corruption scandals that is engulfing European soccer. From Istanbul to Athens to Berlin and Helsinki, national police forces are arresting hundreds of players and sports officials for fixing numerous games across the continent from youth-level tournaments to national team matches. The sport is in such a state of unprecedented crisis that the Italian Prime Minister even suggested that they should close down Italian professional soccer for three years to clean up the game properly.

He is right.

There now exists an industrial-system of corruption in European soccer and a number of other sports like ATP Tennis. It is no longer a few sensational allegations about key players or officials fixing a few games, but a business model of corruption that is enveloping the sport. So at the beginning of the European soccer championship, what lessons can Canadians learn?

We should study what is going on in European sport as it shows both a clear comparison with the current Europe-wide financial crisis and a valuable lesson about how one actually goes about doing business in the old continent.

I do not write those sentences lightly, here is why I say it.

First, lets look at their sports world. Currently, over half the professional soccer teams in Italy are now being investigated for corruption. Those are the teams, not individual players that are being questioned by police. If such a large number of team is alleged to have been involved, it is no longer about sensational details but an informal system of governance.

The umbrella organization of European soccer players’ unions recently produced a survey of over three-thousand of their members. They found that more than ten percent of their members had direct involvement in match-fixing (either fixed themselves or had bee approached directly to fix). Another twenty-three percent of their members knew of fixing going on in their leagues. The authors of the report write they think these numbers are an under-estimation of the amount of fixing going on as many teams that were rumoured to be corrupt refused to allow their players to take part in the survey.

With these kinds of numbers we are speaking of a professionalization of corruption. The allegation at the center of all these scandals is that club officials and seniors players across the continent are sitting down and choosing which games to win and which games to lose based on their own balance sheets and pension plans. They will plan to win twenty games a season, and lose ten. Because they have the certainty in losing they can make more money by gambling against themselves on the losing games then they can by winning all the rest.

All of this bares an uncanny resemblance to the events leading up to the Euro crisis.

The financial collapse was not some inevitable decline or a fiscal anomaly but a wave of bank collapses that owed much to gambling, corruption and deliberately casual government oversight. Forget the nonsense peddled by the financial journalists about the collapse being due to non-taxpaying workers. What actually happened was some European bank personnel took massive gambles with their depositors money and lost their bets. Some German business executives paid multi-million dollar kick-backs to dodgy Greek politicians in return for vastly inflated public work projects that indebted the country. And the official Greek, Italian and Spanish financial numbers were massively overstated by the very government bureaucrats who were supposed to monitor them.

Both the soccer scandal and financial crisis were created by this rampant corruption that went unchecked even when high-ranking officials were made aware of the situation. Those officials chose to look away. They chose to go out for expensive coffees in Brussels cafés or have pleasant, non-threatening conversations at the side of the matches – what they did not do was attempt to investigate corruption or crack down on cheating officials. This corruption and collusion caused a downturn that has affected stock markets around the world. However, not a single government or European Union official has been fired for helping create a financial crisis that has caused untold misery across the globe.

What Europe needs is an international institution with teeth. We are in a globalized world, where German fixers ask their Croatian pals to corrupt Swiss players, while betting with Dutch brokers who wash their cash with Hong Kong agents who place the final bets with Indonesian bookmakers. Or politicians in Athens take kick-backs from German businessmen in Munich who helped them hide their bribes in Caribbean and Swiss banks. These are crimes that stretch across six countries and two continents. Currently, national authorities have neither the resources nor the jurisdiction to properly investigate this new wave of criminals who skip across borders so easily.

Until European officials get some courage and new institutions, then stand-by for more bank collapses and weird stories of under-performing soccer players.

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