The Panama Papers will very likely change the world of offshore finance forever. That football, its rights holders and its marketing agents have been using the same corporate and financial tools to avoid tax (sometimes legally) is no surprise. But what should be a surprise is that FIFA’s shiny new president has been so quickly dragged into the scandal.
However the admirably loyal and increasingly vitriolic UEFA publicity machine tries to spin this one, there is nothing wrong with a feeling of disappointment in the man who was elected with the promise he would rid football of this kind of fiscal corruption but who had in fact signed documents that made him complicit in the kind of practice now considered ‘corrupt’ (whether he knew it or not and ignorance might not be the best defence here – ask Jerome Valcke about how that turns out).
Because avoiding tax via shell companies based in tax havens is corrupt – generally morally if not legally – in most developed countries in the world. The point here is that a shell company like Cross Trading (the company that acquired and resold the Champions League rights in 2006 in a deal signed off on by UEFA’s then Legal Chief Infantino) was set up solely for the purpose of receiving and moving money around. It was not a company that was set up to run all aspects of its business operations in a tax efficient jurisdiction, it was infact just a name and a bank account.
So UEFA seems to be missing the point with its rush to claim that this whole episode is just an unjustified attack on a “man who has always acted with complete professionalism and integrity, and that this attempted slur on his character and on the reputation of UEFA, based on absolutely no evidence whatsoever, is not only a sad day for football but also a sad day for journalism”.
UEFA and its former general secretary turned FIFA emperor need to wake up and smell the coffee. The evidence is that he signed the contract. The Panama Papers generally are absolutely not a “sad day for journalism”. They were leaked to journalists presumably for a reason – that being that our governors on many issues are just not fit to govern us.
A more considered UEFA response might have been to acknowledge a mistake was made and explain how – there is a rationale to how this deal came about and it is plausible and not unusual on a deal level. But let’s not pretend a mistake hasn’t been made, and it was a pretty big one (even if the money isn’t huge) and in character with a lot of the rest of the mess football at the Ivory Tower level finds itself in.
It is important at this stage to be clear that money from the Ecuador deal didn’t go to Infantino for his side of the contract signing, and that he doesn’t have his own off-shore shell company set up by Massack Fonseca in Panama or anywhere else – others did. However, the high-handed tone of UEFA’s statement makes one wonder.
Certainly we are now at a stage where the UEFA responses are triggering more questions for the FIFA president.
The UEFA statement says the contract was awarded to ‘Teleamazonas/Cross Trading’ – so which company was it awarded to? Or was UEFA aware that they came as a package, and if so they presumably knew that there was a $200k+ mark-up and they were happy with that, even though they were only getting $100K for their rights? Do UEFA routinely sign off on tax avoidance schemes for third party negotiated contracts? Did they know that Cross Trading was a shell company set up for the purpose of tax avoidance? Were they aware that Niue is a Pacific Island and not in Ecuador or even South America (they might not have because it isn’t one of FIFA’s 209 ranked playing nations so doesn’t have that all-important vote). UEFA has answered some of these questions in our news story http://www.insideworldfootball.com/2016/04/06/anatomy-cosy-ecuadorian-tv-deal-reverberated-top-fifa/
And then there is the general TV market situation of the time – and we are talking about a deal done in 2006 in South America when the times were a little different (and so was TEAM Marketing).
Ecuador is a tiny market in TV terms, and especially in 2006, so it is understandable why a third party agent with local connections might be brought in to do a deal, and the Jinkis’ were well known players in the TV business across South America – but they came with a less than glowing reputation. Did UEFA really not know this? Pretty much everyone else in the TV market did.
At the time of the deal Infantino’s job was head of legal services (head of legal services in case you missed it). He wasn’t an overworked general secretary adding a second signature to paperwork because one was needed – he was the guy responsible for the paperwork, the guy who must at some point have been part of drawing it up…terms and conditions, that kind of stuff. He had the responsibility and palming it off on his agency TEAM Marketing looks a little weak.
So what is the real problem here? Actually, the problem is becoming a lot about how you deal with the problem.
Attempting to cover it up or brush it under the carpet – which this was looking like – looks remarkably Blatterish. Out with the old and in with the … old. What could have been passed off as an unfortunate and slightly sloppy error of judgement with a little humble pie and a few red faces, suddenly starts to look like a cover up or living in denial at the least. What other deals should journalists be asking about in these ‘sad days’ for their ‘profession’?
UEFA says that they haven’t been questioned as part of the wider US corruption investigation on this Cross Trading deal or any other matter. That might not be because they are of no interest to the investigation but more because the US law folk didn’t know about this deal until the e-mails were leaked. UEFA should probably expect FBI incoming now – Cross Trading falls very much into their jurisdiction and focus.
So where does this leave President Infantino? Far from saving FIFA from self-proclaimed ‘FIFA-slayer’ Loretta Lynch (how she recently described herself in an interview) he may have inadvertently opened the door and let the fox in. They say that the past is like your arse, it is behind you. But in FIFA-land those burdensome pounds just don’t seem to shake off.
Contact the editor of Insideworldfootball at moc.l1732798406labto1732798406ofdlr1732798406owedi1732798406sni@n1732798406osloh1732798406cin.l1732798406uap1732798406