Transparency International UK’s strategies for combatting corruption - A guide for sports organisations

Published 18 April 2019 | Authored by: Keith Oliver, Craig Hogg

In October last year, Belgian authorities charged 19 people, including referees, agents and football coaches with alleged fraud or match-fixing, in a scandal which sent shockwaves through European football, and triggered a fresh examination into the business of sport.1 This was a disappointing revelation, but one which should serve to fortify efforts undertaken by sports clubs and governing bodies currently looking to institute effective anti-corruption policies.

In light of these events, this article briefly examines recent examples of corruption in sport, before highlighting how sports organisations can draw on Transparency International UK’s strategies for combatting corruption.

Belgium football scandal

In late 2017, the Belgian Federal Public Prosecutor’s Office commenced a federal investigation into organised crime, money laundering and corruption in Belgian football. This investigation, unofficially named "Operation Clean Hands", focused on the country’s top two divisions, the Jupiler Pro League and the Proximus League, and targeted some of the most influential people working in the sport in the country.

The investigation culminated, on 10 October 2018, with raids conducted on over 44 premises connected to the game. Few clubs avoided scrutiny, with the offices of Anderlecht, Standard Liege, Genk and current Jupiler Pro League champions, Club Brugge, in addition to others, all raided, leading to the arrest of 29 people. Raids conducted overseas would yield a further 4 arrests.

A number of high-profile individuals were subsequently charged by Belgian prosecutors, including prominent football intermediary, Mogi Bayat, referees, Bart Vertenten and Sebastien Delferiere, and former Anderlecht club lawyer Laurent Denis.2 Football agents, Dejan Veljkovic and Karim Mejjati, were also questioned by investigators.

At the heart of the alleged offending were two relegation matches which took place in the 2017-2018 season, and allegations of match-fixing undertaken by referee, Dejan Veljkovic, in a failed effort to save struggling KV Mechelen from relegation from the Jupiler Pro League.3

The reach of the case extends beyond the national leagues, with further investigations conducted in France, Luxembourg, Cyprus, Montenegro, Serbia and Macedonia, and has led to uncovering of items including luxury watches valued at $9.25 million, as well as jewels and cash4.

Other recent corruption scandals

Karim Hossam (football)

Football was not the only sport to face corruption allegations in the last year. In July 2018, Egyptian tennis player, Karim Hossam, was found guilty by the Tennis Integrity Unit (TIU) of 16 corruption charges relating to fixing tennis matches, committed at ITF Futures tournaments, in the five-year period between 2013 and 2017.

The charges, imposed by the TIU under Section D of the Tennis Anti-Corruption Program, included match-fixing, failing to report corrupt practices, and the provision of “inside information”.5 Hossam was banned from the sport for life, and fined $15,000 (£11,000), effectively ending the 24-year old’s career before he had made any impact in the senior game.

Raj Gaya (badminton)

In the world of badminton, in December 2018, former Mauritian badminton official, Raj Gaya, was found guilty by the Ethics Panel of the Badminton World Federation (BWF) of various financial improprieties, committed between June 2011 and June 2017, for which the BWF imposed a lifetime ban and ordered Gaya to pay a $50,000 (£38,000) fine.

The allegations centred around allegations that Gaya paid grants and funding received from the Badminton Confederation Africa (BCA), into his own personal bank accounts, which he then used for his own benefit. The BWF Ethics Panel further found that Gaya had improperly claimed expenses sums from the BWF, and forged various accounting documents and records.

David John and Jamie Jones (snooker)

More recently, it was reported in February that two Welsh snooker players, David John and Jamie Jones, had received bans from the sport, after the World Professional Billiards and Snooker Association (WPBSA), working in conjunction with Sportsradar and the UK Gambling Commission Sports Betting Intelligence Unit (SBIU), concluded that the pair had been involved in corrupt practices.6

John admitted to fixing two matches, in 2016 and 2017, for which he was handed a suspension from the game for a period of five years and seven months, and ordered to pay £17,000 in WPBSA costs. Jones was cleared of match-fixing offences, but was found to have failed to report John’s corrupt “approach” to the game, for which he was given a one-year ban, and ordered to pay £9,000 in costs.

George Owino and Wilson Raj Perumal (football)

Finally, also making headlines in February, FIFA has called for a full investigation into allegations that former Kenya international, George Owino, and convicted Singaporean match-fixer, Wilson Raj Perumal, were involved in fixing important Kenya international football matches, in the period 2009-2011. 7

FIFA has issued a ten-page report in the matter and has indicated that it has evidence that demonstrates that both the former defender, who played for Kenya between 2008 and 2015, and Perumal, conspired to manipulate the results of a series of international matches. Permual, known as the "Match-Fixing King", has already served sentences for match-fixing offences, in Singapore and Finland.

Transparency International UK’s strategies for combating corruption

With the betting market becoming increasingly more lucrative and diffuse, and as the value of competition increases, fraudsters are making big gains by manipulating sporting events. Accordingly, sports bodies and clubs, as well as their governing organisations, should be alive to the steps that they can take to prevent corrupt practices from happening.

Match-fixing

Transparency International UK (TI-UK) has published a raft of useful documents in on strategies for combating corruption. In its 2014 guidance "Safeguarding the Beautiful Game", the NGO has provided advice to club officials and players on how to tackle match-fixing in the international context, centred around four core "good practice principles".8 These principles include the recommendation that:

  • Organisations commit to a prohibition on bribery and corruption “in any form”, but ideally through a code of conduct, and policy, which addresses, for example, conflict of interest scenarios.

  • There is “top-level” commitment to the implementation of procedures to prevent match-fixing, which should in turn be widely publicised. For example, clubs should make statements via team websites, in brochures, and match-day programmes.

  • Clubs must implement effective risk assessment procedures which are reasonable and proportionate to a club’s assessed risks, its structure and circumstances.

  • Procedures must be implemented effectively in order to prevent match-fixing. In this regard, tailored training should be given to players and officials. Moreover, the recruitment and management of officials, volunteers and players must align with match-fixing policies. Adequate contingency plans should also be put in place to handle incidents, and ongoing monitoring and evaluation of procedures should be undertaken.

A key takeaway for sports clubs and organisations is the need for due diligence measures which account for specific risk factors, such as the permitted modes of sports betting in the jurisdiction concerned, and the degree to which matches are filmed, scrutinised and investigated. For example, in Cyprus, where football match-fixing is so endemic that games in the second division were recently suspended in their entirety, clubs would be well advised to introduce additional systems and controls over third-party relationships, in addition to close ongoing monitoring of players and officials.9

Bribery

TI-UK have also provided useful guidance on how organisations should conduct effective bribery risk assessments. In its report, "Diagnosing Bribery Risk" first introduced in 2013, TI-UK outlines ten principles which should sit as the cornerstone of any effective anti-bribery plan. This includes the advice that sports organisations:

  • Involve the right people when carrying out a bribery risk assessment who are sufficiently informed and can provide a complete overview of the business and its risks. In a “larger and more heterogeneous” business, the involvement of more people may be required. Applying this to the sports context, it is clear that the senior management of a club or sports body, working in conjunction with in-house counsel, are those often best placed to form a bribery risk assessment.

  • Act in a comprehensive manner when formulating policies, which account for all commercial activities. As many reported cases of bribery have demonstrated, most sports are now international in scope. In the 2015 FIFA corruption scandal, for example, which preceded and in many ways set the tone for the Belgium match-fixing investigation, bribery was uncovered in countries across the globe, in European, as well as South and North American countries.10

For UK sports bodies, in particular, global bribery risks are not hypothetical: section 7 of the Bribery Act 2010 imposes liability on companies which are found to have "failed to prevent" bribery committed by "associated persons", a term which is defined to include employees, agents and subsidiary companies, and lays down an offence which carries extra-territorial reach. Given the size of most modern sporting enterprises, a comprehensive anti-bribery plan is therefore a must.

  • Avoid pre-conceptions about the effectiveness of controls or the integrity of employees and third parties. The Raj Gaya case is a perfect of illustration of why this principle is essential: Gaya was a decorated former council member of the BWF. He had also held positions in the Badminton Confederation of Africa (BCA) and the Mauritius Badminton Association (MBA). Often, such positions of authority serve to deflect proper scrutiny, a point the BWF discovered to its detriment in the Gaya case.

As a priority, due diligence should be carried out in respect of all commercial activities undertaken by sports clubs and organisations, and at the earliest opportunity. A red flag system should be instituted where necessary, and appropriate training afforded to those with oversight of legal and compliance risks. Moreover, comprehensive online software, which allows organisations to effectively identify financial, regulatory and reputational risks posed by third-parties, should be invested in where necessary.

Adequate procedures

TI-UK has also produced additional guidance on those “adequate procedures” corporates should undertake in their anti-bribery programmes.11 This guidance further outlines how, for instance, organisations should formally act to prohibit facilitation payments being made, and develop written policies relating to gift and hospitality payments, and political, charitable and sponsorship contributions.

Within this guidance, the advice given to organisations on how to treat agents and intermediaries is particularly useful. This provides that organisations should have effective due diligence policies in place before intermediaries and agents are appointed, and that companies should give consideration to reporting publicly the number and percentage of personnel subject to a due diligence review, where possible.

Furthermore, as UK Government guidance has stressed, when considering what appropriate "adequate procedures" to institute, sports clubs and organisations should think more widely than just imposing controls on players and officials: sales and marketing agents and intermediaries, consultants and distributors all share a close relationship with sportspeople, and consideration should therefore be given to anti-bribery training which addresses the risks posed by individuals holding these specific positions.12

Whistleblowing

TI-UK further recommends that organisations provide secure and accessible channels through which to raise concerns and report violations: in other words, orgnaisations should ensure that effective whistleblowing programmes are put in place. In separate “best practice” guidance published last year, TI-UK highlighted the particular importance of embedding whistleblowing policies into sporting codes of conduct.13

On a more practical level, the European Commission has pointed to the value of so-called "telephone integrity lines", to encourage employee whistleblowing.14 The WPBSA, for example, through its Integrity Unit, operates a confidential telephone line and email address, which, if advised properly, snooker player Jamie Jones could have made use of to report the match-fixing undertaken by David John.

Clubs which operate in a sports sector which does not have a whistleblowing policy at the level of a sports governing body should consider developing their own guidance, taking into account the Government’s Code of Practice in the area.15 Simple steps to promote such policies, such as the use of promotional posters, appropriate staff inductions, and the appointment of a “whistleblowers’ champion” - responsible for protecting whistleblowers in a specific organisation - can all go a long way in fostering a grassroots culture of transparency within a given sport, particularly amongst clubs with limited resources.

Intermediaries and political influence

Finally, it is certainly true that sports organisations should pay close attention to intermediaries, who often pose a reputational risk. As the Belgium football scandal has demonstrated, third parties, operating unscrupulous practices alongside the legitimate businesses of football clubs, can served to undermine an entire national sport.

Equally, as clubs grow, so does their international reach, and careful consideration should therefore be given to devising policies which combat political interference in sporting practices. As Stranden and Fjeldsgard conclude in their 2016 study16 of the primary actors and drivers of corruption in football, bribery - usually committed by high-ranking officials, leaders in criminal organisations and politicians - is perhaps the leading source of malfeasance in the sport.

Sports clubs and organisations therefore need to pay particular attention to protecting against corruption risks in developing economies, where a culture of bribery and match-fixing is likely to be more prevalent. Moreover, where in doubt, sports organisations should consider a complete ban on certain betting practises which may be open to exploitation by intermediaries. In the Cyprus football league, for example, betting by athletes, club officials, referees, and members of the football association is all reportedly banned, and there are further proposals to prohibit club officials from representing athletes.

Conclusions 

In comments made last year, Yury Fedotov, Executive Director of the United Nations Office on Drugs and Crime called for the promotion of sporting integrity on the international stage, to “stop criminals from exploiting sport for illicit gain and [to] harness the power of sport as a force for development and peace17. These comments are no overstatement: the Belgium football match-fixing scandal, and the other instances of sports corruption discovered in the last year, have once again wrought indelible harm to global sport.

However, simple procedures like those recommended by TI-UK should serve as a starting point for sporting bodies in addressing - and hopefully preventing, at least in part - corrupt sporting practices. The guidance should also provide a steer to sportspeople themselves, and sports officials, who are ultimately those most exposed to the source of corrupt business practices. Afterall, the jeopardy underpinning all sporting endeavours is built on trust, and without a roots-up desire to respect the game, anti-corruption policies will be no more effective than shouting in the wind.

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About the Author

Keith Oliver

Keith Oliver

Head of International, Peters & Peters

A renowned litigator and excellent practitioner, Keith is recognised as one of the world’s best investigative lawyers and leads the firm’s international strategy.

Craig Hogg

Craig Hogg

Associate, Business Crime department, Peters & Peters

At Peters & Peters, in the Business Crime department, Craig has assisted on cases involving extradition and Interpol Red Notices, banking fraud (including a Serious Fraud Office investigation into a major multinational bank), Libor, and FX manipulation following a major US Department of Justice investigation.

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