David Owen

The football world is agog over a CHF 2 million (£1.3 million/$2.1 million/€1.8 million) payment made by governing body FIFA to Michel Platini, the man who aspires to be its next President, in 2011 – for work completed in 2002.

Platini has explained that current FIFA President Sepp Blatter informed him when the Frenchman started his role as his adviser that it was not initially possible to pay the totality of his salary because of FIFA’s financial situation at that time.

Given all that might be at stake here, it is worth reminding ourselves what FIFA’s financial situation was – and what else it was spending money on around the time that payment of Platini’s CHF 2 million was postponed.

To do this I will draw on a number of documents, notably a 21-page dossier prepared by one-time FIFA general secretary Michel Zen-Ruffinen and distributed to the body’s Executive Committee in May 2002, and a 30-page “Rectification” of the general secretary’s allegations published by Blatter the same month.

FIFA had been facing problems, that much is clear.

In May 2001, bankruptcy proceedings were opened against the International Sport and Leisure (ISL) and International Sports Media & Marketing (ISMM) sports marketing organisations.

Prior to this, ISL had administered worldwide distribution of marketing licences for the 2002 and 2006 World Cups on FIFA’s behalf, while ISMM looked after TV rights outside Europe and the United States.

Payments involving Sepp Blatter and Michel Platini have caused a latest flashpoint in FIFA's year of woe ©Getty Images
Payments involving Sepp Blatter and Michel Platini have caused a latest flashpoint in FIFA's year of woe ©Getty Images

This led to a request by Executive Committee members for an investigation into FIFA’s financial situation.

A letter to National Associations dated February 1, 2002 and signed by Chung Mong-Joon, a rival candidate of Platini’s in the current race to succeed Blatter, Lennart Johansson, Platini’s predecessor as UEFA President, and Issa Hayatou, who was to lose to Blatter in the 2002 FIFA Presidential election, explains the reasons for the request.

This letter refers, among other things, to “FIFA’s liquidity problems in 2000, that made it necessary to take out a bank loan of CHF 300 million (£200 million/$315 million/€270 million) in order to avoid that the accounts would show a deficit of CHF 220 million (£143 million/$233 million/€198 million) at the end of the year”.

Zen-Ruffinen maintained that FIFA “is in a bad shape today”. He continued: “The financials only seem to be in order, in fact, FIFA today lives from income of the future”.

He goes into more detail in the body of the document, alleging, “As of the end of 1999, the liabilities exceeded the assets of FIFA” and that “the management letter of 2001 of the auditors includes a forecast of equity which is most alarming”.

These appear the sort of circumstances, in sum, in which a postponed payment, of the type experienced by Platini, seems understandable.

And yet, in his detailed response to the allegations, Blatter states bluntly: “FIFA’s financial situation is sound.”

Sepp Blatter, pictured in Sydney in 2002, insisted FIFA was financially secure at the time ©Getty Images
Sepp Blatter, pictured in Sydney in 2002, insisted FIFA was financially secure at the time ©Getty Images

Indeed, KPMG’s audit report dated December 31, 2001 “showed that FIFA has equity of CHF 154 million (£103 million/$168 million/€137 million) and reserves of CHF 367 million (£240 million/$384 million/€340 million).

“As of the end of April 2002, FIFA’s liquidity totalled CHF 913 million (£605 million/$650 million/€815 million).”

A string of payments alleged by Zen-Ruffinen to have been made between 1999 and 2001 is also of some interest, given that Platini was apparently being made to wait for some of his money.

These include CHF 470,000 (£317,000,/$480,000/€430,000) to the Local Organising Committee (LOC) of the FIFA Confederations Cup Saudi Arabia 1997, after the LOC had asked FIFA for some financial support to alleviate the deficit that the tournament had generated.

A payment of $30,000 (£20,000/€27,000) in September 2001 to “the Honorary President”. In his Rectification, Blatter states: “On 5 September 2001 Joao Havelange was paid $30,000 as an advance for his compensation as Honorary President of FIFA for the year 2002.”

Honorary President Joao Havelange was among figures to be paid by FIFA in 2002 ©Getty Images
Honorary President Joao Havelange was among figures to be paid by FIFA in 2002 ©Getty Images

He goes on: “An amount of $25,000 (£16,000/€23,000) was paid, by [cheque], to the family of the late member of honour and long-term member of the Executive Committee, Abilio d’Almeida to cover hospital cost.”

Blatter also confirms approving a request from the Football Union of Russia, dating from September 2001, for $80,000 (£48,000/€70,000) of monetary support for the 10th edition of the CIS Cup.

The same amount had been requested the previous year, which, Blatter says, “on November 8, 2000 the general secretary approved…and wished the organisers good luck for their tournament.”

In response to the allegation that “the secretary to the President received a Mercedes as business car”, meanwhile, Blatter retorts that the general secretary’s secretary “was given a specially equipped Mercedes”.

The documents also contain much interesting detail about FIFA’s use at this time of outside consultants.

Zen-Ruffinen alleges for example that McKinsey “received most significant business”, with invoiced amounts ranging “from CHF 420,000 to CHF 760,000 per month (!) between June 2000 and March 2002, totalling roughly CHF 12 million (£8 million/$12.2 million/€11 million)”.

Blatter confirms “the information on the invoiced amounts is correct”.

He continues: “As a streamlined organisation, FIFA utilises a great number of outside consultants in its work…McKinsey was not the largest consultant employed…

“Until now, contracts totalling CHF 64 million (£43 million/$65 million/€58 million) have been signed with A.T.Kearney, of which CHF 54 million (£36 million/$55 million/€49 million) has already been paid.”