Panama Papers Leak Triggers UEFA Raid, Damiani Resignation

It didn’t take long for the fallout from the ‘Panama Papers’ leak to have a real impact on scandal-plagued FIFA, with Ethics Committee panel member Juan Pedro Damiani resigning this week under intense pressure.

Damiani’s pending departure was writ large when some of the first FIFA-related information to be released amid the Panama Papers leak showed him to have been involved in confidential business dealings with three of the very football executives he and FIFA’s “independent” ethics committee have been charged with investigating, former FIFA vice president Eugenio Figueredo and the Latin American, father-and-son broadcast-marketing team of Hugo and Mariano Jinkis.

Figueredo and both of the Jinkises are among the 30 or so FIFA officials under US indictment for various bribery, fraud and money-laundering offenses generally connected with FIFA’s CONCACAF and CONMEBOL operations in the Americas.  And Damiani, the FIFA ethics official, couldn’t be bothered to disclose his own ongoing business relationships with the three indicted men, all while pretending to be an independent judge within FIFA’s own review.

“We can confirm that Mr. Damiani resigned from his position as member of the adjudicatory chamber of the independent Ethics Committee of FIFA,” said FIFA ethics panel spokesman Marc Tenbuecken.

Adios, Senor Damiani.  But it’s more business as usual, sadly, at FIFA.

In case one might think that this past winter’s culling of FIFA execs on both sides of the pond might mark the end of the seedy FIFA revelations, there’s no chance of that happening.  In the process of the Panama Papers’ leaked revelations regarding many global political leaders, it’s also in the process of peeling back another layer of the moldy onion that’s long been FIFA’s secret business.

Damiani’s quick resignation will be just the start of a second wave of FIFA foulness to be exposed.  The 11.5 million documents in the Panama Papers leak, which emanated from a Panamanian law firm named Mossack Fonseca, are a huge treasure trove of secret-banking information that will take weeks to be processed.  The actual documents have yet to be publicly released in full, and perhaps never will.  Yet it’s clear that in addition to the hundred or so investigative-media outlets that are busy working on the files, dozens of governments have already obtained them well.

Mossack Fonseca’s core business was creating secret off-shore tax shelters for tens of thousands of wealthy clients.  By its very nature (though there will certainly be exceptions here and there), such tax shelters naturally imply tax evasion as a reason for being created.  Europe has plenty of tax-heavy jurisdictions and plenty of famous and important people who might want to hide some income.

Which brings us back to FIFA.  On Wednesday, Swiss authorities raided the offices of UEFA, the Union of European Football Associations, in connection with the “ongoing criminal proceedings” — meaning the various Swiss and US investigations into various FIFA-related activities.  And the news from that front has yet another kick to offer: Newly elected FIFA president Gianni Infantino co-signed a TV-rights deal back in 2006 involving Hugo and Mariano Jinkis, the Honduran father and son noted above whose “Cross Trading” marketing-rights entity figures into the heart of some of the most damning bribery allegations that have surfaced to date.

Jaded onlookers suggested that Infantino’s rapid and unexpected ascendancy to FIFA’s top seat simply meant more of same.  Again, that may turn out to be sadly true… even faster than most people could have imagined.

It’s not only the executives and power movers who are waiting for the rest of this second shoe to drop.  At least 20 international football players have also been connected to the Panama Papers, none more prominent than international superstar Lionel Messi.  Messi, who for years has allowed his father to handle much of his personal and professional finances, has been tied to a company, Mega Star Enterprises, created by Mossack Fonseca.

Messi is already facing a tax-evasion case that will begin next month.  He could be fined 4.1 million euros, which would hurt a bit.  He could also face more than seven month in jail on each of the three charges (though that’s unlikely).  In any case, however, the cloud around the Argentinian superstar and his finances isn’t dissipating soon.

In one of the more detailed examinations of the Messi-Panama Papers links published to date, news outlet Suddeutsche Zeitung (the German outlet that first obtained the leak), noted that the secret Mega Star business entity linked to Messi wasn’t even founded until February of 2012 — after the other tax case against him was well underway.

That’s likely to be a problem for the Argentinian superstar.

Of course, Messi isn’t the only international football already outed within the Panama Papers, just the most famous.  However, another of the patterns that seems to be emerging via the leak is that of prominent, first-division football teams paying most of their stars’ salaries in under-the-table ways.  Several teams, again on both sides of the Atlantic, have been linked to apparent tax-evasion schemes in which star players’ official salaries are a relative pittance, with most of the actual salary being paid into a hidden tax shelter, such as those created by Mossack Fonseca.

By not disclosing the full salaries being paid, both the players and the team involved have been able to achieve a competitive advantage for years.  They simply get more bang for the buck, being unknowingly subsidized by all those unpaid taxes, on literally billions of euros in various forms of business activity.  One can bet that many countries will be taking action, simply because the amounts involved are too large to ignore.

FIFA’s more a symptom here than a cause, but the Panama Papers leak is very likely to have impact on all aspects of the organization for years.  It’s that big of a deal.  The leak and the fallout from it may finally be the catalyst that forces FIFA’s operations out of the mirror-laden funhouse and into the daylight.