THE SOCCER CONNECTION
The leaked documents expose an array of offshore manoeuvrings by soccer clubs, owners and high-profile players, including Barcelona star Lionel Messi,
Leaked files from a Panama-based law firm show that what is often called the called “the beautiful game” could also be dubbed the game of dummy corporations and tax havens. The documents expose offshore entities used by an array of players, team owners, league officials, sports agents and soccer clubs to move money offshore.
These findings are the result of a yearlong investigation by the International Consortium of Investigative Journalists, the German newspaper Süddeutsche Zeitung and other media partners. The reporting partners sifted through more than 11 million records from the internal files of Mossack Fonseca, a firm that specializes in helping the wealthy and powerful set up offshore companies.
The Mossack Fonseca documents include the names of nearly 20 highprofile soccer players past and present, representing some of the globe’s best-known professional soccer clubs, including Barcelona, Manchester United and Real Madrid.
Among the names is Lionel Messi, the Barcelona star, a five-time world player of the year. Messi is already under indictment in Spain on charges that he and his father, Jorge Horacio Messi, used offshore companies in Belize and Uruguay to stiff the government out of millions of tax dollars.
Messi and his father, who served as his son’s agent, are slated to stand trial on tax fraud charges starting May 31. Accused of shortchanging the government of nearly $6.5 million in taxes by shielding his image rights in an offshore network, Messi has paid the back taxes the government said he owed for 2007 to 2009.
Messi denies he deliberately tried to deceive anyone.
The leaked documents show that Messi and his father owned another offshore company in Panama: Mega Star Enterprises.
The first reference to the company in Mossack Fonseca’s files came on June13, 2013 — one day after Spanish prosecutors first filed tax fraud charges against Messi and his father. An email indicated that responsibility for handling the company’s paperwork was being transferred to Mossack Fonseca from another offshore corporate agent.
The first reference to the Messis owning Mega Star came less than two weeks later, on June 23, 2013.
Through his father, Messi declined to comment for this story.
The files also include the offshore holdings of current or former owners of at least 20 major soccer clubs, including Internazionale Milano and Boca Juniors. While soccer players and executives are by far the most common sports-related names in the leaked documents, the files also include the names of current and former athletes from other sports.
“Over the years, we’ve seen an increasing penetration of offshore finance into sports, which we believe is detrimental to the game,” said George Turner of the Tax Justice Network, a fair-tax advocacy group based in London. “If we’re shifting competition away from the athleticism, the skill, the talent of the players and into the skill and talent of the accountants, lawyers, bankers and boardroom executives, the sport quickly becomes a pointless thing to go and watch.”
Also named in the documents is Michel Platini, a former French soccer great and a key figure in the 2015 FIFA scandal. Platini relied on Mossack Fonseca to help him administer an offshore company created in Panama in 2007, the same year he was named president of UEFA. Platini was given an unlimited power of attorney for Balney Enterprises Corp., which was still an active business as of March 2016, according to Panama’s commercial register.
Platini, a longtime member of FIFA’s executive committee, has already been banned from the sport for six years because of a questionable $2-million payment he received from FIFA in 2011.
The soccer players whose names appear in the files hail from Brazil, Uruguay, the U.K., Turkey, Serbia, the Netherlands and Sweden, among other countries. Most seemed to have used the law firm to create offshore companies to hold money they earned selling their image rights to athletic shoe companies and others. Among those named in the secret files:
Leonardo Ulloa, is a top scorer for Leicester City, the surprise Premier League team of the season.
In early 2008, when he was playing in Argentina, Ulloa signed his economic and image rights to Jump Drive Sport Rights LLC, a company registered in New York.
On paper, Jump Drive’s director and shareholder were actually two companies based in the South Pacific nation of Samoa. Jump Drive’s power of attorney was held by José Manuel García Osuna, a businessman and soccer administrator facing fraud charges in Spain, including an allegation that he pocketed a large percentage of the money that Ulloa was supposed to receive for his image rights and for his signing contracts to move from one team to another.
Ulloa declined to discuss his dealings with Osuna. “I don’t have a good relationship with him now, but I don’t want to talk about it,” Ulloa said in a brief telephone interview.
Iván Zamorano, a retired footballer from Chile, was named to the FIFA100 list of the world’s best living players. His image rights were held by Fut Bam International Ltd., when he was a star player for Real Madrid in the 1990s. Fut Bam is based in the British Virgin Islands, which has an effective tax rate of zero, and lists Zamorano as its owner.
Fut Bam granted temporary custody of those image rights to Real Madrid in exchange for about 195 million pesetas — roughly $1.3 million. The club was to pay Fut Bam 45 million pesetas in 1993, then another $330,000 a year between 1994 and 1996.
Gabriel Iván Heinze, who is from Argentina, played with Manchester United and Real Madrid, among others. In 2005, while with Manchester United, Heinze created the Galena Mills Corp., also in the British Virgin Islands. That year he signed a contract with Puma AG that guaranteed him payments of at least $1 million over five years. The payments were channelled through the offshore company whose owner was listed as Heinze’s mother, records show.
The documents also expose how one club, Real Sociedad in Spain, paid its players in a way that appears to have allowed both the club and its players to slash their tax payments.
The documents show that the club shelled out millions each year to its foreign players, even as the players reported a fraction of those payments to the Spanish government.
Spanish authorities were told that Darko Kovacevic, a well-known Serbian footballer, earned about $2,000 a month from the team during the 2006-2007 season, according to online news site ExtraConfidential.com. Mossack Fonseca’s files show the team paid Kovacevic roughly $1.4 million that season through IMFC Licensing in the Netherlands.
Real Sociedad’s press officer said “this sort of practice of using companies abroad to remunerate the foreign players was and is a common practice in all Spanish soccer clubs.” With files from Bastian Obermayer