The confidential audit by PwC paints CAF as a shambles of epic proportions, a quasi-complete failure to subscribe to the most elementary rules of accountancy. It reads more like an indictment. Or a suicide note.
By Philippe Auclair and Pål Ødegård
To many the appointment of FIFA’s Secretary General Fatma Samoura to the role of ‘FIFA General Delegate for Africa’ from 1 August 2019, had been nothing but a disguised takeover of CAF by FIFA .
Some even used the word ‘colonisation’.
It didn’t seem to matter that FIFA had intervened at the formal request of CAF’s own Executive Committee, following a proposal put forward by its President Ahmad to the ExCo members when they met in Cairo on 19 June 2019. To the critics of this move, this ‘request’ was more or less akin to the ‘requests’ of intervention made by faltering communist regimes to their Soviet overseers in Hungary and in Czechoslovakia in 1956 and 1968.
CAF and FIFA took a different view. To quote from the joint statement they published on that day, CAF wished “to seek FIFA’s expertise to assess the current situation in the African governing body and help to conclusively accelerate the implementation of the ongoing reform process destined to ensure that CAF functions with transparency, efficiency while abiding to the highest governance standards. The Executive Committee has unanimously approved the proposal of the President”.
It had also been agreed, crucially, that FIFA and CAF would “undertake as soon as possible a full forensic audit of CAF”, which included an in-depth review of CAF’s finances by PricewaterhouseCoopers (PwC), one of the world’s leading accountancy and company services firms, whose Swiss component, PwC Switzerland, has been operating as FIFA’s ‘statutory auditor’ since September 2016. This was not a cosmetic operation: PwC’s involvement in football affairs also included an audit of the Asian Football Confederation (AFC) which led to the subsequent life ban of its Qatari president Mohammed bin Hammam in December 2012.
Word soon got out that this ‘unanimous’ decision had initially met with strong, if isolated resistance from within CAF’s Executive Committee. Liberian ExCo member Musa Bility, who’d never shied away from criticising the Ahmad regime and had personally called (without success) for such an audit months beforehand, voiced his dissent. To him, Samoura’s appointment represented a ‘clear breach of CAF and FIFA [statutes and] regulations’. Other ExCo members were known to have had strong reservations about the move, but chose to keep their reticence private in the end. Just as a much-rumoured ‘plot’ to oust President Ahmad during the FIFA Electoral Congress held in early June in Paris had been snuffed out – according to information passed on to Josimar, when one of the ‘plotters’ carelessly confided to an Ahmad loyalist, allowing the CAF president to counter-attack -, whatever resistance they may have offered dissipated very quickly. The motion was carried.
The presence at the Cairo CAF ExCo meeting of Gianni Infantino, flanked by one of his closest aides, FIFA’s Deputy Secretary General Mattias Grafström, might have convinced some of those present that it was better to toe the line. A number of CAF’s ExCo members were seemingly unaware that Infantino and Grafström would attend this meeting (some of them were even unsure of the time at which it would take place), and were even more surprised when – according to what one eyewitness told Josimar – the two men took an active role in the ensuing discussions, even if it should be added that CAF had the right to invite FIFA representatives to sit at their deliberations.
Musa Bility, him again, didn’t see it that way, and filed a complaint with the Court of Arbitration for Sport (CAS), which was duly registered by the judicial body. “It is my firm belief that the appointment by CAF of the General Delegate Fatma Samoura was done in contravention of the relevant rules and regulations and I have enlisted legal counsel to seek the appropriate relief”. This was on 23 July 2019. The tables turned within less than twenty-four hours. FIFA’s Ethics Committee announced on 24 July that it had found Bility “guilty of having misappropriated FIFA funds, as well as having received benefits and found himself in situations of conflict of interest”. The Liberian businessman, who’d already been prevented from running for the FIFA presidency for failing an integrity check in 2015, was banned from all football-related activities for ten years and fined CHF500,000.
Two days later, it was revealed that the decision to find Bility guilty and to punish him with such severity had been taken much earlier: the former Liberian FA President had been informed of the judgement on 12 February. When this became known, critics of CAF’s de facto takeover by FIFA immediately suggested that this was ‘proof’ that Bility had been ‘blackmailed’. Should the habitual rebel prove compliant, the case would be mothballed sine die. Should he carry on making a nuisance of himself – the jack would jump out of the box; as it did. Bility appealed against his ban, and could still take his case to the Swiss Federal Court if this appeal failed; this didn’t prevent CAF’s Moroccan Secretary-General Mouad Hadji to inform West African FAs in December that Bility’s seat at the Confederation’s high table was vacant, and that they should file electoral nominations for his replacement at ExCo level.
As to Bility’s complaint against CAF and FIFA, no date has yet been set for a hearing.
The unknown French company
It could be argued that something had to be done in view of the constant flow of allegations which had all but destroyed what was left of CAF’s fragile reputation in the preceding months. On the morning of 6 June, the day after the unopposed Gianni Infantino had been re-elected by acclamation to the FIFA presidency, Ahmad Ahmad, CAF’s president since 2017, had suffered the indignity of being frogmarched from his palatial Parisian hotel by French police officers, and questioned about his involvement in the purchase of millions of dollars worth of football equipment from Tactical Steel, a hitherto unknown French company which was owned by one Romuald Seillier, a close friend – and former comrade-in-arms in an elite French Army regiment – of his private advisor Loïc Gérand.
An investigation had been opened by France’s Central Office for the Fight against Corruption and Financial and Fiscal Offences (OCLCIFF) into suspected “corruption, breach of trust, criminal conspiracy and forgery”, as indicated by French prosecutor Xavier Tarabeux. A visibly shaken Ahmad, who was then released without charge, flew back immediately to his native Madagascar in the company of Gérand (who had also been questioned), denying any wrongdoing.
A special Josimar investigation unveiled the details of the highly unusual relationship between CAF and its new go-to supplier, and how CAF processed and paid invoices amounting to over $4m from December 2017 to December 2018 (*). Not once, for example, had CAF questioned Tactical Steel and its sister companies, ES Pro Consulting SARL and Dubai-based ES Pro Consulting Ltd, over their huge mark-ups; and this, even though no contract had ever been signed with the minuscule French company. Moreover, CAF had, seemingly on Ahmad’s personal order (as suggested by an internal CAF email seen by Josimar), denounced at the 11th hour a previous agreement with PUMA, thus enabling Tactical Steel to become the confederation’s favoured kit supplier. What could have been Ahmad’s role in setting this far from ordinary arrangement? Why was almost every single message exchanged between the French supplier and CAF’s finance officers who diligently wired vast sums to its accounts apparently cc’ed to Ahmad’s personal email address, for example?
Josimar also revealed that the French investigation, far from stalling, had been broadened since Ahmad’s questioning, and was now conducted by two distinct units, one of which had an international remit, and the other concentrated on the activities and banking records of Tactical Steel and related companies on the French territory. We can confirm that these investigations are ongoing.
Many other alleged irregularities were reported in great detail by the media in Africa and elsewhere, most (but not all) of them of a financial nature. These included the six-figure funding of a private pilgrimage to Mecca for president Ahmad and other CAF officials, payments meant for CAF MAs which somehow were wired to a mysterious Polish company, bank transfers into the private accounts of African FA presidents, huge cash withdrawals whose use was virtually untraceable, questionable procurement of official vehicles for the benefit of the CAF president and suchlike.
From March 2019 onwards, a considerable cache of documents, invoices and electronic communications purporting to back these allegations was procured by some media organisations, Josimar among them. CAF responded by denying en bloc and blaming these supposed revelations on a vendetta orchestrated by disgruntled administrators. A wave of sackings followed, the most prominent victims of which were two Egyptians, Secretary General Amr Fahmy (on 15 April 2019, two weeks after he’d alerted FIFA’s Ethics Committee to a number of alleged misdemeanours, including payment of ‘bribes’ and claims of sexual harassment by Ahmad) and Finance Director Mohammed El Sherei (on 8 July, who’d claimed that Ahmad ordered him to foot the bill for the pilgrimage to Mecca mentioned above).
Given the seriousness of the accusations, the weight of evidence, the clout of the accusers and the refusal by CAF to deal with them by means other than blanket denial, something had to give at some point. A controlled explosion might be the only means to ensure that collateral damage would be limited to individuals – if their guilt was established – and that, to some extent, the institution would be spared. Perhaps CAF had to be saved from itself after all. Unfortunately, as recent events have shown, this kind of explosion is almost impossible to contain.
According to a statement published by world football’s governing body published on 2 February, the FIFA mission in CAF had been “successfully completed”. A set of “findings, recommendations and proposals” had been submitted to the CAF Executive Committee at the meeting held in the Moroccan city of Rabat, a popular venue for such gatherings since President Ahmad had been elected. The event had been marked by an intervention by FIFA president Gianni Infantino, in which he’d proposed a number of sweeping changes to the way the game was played, structured and administered on the continent at elite level. His aim, he said, was nothing less than ‘to project African football to the top of the world’, and what he proposed, to many of those present, equated to a revolution.
There was the $1bn plan to build “at least one top stadium in the countries of each of FIFA and CAF’s 54 member associations”; proposals to professionalise and contract twenty African referees; to create a new pan-African competition which would regroup twenty of the continent’s top clubs, thus enabling them to generate the resources necessary to make them competitive against the biggest European and South American clubs, and hold their own in FIFA’s revamped and vastly expanded Club World Cup – which FIFA hopes will pit 24 teams against each other instead of the usual six from 2021 onwards; to hold more international youth tournaments at continental level; to create an African women’s Nations League; and, more controversially, to change the periodicity of the continent’s premier international tournament, the African Cup of Nations, from every two to every four years.
Whilst Gianni Infantino personally received a warm enough welcome from the delegates, and some of the ideas he put forward met with their interest and even approval, the proposal to make AFCON a quadriennal competition was too big a pill to swallow for many. In public, reactions were non-committal at best. Ugandan FA President Moses Magogo’s comment was an example in kind. “This matter is still under debate by the CAF Executive upon advice by Fifa”, he said. “I am limited to make my opinion public at the moment when I belong to the executive forum where I will give my opinion”. In private, many were fuming. Infantino’s ‘suggestion’ sounded too much like an order. CAF officials already had had to swallow their pride to accept that their Confederation had been placed under FIFA’s supervision for six months, and had pointedly declined to renew Fatma Samoura’s mandate when it expired on 31 January 2020. This was a step too far for many. Several close observers told Josimar that Gianni Infantino had overplayed his hand in their view, and underestimated the resentment that FIFA’s high-handed conduct of CAF affairs had created among officials, media and opinion alike. It did not matter that the CAF Reform Task Force which had first convened in September 2019 and was now charged of implementing the 100-point ‘Good Governance’ plan was composed of five eminent African personalities (*); what they would be implementing was FIFA’s, not CAF’s policies.
This is what “successfully completed” actually meant. But this was nothing compared to the bomb that was about to explode.
On 8 February, a select group of media, the New York Times and Reuters first among them, made public some of the key findings of the confidential audit of CAF’s finances which had been completed by PwC in November 2019.
The picture these media reports painted of CAF’s financial management was one of systemic dysfunction, to such an extent that it was impossible not to suspect that something worse than incompetence was to blame. If it was CAF indeed which had insisted on this audit being conducted, what it had got in the end was much more than a report. It read more like an indictment. Or a suicide note.
The confidential report
Josimar has seen the 55-page Confédération Africaine de Football (CAF) – Review which was sent on 2 December by the PwC team to CAF’s Chief Compliance Officer Abdulah Moutapha, and can now reveal more about the fifty-nine points of its Executive Summary and the ‘detailed findings’ on which the auditors based their conclusions. “Several red flags, elements of mismanagement and potential abuse of power [have been] identified in key areas of CAF”, they said. And they could not “rule out any potential financial irregularities due to matters requiring further investigation”.
It clearly had been a thankless task for PwC’s analysts and investigators, who sifted through what documentation they could get hold of throughout September and October 2019, a month in which they also held four workshops with various CAF officials in Cairo. That documentation was by no means exhaustive. The data they had requested in mid-September were delivered late; some were not delivered at all, among them the General Ledger of Bonus and other one-time payments, the General Ledger of Travel Expenses and the Vendor master list. Information pertaining to the first semester of 2019 was ‘fragmented and incomplete’, which prevented the auditors from fulfilling – in their own estimation – more than a fifth of their review.
What was going on? It was difficult to blame these multiple failings solely on the upheavals which had shaken CAF throughout 2019, including the sacking of Secretary General Amr Fahmy and Finance Director Mohamed El Sherei. What PwC had uncovered was a shambles of epic proportions, a quasi-complete failure to subscribe to the most elementary rules of accountancy, to the extent that the ‘unreliable and not trustworthy’ accounting records of CAF had been subjected to ‘manual adjustments […] without narration and supporting documents’. As a result, PwC could not ‘rule out any potential fraudulent adjustments / postings to […] accounting system prior to and /or during the review potentially causing misstatements of CAF’s financials”.
Putting aside (if such a thing is possible) CAF’s irregular accounting practices and ‘methodology’ (if such a word can be used), PwC had nevertheless managed to identify six major problem areas within CAF’s financial arrangements, namely: the use and distribution of FIFA Development Funds; the agreement on TV rights with the Lagardère group (an extraordinarily complex subject to which Josimar will turn in the near future); the strange deals passed with Tactical Steel; the payments made by CAF to Member Associations; CAF’s predilection for cash transactions; and the compensation payments made out to CAF ExCo members. As covering all of the detail of all of these would be beyond the scope of the present piece, what follows is a summary of the salient points, those which seem the most worthy of attention for the formal investigation which must surely follow, and which also happen to be the most damaging for the current CAF administration in the run-up to the confederation’s next presidential election, which is due to take place in 2021.
These are the plain, hard facts. FIFA paid a total of $51m to CAF through its Forward Programme between 2015 and 2018, $24m of which had been disbursed by CAF by 31 December 2018. PwC reviewed and investigated a total of forty payments made by CAF during this period, which accounted for just over 40% of the total $24m spend, that is $10m. Their findings make for uneasy reading. Of these forty payments, fourteen (for a total of $4.6m) were found to have had ‘no or insufficient supporting documentation to determine the beneficiary, purpose and benefit for CAF’. Twenty-one (for a total of $3.6m) ‘were considered unusual or deemed high risk’. This leaves us with a mere five payments (out of a total of forty, for a combined value of $1.6m) which had ‘sufficient documentation’. It doesn’t seem that surprising that the auditors were led to conclude that ‘the traceability and accountability of [the FIFA Forward programme] funds [appears to be compromised]’.
The same lack of supervision and control of the use – or misuse – of CAF monies was also apparent in the subvention payments which were forwarded to the fifty-four Member Associations (MA) of the Confederation, a portion of which was sent directly to the heads of the MAs, for reasons which are not completely clear. CAF had not defined any protocol around the utilisation, legitimate or otherwise, of the $20,000 which had been paid directly into of each of the personal accounts of CAF’s 54 FA Presidents (with the exception of at least one of these, whose identity Josimar is aware of, but who doesn’t wish to be named). To quote PwC’s report, “specifically, CAF do not have procedures in place to identify the signatories and the beneficial owner of the bank account where they credit the subventions”.
Even more incredible is what happened to the $300,375 which had been earmarked for Musa Bility’s Liberian FA – and ended up being paid into ‘unidentified third-party accounts in Estonia and Poland’ for reasons which nobody has yet been able to fathom.
Josimar was already aware of these payments and had tried to identify their beneficiaries. The first, in Estonia, had been credited to one Lisa Oshoffa, whom it has not been possible to track down with absolute certainty; according to CAF, this payment was sent back, though they did not submit evidence of the reimbursement to PwC. The second and third payments, which Musa Bility had flagged out to CAF in 2018, were wired to a Warsaw-based company called ‘Rosenbaum Contemporary SP z.o.o’, which still features on the registry of extant Polish companies but doesn’t appear to be active, or have filed accounts, and from whom CAF has yet to recover its money.
This may be just the tip of the iceberg, judging by the number of payments to MAs which PwC deemed ‘high risk’ or which were simply not accounted for at all, as appears to be the case for five transfers to three separate MAs, worth just over $500,000 in total, made in 2017 and 2018, and of which the investigators could find no trace in CAF’s accounting books.
Then there is CAF’s fondness for using cash, actual cash – greenbacks.
It is one thing to have to rely on cash payments to MAs from countries in which the banking system is either unreliable or no longer functional, such as Libya and South Sudan; it is quite another to issue so-called ‘cheques for cash’ for considerable sums which are then disbursed out of hand – literally – without regard for basic accountability. It appears, for example, that a total of $215,000 in cash was transported in tranches of $10,000 (in order to circumvent Egyptian restrictions on the export of foreign currency) by various CAF staff to Addis Ababa, where the Confederation held its 39th General Assembly in March 2017 – and where, to the surprise of many, Ahmad Ahmad was elected president, putting a end to Issa Hayatou’s 29-year-long reign. This money was purportedly used to pay the indemnities and expenses of a vast array of people, including the spouses of CAF ExCo members. The PwC auditors noted that “no proper documents could be provided by CAF to support the individual payments”. Similarly, neither could CAF “provide sufficient documents to support the reimbursement of $50,377 [in cash]” to President Ahmad in June 2018.
Then there are the payments and ‘reimbursements’ to CAF ExCo members which, in PwC’s estimation, ‘majorly contribute to CAF’s administrative expenses’ (*), and for which, not so incidentally, CAF was unable to provide an overview, as CAF ‘does not have separate ExCo payroll data or [a] dedicated [General Ledger] to account for ExCo payments’. These have included generous per diems paid out to ExCo members spouses, gift, donations, ‘organising funeral, etc’. At which point it would be tempting to sense some weariness in that ‘etc’, especially in the light of one of the points raised in the conclusion of the auditors’ report: ‘the possibility exists that not all of the relevant information and documentation has been presented by PwC by FIFA and CAF’.
Josimar believes that such might have been the case when it comes to a ‘problem area’ to which PwC devotes no fewer than six of the nineteen pages of the ‘Detailed Findings’ section of its report, that is: the Tactical Steel dossier which we have already presented to our readers in great detail.
It is not surprising that the auditors should have ‘homed in’ on the dealings between CAF and the French company which belongs to Romuald Seillier, an old friend of one of President Ahmad’s closest advisors, the former Madagascar MP for Maintirano Loïc Gérand (*). That a recently-registered firm which had no previous experience whatsoever of supplying football equipment to anyone could possibly end up as CAF’s first-choice partner for all of the international competitions it organised in 2018 bordered on the incomprehensible.
There is nothing in the sections of the PwC report devoted to Tactical Steel which had not already been part of our exposé into the relationship between CAF on one hand, and the French company and its sister operations ES Pro Consulting SARL and ES Pro Consulting Ltd on the other. These three companies had been given the task by CAF to procure equipment (for a total of $4,4m) for a number of its competitions, namely the 2018 African Nations Championship (CHAN), the 2018 Women’s AFCON the 2018 Beach Soccer AFCON, as well as 60,000 footballs which were to be shipped to all fifty-four CAF MAs.
The attention of the auditors was caught by a number of highly unusual arrangements, starting with the commissioning of Tactical Steel in late December 2017 to procure and deliver the equipment needed for the 2018 CHAN, when an agreement had been signed only a matter of days beforehand by PUMA, and was then denounced by CAF, seemingly following a direct instruction by President Ahmad himself (or so correspondence seen by Josimar suggested). The internal CAF emails to which Josimar had access prior to the completion of PwC report also showed that messages related to Tactical Steel were routinely copied to what could be presumed to be President Ahmad’s private address. No contract was signed between CAF and the French company – whose turnover was virtually nil before it started receiving CAF’s orders – throughout their commercial relationship.
Another glaring irregularity was the sudden arrival on the scene of another company, ES Pro Consulting, which purported to act as a partner of TS, and which, according to the documentation Josimar has reviewed, issued its first invoices to CAF on 21 October 2018 for a total of $1,774,412 (*), to cover the procurement of the 60,000 footballs mentioned above. It should be noted that the registered address of ES Pro Consulting SARL in La Seyne sur Mer, France, is also that of ACTI, another of Mr Seillier’s network of companies, and that it had only been registered with the French authorities in March 2018.
That same day, 21 October 2018, CAF received another invoice, this time from a third company, ES Pro Consulting Ltd, based in Dubai – or so it said: this company had no legal existence yet and, as shown on the French Registry of Companies, would only be incorporated in July 2019. This did not prevent CAF from processing two payments for a total of $1,254,395 to the account of the Dubai-based ‘company’ on 4 November 2018. Strangely, the first of these payments, for £885,060, corresponded exactly to the amount which had been invoiced by the French arm of ES Pro Consulting two weeks previously. For some reason, this discrepancy does not seem to have attracted the auditors’ attention. Could it be that they did not have access to the documents which showed it?
To add to the mind-boggling complexity of the situation, $885,060 were then refunded to CAF by the Dubai-based payee on 11 December 2018; and, twenty days later, CAF processed a payment of $889,412 to the French account of ES Pro Consulting (*).
All in all, Tactical Steel itself had been paid a total of $3,170,597 by CAF since the first order was passed in December 2017, the two ES Pro entities receiving a combined $1,258,797. Josimar noticed that Tactical Steel’s own accounts for this period, which were filed with the French authorities on 17 October 2019, show a turnover of €2,966,515 – that is the almost exact equivalent of what it was paid by CAF, which appears to have been its sole client since the company started trading, despite the fact that Tactical Steel does not mention its relationship with the Confederation anywhere on its own website.
Whilst neglect and incompetence are not criminal offences, the PwC report indicated that ‘the refunds from Tactical Steel and ES Pro Consulting, UAE and the incorporation of ES Pro Consulting Ltd, UAE in July 2019 (with the same name and address as seen in the invoices sent to CAF) are highly suspicious’ and ‘could potentially indicate a kick back arrangement between parties involved and a case of tax evasion through the off-shore payments’.
It seems likely that the French investigators who have been working on this case since the spring of last year will attempt to get to the bottom of this matter. It is also hard to conceive how CAF – and FIFA – can now ignore the growing calls for a full disclosure of the findings of the PwC report they commissioned in the first place, and conduct their own investigation into the chaotic state of CAF finances and the role played by their own executives in the first place.
(*) It is unclear whether Tactical Steel and its sister companies supplied CAF with more football equipment beyond December 2018 or not, even if correspondence seen by Josimar suggests that the French company was considered to procure equipment for the 2019 AFCON. An internal email from the Deputy Secretary General office dated 27 March 2019 indicates that ‘A meeting was held today with Tactical Steel Company, in relation with AFCON balls and equipment’ and enjoins its recipients to submit information to the French company within 24 hours ‘in order to meet the previously estimated delivery date of June 1, 2019’. Josimar was not able to delve into the matter any further.
(*) Namely: Abdoulaye Diop (Mali; Chief of Staff of the Bureau of the Chairperson of the African Union (AU) Commission and former Minister of Foreign Affairs of Mali), Hossam El Shafei (Egypt; audit and anti-corruption expert), Janet Katisya (Kenya; Independent (FIFA) Ethics Committee investigatory chamber member), Martin Ngoga (Rwanda; Speaker of the East African Legislative Assembly (EALA), Independent (FIFA) Ethics Committee deputy chairman and former Rwanda Prosecutor-General) and Anin Yeboah (Ghana; Chief Justice of Ghana, FIFA Disciplinary Committee chairman and former Independent (FIFA) Ethics Committee adjudicatory chamber member).
(*) To illustrate this, the small sample of thirty-five payments by CAF to ExCo members reviewed by PwC amounted to over $1,1m. CAF was seemingly unable to provide PwC with the documentation required to establish the legitimacy of these payments.
(*) Gérand, who was discreetly relieved of his duties in November 2019, recently reappeared at the 2020 Futsal AFCON which was held in late January in Laayoune, in the disputed Saharan territory which is currently administered by Morocco. Whether it was in a private or public capacity is not entirely clear.
(*) We have seen no mention of either of these invoices in PwC’s report. Neither appears to have been paid by CAF in the end.
(*) Josimar had seen the invoices and bank transfer orders in question before PwC completed their audit.