SII Focus 13th May 2020

The Ukraine FA, UEFA funding & football politics…

FIFA and UEFA questioned Andriy Pavelko (Андрій Павелко), President of the Ukrainian football association (УАФ), over use of football development funds, however it remains unclear as to whether a formal investigation was ever opened. Pavelko and the УАФ argue that no FIFA or UEFA investigation was opened, as no UEFA HatTrick development funds were used to construct an artificial turf factory in order for football to continue in winter, as alleged in various articles by the same journalist. FIFA and UEFA do not comment on investigations unless there is a case to answer.

Background

On 30 August last year, FIFA’s Ethics Committee sent a letter to Pavelko asking whether UEFA ‘loaned’ the УАФ (FFU) €4 million in July 2017. FIFA’s letter followed a 5 December 2018 article detailing a complaint lodged by the Football Federation of Kiev (FFK) with Swiss authorities. The article was a follow up to an 8 August 2018 article alleging embezzlement of 20% of the €4 million (see tweet below) which appears to have been taken down, but the allegations were reported by FranceFootball.

‘We wanted to bring to the attention of the Swiss authorities that the Union of European Football Associations (hereinafter UEFA), voluntarily or not, participated in a crime – the loan of €4 million to the FFU in an embezzlement scheme later used to launder money’, reads the FFK’s 28 November 2018 complaint, reproduced in the December 2018 article. ‘On 29 May 2017, FFU Secretary General Yurii Zapisotskyi [Юрій Запісоцький] received an email from FFU Director Andrii Bondarenko [Андрій Бондаренко] regarding a request to provide €4 million in the form of a loan, which will be obtained from UEFA for the purchase of equipment necessary for the construction of an artificial turf factory in the Kiev region. An email sent to UEFA’s Finance Director, Mr. Joseph Koller, shows that the funds requested will be used to buy equipment from a US company called Eco Green Equipments LLC, a Utah Limited Liability Company. 

‘On 6 June 2017, Mr. Koller confirmed to Mr. Zapisotskyi that UEFA was ready to commit €4 million to the FFU with an annual interest rate of 2%. The next day on 7 June 2017, Mr. Zapisotskyi accepted the loan terms on behalf of the FFU. Originally, on 1 August 2016, the contract between Eco Green Equipment LLC and the FFU had a value of $2,999,500.’

Pavelko’s 23 October 2019 reply to FIFA’s August letter, reproduced in the tweet below, refutes the allegations and argues that he cooperated with UEFA’s investigations. It outlines that UEFA didn’t loan the FFU €4 million, but the FFU did ask UEFA to advance its share of TV rights money in July 2017. It argues that the artificial turf company, FFU Production, was financed through FFU funds following a 15 June 2016 decision of the FFU Executive Committee.

‘As a partner, the Executive Committee has chosen the German company Polytan – one of the world leaders in its field, which has the status of “FIFA’s Premier Partner”’, read a statement issued following the 15 June 2016 Executive Committee decision. ‘“The plant will be constructed in the Boryspil district of Kiev and will start production at the beginning of the year”’, said Pavelko in the statement. ‘“The Football Federation of the Ukraine will be the first in the world to have its own plant for the production of artificial turf for football pitches”’. 

A link in the statement to the FFU’s plans for the facility appears to have been taken down, however Polytan’s presentation to the FFU remains on its VKontakte page. There doesn’t appear to be any mention of the deal with the FFU on Polytan’s website. A 30 September 2017 statement from Eco Green, the US company, details the instalment of a machine to recycle tyres used to provide the rubber crumb for the FFU’s artificial pitches. This statement mentions the involvement of Polytan in the project.

There is no doubt that FFU Production LLC, the artificial turf company, exists. British journalist Oliver Regan visited the factory in a November 2018 documentary entitled ‘Muddy Waters’ (below). In his October 2019 reply to FIFA and in the below documentary, Pavelko and the FFU outline that contracts with a company in the United Arab Emirates (UAE) and the US were due to its agreement with Polytan in order to meet FIFA’s artificial pitch requirements.

Update

The reason that this issue has again been placed under the spotlight is due to a new article, which alleges that Pavelko signed a ‘secret agreement’ with FIFA to end all investigations against him, provided he resign from the FIFA Disciplinary Committee and pay a CHF10,000 (€9,416) fine. In a statement (below), the FFU deny the article’s allegation that the Investigatory Chamber of FIFA’s Ethics Committee had begun an investigation against him in relation to the allegations of financial impropriety.

L'illustr'e. Арно Беда й жирна крапкаОФІЦІЙНО про твердження швейцарського журналістаРозслідування ФІФА стосовно…

Posted by Ukrainian Association of Football on Tuesday, 12 May 2020

‘The FIFA investigation regarding Andriy Pavelko turned out not to involve corruption and was not a financial episode at all, as the UEFA checks on funding for the Ukraine did not find facts to start an investigation’, it reads. ‘FIFA officially reported that its disciplinary proceedings, falsely described in the article as a financial affairs investigation, actually applies solely to public support for Croatian footballers involving Andriy Pavelko’. It adds that a lawsuit has been launched in the Swiss courts against the author of the articles.

FIFA told the Associated Press that Pavelko had resigned from its Disciplinary Committee in mid February this year. It told the news agency that a plea bargain was finalised in April for Pavelko to pay a fine but this was due to a separate Ethics Commission investigation opened in 2018, due to Pavelko publicly criticising a FIFA ruling warning Croatian defender Domagoj Vida for comments in support of the Ukraine after Croatia beat Russia in the quarter final of the Russia 2018 FIFA World Cup.

Stand off

It would appear that there is no evidence that UEFA ‘loaned’ the FFU €4 million, or that UEFA HatTrick football development funds were used to finance its artificial turf plant. But that doesn’t automatically mean that no corruption occurred around construction of the facility. As the FFU hasn’t commented publicly on this, only it and football’s investigatory committees know how the facility was financed. And as previously mentioned, they don’t comment unless there is a case to answer.

Pavelko is a politician. As such, on 14 June 2018, the National Anti-Corruption Agency of Ukraine (NABU) launched an investigation into the situation. 

‘NABU investigators have launched an investigation into facts outlined by NGOs [non-governmental organisations] and media articles on possible abuse by people serving legislative and executive branches of government through allocation of funds, procurements of works, and construction services through the State budget for the construction of services to provide artificial football pitches’, read a statement (below). ‘It is important to point out that the provision of this information in no way suggests that parts played by other people involved illegal action. In order to establish objective facts and evidence, an investigation will be conducted.’ It is understood that this investigation has now been extended until 2021.

У відповідь на запити ЗМІ повідомляємо, що детективи НАБУ розпочали розслідування за фактами, викладеними в зверненнях…

Posted by НАБУ on Thursday, 14 June 2018

On 7 February last year, Pavelko was elected to UEFA’s Executive Committee. Article 60.2(h) of UEFA’s Organisational Regulations requires members of its Executive Committee to ‘remain politically neutral in dealings with government institutions, national and international organisations, associations and groupings’. It could be argued that due to his criticism of FIFA’s ruling on Domagoj Vida’s comments, he has already beached this Article. A cynic might also argue that it is difficult to see how a Ukrainian politician could remain neutral in dealings with institutions in the Ukraine or Russia.

It has also been alleged that Pavelko made threatening telephone calls to the journalist responsible for the articles, and is responsible for a ‘disinformation campaign’ against him. These allegations are understood to be under investigation by the prosecutor’s office in the Swiss Canton of Jura.

The allegations against Pavelko appear to stem from the Football Federation of Kiev (FFK), which republished the latest article concerning them. The ‘Muddy Waters’ documentary suggests that Hryhoriy Surkis (Григорій Суркіс), former President of the FFU and a former UEFA Vice President, may have a reason not to be keen on Pavelko’s appointment to the UEFA Executive Committee. He is a former President of Dynamo Kiev, which falls under the FFK’s jurisdiction.

In March 2019, it was reported that criminal proceedings were launched against Surkis. It is understood that prosecutors are investigating what happened to money collected from Ukrainian football clubs for the construction of a new training base that was never built. His brother, Ihor Surkis (Ігор Суркіс) was implicated in the ‘Football Leaks’ investigations as receiving €380 million allocated to the FFU into an account he owned in the British Virgin Islands (BVI).

As mentioned, Pavelko is a People’s Deputy of the Ukraine with the EU Solidarity Party. It is alleged that a business partner of Surkis is Viktor Medvedchuk (Виктор Медведчук), the Head of the Council of the Opposition Platform – For Life party, a political opponent to Pavelko. Surkis’s Ukrainian Wikipedia page mentions that Medvedchuk is a co-owner of Newport Management, the BVI company used to pay Dynamo Kiev players from 2003 until 2012 (the payments are outlined in this document). According to a Company Register operated by a Ukrainian anti-corruption centre (ANTAC), Medvedchuk is the Founder of Newport Management.

In the ‘Muddy Waters’ documentary, Ukrainian journalists outline that the journalist responsible for the articles appeared on Ukrainian TV channels owned by Medvedchuk. The politician has been accused of lobbying for Russian interests, and last year chose Vladimir Putin as godfather to his daughter.

On the face of it, this background evidence does appear to indicate a motive for attempts to smear Pavelko. However, it could also be the ‘disinformation campaign‘ that the journalist alleges Pavelko has waged against him.

Whichever version of events is true has the potential to embarrass UEFA, which is perhaps why investigations have entered a stand-off. UEFA has elected an official under investigation for embezzlement to its Executive Committee. If the allegations against Pavlenko turn out to be unjustified and false, it would appear that its former Vice President may have questions to answer about whether he played a role in spreading them.

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