AS READERS of the back pages of newspapers will know, there is a longstanding belief that a conspiracy of silence exists in the world of football about the “bung culture”. Bungs — where “backhanders” are paid, often by agents, to managers at the time of player transfers — have inflated the cost of the national game and distorted the market in footballers’ services.
At long last the FA Premier League has announced that there will be an inquiry into the extent of bung payments after the whistle-blowing by Mike Newell, manager of Luton Town, and some of Sven- Göran Eriksson’s unguarded comments to the News of the World.
But more than just football has been affected by this culture of secrecy. Football clubs are leading users of legal services so lawyers too, albeit vicariously, are caught up in this saga. Yet persuading some lawyers to talk about the subject, even in the most general terms, is almost as difficult as getting a goal past Chelsea. Many leading law firms work for top football clubs and there is a deep reluctance to comment in public about what goes on.
Nonetheless, if you penetrate the wall of silence there is a cacophony of well-informed chatter about which managers’ bank accounts are bubbling with bungs. For example, there is consistent “naming of names” by lawyers as to the identity of the Premiership’s top bung-taker.
But it is not just an English problem. Buying and selling players is a global business and many of the worst abuses may arise from international transactions. “The flaw in the system,” said one leading sports lawyer last week (who preferred not to be named), “is that if there are any suspicions of ‘secret commissions’ being paid involving more than one country — and that includes an agent from another country — then it is automatically taken out of the hands of the domestic authorities and becomes a Fifa matter. Unfortunately, the record of the world governing body in handling these investigations is lamentable. It does not have the number or level of staff to deal with it. And if a case is left on the shelf for a couple of years, then it tends to lapse.”
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This view is confirmed by Stuart Benson, a former DLA partner, now on the board of Fulham FC, who points out that one of Fifa’s objectives is to root out corruption in the game, yet, when it comes to bungs, Fifa has “failed to do anything about it”. Indeed, it was not without a wry grin then that Benson said in his opening remarks to a recent Fifa disciplinary committee in Zurich: “Gentlemen, I am here to talk about corruption — a subject which you are all very familiar with . . .”
But what can be done on the domestic scene? Although we are in a “hear no evil, see no evil” scenario it is clear that the law is being broken comprehensively by these backhander arrangements. Chris Hardman, a litigation lawyer for Lovells, points out that there is a long list of criminal charges that a manager might face if investigated by the police — starting off with the Prevention of Corruption Act, which makes it an offence for “agents” (that is, those citing on behalf of someone else such as a manager) to offer or receive a bribe. This carries, potentially, seven years in prison. But that is just the beginning. Depending on the circumstances there could also be prosecution on the grounds of conspiracy to corrupt and conspiracy to defraud. Meanwhile, Customs & Revenue could take an interest if money that is handed over in brown paper bags is not entered into the manager’s tax returns.
But even if no criminal charges were pressed there is the relationship between the manager and the club to take into account. David Becker, a partner at Collyer-Bristow, says that any manager taking bungs would almost certainly be in breach of his employment contract. He could be fired on the ground of gross misconduct, and if the manager is also a director of the club (as happens occasionally) he would be in breach of his fiduciary duties.
Bungs are not unique to football but part of the growing culture of white-collar crime that goes largely uninvestigated because it is reckoned to be “victimless” — apart from the supporters whose loyalty is milked by ever higher set and short prices. One way forward, Becker suggests, is that the Football Association’s requirements for directors to be “fit and proper persons” should be extended to include managers — but there is no sign of that yet. Another would be for Fifa to surrender its automatic right to investigate international deals and allow domestic authorities to take the initiative.
So what can we expect to see happen next? Adrian Barr-Smith, of Denton Wilde Sapte, suggests that if any progress is to be made then what is required is “greater transparency, rigorous enforcement and some degree of self-denial by football clubs”. In reality, we shall probably see “Sweet FA” as they say at the Football Association.