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FIFA, THE FAI AND ‘HUSH’ MONEY

FIFA, THE FAI AND ‘HUSH’ MONEY

FIFA has lurched from disaster to catastrophe in the last two weeks as more and more revelations about alleged corrupt practices have been uncovered and exposed. I have watched, like many people, with an ever dropping jaw as more and more information is revealed as to what has allegedly gone on at the highest echelons of FIFA. However, one issue that has perhaps been included in the ever growing list of alleged wrongs committed by FIFA is the payment to the Football Association of Ireland of 5million euros following the infamous Henry handball and the Republic of Ireland’s subsequent failure to reach the 2008 World Cup.

As the story goes, FIFA paid the FAI 5million euros in order to avoid the FAI taking legal action to challenge their elimination from the 2008 World Cup Qualification following their loss to France. The FAI were apparently so enraged that everyone and their next door neighbour, but not the referee – the most important person on the night – had seen Thierry Henry’s handball, that they were minded to launch legal proceedings to force a replay of the game. In turn, and in order to avoid this, FIFA paid the FAI a settlement of 5million euros which the FAI used to build a new stadium. This was enshrined, I assume, in some sort of settlement agreement, which included confidentiality clauses etc etc. This ‘hush money’ payment has been thrown into the pot of the FIFA corruption scandal – but if we take a step back and try and look at this payment objectively, without the circus that is the FIFA corruption scandal, it begs the question, is there really anything wrong with this payment? Is it really ‘hush money’?

Now don’t get me wrong, I DO NOT CONDONE FOR ONE SECOND WHAT FIFA HAVE ALLLEGEDLY BEEN DOING. I am not blasé about it. I am a  football fan like any other and I hate the thought that our beautiful game could have a governing body that is allegedly so rotten at its core. However, this ‘hush money’ payment is not in the same ball park, where seriousness is concerned, as some of the other allegations.

Every single day litigation is intimated, foreshadowed, threatened like a loaded cannon between people all over the world. Sometimes parties are so far apart, or so embittered, or so embedded in their position that litigation is happening no matter what. But sometimes a party looks at matters commercially, does not want a long drawn out litigation war where the outcome (no matter how obvious it seems) is not 100% certain, or where they see that they are in trouble should the case be interrogated and analysed by a Court. In these circumstances parties settle, money/promises are exchanged in return for litigation not being commenced, and litigation is curtailed before it even begins. Payments can be labelled as ‘loans’, ‘settlements’, ‘consideration’ – these are just labels for a payment in settlement of litigation or contemplated litigation.  There is nothing wrong with this. It is not corrupt. As you read this there are lawyers all over the world advising their clients to settle in order to avoid litigation. This appears to be exactly what FIFA have done here with the FAI – for whatever reason they wanted to pay out rather than fight. This is not corrupt practice: it is sensible management.

I discussed this with my friends during the Champions League final, all of whom were outraged at FIFA, at the FAI, at this ‘hush money’ payment. They were perplexed that I was somewhat nonplussed by this. But when I explained the above, there was more understanding and definitely more appreciation as to what this ‘hush money’ payment (a phrase coined by the media) actually was and what it represented, a settlement to the FAI.

It does not seem to me that this payment from FIFA to the FAI was corruption at its most rotten and crooked. It may be the case that we have yet to see the worst of the alleged corruption at FIFA – and only time will tell in this regard.

John Spyrou

Director – Heads of Sports, Media and Internet Law

Pinder Reaux

@john_spyrou

@pinderreaux