Is ‘Fifagate’ a re-run of All The President’s Men?

May 27, 2015

The arrest of five Fifa executives in a Swiss luxury hotel has freaky echoes of the Watergate scandal which was to lead to the impeachment of President Nixon

Wednesday 27th of May, 2015:  Breaking news that five Fifa executives had been arrested by Swiss police on charges of corruption and money-laundering over a period of twenty years.

In breaking the news, The New York Times offered the curious headline: FIFA Officials Arrested on Corruption Charges; Sepp Blatter Isn’t Among Them

In its first report, still in the early hours in New York, the paper outlined the background to the breaking news:

Swiss authorities conducted an extraordinary early-morning operation here [today] to arrest several top soccer officials and extradite them to the United States on federal corruption charges.

As leaders of FIFA, soccer’s global governing body, gathered for their annual meeting, more than a dozen plain-clothed Swiss law enforcement officials arrived unannounced at the Baur au Lac hotel,

The inquiry is also a major threat to Sepp Blatter, FIFA’s longtime president who is generally recognized as the most powerful person in sports, though he was not charged. Blatter has for years acted as a de facto head of state. Politicians, star players, national soccer officials and global corporations that want their brands attached to the sport have long genuflected before him.

An election, seemingly pre-ordained to give Mr. Blatter a fifth term as president, is scheduled for Friday. A FIFA spokesman insisted [at the news conference] that Mr. Blatter was not involved in any alleged wrongdoing and that the election would go ahead as planned.

The Lessons of History

In my mind, the business has remarkable aspects of the Watergate affair which eventually led to the impeachment and disgrace of President Nixon. The plot, if not the details of All The President’s Men, carries a great deal of accurate reporting of the drama.

It is usual to acknowledge the dangers of assuming history repeats itself accurately. It may help suggest ways of interpreting a contemporary story. Or, if we follow the gloss on Hegel made famous by Marx, the events of Watergate occurred as tragedy and may now be re-occurring as farce.

If Fifagate is a farcical rerun of Watergate, don’t expect a sudden resolution. Richard Nixon continued to protest his innocence as the evidence against him mounted. Sepp Blatter, will do likewise, although the suggestion that he was unaware of any corruption going on around him is itself evidence of at least leadership incompetence on a heroic scale.


Is there a Watergate Scandal Emerging at Volkswagen?

February 25, 2008

watergate.jpg

Watergate is shorthand for a gradual but remorseless process through which a powerful leader becomes destroyed. Are there parallels in the current scandals at Volkswagen which have resulted in imprisonment for several middle-ranking executives? Will the very top leadership in Germany eventually be brought down?

Earlier this week [February 2008] Klaus Volkert, the former head of Volkswagen’s employee council, was jailed for his role in a corruption scandal.

According to The BBC, Volkert

was found guilty of incitement to breach of trust in the case, which involved employee representatives getting illegal privileges.

We have commented over the last year of the leadership troubles that have been hitting the corporate reputation of Europe’s premier car manufacturer.

I picked up the scent of something of interest, because of a little surge of numbers of visitors to this site searching for news about the VW company. That’s when I came across a Reuters report

Volkswagen supervisory board member Guenter Lenz has resigned his seat, becoming the latest casualty of a scandal involving the use of corporate funds to bribe the carmaker’s senior labour leaders. According to a statement from the Hanover works council, Lenz told employees on Tuesday at a plant staff meeting that he would now resign his board seat and his post as the site’s works council boss after previously ceasing to actively execute his duties. The public prosecutor’s office in Brunswick accuses him of aiding and abetting fraud and partaking in parties with prostitutes paid for out of a VW slush fund. Lenz, who has also resigned from the Lower Saxony state parliament, would accept a court sentence for his wrongdoing, the Hanover works council said.

The scandal has already cost the jobs of VW management board member Peter Hartz, group works council chief Klaus Volkert, as well as a member of the German federal parliament.

An earlier post [updated in October 2007] looked at the history of leadership problems at VW, concluding that
… the financial markets have absorbed the uncertainties regarding VW’s less secure future when and if the Volkswagen protection laws are removed. They are also unshaken by the leadership scandals, and by the risk that VW is falling behind Toyota in the development of its hybrid car range. (Strictly speaking, that is a wider concern for the future success of the German premium automobile marques, VW’s Audi, but even more so, BMW and Mercedes). At least Martin Winterkorn seems to be enjoying a leadership honeymoon.

Martin Winterkorn appears to have been parachuted in as someone untained with earlier scandals.

Back to Watergate

President Nixon’s downfall is now a classic of modern cultural mythology. The great leader is brought low, despite all efforts he made to protect himself.

At first, only the minor players in the drama are attacked. But as each each in turn is weakened, it becomes easier for a more important figure to come under attack. The drama is sustained with the prospect of defeat for the most powerful figure of all.

Forward to Volkswagen

Are we witnessing at Volkswagen a story that is gradually working its way towards the very highest of executives associated with the scandal?

I can only observe that denials are being made. The denials may be a necessary strategy to protect individuals from the hints that are emerging in the press.

Until something more substantial emerges, I shall not be naming names.

Acknowledgement:

Image of Watergate was downloaded from Professor Olsen’s fascinating history site