Deviance in football: An organised fraud and regulatory bias?

A criminological analysis of UEFA’s regulatory response to an alleged contravention of Financial Fair Play by Manchester City FC

PDuncanPete Duncan is a current MRes Criminology student at The University of Manchester. He has widespread criminological interests, including political economy, drug policy, drug markets, deviance in sport, residential burglary and research methods.

 

In 2011, UEFA – the governing body of European football – introduced Financial Fair Play (FFP) regulations to reduce unsustainable investment in football clubs by billionaire owners. Clubs were only allowed to spend money that was earned through footballing endeavours. It is alleged that Manchester City Football Club (MCFC) contravened FFP regulations at least twice. This post will use criminological theory to analyse these alleged acts of deviance and UEFA’s regulatory response.

In a recent article, investigatory newspaper Der Spiegel published documents from Football Leaks to provide insight into the methods MCFC are purported to have used to bypass FFP regulations. It is alleged that MCFC’s owners – Abu Dhabi United Group Investment and Development Limited (ADUG) – injected funds into MCFC via hidden payments processed through the accounts of their sponsors, thereby making extra funds available for expenditure whilst appearing to abide by FFP regulations. Figure 1 depicts how this agreement differs from the usual club-sponsor relationship.

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Figure 1: Disparity between usual club-sponsor relations and those allegedly manipulated by ADUG

The Action Fraud website defines fraud as ‘when trickery is used to gain a dishonest advantage, which is often financial’. If the allegations are true, it seems clear ADUG utilised trickery to increase the funds available for expenditure by their subsidiary MCFC. As expenditure is positively associated with footballing success (see page 112 of this UEFA benchmarking report), and success brings further revenue which can be legitimately reinvested, the ability to increase expenditure would clearly have given MCFC a dishonest financial advantage.

The well-known routine activities theory stipulates that offending requires the temporal and spatial convergence of a motivated offender and a suitable target. When co-offenders are required for an offence, they similarly must meet offenders in time and space.

Co-offenders must be trustworthy and possess the required skillset or status to fill the gap in a motivated offender’s ability to offend on their own. In this case, the implicated sponsors represented suitable co-offenders. For example, the Chairman of Etihad – MCFC’s main shirt and stadium sponsor – is also a member of the MCFC Board, and therefore presumably trustworthy, and all sponsors made legitimate payments to MCFC within which ADUG could hide their own funds.

The ease with which motivated offenders can locate suitable co-offenders in a network is a measure of that network’s organisation. The convergence of motivated offender (MCFC) and suitable co-offenders (some sponsors) was facilitated by pre-existing personal and working relationships (a number of other sponsors implicated are also Abu Dhabi-based) suggesting this deviant network was tightly organised. Furthermore, the use of sponsors as ‘corporate vehicles’ is additional evidence of organised deviance.

A prerequisite of any deviant act is the opportunity to deviate, and it has been suggested that opportunities are more likely to be taken when they are encountered in a familiar environment. MCFC’s ability to manipulate pre-existing relationships to agree sponsorship contracts with familiar and willing entities provided a suitable opportunity to circumvent FFP regulations.

Other explanations for the alleged deviance relate to the notions of ‘amoral calculators’ and ‘techniques of neutralisation’. Both suggest that deviant behaviour may be explained by moral variation. The former suggests the deviant cares not for the immoral nature of their behaviour, whereas the latter (specifically the ‘appeal to higher loyalties’) suggests deviant decisions may be justified as loyalty to the goals or norms of a subgroup (MCFC in this case) outweighs the necessity of conformity. When a colleague questioned whether MCFC’s deviance was acceptable conduct, it is alleged an executive simply responded ‘of course, we can do what we want’. An ‘appeal to higher loyalties’?

UEFA investigated, and on 16 May 2014 a settlement agreement with MCFC was published. MCFC were fined €60m, although €40m of this would be waived if they met various terms. MCFC were also restricted to entering a squad four players smaller than usual for the following season’s UEFA Champions League. This sanction would also apply to the subsequent season should MCFC fail to comply with certain terms.

Whilst this may seem to be a relatively open-and-shut case, it is alleged that MCFC received lenient treatment from UEFA. Leniency can be problematic as the effect of punishment is insufficient to deter future deviance. It seems hard to believe that a €20m fine (€60m minus the suspended €40m) and reduction in permitted Champions League squad size constituted a substantial enough punishment to come close to outweighing the potential benefits brought by substantial overinvestment in playing staff.

UEFA had more severe punishments available to them, principally excluding MCFC from participation in future UEFA competitions (see page 9 of the FFP regulations), but they elected not to apply this sanction. In this regard, UEFA may be seen to have followed due regulatory process as scholars have suggested regulation may be most effective when heavy sanctions are available but not used. Another justification for leniency is that severe sanctions can have significant negative consequences for many innocent individuals within an organisation, with revocation of a licence having been likened to a ‘corporate death penalty’ capable of rendering thousands of jobs obsolete.

Unfortunately for UEFA, these defences fall apart under closer scrutiny: their responses to FFP violations by economically lesser European teams of the time were more severe. UEFA excluded Romania’s FC Astra from European competitions for the following three seasons because of overdue payments totalling approximately €1.5m. For a club with financial difficulties, as UEFA acknowledged, exclusion from European competitions can be more of a corporate death penalty than it would have been for MCFC, as these clubs rely on the revenue that participation in these competitions provides. Four out of the five other cases closed at the time involved exclusion of the offender from UEFA competitions. Clearly UEFA were not averse to applying the heaviest sanction available.

Der Spiegel allege Gianni Infantino, UEFA General Secretary at the time and current FIFA President, acted as an intermediary between UEFA’s investigatory division and MCFC, helping the latter to propose an agreement that would be accepted by UEFA. These were not Infantino’s duties, and the investigatory team is supposed to be independent (see page 3 of the FFP regulations).

This behaviour could be argued to constitute a clear example of a problem termed ‘regulatory capture’: when a regulator ceases serving their controlling purpose and instead serves the interests of those they are supposed to regulate. Infantino apparently did not intervene in cases involving the likes of FC Astra, suggesting that the term ‘regulatory bias’ may be more appropriate.

Issues of insufficient and disproportionate sanctioning and regulatory bias could perhaps be at least partially understood if they had fostered FFP compliance on the part of MCFC; it has been argued that promoting compliance is the main aim of regulatory systems. However, leaked emails from 2015 allege MCFC remained uncompliant despite their settlement agreement with UEFA and continued to circumvent FFP.

UEFA may have fallen into the ‘compliance trap’, whereby attempts to coerce compliance through moral reasoning instead produce defiance as the regulated feel unfairly stigmatised. Regardless of this, the 2015 allegations suggest that UEFA’s earlier regulation attempt was ineffective.

The criminological literature can provide guidance regarding how UEFA could improve their regulatory practice. Opportunities for deviance could be targeted for situational crime prevention (SCP); removing criminogenic opportunities through environmental manipulation. SCP concepts could be used to supplement UEFA’s attempts to coerce FFP compliance through regulation.

In this case, scrutiny of sponsor structures at the point of contract agreement would give UEFA more insight into potential opportunities for deviance. However, this would be a costly undertaking and may also be limited by jurisdictional issues. Consideration of the other possible opportunities that clubs may utilise to circumvent FFP would give UEFA the chance to take a more proactive approach to prevention.

UEFA could also consider utilising a method of deterrence known as ‘naming and shaming’, which has been suggested to deter organisations that fear reputational damage and shame. UEFA’s current practices more closely reflect ‘naming without shaming’: violators are publicly named but their behaviour is not condemned. For a club with an allegedly substantial interest in promoting a positive image, the threat of being named and shamed could have a significant deterrent effect.

If MCFC are judged to have circumvented FFP a second time, UEFA have a chance to learn from their mistakes and enact effective regulation. Recent reports suggest their response may be more severe this time around.

 

Contact

Peter Duncan, The University of Manchester

Email: peter.duncan-2@manchester.ac.uk

 

Images: courtesy of the author

Safeguarding the rights of police detainees?

Official policy makes the Independent Custody Scheme visiting ineffective to safeguard suspects detained in police custody.

J Kendall

John Kendall is a retired solicitor. With no intention of writing about it, he worked as a volunteer custody visitor. He found it puzzling, and, as nothing academic had been written about it, wrote a PhD about the scheme, on which his book Regulating Police Detention is based.

 

Few police scholars, and hardly any members of the public, have heard of the Independent Custody Visiting Scheme. It is a substantial operation and an important part of the criminal justice system. Some 2,000 volunteers around the country combine to make unannounced weekly visits to check on the welfare of detainees in police custody throughout England and Wales.

I am a retired solicitor. I happened to read about the scheme in a local newspaper, and applied to become a custody visitor, with no intention of writing about it. I found working as visitor puzzling and looked for academic discussions of the scheme. I found none, so I decided that I would write about the scheme. Needing academic help, I wrote my PhD thesis at Birmingham University. The research has now been published by Policy Press in my book Regulating Police Detention: Voices from behind closed doors.

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I carried out an in-depth local case study. I observed the visits and the general conditions in custody suites, and I interviewed visitors, police officers, civilian custody staff, defence lawyers, the manager of the local scheme, and perhaps most significantly, the detainees themselves. The scheme is supposed to be for the benefit of detainees, but no one had ever asked them for their views about it, or if they had, they had not published those views.  I contend that the results of my research are generally applicable because the same factors prevail in all areas: the statutory scheme, the statutory arrangements about custody, and the power of the police which, as I demonstrate, makes a strong impact on the visitors’ attitudes and their behaviour. It is particularly noticeable that they rarely challenge the police.

The Independent Custody Visiting Scheme is run locally by Police and Crime Commissioners (PCC).  By statute, the PCC are charged with securing the independence of the visitors from the PCC and the police. This is a remarkable conjuring trick, as the PCC have complete control over the hiring, training, managing and occasional firing of the visitors. The scheme lacks structural independence, belying its branding as independent. Visitors also lack independence of mind: they tend to arrive with, and/or develop later, attitudes similar those held by the police.

Custody visiting is part of the UK’s National Preventive Mechanism. It is, therefore a form of regulation, although the official line is that the scheme is here to reassure the public about conditions in custody, which ignores the fact that so very few people have heard about it.  Unannounced visits are a familiar principle of regulation. The original purpose of custody visiting was that unannounced visits would deter police conduct that might lead to abuse, neglect or death in custody, but this has been airbrushed out of the official literature about the scheme.   Visitors have little understanding of deaths in custody, and do not see that their work has anything to do with contributing to prevent the incidence of these tragedies.

The way that the visiting operates prevents the work from being effective. It makes no impact on police behaviour. The police do not respect the visiting, despite the party line supporting the scheme.  An even more serious defect is that the detainees do not trust the visitors. A central feature of each visit is meeting the detainees in their cells. These meetings come out of the blue for detainees who do not understand what the visitors are there for. The meetings are very brief and are supervised by custody staff. There is therefore absolutely no possibility that detainees would feel able to let the visitors know anything important or disturbing about their detention.

The national organisation for custody visiting, the Independent Custody Visiting Association, does not allow visitors to become members. Its only members are the Police and Crime Commissioners. It therefore lacks legitimacy, but few people realise this. ICVA plays an essential role in running custody visiting along the lines approved of by the Home Office and the police.

The purpose of custody visiting is to check on the welfare of the detainees, but official policy prevents the visitors from doing this work effectively. The scheme lacks legitimacy in that it makes no impact on the behaviour of the police. Custody is largely self-regulated, by the police. The existence of the scheme enables the police to argue that there is no need for further, outside regulation of police detention. If MPs, journalists and the general public knew the truth about the scheme, radical reforms could make the scheme an effective regulator of police detention, which, arguably might save lives.

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Book Prize

We were delighted to offer the chance to win a free copy of this book during November 2018.  The winner was mature student Melissa Pope, who is in her first year of studying Psychology with Criminology at Birmingham City University. She is really enjoying the course so far and praises the excellent teachers there. We hope she enjoys the book.

 

Contact

Gilbert John Kendall PhD, Visiting Scholar Birmingham Law School

johnkendall475@gmail.com

 

Images: courtesy of the author and Greater Manchester Combined Authority