Banks face ‘serious questions’ over FIFA scandal, UK lawmakers told
10 February 2016. By Martin Coyle.
The scandal engulfing world soccer body FIFA raises “serious questions” about the part banks played in facilitating corrupt payments, UK lawmakers have heard.
Banks played a “crucial role” in handling money that passed between FIFA members, Stuart McWilliam of anticorruption group Global Witness told a parliamentary committee hearing yesterday evening.
“It would have been almost impossible for bribery to take place without the banking system,” the senior campaigner said.
McWilliam questioned whether banks had done enough to check whether FIFA-related payments were legitimate. A US Department of Justice indictment published last May alleged that FIFA officials and other sports officials used accounts at major global banks to make graft payments (see here).
The campaigner said the indictment raised serious questions as to whether banks knew the payments were genuine or not. Although none of the banks named in the indictment had so far been accused of any wrongdoing, there were concerns that they hadn’t reported suspicious activity to the authorities, he said.
Banks could play a big part in ensuring that money isn’t looted and deposited, McWilliam said. “If you know there is no place to land the money you steal, then you don’t steal it in the first place,” he said.
McWilliam said that while most banks did the checks they are supposed to do on suspicious payments, many didn’t. “Sometimes banks are knowingly handling corrupt money,” he said.
“Many banks are leaving their doors wide open for corrupt officials to deposit their funds,” he added.
UK banks had poor records in complying with money-laundering rules, he said, pointing to separate reviews — by the Financial Services Authority in 2011 and the Financial Conduct Authority in 2014 — which found significant lapses in the handling of risky customers.
One key weakness in the banking system was that institutions could make a lot of money from handling stolen money, he added. They also faced little punishment if caught, he said. Bankers needed to face more personal accountability for wrongdoing.
The UK government is set to look at corruption in sport, including the FIFA debacle, at its global anticorruption summit, set to be held in London in May.
The US Department of Justice is currently investigating allegations of widespread corruption at the football body, possibly spanning decades. Its probe has led to charges against 39 people for crimes including fraud and money laundering.