Roman Abramovich: What football knew… and ignored

by | Jun 18, 2022

So. Roman Abramovich, Russian politician, oligarch, friend-not-friend of Russian dictator Vladimir Putin and, to some, hero, achieved his “goal” for the enforced sale of his ‘beloved’ Chelsea. To “ensure that the next owner has the mindset that will enable success” and the “will and drive to continue developing key aspects of the club.”

No money to fund Chelsea’s frequently loss-making business model? No replacement for the loans covering the losses incurred within Chelsea’s corporate structure? No repayment of the billion-and-a-half-pound loans through which he funded Chelsea’s UK parent company Fordstam? Well, he says not.

So, let’s give him the benefit of the doubt. After all, that’s what English club football authorities have done since he came under their ‘authority,’ despite their being gargantuan ‘doubt’ about the provenance of his finances ever since Kenneth William Bates, another man of questionable financial provenance, sold Chelsea to him in 2003. And we could have doubt without the inverted commas thanks to the 2011/12 London High Court case between Abramovich and then-fellow suspiciously super-rich Russian Boris Berezovsky.

All relevant information about Abramovich has been available to football authorities since 2003. He appeared at the end of Tom Bower’s 2003 book, ‘Broken Dreams,” as a “bizarre personality whose personal wealth had mysteriously soared from virtually zero to an alleged £5.4bn in less than twenty years in Russia’s murky oil and aluminium industries.” And Bower noted that the ”combined silence of the FA, who ignored calls to enquire whether Abramovich was ‘fit and proper’ to own a football club, and the celebration of some fans about a source of seemingly unlimited money, exposed all the weaknesses of the national sport.” Then and now, seemingly.

Incidentally, a review on the back cover of my copy called the book “a devastating indictment of football.” The reviewer? The Times newspaper’s Daniel Finkelstein, now a Conservative peer and part of…Todd Boehly’s successful Chelsea bid.

In the “Epilogue – April 2005” chapter of Guardian newspaper journalist David Conn’s 2004 book, “The Beautiful Game?”, Conn noted that since its first edition, “a little more information” had “seeped out” about what its first page called “the shameless wad of…the shy thirty-something who arrived at debt-ridden Chelsea with a fifth of the Russian oil industry to spend.” And about “how Abramovich emerged from” post-communist Russia “as one of the handful of men who own the vast bulk of what were Russia’s state-owned resources.”

Abramovich’s spokesman, John Mann, told Conn “straight” that “Sibneft, the oil company Abramovich bought, was ‘undervalued’” and that the auction where he bought it “‘was not perfect.’” Despite this, “Roman” was a “responsible businessman” who had “broken no laws.” But Mann also told Conn that Abramovich, the then governor of eastern Russian province Chukotka, had “stayed out of Russian politics.” What to believe, eh?

Conn also contrasted Abramovich’s fate with that of fellow oil company owner Mikhail Khodorkovsky, who was sentenced to nine years’ imprisonment, for “massive tax evasion and fraud.” Why was Abramovich’s comparable behaviour not punished by the regimes of 1990s Russian president Boris Yeltsin and 2000s successor Putin? Who can tell?

Even ‘celebrity’ Chelsea fans had pre-hindsight concerns. In July 2003, Labour MP and ex-Sports Minister Tony Banks asked the FA to investigate Abramovich. His “immediate and obvious questions” included: “How did he become so rich in Russia? Is he fit and proper to be running a football club?” But no-one cared. ‘Genial’ Harry Grout claimed, in 1970s BBC sitcom, Porridge that he got his enjoyment of sports betting “from knowing that I’m on a certainty.” Abramovich wanted to buy as much of that certainty as possible. And football let him.

The BBC ‘Panorama’ programme, “Roman Abramovich’s Dirty Money,” transmitted in the wake of his sanctioning by the UK government, offered further evidence that Abramovich’s wealth acquisition required the investigation football failed to undertake. Presenter Richard Bilton, unsettlingly resembling Alan Pardew from certain camera angles, said: “We started investigating Abramovich four years ago.” And they uncovered quashed investigations of illegal activity, as well as bribery, rigged auctions, kidnaps and sex-tapes; information collated from secret and public documents, plus interviews with whistle-blower types who lost various jobs because they whistle-blew.

Like other tellers of his tale, Panorama left unspecified why Abramovich remained within “the Kremlin’s inner circle.” But if he was an innocent by-stander to sex-tapes and kidnappings, it is perhaps little wonder that his eyebrows are always raised.

Less intriguingly, Panorama also offered fans’ competing perspectives. One laughed a little sheepishly that “we’ve won 19 trophies over the years, so we’ve been quite happy” while admitting that “the reality is kicking in now. He’s too closely tied to Putin for us to ignore it anymore.” But another asked, out loud, on purpose: “Get rid of Abramovich. But why let the fans and the club suffer?”

Bilton noted that Abramovich had “already confirmed some of the allegations” during the above-mentioned High Court case, at which “he effectively admits that his vast wealth is based on corruption.” And contemporary reporting of Abramovich’s evidence heralded much of Panorama’s. In November 2011, Private Eye magazine correspondent ‘Slicker’ reported that “Abramovich explained how, in 1995,” he gave Berezovsky $5m in cash “to pay” Yeltsin’s then personal security chief Alexander Korzhakov (a Panorama interviewee) “who helped enable the Sibneft deal.” And Korzhakov “described Abramovich in his memoirs as ‘the cashier to the Yeltsin family.’”

Abramovich was not on trial, though. He was being sued for $6.5bn by the legally clueless Berezovsky. And the hearing and Mrs Justice Gloster DBE’s August 2012 judgment resulted in “the wholesale demolition of Berezovsky’s credibility and case against Abramovich.” But Abramovich’s five-day testimony showed how and why he ill-got his gains.

UK company law was inapplicable to this “uniquely Russian story,” Slicker noted. No Russian law applied to such business dealings. Berezovsky claimed he was made sell his Sibneft shares too cheaply. Abramovich said he “alone” held shares, although investors and Russia’s stock market were told Sibneft was “controlled by” a shareholder group. Abramovich said this was “mainly for reasons of security.” But, Slicker added: “it was not the truth.”

And Abramovich admitted to other “normal Russian practices” which, he euphemised as “difficult to comprehend in the eyes of English law.” These included personally gaining from tax loopholes (“the tax savings did not return to Sibneft, that is true”) and using Sibneft funds to purchase shares in…er…Sibneft, about which Abramovich said “we did not have agreements, we had mutual understandings.” Very Don Corleone.

Abramovich testified with “detached, enigmatic bemusement.” Which strongly begged Slicker’s question about someone “who described himself in 1994 as a ‘nobody’” becoming “one of the world’s richest men?” Abramovich was always “happy to help” people whose finances and status happily helped him. “As power changed, so he changed. He…always toed the Kremlin line.” And Slicker concluded that the dispute was “over the share-out of the proceeds from a robbery” with “English law rewarding one of those who have cheerfully admitted to what in Britain would be crimes.”

And what did football do with all this reportage? Two-tenths of five-eighths of FA. In 2003. In 2005. In 2011/12. And, of course, now. There was no sign that any English football authority was about to consider Abramovich’s fitness and propriety until Russia invaded Ukraine and the government belatedly, reluctantly intervened. Not even after his 1987 wedding photo, with curly quiffed dark hair and ludicrously incomplete beard, illustrated one of Conn’s Guardian Abramovich pieces.

And the finally-completed Chelsea sale process has exposed how little football’s attitude towards the super-rich and, more significantly, the purported super-rich, has changed. Hence a short-list of bidders exclusively from those ranks, with financial self-sustainability not even an issue. After all, a sustainable Chelsea, like a driver sticking to a 30mph speed limit, would be overtaken instantly. And that is only how the EPL SHOULD work, not how it does.

As New York Times journalist Tariq Panja tweeted, the list included “MBS’s pal” (Mohamed Alkhereiji, Saudi Media Group bid leader, linked to Saudi Crown Prince Mohammed bin Salman), “Arkan’s pal,” (former oil trader Bob Finch, who used indicted Serbian war criminal Arkan to “solve” a dispute over a UN sanction-busting 1990s oil deal), “Johnson’s Covid Party pal,” (Tory donor Nick Candy, present at the high-profile lockdown-breaching party thrown by London mayoral candidate Shaun Bailey) and “Islamophobe,” (Joe Ricketts, who called Muslims “naturally my {our} enemy” in 2019, father of Tom, the baseball team owner who fronted a family bid).

There was also John fcuking Terry, whose interest in buying a 10% stake was not because he couldn’t count to eleven. Oh no. Meanwhile, the involvement of former Fifa Ethics Committee chair Sebastian Coe reminded me why I was a Steve Ovett fan.

Alongside that lot, who would be denied entry to any self-respecting rogues gallery on ethical grounds, Boehly seems angelic. And the status of THIS government as seller guaranteed a proper sales process, with proper scrutiny of all financial and ethical issues. Why are you laughing? Is it because Chelsea was unsustainable without Abramovich’s billion-and-a-half-pound loans, and Boehly’s bid would not have been successful without a willingness to continue that loss-making business model? Or because this government seems happy to countenance such fantasy finance? Yes? OK. Laugh away.

Abramovich’s policy towards his assets since Ukraine was invaded has been to move them out of range of sanction. For instance, the FBI allege that in late February, he transferred “hundreds of millions of dollars’ worth of assets,” including jets, yachts and helicopters to his children, aged between eight and 30 (and what eight-year-old doesn’t need a yacht?). Then on 26th February, two days after the invasion began, and two days after UK parliamentary calls for his sanctioning, he said he would give Chelsea’s charitable Foundation the “stewardship and care,” though no ownership, of the club. But when the offer lost its sanction-busting value, it disappeared.

(This reminded me of Isthmian League Kingstonian’s owner Rajesh Khosla offering “the club” to its Supporters Trust, which I chaired, in 2004. However, when we asked lawyers to help us clarify whether the offer was more than the ‘opportunity’ to fund club losses, it disappeared).

Abramovich’s second foundation proposal that day remains as vague. He claimed to have “instructed my team to set up a charitable foundation where all net proceeds of the sale will be donated…for the benefit of all victims of the war in Ukraine.” On 28th May, in his ‘farewell’ statement, he said “millions of people will now benefit from the new charitable foundation which is being established.” But “all victims” and these “millions” remain undefined, beyond a “key figure close to the process” telling the Guardian that funding eligibility would “not be connected to origin.”

So, the proceeds of the sale could yet go anywhere, despite Abramovich’s declared philanthropic intent. Because he can’t financially benefit from the sale, and the timing of his philanthropic declaration strongly suggest that it is ONLY because of that, Chelsea announced on 7th May that the £2.5bn used to purchase Abramovich’s club shares would be “deposited into a frozen UK bank account with the intention to donate 100% to charitable causes” and UK government approval required to transfer them out again.

However, on 31 May, hours after Chelsea’s sale, he sued the European Union Council over the sanctions they imposed in March, due to his links to Putin. Or, as the UK government called him that very day, without being sued yet, due to being “an individual who enabled Putin’s brutal and barbaric invasion.” Overturning the sanctions would allow him to financially benefit from Chelsea’s sale. So we will wait and see if he STILL donates the proceeds as above when he doesn’t have to.

His lawyers naturally deny those Putin links, and part-blame antisemitism for his sanctioning…as religion always informs discussions about dodgy state-asset sell-offs in 1990’s Russia. They also cite claims that he got “400,000 civilians” evacuated from the war, although how he did this without influence over Putin isn’t clear. And they say he “has never expressed support for Russia’s policy towards Ukraine.” Not that he ever expresses much to anyone about anything. Such as, to pick an example purely at random, condemning “Russia’s policy towards Ukraine.”

It may prove otherwise. But his lawyers seem to think that enough key people will be as gullible/compliant as too many Chelsea fans and football governance authorities, past and present. They may be right.

The following is undeniable: “Football clubs in Britain have always been run by businessman, often with less than spotless reputations. In one sense, Abramovich differs from them only in that he has a lot more money. But whether he is more or less unscrupulous than football’s past overlords is beside the point. What matters is that football is wide open to someone with Abramovich’s inclination and reach.”

These words belong to Chelsea fan, co-founder of ‘When Saturday Comes’ magazine and the current news editor at the Guardian Australia paper Mike Ticher. That they were published in August shows that “issues” with Abramovich are not news. That they were published SEVENTEEN Augusts ago condemns everyone in football ever since that ever had the chance to act against Abramovich and, when faced with that gaping governance goal, became Timo Werner.