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Tuesday, November 20, 2012

Qatar faces double-barreled attack as Singapore company moves into the firing line

 Mohammed Bin Hammam
and

By James M. Dorsey
Qatar’s successful bid to host the 2022 World Cup faces a double-barreled attack with a decision by world soccer body FIFA to investigate the Gulf state’s bid, fresh allegations of alleged attempted bribery, and imminent trade union actions in protest of Qatar’s treatment of foreign workers involved in the construction of World Cup-related infrastructure.

FIFA’s investigation comes on the back of a decision to expand its enquiry into bribery charges against its suspended vice-president, Mohammed Bin Hammam, a Qatari national who has also been suspended as president of the Asian Football Confederation (AFC), into Mr. Bin Hammam’s financial management of the Asian soccer body. The enquiry is likely to focus on what an internal audit conducted by PricewaterhouseCoopers (PwC) described  as his management of an AFC sundry account as his personal account as well as the negotiation and terms of a $1 billion master rights agreement with Singapore-based World Sports Group concluded by the soccer body on Mr. Bin Hammam’s authority.
A Singapore court this week instructed veteran journalist and soccer scholar James M. Dorsey to reveal his sources for his reporting on the audit and Mr. Bin Hammam’s relationship with WSG. Mr. Dorsey has not commented on the ruling.

FIFA made its decision to investigate Qatar public after The Sunday Times handed over evidence that constituted the basis for its reporting that the Gulf state had discussed sponsoring to the tune of $1 million a gala dinner organized by Samson Adamu, the son of Nigerian FIFA executive committee member Amos Adamu.
Mr. Adamu Sr was banned for three years from involvement in professional soccer in 2010 in the run-up to the FIFA vote following a Sunday Times undercover investigation that secretly filmed him offering to sell his vote on the 2018 World Cup for a payment of $1.3 million into his personal bank account, which he said he would use to build football pitches in his native Nigeria.

The newspaper quoted Hassan al-Thawadi, the deputy head and main spokesman of the Qatari World Cup organizing committee, as confirming initial negotiations about the sponsorship of the dinner but insisting that those talks were ultimately broken off after taking FIFA bid rules into consideration.
Qatar has so far successfully fended off repeated allegations of wrong doing in its effort to win the World Cup hosting rights that was far better funded than the bids by its competitors, the United States, Australia and South Korea.

Qatar faces in addition to the FIFA investigation escalating action by the International Trade Union Confederation (ITUC) that has 175 million members in 153 countries because of what it describes as inhuman conditions for foreign workers that violate international labor standards. The ITUC is expected to make its rejection of Qatari efforts to improve the material conditions of foreign workers, who account for a majority of the Gulf state’s population, as insufficient because they do not include recognition of the right to free association and collective bargaining at a climate change conference that opens in Doha later this month.
“The Qataris are offering short term conditions that make a difference but for the international union movement this is not about fixing bedrooms, It is about freedom of association and the right to collective bargaining – fundamental rights. When you have trade unions and collective bargaining all other things get fixed. Work and living conditions are part of collective bargaining,” said a source familiar with trade union thinking.

The ITUC has launched an online campaign calling for a boycott of Qatar if it fails to adhere to international labor standards.  
Construction industry sources said that Qatar was trying to fend off the ITUC’s rights demands by ensuring that companies enforce safety and security standards, pay workers on time and ensuring that they are properly housed. The sources said Qatar had reduced the number of workers allowed to live in one room from eight to four and that it was building a compound for the laborers with modern residential units as well as shops and cinemas.

The FIFA investigation of Qatar intersects with that of Mr. Bin Hammam given widespread skepticism about Qatari assertions that he was not involved in the World Cup bid despite the fact that he was the most important figure in Asian soccer and one of the most important people in world soccer.
Mr. Bin Hammam has repeatedly denied any wrongdoing and has charged that he is the victim of a vendetta by FIFA president Sepp Blatter, whom he last year challenged in FIFA presidential elections. Mr. Bin Hammam withdrew his candidacy after he was accused of seeking to buy the votes of Caribbean soccer officials.

Sources close to FIFA ethics investigator Michael J. Garcia described the former US district attorney as a stickler for detail who played everything by the book. The sources said Mr. Garcia was unlikely to leave a stone unturned and would therefore look closely at all allegations raised in the PwC report.
The report, beyond discussing Mr. Bin Hammam’s financial management of the AFC and negotiation of the WSG contract, raised questions about two payments totaling $14 million by a WSG shareholder to Mr. Bin Hammam’s AFC sundry account prior to the signing of the agreement.

The report said that “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.”
Mr. Bin Hammam reportedly furnished FIFA investigators in September with his own independent expert's report from London accountants Smith and Williamson into the AFC account that was said to include a line-by-line explanation of all expenditure.

Rather than opting for transparency, WSG has sought to squash all reporting on its relationship to Mr. Bin Hammam and the AFC with its legal proceedings against Mr. Dorsey. Its refusal to comment on the PwC report has been reinforced by the Singapore court decision. In its only comment publicly available, WSG said in an August 28 letter in which it initially threatened this reporter with legal action 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.”
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.

 

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