(IS THE U.S. THE WORLD’S WATCHDOG?)
(By Joe Koletar) At first glance, soccer balls and Volkswagen (VW) automobiles do not seem to have much in common, but let us look at the two situations a bit more closely.
On September 24, 2015 the Wall Street Journal carried the following article on page A-1:
“VW CEO OUT AMID TESTING SCANDAL”
The article recounts that VW seems to have installed some software on 11.5 million diesel vehicles to make them appear to perform better on emissions tests than was the actual case. This apparently had been going on some years. The article also indicates that VW has taken an aggressive stance on addressing this issue, and has set aside a $7.2 billion “charge to earnings” to cover the anticipated cost of remediation. The company’s market value dropped 29 percent in a matter of days, per the article. This may be but part of the final cost, since the company will almost surely face on-going challenges to restore consumer confidence.
Now let us switch to soccer balls. FIFA is the ruling body of professional soccer, the most popular sport on the face of the Earth. The story of its scandal seemed to begin to break around May 2015. Top officials were under investigation for money-laundering, bribery, and various forms of corruption. Press releases were put forth, accusations and denials traded, and promises of further action began to bloom from many quarters. By this point in time, the consequences have become more apparent – charges filed, resignations tendered, “reforms” announced – all the usual stuff.
What do FIFA and VW have in common? Both were world-wide organizations. Their actions affected scores of countries. Their actions had gone on for years, with apparent immunity or, worse yet, apathy from those who should have been attentive and concerned.
Where does the United States come into in these issues? In the case of FIFA, several countries had raised questions about FIFA’s methods of operation, but relatively little came of it.
In the case of VW, their vehicles were sold in scores of countries but the faulty emission readings were either missed or not acted upon.
The common link? The United States. U.S. law enforcement and regulatory bodies saw a series of unusual financial transactions flowing through U.S. financial institutions and began to ask questions and launch investigations. So much for FIFA.
With regard to VW, the U.S. Environmental Protection Agency began to become curious about the seemingly excellent emissions performance of VW vehicles, in light of consumer complaints.
Were it not for U.S. involvement and follow-up would these misdeeds have continued into the future? Fair question, but both situations seem to have a lot in common.
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