Concrete Graft: Thoughts on the MCCI Report on the Mexico City Earthquake

On September 11, Mexicans Against Corruption and Impunity (MCCI), a private-sector organization, issued a report on the results of its investigation into the collapse of dozens of buildings in Mexico City in the September 19, 2017 Central Mexico earthquake, which took 228 lives.   According to the Los Angeles Times, the report linked the collapses to corruption, finding “that dozens of buildings that collapsed in the quake had been shoddily constructed and wrongly deemed safe by building inspectors.”  Even though experts from the Universidad Nacional Autónoma de México (UNAM) characterized Mexico City’s Building Code as a “state-of-the-art code,” the Times reported that a principal reason that unsafe construction continues is “outsourcing of building inspections to private engineers who are hired and paid by developers, an arrangement that gives engineers an incentive to declare buildings safe, even when they aren’t.”   In addition, MCCI investigative journalism director Salvador Camarena reportedly “criticized the fact that it is not possible to easily access information about a building’s history including the construction method used.”  (A YouTube video relating to the report is available via the MCCI website.)

Mexico’s tragic experience is just the latest instance of countries with substantial bribery and corruption problems suffering the tragic consequences of corruption-influenced substandard construction.  Here are a few of the more prominent examples in recent years:

  • Iran: In November 2017, a 7.3 magnitude earthquake that killed at least 530 people and injured thousands of others brought down many state-built homes, which Iranian President Hassan Rohani attributed to corruption in construction contracts.
  • India: In August 2013, 150 people reportedly died in Mumbai “in building collapses resulting from substandard or illegal construction.” An Indian Supreme Court Justice, Madan B. Lokur, reportedly said that thousands of buildings in Mumbai are unsafe.
  • Bangladesh: In April 2013, Rana Plaza, an industrial building used by several garment factories, collapsed, resulting in the deaths of more than 1,130 people.  The collapse, described as “one of the world’s worst industrial accidents,” led to the Bangladesh Anti-Corruption Commission charging 18 people, including the owner of Rana Plaza, Mohammad Sohel Rana.  Rana was eventually convicted and imprisoned on corruption-related charges.
  • Haiti: The January 2010 earthquake that killed an estimated 200,000 to 250,000 people also caused the pervasive collapse or semi-collapse of buildings across the country.
  • Egypt: In December 2007, more than three dozen people were reported killed in the collapse of a 12-story apartment building in Alexandria. At the time, illegal building was reportedly ubiquitous in Egypt; the governor of Alexandria said that there were approximately 31,000 known building violations in the city, and the head of the city council said that at least 6,500 buildings “are near collapse.”  By 2016, Daily News Egypt reported that Alexandria had become one of “the top cities with illegal buildings, with 14,521 buildings without licences.”

The linkage between widespread corruption and fatal building collapses is not random.  A 2011 academic study of global earthquake fatalities found that in the three preceding decades “83 percent of all deaths caused by the collapse of buildings during earthquakes occurred in countries considered to be unusually corrupt.”

The factors that influence substandard construction in countries with higher corruption risk are widely recognized.  Lack of a national building code, urban population density, increases in housing demands, proximity of buildings to earthquake zones, and property laws that developers can exploit to frustrate government efforts to demolish unsound buildings are just some of the factors that can influence and interact with corrupt building practices, including “use of substandard materials, poor assembly methods, the inappropriate placement of buildings and non-adherence to building codes.”

What appears to be lacking is a consensus among nations that building-related corruption warrants special attention and some form of coordinated and collective action on a global scale.  Admittedly (to paraphrase the late Tip O’Neill) all building is local, as are the laws and regulations that are supposed to ensure safe and sound construction.  But most types of corruption do not pose a risk of widespread deaths and devastation to neighborhoods and workplaces.  Some multinational organization with expertise in anti-corruption measures, such as the United Nations Office on Drugs and Crime, could be a suitable convenor of a long-term initiative, which could marshal resources to explore the problem on an international scale and develop frameworks that governments could use or adapt as necessary to combat the problem at a national level.  All types of corruption are unacceptable, but some ought to be more unacceptable than others when their cost includes human lives.

United Nations Security Council Holds First-Ever Sessions on Corruption and Conflict

On September 10, the United Nations Security Council held two sessions dedicated to discussing the relationship between corruption and conflict.  These sessions were convened by the United States, in connection with its assumption of the revolving Presidency of the Security Council.

The morning session, which was the first ever for the Security Council on the topic, featured speeches by United Nations Secretary-General António Guterres and Founding Director at the Enough Project and co-founder of The Sentry John Prendergast.  Secretary-General Guterres expressed concern about “the startling scope of the challenge,” citing World Economic Forum estimates that the cost of corruption is at least $2.6 trillion (5 percent of global Gross Domestic Product).  He commended the Security Council and the General Assembly for “repeatedly recogniz[ing]” the connections among corruption, terrorism and violent extremism, and cited the United Nations Office on Drugs and Crime’s large-scale corruption surveys, which “found that bribery of public officials was particularly high in areas affected by conflict.”

Secretary-General Guterres called on Member States to “be on the frontlines in the fight against corruption.” On this point, he emphasized the importance of capacity-building for national anti-corruption commissions and prosecutorial efforts, and recommended that government enhance anti-corruption efforts “by ensuring independent judiciaries, a vibrant civil society, freedom of the media and effective whistleblower protections.”  Finally, he encouraged all Member States “to bring greater resolve to [the] implementation [of the United Nations Convention Against Corruption (UNCAC)].”

Prendergast’s remarks concentrated on the linkages between corruption and “[t]oday’s deadliest conflicts in Africa — such as those in South Sudan, Somalia, northern Nigeria, Sudan, the Central African Republic, and the Democratic Republic of Congo.”  “Until the Security Council and other interested parties with potential influence can create leverage to change these dynamics,” he stated, “the bottom line is that war is more beneficial than peace for those at the center of conflict and corruption.”  He proposed that, as part of a coordinated strategy to break the link between conflict and corruption in those countries, the Security Council ”and other interested parties” undertake three sets of actions: “a network-focused approach to sanctions that focus on grand corruption; anti-money laundering measures that focus on illicit movement of money through the international financial system; and prosecutions that focus on financial crimes associated with atrocities.”

In followup remarks, U.S. Ambassador to the United Nations Nikki Haley was more openly critical of the Security Council’s inattention to corruption and conflict.  “[W]e hardly ever talk,” she declared, “about how corruption fuels the instability, violence, and criminal activity that put countries on our agenda.”  She said that “the United Nations is too often willing to ignore corruption,” whether out of fear “that addressing it will put off governments and shut off cooperation” or acceptance that corruption is “just the ‘cost of doing business’ in some countries.”  Ambassador Haley also highlighted U.S. Government efforts to take action against corruption and corruption-related money laundering.  She singled out the Congo, Nicaragua, and Venezuela, “where corruption has fueled conflict or prevented its resolution,” as instances in which the United States Treasury Department “leveled significant sanctions.”

In the afternoon meeting, as Ambassador Haley promised beforehand, U.S. representatives squarely charged Venezuela’s leaders with “profit[ing] at the expense of their people.”   The Treasury Department’s Assistant Secretary for Terrorist Financing Marshall Billingslea reportedly asked Security Council members “to investigate Venezuelan leaders for money laundering in their countries and block Venezuelan officials from using their financial systems and report suspicious flows of currency.”  Ambassador Haley urged other Security Council representatives “to take concreate action” against the regime of President Nicolas Maduro, and indicated that continued support for the regime could have unspecified adverse consequences.

Note: It would be comforting to think that these Security Council sessions may represent “the start of a new era for the fight against corruption.”  It is more likely that they will come to be seen as small milestones on the tortuous path to comprehensive global anti-corruption action.  Secretary-General Guterres’s diplomatically worded request that nations “bring greater resolve” to implementing the UNCAC is one indicator of how long that path is.  A September 12 report by Transparency International on the state of implementation of the OECD Anti-Bribery Convention found that “only 11 major exporting countries – accounting for about a third of world exports – have active or moderate law enforcement against companies bribing abroad in order to gain mining rights, contracts for major construction projects, purchases of planes and other deals.”  When even countries that rank among the least corrupt, such as Denmark, fail to adopt sufficient anti-corruption measures, countries with higher levels of bribery and corruption can easily applaud the sentiments expressed in the Security Council and still conclude that there is no urgency about addressing the problem.

A video recording of the sessions is available at UN Web TV.

European Commission Proposes Stronger AML Supervision for Financial Sector

Today, the European Commission proposed to amend the Regulation on the European Banking Authority (EBA) in order to strengthen the EBA’s role with regard to money-laundering and terrorist financing threats.  According to the Commission,

several recent cases of money laundering in European banks have given rise to concerns about weaknesses and gaps in the implementation of the legislative framework by the EU’s network of different supervisors, in relation to three issues in particular:

  • Delayed and insufficient supervisory actions to tackle weaknesses in financial institutions’ anti-money laundering [(AML)] risk management;
  • shortcomings with respect to cooperation and information sharing both at domestic level, between prudential and anti-money laundering authorities, and between authorities in different Member States;
  • lack of common arrangements for the cooperation with third countries in relation to the anti-money laundering supervision of financial institution[s].

To address these issues, the Commission proposed “to introduce a set of targeted amendments to the existing legislation on prudential supervision and the regulatory framework of the European Supervisory Authorities” (i.e., the EBA, the European Securities and Markets Authority, and the European Insurance and Occupational Pensions Authority).  Those amendment would charge the EBA with AML supervisory and coordination responsibilities in the financial sector across the European Union (EU).

In particular, because the supervision of compliance with AML legislation is carried out at the national level. the Commission proposed to make the EBA’s AML mandate “more explicit and more comprehensive,” by amending the Regulation in six respects:

  • “ensure that breaches of anti-money laundering rules are consistently investigated,” by empowering the EBA to request national AML supervisors “to investigate potential material breaches and to request them to consider targeted actions – such as sanctions”;
  • provide that the national AML supervisors “comply with EU rules and cooperate properly with prudential supervisors”, including, as a last resort if national AML authorities do not act, authorizing the EBA “to address decisions directly to individual financial sector operators”;
  • “enhance the quality of supervision through common standards, periodic reviews of national supervisory authorities and risk-assessments”;
  • “enable the collection of information on anti-money laundering risks and trends and fostering exchange of such information between national supervisory authorities (so-called data hubs);
  • “facilitate cooperation with non-EU countries on cross-border cases”; and
  • “establish a new permanent committee that brings together national anti-money laundering supervisory authorities.”

Finally, the Commission urged the EU Parliament and Council to consider the proposed amendments immediately and “to reach agreement on [them] swiftly.”

Note: Only last week, even after the spate of publicity relating to significant AML failures at institutions such as ING and Danske Bank, EU authorities reportedly were contemplating delaying revisions in the EU’s AML supervisory framework to mid- to late 2019.  The latest Danske Bank report, that as much as $150 billion in transactions moved through its Estonian branch between 2007 and 2015, may well have prompted the Commission to conclude that some immediate action was necessary.

Today’s Commission release on the proposal made clear that the Commission views the EBA Regulation amendments as only “part of a broader strategy to strengthen the EU framework for prudential and anti-money laundering supervision for financial institutions,” which it would announce in a Communication.  In the short term, however, it is unclear whether the EBA is in a position to take on even the additional responsibilities in the proposal.  A report by a Commission group of experts reportedly urged enhanced AML supervision, but acknowledged that the EBA “lacks staff to carry out this additional task and is in the process of moving its headquarters from London to Paris after Britain’s vote to leave the EU.”  Lawyers and compliance officers with AML responsibilities will need to track developments on the Commission proposal closely over the next several months.

New Serious Fraud Office Director Lisa Osofsky Delivers Speech at Cambridge Symposium

On September 3, the new Director of the United Kingdom Serious Fraud Office (SFO), Lisa Osofsky, gave a speech at the Cambridge International Symposium on Economic Crime 2018.  Because Osofsky gave the speech during her first week in office, it provides the first specific indications of her initial approach to leading the SFO.

Osofsky first cited her background as a former U.S. federal prosecutor, and her experience in working collaboratively across jurisdictions, agencies, and business sectors, in asserting, “That’s the way to make strong cases – cases with impact.  The most complicated and difficult cases, the cases the SFO makes and will continue to make, require it.”  She stated that what she envisions for the SFO over “at least the next months” is “to build on our successes with taking on and cracking the most complex and difficult crimes and bringing these cases to trial or, if appropriate – if in the public interest – to resolution through [Deferred Prosecution Agreements (DPAs)] . . . [b]y using an active and engaged approach to the following areas”:

  1. Cooperation: Osofsky cited five categories of cooperation:
    1. International – On this point, she stated that “[s]trengthening and deepening the relationships that make [global settlements like the $800 million Rolls-Royce resolution] happen is going to be a major focus for me.” She also briefly mentioned “[w]orking with the newcomers to DPAs – [France and its] Sapin II [legislation], Argentina, Canada, Australia,” and the SFO’s hosting of secondments and exchange programs for enforcement authorities.
    2. National law enforcement –She noted that the SFO would be seconding staff to the National Economic Crime Centre now being built out within the National Crime Agency, with which she stated her intention to continue to work. She also mentioned regional and local police forces, especially the City of London Police, and deemed HM Revenue and Customs “a natural ally . . . as we could build very strong cases together.”
    3. Regulators – She referred to UK and U.S. financial regulators as “valuable allies.”
    4. Non-Governmental Organizations – She stated that “[c]loser work with non-governmental organisations and others on the ground who have a wealth of experience and information is also a priority.”
    5. Private sector – She said that she aims “to leverage the information [that financial institutions and companies] hold to help us in law enforcement build strong cases,” and to use the expertise of the legal sector and academia.
  2. Technological Solutions: Osofsky stated her intention to focus “on the SFO’s strategic use of cutting edge technology.” She cited the SFO’s current uses of artificial intelligence and e-discovery technology, and added that her aim is “to build our [strategic intelligence] capabilities through the use of dedicated intelligence analysts and by strengthening our capabilities to deal with both human intelligence sources and internet intelligence in our investigations.”
  3. Encryption: Noting the challenges that encryption of digital devices poses to law enforcement, Osofsky said that the SFO is interested in working with technology companies and both UK and non-UK law enforcement on the issue.
  4. Proceeds of Crime: Osofsky stated that the SFO “will also continue to prioritise the recovery of criminal proceeds,” in conjunction with partners such as the National Crime Agency and the City of London Police.

With regard to DPAs, Osofsky briefly commented that when considering resolutions short of trial such as DPAs, the SFO must analyze whether the company under investigation “has a credible and colourable defence” under Section 7 (the corporate “failure to prevent bribery” offense) of the Bribery Act 2010, with reference to three key issues: (1) “Has the company engaged in proactive efforts to clean house and to reform?”; (2) “Has the company instilled the right controls?”; and (3) “Are these backed by demonstrable commitment at the appropriate level?”

Osofsky concluded by stressing that her approach to the job would be proactive and that her goal “is to make sure our country is a high risk place for the world’s most sophisticated criminals to operate.”

Note: As this speech was her first in identifying her priorities for the SFO, Osofsky’s remarks hold few surprises.  Most of her principal priorities – public- and private-sector cooperation, technological solutions, and pursuing proceeds of crime – are issues that the SFO has been pursuing for some time.  They therefore appear to represent incremental, rather than fundamental, changes in how the SFO does business.

Osofsky has the advantage of inheriting an agency whose reputation and future appear considerably brighter than when her predecessor, David Green, came to office in 2012.  Given Green’s considerable accomplishments in steering the SFO through legal, political, and reputational challenges and negotiating several notable DPAs, Osofsky could afford in this speech to focus on organizational and process issues that are mostly uncontroversial.

What Osofsky understandably did not address are several more complex and challenging issues that she understands full well could play a significant role in defining her tenure:

  1. Conduct of Investigations and Litigation: The SFO already has underway a number of high-visibility fraud and bribery investigations and cases that will require Osofsky’s close attention, such as Airbus and Unaoil.  In addition, the SFO has not fully established that it is a force to be reckoned with in the courts.  While the SFO can fairly point to various trials in which it secured convictions, its mixed record in other litigation — such as the LIBOR prosecutions and the September 5 decision by the Court of Appeal on the scope of legal professional privilege — are unlikely to quiet some of the SFO’s critics.  In the longer term, taking more cases to trial and winning them will be important if Osofsky is to retain political support for the more than 50 percent increase in the SFO’s core budget, which was agreed at a time when other UK police and prosecutive agencies have suffered severe and continuing austerity-driven cutbacks.
  2. Corporate Criminal Liability Standard: In recent years, both Green and SFO subordinates have publicly supported revision of the UK standard of corporate criminal liability.  The UK Parliament has already twice adopted legislation creating corporate “failure to prevent” offenses, in the Bribery Act 2010 and the Criminal Finances Act 2017, and the UK Government has considered extension of the “failure to prevent” concept to other offenses such as fraud and money laundering.  Osofsky will need at some point to decide whether to continue or revise her predecessor’s support for such revisions.
  3. SFO-NCA Merger: Finally, although not an immediate threat, the idea of merging the SFO into the NCA, which was set aside after last year’s UK election, remains a potential risk for Osofsky and the SFO. Early and continuing successes with her priorities, and with SFO investigations and cases, will be key to warding off that threat.

Assistant Attorney General Delrahim Remarks on Competition Policy in Collegiate and Professional Sports

On August 31, the U.S. Department of Justice’s Assistant Attorney General for the Antitrust Division, Makan Delrahim, delivered remarks at Notre Dame Law School on the topic of competition policy in collegiate and professional sports.  Delrahim’s remarks warrant an extended discussion, as they contained certain observations and recommendations that should be of interest to lawyers, antitrust compliance officers, and executives involved in college and professional sports issues.

Delrahim began with a comment that he wanted to “share some lessons and observations about antitrust policy in collegiate and professional sports.”  He first acknowledged that “[t]he realities of organized sports make the application of the antitrust laws to sports unique,” then added:

Just as in music and other entertainment industries, however, the considerable evolution of the business of sports over the last century prompts us to take a fresh look at competition policy in an industry that’s as much a part of our national economy today as it is part of our culture.

Delrahim briefly discussed the federal antitrust laws, commenting, “Like antitrust policy, competition is the lifeblood of sports.  In sports, as in antitrust policy, we don’t pick winners and losers, but provide rules designed to promote the competitive process and let competition determine the winner.”  Referring to the Sherman Act as “a favorite vehicle for challenging conduct in sports,” he stated:

[S]ports fans should care about antitrust and antitrust lawyers should care about sports for at least three reasons.  First, sports teach us important lessons about the structure of our government.  Second, antitrust challenges in sports reaffirm the flexible and resilient nature of antitrust law itself.  And third, competition and its enforcement has helped sports improve and become a more enjoyable experience for the American consumer, fans like you and me, and for the athlete that makes it all happen.

Delrahim then reviewed three situations involving antitrust and sports that he cited as “lessons” in antitrust policy.  His first “lesson” related to the history of baseball’s reserve clause and the litigation and legislation stemming from it. From that history, he drew the lesson that “markets operate best when unencumbered by anticompetitive restraints.”

His second lesson pertained to the rules of the National Collegiate Athletic Association (“NCAA”) and its affiliates. He acknowledged the NCAA’s dual status as an entity “maintaining academic standards and codes of conduct for student-athletes” and “unquestionably a substantial commercial enterprise that generates over $1 billion annually.”  He termed the U.S. Court of Appeals for the Ninth Circuit’s decision in O’Bannon v. NCAA, 802 F.3d 1049 (9th 2015), cert. denied, 580 U.S. __  2016  – which held that the NCAA’s amateurism rules were subject to antitrust scrutiny and must be analyzed under the Rule of Reason – a “landmark” decision that explored “[t]he tension between eligibility rules that promote amateurism and what some have challenged as an anticompetitive agreement to fix at zero a student-athlete’s compensation.”  Stating that “amateurism, although a laudable goal, in itself does not grant antitrust immunity, and rules designed to promote amateurism need to be carefully tailored so they don’t unreasonably limit competition,”  he then commented on various changes in NCAA rules pertaining to student athletes:

I applaud these procompetitive changes and am proud of the role the Antitrust Division has played in advocating for increased competition. I hope the NCAA will go further, as needed, to implement new rules or modify existing ones to promote increased competition for student-athletes.  In the future, for example, I hope to see schools consider competing fully to fund student-athletes’ educational expenses, for example, by offering graduate education tuition incentives and job training as they compete for top student-athletes.

His third lesson was that “competitive markets improve on-the-field competition and the consumer experience.” In that regard, he pointed to the proconsumer effects of professional football leagues such as the XFL, the Alliance of American Football (AAL),  and the United States Football League (USFL) as competitors to the National Football League (NFL).  He also stated generally that “the Antitrust Division remains an active observer that is ready to investigate and enforce the antitrust laws.”  In particular, he noted the Division’s record since 2016 in taking enforcement actions, such as the 2018 required divestiture of Disney’s Regional Sports Networks in connection with the Fox-Disney merger and the 2017 civil settlement regarding a planned information exchange between DIRECTV and three of its pay television competitors.

Note: Several of Assistant Attorney General Delrahim’s remarks require closer attention, as they are likely to prompt speculation (perhaps even a trace of concern) in the antitrust legal community.  Take, for example, his passing reference to the Antitrust Division “tak[ing] a fresh look at competition policy in the [sports] industry.”  Since the Antitrust Division in this Administration has already been taking enforcement actions involving professional sports, it is not clear whether Delrahim’s comment is merely a signal that the Division will continue to maintain the same level of oversight or reflects an intention to scrutinize college and professional sports more or less closely than in recent years.  Delrahim’s favorable comments about the Division’s activity in this area makes the latter alternative of less scrutiny extremely unlikely.

In addition, his stated “hope” that universities would consider full competition to fund student-athletes’ educational expenses goes farther than seems appropriate for the Antitrust Division’s chief to advocate on the basis of antitrust policy. The interests to be weighed regarding the relative costs of college sports versus non-sports higher-education costs are complex and extend well beyond simply touting the virtues of increased competition in college sports, for at least three reasons.

First, if universities were to “compete for top student-athletes” in the ways Delrahim proposed, they would necessarily be choosing to spend more money on athletes in ways that they are likely not offering at present to non-student-athletes.  Colleges and universities therefore would have to choose between doing so only for student-athletes, which would exacerbate the massive spending disparity between athletics and education, or offering comparable support for non-athletes, which would drive costs to colleges and universities even higher.

Second, referring to universities’ competition for “top student-athletes” seems to suggest that the playing field, so to speak, for colleges and universities is a level one.  The current state of affairs, however, can be seen more as an example of oligopolistic coordination by a small coterie of well-funded universities than free and open competition among many competing colleges and universities.  A 2015 Chronicle of Higher Education and Huffington Post study found that

[a]t many midtier and smaller institutions, [business] decisions [based on a desire to compete at the highest level] are fueled by a pressure to keep up with better-financed peers, even though the colleges are unable to tap into the same television and licensing money.  Just two dozen universities collect nearly half of the $26 billion in revenue that has flowed into the athletic departments of Division I public colleges in the past five years . . . .

Similarly, a 2017 USA Today analysis found that only 23 public universities, thanks largely to television-rights revenues, “finished their 2016 fiscal years having met the NCAA’s benchmark for financial self-sufficiency.”

Third, many colleges and universities, in their efforts to keep up, have chosen to shift more of their athletics costs directly onto students, regardless of whether those students value having elite-caliber sports teams.  The ChronicleHuffington Post study found that public universities had taken in more than $10.3 billion in mandatory student fees and other subsidies to support their sports programs in the previous five years, and that student subsidy rates “tend to be highest at colleges where ticket sales and other revenue are the lowest — meaning that students who have the least interest in their college’s sports teams are often required to pay the most to support them.”

One can agree with Delrahim that “rules designed to promote amateurism need to be carefully tailored so they don’t unreasonably limit competition.”  Yet it should be equally true that competition in only one, nonacademic, dimension of higher education needs to be carefully tailored, so that it does not unreasonably constrain colleges and universities in pursuing what should be their primary mission of high-quality education.

Delrahim’s citation of NFL-competitor football leagues as an example of how “competitive markets improve on-the-field competition and the consumer experience” also requires a closer look at the historical record.  Although the USFL reportedly had success in its first three years, despite having a lower aggregate level of player talent than the NFL, it was able to succeed because it was offering its product in the spring rather than in head-to-head competition against the NFL in the fall.  What changed the USFL’s success was the insistence by one vociferous USFL team owner to move the USFL schedule to the fall, hoping to leverage a rapid merger with the NFL rather than to conduct sustained head-to-head competition with the NFL.

Delrahim correctly noted that the USFL collapsed soon after its failed civil antitrust litigation against the NFL, but deemed the competitive impact of the USFL “undisputed” based on the NFL’s adoption of innovations such as “two-point conversions, the instant replay, and expansion teams” and the availability of “a multitude of greater players.”  It should be noted, however, that the NFL did not adopt the two-point conversion until 1994 – eight years after the USFL’s demise in 1986, and 36 years after college football adopted it in 1958.  As for instant replay, the NFL itself experimented with instant replay in the 1976 and 1978 seasons –five to seven years before the USFL’s first season – and again in the 1986-1991 seasons, but abandoned it each time because of ineffectiveness until the 1999 season.

The competitive impact of the USFL is therefore, at the very least, open to dispute.  As one sports writer put it, “if it weren’t for [that USFL owner], we might have pro ball year-round.”  Perhaps Delrahim’s faith in competitive markets improving competition and consumer experience will be better repaid with the arrival and eventual success of the AAL and the XFL.