A controversial $1 billion commercial agreement between the Asian Football Confederation (AFC) and a Singapore-based sports marketing company moved this week into the firing line with world soccer body FIFA's decision to ban its executive committee member and suspended AFC president Mohammed Bin Hammam from involvement in soccer for life.
FIFA said Mr. Bin Hammam, a 63-year old Qatari national, had been banned because of "conflicts of interest" during his AFC presidency. Sources said the conflicts included payments totaling $14 million made to him by one of World Sports Group's (WSG) shareholders in the walk-up to the signing of the $1 billion master rights agreement (MRA) and his alleged use of an AFC sundry account as his personal account.
The payments and the issue of the sundry account were first revealed this summer in an internal audit of Mr. Bin Hammam's financial management of the AFC conducted by PricewaterhouseCoopers (PwC).
The AFC last month side stepped PwC's advice that it seek legal counsel to see whether it could file criminal charges against Mr. Bin Hammam and renegotiate or cancel the WSG contract. It opted instead to hold presidential and executive committee member elections in April in which the Qatari national would not be allowed to stand for office.
"The onus lies on the next president to challenge the WSG contract that is largely seen as a bad deal for Asian football. The next AFC president should have the strength to do this right," one source said.
WSG has taken legal action against this writer for reporting on advice rendered to the AFC prior to the signing of the MRA that cautioned against the signing of a master rights rather than a service provider agreement that industry sources said would have been more advantageous to the soccer group. The legal action is designed to squash media reporting, intimidate sources and stop leaks.
In a statement, FIFA said the decision by its independent adjudicator to ban Mr. Bin Hammam was based on a report by FIFA ethics investigator Michael J. Garcia that charged him with "repeated violations" of the FIFA Code of Ethics with regard to conflicts of interest.
"That report showed repeated violations of Article 19 (Conflict of interest) of the FIFA Code of Ethics, edition 2012, of Mohammed Bin Hammam during his terms as AFC President and as member of the FIFA Executive Committee in the years 2008 to 2011, which justified a life-long ban from all football-related activity," FIFA said.
The AFC signed its agreement with WSG in 2009.
FIFA said its ban followed a December 15 letter from Mr. Bin Hammam in which he resigned from his post with immediate effect. Mr. Bin Hammam has repeatedly denied any wrongdoing and has vigorously fought for more than a year against allegations of bribery, financial mismanagement and potential corruption.
Sources said Mr. Bin Hammam wrote his letter following a meeting between FIFA President Sepp Blatter and senior Qatari officials on the side lines of last week's Doha Goals conference in the Qatari capital.
Some sources said the ban would make it more difficult for Qatar to distance itself from Mr. Bin Hammam. Qatar has repeatedly said that Mr. Bin Hammam was not involved in its successful campaign to win the hosting of the 2022 World Cup.
"It will become more and more difficult for Qatar to pretend that MBH (Mohammed Bin Hammam) was not involved in the bid process, that he did all this without the authorities, the Football Association etc knowing what he was doing. This fiction of Mohammed Bin Hammam independent of 2022 will unravel quickly" and implicate others, one source said.
Mr. Bin Hammam had been suspended by FIFA and the AFC since this summer pending investigation of the PwC report as well as charges that he had sought to bribe Caribbean soccer officials to support his failed challenge last year of Mr. Blatter in FIFA presidential elections.
The suspension was imposed after the Swiss-based Court of Arbitration of Sports (CAS) overturned FIFA's earlier banning of Mr. Bin Hammam in relation to the Caribbean bribery charges on grounds of insufficient evidence. The court however went out of its way to make clear that its decision did not constitute an acquittal of Mr. Bin Hammam. It urged FIFA to conduct a better investigation and resubmit its case.
FIFA said last week that Mr. Garcia had dropped the Caribbean bribery charges because Mr. Garcia had not found new evidence to support the claim. Instead, the FIFA investigator focused on issues associated with Mr. Bin Hammam's management of the AFC, including the PwC report.
Sources said that Mr. Garcia's report elaborated on the PwC assertions. "It is everything. The report was very detailed and very comprehensive and went beyond the PwC report," one source said.
The report concluded in no uncertain terms that Mr. Bin Hammam had used an AFC personal account as his personal account. Mr. Bin Hammam has reportedly countered that monies withdrawn from that account or used for personal expenses constituted repayment of monies he had advanced to the AFC to ensure its cash flow.
The audit, because of PwC's limited mandate and limited resources that AFC made available, stopped short of drawing conclusions with regard to WSG but raised serious questions about the terms and negotiation of its marketing agreement, including the payments to Mr. Bin Hammam totaling $14 million by a WSG shareholder. The audit noted that the contract had not been put to tender and that it may be undervalued.
Referring to the payments to Mr. Bin Hammam by the WSG shareholder, the audit said: "It is highly unusual for funds (especially in the amounts detailed here) that appear to be for the benefit of Mr. Hammam personally, to be deposited to an organization's bank account. In view of the recent allegations that have surrounded Mr. Hammam, it is our view that there is significant risk that... the AFC may have been used as a vehicle to launder funds and that the funds have been credited to the former President for an improper purpose (Money Laundering risk)" or that "the AFC may have been used as a vehicle to launder the receipt and payment of bribes."
WSG has yet to comment publicly on the PwC report. However, in an August 28 letter to this reporter that first threatened legal action, WSG legal counsel Stephanie McManus asserted that "PWC are incorrect and misconceived in suggesting that the MRA (master rights agreement) was undervalued. They have neither considered the terms of the contract correctly, the market, nor the circumstances in which it was negotiated." Ms. McManus's comments failed however to address the bulk of the concerns raised by PwC.
James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies and the author of The Turbulent World of Middle East Soccer blog.