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The dictator Jorge Ubico is overthrown and Guatemala enjoys what is known as the “ten years of spring” with two popularly elected and reformist presidents. The second president during this era, President Jacobo Arbenz (1951-1954), permits free expression, legalizes unions, allows diverse political parties, and initiates basic socioeconomic reforms. One key program is a moderate land reform effort aimed at alleviating the suffering of the rural poor, by which only plantations of very high acreage are affected, and only in cases where a certain percentage of such acreage is in fact lying unused. In these extreme cases, the unused portions of the land are not expropriated, but simply purchased by the Guatemalan government at the same value declared on the owner’s tax forms.The property is then resold at low rates to peasant cooperatives. To set an example, President Arbenz starts with his own lands. [Gleijeses, 1992; Woodward, 1999; Schlesinger and Kinzer, 1999]
Traveler Robert Scott tours the Chagos Archipelago and later writes of a thriving settlement at East Point on the island of Diego Garcia. “East Point has a look of a French coastal village miraculously transferred whole to this shore,” he writes. He recalls “the touches of old-fashioned ostentation in the chateau and its relation to the church… the neighborly way in which whitewashed stores, factories and workshops, shingled and thatched cottages, cluster round the green. The lamp standards along the roads and the parked motor lorries.” He notes how the islanders owned their own boats, fished, gardened and raised livestock. “Roots have been struck and a society peculiarly suited to the islands have [sic] been developed,” he observes. He also reports that there are three or four other villages on the island and numerous smaller hamlets. [Sunday Times (London), 9/21/1975]
The land redistribution collides with the interests of the United Fruit Company (UFCO), for whom 85 percent of the 550,000 acres they own are uncultivated. The US government demands extra compensation for the United Fruit Company over what has already been given. [Gleijeses, 1992; Woodward, 1999; Schlesinger and Kinzer, 1999]
The Ghanaian government, headed by Dr. Kwame Nkrumah, embarks on numerous infrastructure projects. The government begins building and improving roads, the rail system, schools, hospitals and industrial facilities. Nkrumah’s popularity increases immensely as economic conditions begin to improve. [West Africa Review, 1999; Encyclopaedia Britannica, 2004]
The midfielder George Eastham leaves Newcastle United and takes work outside football. Eastham has made several transfer requests, but they have been rejected by the club and his contract with it has expired. However, due to the retain-and-transfer system currently in operation, Eastham cannot simply sign for another club, as Newscastle holds his registration. Newcastle will relent and sell Eastham to Arsenal for £47,000 in November. However, at the urging of the Professional Footballers’ Association, Eastham will launch a legal action against Newcastle alleging the retain-and-transfer system is unlawful (see Summer 1963). [McArdle, 2000]
Following pressure from players and the threat of a strike, the English Football League agrees to abolish the maximum wage that players can be paid. The wage is substantially below what the market rate would be, and in recent years there have been numerous cases of under-the-table payments being made to players. Immediately after the abolition, Fulham announces it intends to pay its star player, Johnny Haynes, £100 per week. This is five times more than the previous maximum wage and seven times more than the current average manual wage. [McArdle, 2000]
Ghanaian President Kwame Nkrumah introduces his Soviet-inspired Seven-Year Plan to establish state-owned factories and public authorities. The projects are financed by foreign loans and taxes, saddling the country with debt and stifling certain sectors of the economy. Cocoa production in Ghana drops dramatically when farmers, whose income has been reduced by the government marketing board’s price controls, begin smuggling cocoa to neighboring countries or switch to other crops. As a result, Ghana ceases to be the world’s largest cocoa producer. Burdened with debt, the Ghanaian economy contracts, undermining the Nkrumah government’s popularity. The downturn brings widespread unrest which is exacerbated by criticisms that Nkrumah is focusing too much on the promotion of his vision of African-unity (see 1960-1966). [Yergin and Stanislaw, 1998; Encyclopaedia Britannica, 2004]
George Eastham. [Source: BBC]Former Newcastle United midfielder George Eastham wins the Eastham v Newcastle United court case against the club (see June 1960). The case significantly changes the “retain-and-transfer” system that bound footballers to their clubs even when there was no contract between them. Essentially, the judge, Mr. Justice Wilberforce, finds that the system is an unreasonable restraint of trade and goes far beyond what is necessary to ensure clubs are able to protect their legitimate interests. The Football League argues that the retention provisions are necessary to stop the richer clubs signing all the best players, which helps maintain interest in the spectator sport. However, Wilberforce finds that this argument does not justify the mechanisms used by clubs to retain players and that it is unfair that players cannot get a job with a different club at a time when they are no longer employees of their old club and are not being paid by it. “The system is an employers’ system,” Wilberforce comments, “set up in an industry where the employers have succeeded in establishing a united monolithic front all over the world, and where it is clear that for the purpose of negotiation the employers are vastly more strongly organised than the employees. No doubt the employers all over the world consider this system to be a good system, but this does not prevent the court from considering whether it goes further than is reasonably necessary to protect their legitimate interest.” Despite Eastham’s victory, only the “retain” element of the retain-and-transfer system is abolished and a new transfer system is constructed. Every player’s contract is now a matter of free negotiation between him and the club, without the binds of the maximum wage (see 1961). Once a contract has expired, the club can only renew it on terms that are no less advantageous to the player than the old ones had been, and the new contract has to last for at least the same time period (unless both parties agree otherwise). If the club is unwilling to do this, the player is entitled to a free transfer; if the club decides to get rid of the player, the original contract will continue to run until he is transferred. Disputes will be referred to the League Management Committee and then to an independent tribunal incorporating league and players’ union representatives. [McArdle, 2000]
Brazilian President Joao Goulart nationalizes oil, expropriates unused land, and passes a law limiting the amount of profits multinationals can send out of the country. [Counterspy, 4/1979; Keen, 1992, pp. 358]
Ghanaian President Kwame Nkrumah rejects IMF and World Bank recommendations to implement a economic development strategy based on non-inflationary borrowing and reduced government spending. Ghana’s refusal to implement these reforms makes it ineligible to receive loans from the two institutions. Nkrumah continues with a policy aimed at diversifying the Ghanaian economy through import substituting industrialization (ISI). [BBC, 11/4/1997; West Africa Review, 1999; Encyclopaedia Britannica, 2004]
Mount Weather, a secret underground government installation located about 50 miles west of Washington, DC (see 1950-1962), maintains a “Civil Crisis Management” program aimed at monitoring and managing civil emergencies, such as resource shortages, labor strikes, and political uprisings. The installation is a key component of the highly classified Continuity of Government (COG) program, which is meant to ensure the survival of the federal government in times of national emergency. “We try to monitor situations and get them before they become emergencies,” says Daniel J. Cronin, assistant director of the Federal Preparedness Agency (FPA), which is responsible for managing parts of the facility and program. As part of the program, Mount Weather collects and stores data regarding military and government installations, communications, transportation, energy and power, food supplies, manufacturing, wholesale and retail services, manpower, medical and educational institutions, sanitary facilities, population, and stockpiles of essential resources. The Progressive reports in 1976, “At the heart of the Civil Crisis Management program are two complicated computer systems called the ‘Contingency Impact Analysis System’ (CIAS) and the ‘Resource Interruption Monitoring System’ (RIMS).” The complex systems apparently interpret crisis situations, predict future outcomes, and provide possible solutions for emergencies. According to a 1974 FPA report obtained by The Progressive, CIAS and RIMS are used in close cooperation with private US companies “to develop a range of standby options, alternative programs… to control the economy in a crisis situation.” The Civil Crisis Management program is put on standby during several national anti-war demonstrations and inner city riots in 1967 and 1968. The program is activated during a 1973 Penn Railroad strike and is put to use again in 1974 when a strike by independent truckers threatens food and fuel shipments. By March 1976, the Civil Crisis Management program is being used on a daily basis to monitor potential emergencies. Senator John Tunney (D-CA) will claim in 1975 that Mount Weather has collected and stored data on at least 100,000 US citizens (see September 9, 1975). [Progressive, 3/1976]
The Organization of Petroleum Exporting Countries (OPEC) announces a planned meeting set for September 22, 1971 to call for a larger share of assets, profits, and management of oil companies operating in its countries. The relevant oil companies refuse its demands. OPEC specifically states in its announcement that it wants to “take immediate steps toward the implementation of the principle participation in the existing oil concessions.” [New York Times, 8/14/1971]
President Nixon officially announces the end of the gold standard system of monetary policy for international exchange of gold deposits in an evening address to the country. Nixon’s move to sever the link between the dollar’s value and gold reserves effectively ends the Breton Woods system of monetary exchange and changes the dollar to a “floating” currency whose value is to be determined largely by market influences. Nixon’s decision results from a run on gold exchanges and rampant speculation in gold markets in Europe, and he changes the US monetary policy after receiving advice from Treasury Secretary John Connally, Under Secretary for Monetary Affairs Paul A. Volcker, and others in a special working group. The dollar becomes a fiat currency, causing a brief international panic before other countries follow suit and also allow their currencies to “float.” [New York Times, 8/16/1971, pp. 1]
On a two day tour of Europe stopping in London and Paris to meet with finance ministers, Undersecretary of the Treasury for Monetary Affairs Paul A. Volcker meets with the finance ministers of both Britain and France to reassure their governments that the end of the gold standard is in the best interests of both governments and maintain that the United States is in no position to prevent other governments from “floating” their currencies. [New York Times, 8/18/1971]
James Bath, who has some unexplained ties to George W. Bush, opens an aircraft brokerage firm. Investors for the firm include Texas Governor John Connally, alleged Bank of Credit and Commerce International (BCCI) Saudi front man Ghaith Pharaon, and Saudi banker Khalid bin Mahfouz, a major BCCI shareholder and husband to one of Osama bin Laden’s sisters. Time magazine will later report that “Bath’s penchant for secrecy has been frustrated by a feud with a former business partner, Bill White, who claims that Bath was a front man for CIA business operations. White contends that Bath has used his connections to the Bush family and Texas Senator Lloyd Bentsen to cloak the development of a lucrative array of offshore companies designed to move money and airplanes between the Middle East and Texas.” Bath will deny White’s claims, saying, “I am not a member of the CIA or any other intelligence agency.” However, he will acknowledge knowing Bush from serving with him during his time in the Texas Air National Guard. But, as Time will note: “Even so, Bath, while insisting he is nothing more than a ‘small, obscure businessman,’ is associated with some of the most powerful figures in the US and Middle East. Private records show, and associates confirm, that Bath is a ‘representative’ for several immensely wealthy Saudi families, an unusual position for any small-time Texas businessman.” As Time will note, “The firm that incorporated Bath’s companies in the Cayman Islands is the same one that set up a money-collecting front company for Oliver North in the Iran-Contra affair.” [Time, 6/24/2001] There will be further evidence linking both Bath and bin Mahfouz to Bush (see June 4, 1992 and 1988).
President Jimmy Carter signs the Depository Institutions Deregulation and Monetary Control Bill into law. Carter says the bill will “help control inflation, strengthen our financial institutions and help small savers.” Among the bill’s main provisions are raising of ceilings on the interest paid to small savers and a substantial enhancement to the monetary control powers of the nation’s central bank, the Federal Reserve System. The main provisions of the law:
Permanently overrides state-imposed ceilings on mortgage rates unless states act within three years to reenact them.
Wipes out for three years interest rate limits on agricultural and business loans of more than $25,000.
Increases to 15 percent from 12 percent the maximum interest rate on credit union loans, with even higher rates possible for periods up to 18 months.
Continues use of credit union share drafts, bank’s automatic transfer accounts and remote service units.
Simplifies truth-in-lending laws.
Requires lenders to repay consumers for overcharges.
Authorizes federal savings and loan associations to expand their consumer loan and credit card operations and allows them to offer trust services.
Gives the Federal Reserve a more effective reach by establishing a universal and uniform system of banking reserves. Over an eight year period all depository institutions, including savings and loan associations and mutual savings banks, will be encouraged to post reserves with their chapter Federal Reserve banks which will be 12 percent of all transactions as opposed to the tiered structure at 16 1/4 percent, leaving those that left the Federal Reserve System prior to the enactment of this law at a competitive disadvantage until they themsleves register their funds with the Federal Reserve. [New York Times, 4/1/1980, pp. 1]
Star French playmaker Michel Platini signs for Juventus. Platini will go on to make 147 appearances for the Italian football giants, and will lead them to victory in the European Cup in 1985 (see May 29, 1985). [Independent, 4/5/2005]
Hernan Siles Zuazo is defeated in Bolivian elections by Paz Estenssoro, who promptly moves to curb the extremely high inflation levels, which at one point reach 35,000 percent annually. He imposes austerity measures under pressure from the International Monetary Fund (IMF) in exchange for temporary relief of Bolivia’s large foreign debt. [Library of Congress, 1991; Green Left Daily, 7/24/2002]
Thirty-nine people die at the European Cup final between Juventus and Liverpool, played at the Heysel Stadium in Brussels, Belgium. [Independent, 4/5/2005] The deaths occur as a group of Liverpool supporters break through a thin line of police at the aging stadium and advance towards the Juventus section. As the Italians try to escape, a retaining wall in one of their sectors collapses and many fans are crushed or trampled to death. [BBC, 5/29/2000] The game is won by Juventus, after playmaker Michel Platini scores from a wrongly awarded penalty. Platini will later say that when he discovered the number of Juventus fans who had lost their lives, “Something inside me died,” but add that despite the deaths, the game, which gave Juventus its first European Cup triumph, “was not meaningless.” He will also say that the referee’s mistake in awarding the penalty was understandable: “If I’d been the referee I’d have given it too. [Juventus striker Zbigniew] Boniek was 60 meters away and he was going too quickly.” [Independent, 4/5/2005]
FC Barcelona signs future superstar Lionel Messi, currently a 13-year-old schoolboy, from Newell’s Old Boys, a football club based in Rosario, Argentina. Messi has growth hormone deficiency; due to Argentina’s economic crisis, neither the country’s government nor Newell’s Old Boys can afford to pay for his treatment. Barcelona offers to pay for the medicine, which the club’s doctors deem necessary. The signing is made by Carles Rexach, Barcelona’s sporting director, when Messi does well after being flown to Spain for a trial. [Daily Telegraph, 4/28/2009]
Since 1985, US Congress has required that sanctions be imposed on Pakistan if there is evidence that Pakistan is developing a nuclear weapons program (see August 1985-October 1990). With the Soviet-Afghan war over, President Bush finally acknowledges widespread evidence of Pakistan’s nuclear program and cuts off all US military and economic aid to Pakistan. However, it appears some military aid will still get through. For instance, in 1992, Senator John Glenn will write, “Shockingly, testimony by Secretary of State James Baker this year revealed that the administration has continued to allow Pakistan to purchase munitions through commercial transactions, despite the explicit, unambiguous intent of Congress that ‘no military equipment or technology shall be sold or transferred to Pakistan.’” [International Herald Tribune, 6/26/1992] These sanctions will be officially lifted a short time after 9/11.
John Meriwether, formerly of Salomon Brothers, starts the process of collecting talented individuals to form a team to head a new hedge fund based on arbitrage deals surrounding government bonds. The “new” model will pull from George Soros’ Quantum fund tactics and high-level academic consultants to achieve possible gains in derivatives off fluctuations in the valuation of the government bonds. The fund will start with a $2-3 billion dollar investment fund, which, from its inception, will be managed by “some of Wall Street’s best traders and some of academia’s most influential minds.” [New York Times, 9/15/1993]
In Haiti, International development agencies implement short-term, labor-intensive job programs, focused primarily on road construction. According to agronomists interviewed in late summer of 1995, the programs are undermining local agricultural production and long term sustainable development programs. “In the middle of planting season, a large number of peasant farmers in the northeastern town of Vallieres abandoned their land to begin working in the areas with one of these projects,” agronomist Harry Noel explains. And in Artibonite Valley, revenues from levies on the irrigation pumps dramatically decrease when the job programs siphon off its labor supply. “Efforts over the years to create communally-managed irrigation systems have failed in just one season because of the job programs,” explains Volny Paultre, agronomist and consultant to the UN’s Food and Agricultural Organization (FAO). [Inter Press Service, 9/4/1995]
After the Taliban takes control of the area around Kandahar, Afghanistan, in September 1994, prominent Persian Gulf state officials and businessmen, including high-ranking United Arab Emirates and Saudi government ministers such as Saudi Intelligence Minister Prince Turki al-Faisal, frequently secretly fly into Kandahar on state and private jets for bird hunting expeditions. [Los Angeles Times, 11/18/2001] General Wayne Downing, who will later serve as one of President Bush’s counterterrorism “tsars,” says: “They would go out and see Osama, spend some time with him, talk with him, you know, live out in the tents, eat the simple food, engage in falconing, some other pursuits, ride horses.” [MSNBC, 9/5/2003] One noted visitor is Sheikh Mohammed bin Rashid Al Maktoum, United Arab Emirates (UAE) Defense Minister and Crown Prince for the emirate of Dubai. Another is Sheikh Zayed bin Sultan Al Nahyan, ruler of the UAE. While there, some develop ties to the Taliban and al-Qaeda and give them money. Both Osama bin Laden and Taliban ruler Mullah Omar sometimes participate in these hunting trips. Al Maktoum allegedly hunts with bin Laden once in 1999 (see 1999). [Los Angeles Times, 11/18/2001; Farah and Braun, 2007, pp. 120-121] On one occasion in 1999, the US will decide not to attack bin Laden with a missile because he’s bird hunting with important members of the UAE’s royal family (see February 11, 1999). US and Afghan officials suspect that the dignitaries’ outbound jets may also have smuggle out al-Qaeda and Taliban personnel. [Los Angeles Times, 11/18/2001] The CIA also develops suspicions that many royals use the hunting trips as cover to fly out of Afghanistan with large amounts of heroin, but they are unable to prove it (see 1998).
Haitian President Jean-Bertrand Aristide announces a doubling of the minimum wage effective June 1, 1995 from 18 gourdes to 36 gourdes per day. Articles 1 and 2 of his decree reads, “Beginning June 1, 1995, the minimum wage paid in industrial, commercial, and agricultural businesses is fixed at 36 gourdes per 8-hour day… Where the employee works per piece or per task, the price paid for a unit of production (per piece, per dozen, per gross, per meter, etc.) must allow the employee who works 8 hours to earn at least the minimum salary.” [Verhoogen, 1/1996]
Arsenal pays £7.5m to sign Dutch striker Dennis Bergkamp from Internazionale. The fee is three times the club’s previous record and the move ends Bergkamp’s unhappy time in Italy, where he scored just 11 goals in 54 Serie A games. Bergkamp is reportedly to be paid £25,000 a week, making him the highest paid player in Britain. [Independent, 6/21/1995] Bergkamp’s contract is apparently the first for a British footballer to include a provision that part of the money Arsenal pays him is for image rights. This money is paid into an account in an offshore tax haven and taxed at a lower rate than the salary for playing football. David Platt, also signed by Arsenal around this time (see July 10, 1995), has a similar provision in his contract. [SportsPro, 2/25/2011] The Inland Revenue will challenge the image rights payments, but will be unsuccesful (see April 2000). However, it will later win a significant settlement from British football clubs (see (March 2011)).
Arsenal pays £4.75m to sign veteran England international David Platt from the Italian club Sampdoria. [Independent, 7/11/1995] Platt’s contract is reportedly the second for a British footballer to include a provision that part of the money Arsenal pays him is for image rights. This money is paid into an account in an offshore tax haven and taxed at a lower rate than the salary for playing football. Dennis Bergkamp, also signed by Arsenal around this time (see June 20, 1995), has a similar provision in his contract. [SportsPro, 2/25/2011] The Inland Revenue will challenge the image rights payments, but will be unsuccesful (see April 2000). However, it will later win a significant settlement from British football clubs (see (March 2011)).
Haitian Prime Minister Smarck Michel begins a 10-day trip aimed at “unlocking about [$1 billion] in foreign aid stalled after a political row in Haiti about planned privatization.” He begins in New York where he meets with commercial bankers. Afterwards, in a two-hour press conference with the Haitian press, he explains to his Haitian viewers that the World Bank, International Monetary Fund (IMF) and the Inter-American Development Bank (IDB) are holding back $150 million until Haiti can “fulfill the conditions which structural adjustment demands,” and warns that there will be “dire consequences” if the Haitian people continue to resist privatization and other neoliberal reforms. [Haiti Progres, 9/13/1995]
William Flanagan. [Source: US Department of Defense]The Naval War College in Newport, Rhode Island, and Wall Street bond firm Cantor Fitzgerald hold three “economic security exercises,” in which the participants consider, among other scenarios, terrorists attacking the US financial community with bombings using aircraft. The exercises are intended to explore the link between national security and economic issues. [Cantor Fitzgerald, 4/29/1999; Barnett and Hayes, 5/18/2001; Foreign Policy, 9/12/2011] They bring together “key figures from the national security, governmental, and financial communities to explore and test the relationships between international events, national security, and financial markets,” according to a report prepared by the Naval War College. [Hayes, 6/1998, pp. 1 ] The exercises are all held in New York. [Barnett and Hayes, 5/18/2001] The first one takes place on the top floor of one of the Twin Towers of the World Trade Center, where Cantor Fitzgerald has its main offices. [Washington Post, 3/6/2002; Associated Press, 1/19/2011] Whether the second and third exercises also take place at the WTC is unstated.
1997 Exercise Considers Attacks on the US Financial Community - The first exercise, held in October 1997, is based around two related scenarios that would take place in February and March 2000, in the middle of the US presidential primary season. [Journal of Commerce, 12/22/1997; Hayes, 6/1998, pp. 1 ] The first scenario involves a crisis “spilling out of conflict in the oil fields of the Middle East,” which is “followed by terrorist assaults against oil fields in the Persian Gulf and US military installations,” according to Fortune magazine. America’s access to Persian Gulf oil supplies is threatened and there is a disruption of the “sea lines of communication.” The second scenario involves a cyber-terrorist attack on Wall Street, in which information warfare attacks are launched against the critical infrastructures underpinning America’s business and financial communities. The computer networks of US financial institutions and power grids in the New York area are targeted, with the intention of inflicting psychological and economic damage on the US. [Journal of Commerce, 12/22/1997; Barnett and Hayes, 5/18/2001; Fortune, 10/8/2001] Furthermore, according to David Rothkopf, managing director of Kissinger Associates, who attends the exercise, participants consider “a variety of potential ways terrorists might target the US financial community, including bombings using trucks or aircraft.” [Foreign Policy, 9/12/2011]
Senior Government Officials Attend the 1997 Exercise - The exercise addresses the potential vulnerability of the US to “asymmetric warfare,” which one participant will later describe as warfare in which “a little guy with the right technology can confront the big giant in a devastating way.” [Journal of Commerce, 12/22/1997] In the simulated scenarios, according to Fortune, “the terrorists succeeded spectacularly.” [Fortune, 10/8/2001] Those attending the exercise include Richard Clarke, President Clinton’s special assistant for global affairs, Rand Beers, special assistant to the president and senior director for intelligence programs, and Anthony Lake, the former national security adviser. [Journal of Commerce, 12/22/1997; Rothkopf, 2014, pp. 266]
1998 Exercise Involves a Rebellion in Indonesia - The second exercise, held on June 1, 1998, focuses on a hypothetical financial crisis combined with a sea lines of communication disruption in Asia, involving Indonesia. The scenario, which would take place around late 1998 to early 1999, involves opposition forces mounting successful rebellions in parts of Indonesia and leaders of the opposition movement declaring themselves Indonesia’s legitimate government. The US military intervenes in response to the crisis. Subsequently, “malevolent insiders” launch coordinated attacks against selected financial institutions in Singapore. These are followed by cyberattacks against some financial institutions in Japan. [Hayes, 6/1998 ; Barnett and Hayes, 5/18/2001]
1999 Exercise Is Based around the Y2K Computer Problem - The third exercise, held on May 3, 1999, focuses on the possible global financial consequences of a serious Year 2000 computer problem, caused by computers being unable to properly read dates at the start of the new millennium, as well as “related events surrounding the millennial date change event.” [New York Times, 2/9/1999; Cantor Fitzgerald, 4/29/1999; Barnett and Hayes, 5/18/2001]
Cantor Fitzgerald Requested the 'War Games' in the Mid-1990s - The three economic security exercises are the “brainchild” of retired Admiral William Flanagan, former commander in chief of the Navy’s Atlantic Fleet, who is now the senior managing director of Cantor Fitzgerald. [Wall Street Journal, 5/5/1997; Proceedings, 10/2001; Virginian-Pilot, 9/11/2006] According to Thomas Barnett, a senior strategic researcher at the Naval War College, they have come about because Cantor Fitzgerald went to the Naval War College in the mid-1990s and said it would like to run “economic-oriented war games” with the college. [Institute of International Studies, 3/8/2005] Several senior members of Cantor Fitzgerald have close professional ties with the US Navy, so the collaboration between the company and the Naval War College is a “natural partnership,” according to a report prepared by the college. [Hayes, 6/1998, pp. 1 ]
Exercise Scenarios Are 'Amazingly Prescient' - The fact that the exercises explore “such real-world scenarios as a terrorist strike on Wall Street, war in the Persian Gulf, and a financial crisis in Asia,” Barnett will comment after 9/11, “proved amazingly prescient.” [Barnett, 2004, pp. 197] “September 11 was crystallizing,” he will say. “We all just went, ‘This is what we were talking about: a peacetime, war-like event that’s so profound it forces us to rethink everything.’” [Esquire, 12/2002] The exercises will evolve into something called the “New Rule Sets Project,” which is a research partnership between the Naval War College and Cantor Fitzgerald that aims to explore how globalization is altering America’s definitions of national security (see May 1, 2000-June 4, 2001). [Barnett, 2004, pp. 46; Institute of International Studies, 3/8/2005] Cantor Fitzgerald will suffer the greatest single loss by any company on 9/11, with 658 of its employees dying in the North Tower of the WTC. [Business Week, 9/10/2006]
Aguas del Tunari, a subsidiary of the privately-owned US corporation Bechtel through International Water, purchases a 40-year concession to operate the public water system of Cochabamba, Bolivia after the country is pressured by the World Bank and IMF to privatize its water services in return for a $25 million loan. It had been an apparent easy win for Bechtel, whose bid was the only one considered for the contract. Despite promises that the privatization of Cochabamba’s water would not send prices skyrocketing, that is exactly what happens. In December of 1999, Aguas del Tunari doubles the price of water and as a result, water bills in some households jump to over $20 per month. This is devastating to Cochabamba’s poor, many of whom earn monthly wages of about $67. But the privatization scheme is not limited to just the privatization of water services. The World Bank also pressures the Bolivian government to pass several other laws protecting the interests of the water company. One law pegs the cost of water to the US dollar in order to eliminate the company’s exposure to changes in the Bolivian currency’s exchange rate. Another law grants water privateers exclusive rights to Bolivia’s water. Now, Bolivians would have to pay for every drop of water they use, even if it comes from their own wells or is rainwater they collect on their own property. And to protect Bolivia’s creditors from the risk of Bolivia defaulting on the loan, the World Bank prohibits the government from using a portion of the aid money to help the poor pay for their water. Angered by the water privatization, Bolivians take to the streets. Hundreds of demonstrators are injured and one youth is killed during the protests. Finally, in April 1999, the company leaves Bolivia. Bechtel will later attempt to sue the Bolivian government for $25 million for breach of contract. [Z Magazine, 4/24/2000; PBS Frontline, 6/2002; Pacific News Service, 11/11/2002; Democracy Center, 9/15/2005]
The Inland Revenue loses a test case against Arsenal and two of its players, Dennis Bergkamp and David Platt, over the use of image rights provisions in playing contracts to avoid tax. Bergkamp (see June 20, 1995) and Platt (see July 10, 1995) receive a portion of the money Arsenal pays them not as salary, but as compensation for the use of their image rights. The Inland Revenue claims to the Tax Special Commissioners hearing the case that this is a “smokescreen” for paying them money offshore to avoid tax, and that Arsenal, Platt, and Bergkamp should be subjected to income tax and national insurance contributions via Arsenal’s payroll. However, the commissioners decide that the payments are legitimately made in return for allowing Arsenal to exploit the players’ images, a purpose different to playing football. [SportsPro, 2/25/2011] The making of payments to footballers for image rights will grow in future years, although the British tax authorities will win a settlement for the scheme’s over-use in 2011 (see (March 2011)).
The Spanish football club Real Madrid sells its training ground to the city council for €480m to wipe out a €290m debt. Under the agreement, the football club will relocate to a new training complex on the outskirts of the city by 2004. The council plans to construct four huge office blocks on the site of the current training ground, as well as a new 20,000-capacity sports pavilion for the city’s 2012 Olympic bid. Real president Florentino Perez says the deal will lift a major burden that has been hanging over the club. “I have been working for this from the very day I became president,” says Perez. “This is very important for Real Madrid because we have removed a terrible burden and will soon have a new training ground which will be even better than AC Milan’s Milanello training complex. From now on we can live without anxiety or financial difficulties. Real Madrid has not only to be a sporting leader, it must also be a financial leader too.” [BreakingNews(.ie), 5/8/2001] Real will use the proceeds of the sale to buy top players such as Zinedine Zidane, Luis Figo, Ronaldo, and David Beckham, but the transaction will be investigated by the EU (see March 3, 2004). However, Real will not be forced to repay any of the money (see (November 9, 2004)).
At Boston’s Logan Airport, from which Flight 11 and Flight 175 took off, directors learn that a plane thought to be from there has hit the World Trade Center, and another from there is missing. John Duval, the airport’s deputy director of operations, is at his desk in the executive aviation office, when his son calls and informs him of the first plane hitting the WTC. A duty manager then calls, saying he has been on the phone with the FAA control tower at the airport. The manager tells Duval he has been informed that, as well as the plane that hit the WTC, “Another one is missing,” and, “They think the two planes came from here.” Duval immediately calls Ed Freni, who is Logan’s director of aviation operations. Duval passes on the news of the WTC crash and the other information from his duty manager. The two men arrange to meet in five minutes time at the Massachusetts Port Authority (Massport) aviation office on the 18th floor of the FAA control tower at the airport. [Murphy, 2006, pp. 30-33]
Ed Freni. [Source: Associated Press]As he learns of the two plane crashes in New York, a director at Boston’s Logan Airport—from where the two crashed aircraft took off—contacts the airlines to request the passenger manifests for these flights. At around 9:00 a.m., Ed Freni, who is Logan’s director of aviation operations, has just been informed that a plane—believed to be from his airport—has hit the World Trade Center, and another plane from the airport is missing (see (8:50 a.m.-9:00 a.m.) September 11, 2001). He calls the American Airlines station in Logan’s Terminal B. A friend of his there tells him they are concerned about American Airlines Flight 11. The friend says Amy Sweeney, one of its flight attendants, called from the air (see 8:22 a.m.-8:24 a.m. September 11, 2001), said they were flying low over Manhattan, and then her line went dead (see (8:44 a.m.) September 11, 2001). Freni asks to be faxed a copy of the manifest for Flight 11. The manifest holds the names of passengers on an aircraft by seat number. If there is an accident, it allows officials to begin contacting next of kin. At 9:05, he arrives at the Massachusetts Port Authority (Massport) aviation office on the 18th floor of the FAA control tower at Logan, where he has arranged to meet John Duval, the airport’s deputy director of operations. Freni sees on television the footage of the South Tower being hit just two minutes earlier. He calls his contacts at various airlines at Logan and learns that United Airlines is concerned about its Flight 175. He asks United to fax him the manifest for this plane. According to author Tom Murphy, Freni will receive the manifests for Flight 11 and Flight 175 at 9:30 a.m. (see 9:30 a.m. September 11, 2001). Meanwhile, Duval is talking with FAA officials further up in the control tower. They tell him: “United 175 came from here. We lost contact at 8:43.” [Murphy, 2006, pp. 33-35]
The Carlyle Group is a large private-equity investment firm, closely associated with officials of the Bush and Reagan administrations, and has considerable ties to Saudi oil money, including ties to the bin Laden family. This morning it is holding its annual investor conference at the Ritz Carlton hotel in Washington, DC. Among the guests of honor is investor Shafig bin Laden, brother of Osama bin Laden. [Observer, 6/16/2002; London Times, 5/8/2003] Former President George H. W. Bush, who makes speeches on behalf of the Carlyle Group and is also senior adviser to its Asian Partners fund [Wall Street Journal, 9/27/2001] , attended the conference the previous day, but is not there today (see (8:00 a.m.) September 11, 2001). [Washington Post, 3/16/2003]
Craig Parfitt. [Source: Publicity photo]The United Airlines dispatch operations manager speaks with the American Airlines dispatch operations manager, and they discuss the two plane crashes in New York. [9/11 Commission, 8/26/2004, pp. 25] Mike Barber, the United dispatch manager, is at the airline’s System Operations Control (SOC) center, just outside Chicago, while Craig Parfitt, the American dispatch manager, is at that airline’s SOC center in Fort Worth, Texas. [Wall Street Journal, 10/15/2001] At 9:10, United Airlines is aware a second aircraft has hit the World Trade Center, but it does not realize this is one of its own flights. During their call, Parfitt says to Barber he believes both the aircraft that hit the WTC belonged to American Airlines. (At 9:08 a.m., officials at American Airlines’ SOC mistakenly concluded the second aircraft to hit the WTC might have been Flight 77 (see 9:08 a.m. September 11, 2001).) But Barber says he is increasingly “confident” that the second plane was United Airlines Flight 175. “In slow motion and enlarged images of the second impact on CNN, he could see that the airplane did not have the shiny metallic color of American jets.” By 9:20, according to the 9/11 Commission, although Barber believes the second crashed plane was Flight 175, the identity of this aircraft is “still unconfirmed.” [9/11 Commission, 8/26/2004, pp. 25-26]
Damage to the southwest corner of WTC 7. [Source: Arquelio Galarza]World Trade Center Building 7 (WTC 7) suffers some damage, caused by debris from the collapse of the north WTC tower, according to later official reports. [Federal Emergency Management Agency, 5/1/2002, pp. 5-16; National Institute of Standards and Technology, 11/2008, pp. 16]
WTC 7 Undamaged by South Tower Collapse - WTC 7 is a 47-story office building located 370 feet north of the North Tower (WTC 1). In the final report of its investigation into WTC 7’s collapse, published in November 2008 (see November 20, 2008), the National Institute of Standards and Technology (NIST) will state that although a few windows on the lower floors of WTC 7’s south face were broken when the South Tower (WTC 2) collapsed at 9:59 a.m. (see 9:59 a.m. September 11, 2001), “None of the large pieces of debris from WTC 2 hit WTC 7, because of the large distance between the two buildings,” and there is “no evidence of structural damage to WTC 7” as a result of the South Tower’s collapse.
Debris Reportedly Damages Exterior Columns - However, when the North Tower collapses (see 10:28 a.m. September 11, 2001), some fragments of debris are “forcibly ejected” from it, and travel “distances up to hundreds of meters.” According to NIST, pieces of this debris “hit WTC 7, severing six columns on floors 7 through 17 on the south face and one column on the west face near the southwest corner.” NIST will add that the debris also causes “structural damage between floor 44 and the roof,” and breaks a large number of windows on WTC 7’s south face.
Building Core Undamaged - However, NIST will state, based on “photographic evidence, witness accounts, and engineering judgment, it is likely that the structural damage (steel and floor slabs) did not penetrate beyond the perimeter of the building core. At the southwest corner, the structural damage extended only about one-third of the distance from the exterior wall to the building core.” NIST will comment, “Compared to the airplane impact damage to the WTC towers, there was relatively little damage to the interior of WTC 7.” There is also “no superficial or structural damage” to WTC 7’s north and east faces. And the sprayed fire resistive material that has been applied to the building’s steel columns, girders, and beams is only damaged in the “immediate vicinity of the WTC 1 debris impact.” NIST will admit, however, that there are “uncertainties” in its accounting of the events leading up to the collapse of WTC 7, because “the remains of all the WTC buildings were disposed of before Congressional action and funding was available for [its] investigation [of the WTC collapses] to begin” (see Shortly After September 11, 2001 and September 12-October 2001). [National Institute of Standards and Technology, 8/21/2008; National Institute of Standards and Technology, 11/2008, pp. 15-16]
FEMA Describes WTC 7 Damage - According to an earlier report on the collapse of WTC 7, published by the Federal Emergency Management Agency (FEMA) in May 2002 (see May 1, 2002), at that time, the “extent and severity of the resulting damage to WTC 7” when the North Tower collapses “are currently unknown.” But based on “photographic evidence and eyewitness accounts,” it is “assumed that the south side of the building was damaged to some degree.” FEMA’s report will state: “It does not appear that the collapse of WTC 1 affected the roof, or the east, west, and north elevations of WTC 7 in any significant way. However, there was damage to the southwest corner of WTC 7 at approximately floors 8 to 20, 24, 25, and 39 to 46.” The report will add: “According to firefighters’ eyewitness accounts from outside of the building, approximately floors 8-18 were damaged to some degree. Other eyewitness accounts relate that there was additional damage to the south elevation.” [Federal Emergency Management Agency, 5/1/2002, pp. 5-16, 5-20]
Structural Damage Not Responsible for Collapse - WTC 7 will collapse at 5:20 p.m. this afternoon (see (5:20 p.m.) September 11, 2001). [National Institute of Standards and Technology, 8/21/2008] However, NIST will conclude that the structural damage the building suffers plays no role in causing it to come down. NIST will state, “Other than initiating the fires in WTC 7, the damage from the debris from WTC 1 had little effect on initiating the collapse of WTC 7.” [National Institute of Standards and Technology, 11/2008, pp. xxxvii] WTC 7 suffers fires on some floors, which are reportedly initiated by debris from the collapse of the North Tower (see (10:28 a.m.-5:20 p.m.) September 11, 2001). According to NIST, it is these fires, “rather than the structural damage that resulted from the impacts” of debris, which “initiated the building’s collapse.” [National Institute of Standards and Technology, 8/21/2008]
World Trade Center Building 7 (WTC 7) suffers fires on several floors, some of which last until 5:20 p.m., when the building collapses. [National Institute of Standards and Technology, 8/21/2008] WTC 7 is a 47-story office building located just north of the Twin Towers. It is damaged when the north WTC tower (WTC 1) collapses at 10:28 a.m. (see 10:28 a.m. September 11, 2001). [National Institute of Standards and Technology, 11/2008, pp. 2, 16]
Fires Started by Collapse Debris - Two official reports on the collapse of WTC 7 will tentatively conclude that fires in this building are initiated by debris that is ejected when the North Tower collapses (see 10:28 a.m. September 11, 2001). In a 2002 report (see May 1, 2002), the Federal Emergency Management Agency (FEMA) will state, “It is likely that fires” in WTC 7 “started as a result of debris from the collapse of WTC 1.” [Federal Emergency Management Agency, 5/1/2002, pp. 5-20] In a 2008 report (see November 20, 2008), the National Institute of Standards and Technology (NIST) will state, “Most likely, the WTC 7 fires began as a result of burning debris from the collapse of WTC 1.” However, NIST will add, “visual evidence of fires in the building was not available until around noon.” [National Institute of Standards and Technology, 11/2008, pp. 18]
Fires Spread in WTC 7 - According to NIST, fires are ignited “on at least 10 floors” of WTC 7, but “only the fires on floors 7 through 9 and 11 through 13 grew and lasted until the time of the building collapse.” [National Institute of Standards and Technology, 11/2008, pp. xxxvi] NIST will state, “Early fires were seen on the southwest corner of floors 19, 22, 29, and 30 shortly after noon,” but “These were short-lived.” [National Institute of Standards and Technology, 11/2008, pp. 51] The fires on floors 7 to 9 and 11 to 13, however, “grew and spread, since they were not extinguished either by the automatic sprinkler system or by [the New York City Fire Department], because water was not available in WTC 7.” Fires are “generally concentrated on the east and north sides of the northeast region beginning at about 3 p.m. to 4 p.m.” [National Institute of Standards and Technology, 11/2008, pp. 21] The fires on floors 7 to 9 and 11 to 13 have “characteristics similar to those that have occurred previously in tall buildings,” according to NIST, and “Their growth and spread [are] consistent with ordinary building contents fires.” [National Institute of Standards and Technology, 11/2008, pp. xxxvi] These fires are “fed by combustibles (e.g., desks, chairs, papers, carpet) that were ordinary for commercial occupancies.” However, NIST will point out, there is “no evidence that the fires spread from floor to floor, except, perhaps, just prior to the collapse of the building.” [National Institute of Standards and Technology, 11/2008, pp. 51-52]
Limited Evidence Available - Both FEMA and NIST will admit that their accounts of the fires in WTC 7 are based upon imperfect evidence. In its report on the WTC collapses, published in May 2002, FEMA will note, “Currently, there is limited information about the ignition and development of fires at WTC 7.” [Federal Emergency Management Agency, 5/1/2002, pp. 5-20] In the final report of its investigation of the collapse of WTC 7, NIST will point out that “available images showing fires in WTC 7 did not allow the detailed description of fire spread that was possible for the WTC towers.” The report will add: “It must be kept in mind that [NIST’s] fire observations were based on images of the exterior faces, which provided little indication about the behavior of fires well removed from the exterior walls. It is likely that much of the burning took place beyond the views of the windows.” But, the report will state, “[T]here was sufficient information to derive general descriptions of fire ignition and spread on various floors of the building.” [National Institute of Standards and Technology, 11/2008, pp. 18]
NIST Blames Fires for Collapse - WTC 7 collapses at 5:20 p.m. this afternoon (see (5:20 p.m.) September 11, 2001). In late 2008, at the end of its investigation into WTC 7’s collapse, NIST will blame the fires WTC 7 suffers for causing its collapse (see August 21, 2008 and August 21, 2008). NIST will state: “The heat from the uncontrolled fires caused steel floor beams and girders to thermally expand, leading to a chain of events that caused a key structural column to fail. The failure of this structural column then initiated a fire-induced progressive collapse of the entire building.” [National Institute of Standards and Technology, 8/21/2008; National Institute of Standards and Technology, 11/2008, pp. xxxvi-xxxvii] However, critics will dispute this conclusion, instead blaming explosives for the collapse (see August 21, 2008). [New York Times, 8/21/2008] FEMA will offer no firm conclusions about the possible role fires play in causing WTC 7 to collapse. In its 2002 report it will state, “The specifics of the fires in WTC 7 and how they caused the building to collapse remain unknown at this time.” [Federal Emergency Management Agency, 5/1/2002, pp. 5-31]
Steel beams from the WTC were already being removed and recycled on September 20, 2001. [Source: Associated Press]In the month following 9/11, a significant amount of the steel debris from the WTC collapses is removed from the rubble pile, cut into smaller sections, and either melted at a recycling plant or shipped out of the US. [US Congress, 3/6/2002] Each of the Twin Towers contained 78,000 tons of recyclable steel. Much of this is shipped to India, China, and other Asian countries, where it will be melted down and reprocessed into new steel products. Asian companies are able to purchase the steel for just $120 per ton, compared, for example, to a usual average price of $150 per ton in China. Industry officials estimate that selling off the steel and other metals from the WTC for recycling could net a few tens of million dollars. [New York Times, 10/9/2001; Reuters, 1/21/2002; Reuters, 1/22/2002; Eastday, 1/24/2002; CorpWatch, 2/6/2002] 9/11 victims’ families and some engineers are angered at the decision to quickly discard the steel, believing it should be examined to help determine how the towers collapsed. A respected fire fighting trade magazine comments, “We are literally treating the steel removed from the site like garbage, not like crucial fire scene evidence.” [Fire Engineering, 1/2002] Rep. Joseph Crowley (D-NY) will later call the loss of this evidence “borderline criminal.” By March 2002, 150 pieces of steel from the WTC debris will have been identified by engineers for use in future investigations (see March 6, 2002). [Federal Emergency Management Agency, 5/1/2002, pp. D-13] A study by the National Institute of Standards and Technology (NIST), which commences in August 2002 [National Institute of Standards and Technology, 8/21/2002; Associated Press, 8/21/2002] , will have 236 pieces of recovered steel available to it. Of these, 229 pieces are from WTC 1 and 2, representing “roughly 0.25 percent to 0.5 percent of the 200,000 tons of structural steel used in the construction of the two towers.” [National Institute of Standards and Technology, 9/2005, pp. 85 ] New York Mayor Mike Bloomberg defends the decision to quickly get rid of the WTC steel, saying, “If you want to take a look at the construction methods and the design, that’s in this day and age what computers do. Just looking at a piece of metal generally doesn’t tell you anything.” Officials in the mayor’s office decline to reply to requests by the New York Times regarding who decided to have the steel recycled. [New York Times, 12/25/2001; Eastday, 1/24/2002]
UNESCO’s Universal Declaration on Cultural Diversity is adopted at its 31st General Conference, the international agency’s governing body, in Paris, France. It is the highlight of the first ministerial-level meeting held by the international body after 9/11. The landmark international instrument brings cultural diversity to the unprecedented level of being defined “the common heritage of humanity” and deemed “as necessary for humankind as biodiversity is for nature.” In a statement marking the adoption, UNESCO Director General Koïchiro Matsuura says the declaration is “an opportunity for states to reaffirm their conviction that intercultural dialogue is the best guarantee of peace and to reject outright the theory of the inevitable clash of cultures and civilizations.” Matsuura adds that the declaration “can be an outstanding tool for development, capable of humanizing globalization.” The declaration is adopted just less than a year after “preliminary items” for a draft declaration on cultural diversity were first submitted at the second round table of culture ministers held on December 11-12, 2000 in Paris, France. The “preliminary items” were proposed alongside the presentation by a UNESCO Experts Committee of its conclusions on “strengthening UNESCO’s role in promoting cultural diversity in the context of globalization.” [UNESCO, 11/2001]
The San Francisco Examiner publishes an article speculating that the US may be planning a coup in Venezuela. The article also notes that Venezuelan President Hugo Chavez has reduced inflation from 40 percent to 12 percent, generated economic growth of 4 percent, and increased primary school enrollment by 1 million students. [San Francisco Examiner, 12/28/2001; Foreign Policy in Focus, 4/17/2002]
At some time in 2002, the the private military corporation Blackwater wins a classified contract to provide security for the CIA station in Kabul, Afghanistan. The circumstances and details of the contract are unknown, although this is only one of several contracts Blackwater and the CIA conclude after 9/11 (see, for example 2002 and 2004). [New York Times, 8/20/2009]
Lavalas Family (LF) deputy Nahoum Marcellus exposes a scandal involving the duty-free import of 70,000 metric tons of rice by Lavalas senators and representatives. They used the cover of a fake cooperative reportedly founded by FL Senator Mirlande Liberus (an Aristide Foundation director), Paul Preslet (a former Aristide Foundation director, current head of the National Bank of Credit), and Jonas Petit, the FL’s official spokesman. Charles Souffrant, head of the peasant organization Kozepe, denounces the scheme which undermines the production of local rice and hurts Haiti’s rice growers. The Haitian treasury lost some 117 million gourdes in customs duties and tax revenues as a result of the ploy. [Haiti Progres, 2/6/2002]
Farah Addo, vice president of the Confederation of African Football and president of the Somali Football Federation, alleges that the election of Sepp Blatter as FIFA president in 1998 was marred by bribery. Addo tells the Daily Mail that he was offered $100,000 for his vote. He refused, but “18 African voters accepted bribes to vote for Blatter.” Addo adds that he believes that some people in Blatter’s campaign were involved in the offers, although Blatter himself was not. According to Addo, all 51 African countries initially decided to vote for Blatter’s rival, Lennart Johansson. However: “Then I received a phone call from Somalia’s ambassador to one of the Gulf states. He said: ‘I have a friend who you know who wants to offer you $100,000 to switch your vote. Half in cash and the rest in sports equipment.’ They would send the cash to me or I could go to the Gulf to collect it.” Addo further alleges: “The night before the election people were lining up in Le Meridien Hotel [in Paris] to receive money. Some told me they got $5,000 before the vote and the same the next day, after Blatter won. I made my own private investigation and found that 18 African voters accepted bribes to vote for Blatter.” Mohiadin Hassan Ali, vice president of the Somalian association, confirms the story, saying, “We accepted money to vote on behalf of Somalia FA for J.S. Blatter in the FIFA presidential election in Paris.” [CNN, 2/28/2002]
After months of negotiations, David Beckham signs a new three-year contract with Manchester United. Beckham is to receive £70,000 a week in basic pay and £20,000 for use of his image rights, representing a 300 percent salary increase. It is the image rights issue that caused the negotiations to go on for so long. “The process of every player contract negotiation is different,” says United chief executive Peter Kenyon, “and one of the unique aspects of David’s was understanding how his global image could best be utilized to the mutual benefit of Manchester United and David himself.” [BBC, 5/12/2002] Clubs and players are keen to agree that a portion of compensation be paid for image rights, because it is taxed at a lower rate. [SportsPro, 2/25/2011] The new contract should take Beckham’s total earnings to around £11m a year. Although Beckham’s deal is not the highest in world football, Beckham receives so much from endorsements that he may overtake French midfielder Zinedine Zidane as football’s top earner. [BBC, 5/12/2002]
FIFA executive committee member Julio Grondona, an Argentinian, makes disparaging remarks about Jews’ ability to referee football games. He comments, “I do not believe a Jew can ever be a referee at that level [the Argentinian first division] because it’s hard work and, you know, Jews don’t like hard work.” Grondona will not lose his position at FIFA, but will later become senior vice president of the organization. [Observer, 11/28/2010]
A UN report, titled, World Economic Situation and Prospects 2003, observes that tensions over an imminent war in the Middle East are “having a negative impact on global economic growth through the higher price of oil, rising economic uncertainty and the decrease in business and consumer confidence that they have generated,” and that therefore “an escalation of conflict in that area would only have damaging effects.” The report notes that despite the two-year economic slowdown, “stock prices remain[ed] high relative to traditional benchmarks,” suggesting that continued stagnation in the major equity markets could “send the global economy into a tailspin.” [United Nations, 1/9/2003 ; United Nations, 1/9/2003; Associated Press, 1/10/2003]
Former Iraqi soldiers, angry about their loss of employment one month after the order to disband was issued, say that they will begin to take up arms against the US occupation if they do not receive any financial compensation. They had previously set this day as the deadline for when the coalition must pay them. A former soldier named Tahseen Ali Hussein is quoted by the Agence France-Presse as saying, “We are all very well trained soldiers and we are armed. We will start ambushes, bombings and even suicide bombings. We will not let the Americans rule us in such a humiliating way.” [Agence France-Presse, 6/23/2003] The same day, the US-led Coalition Provisional Authority agrees to pay the soldiers (see June 23, 2003). Most of the soldiers consider the payments inadequate (see July 15, 2003).
Chelsea FC owner Ken Bates agrees to sell the club to Russian oil and aluminum mogul Roman Abramovich for £140m. £80m of the money will be spent paying down debts Chelsea has recently accrued. £59.3m will be used to buy shares in the parent company, Chelsea Village, which are valued at a mere 35p each. Bates bought the club for £1 in 1982. The deal is the biggest in British football history. A statement issued for Abramovich pledges that he will invest in the team. [BBC, 7/2/2003]
Cesc Fabregas, who will go on to captain Arsenal for a number of years, joins the club from Barcelona’s youth team. He is 16 years old. [Arsenal, 2010] Fabregas is one of several Spanish players who leave their native country to join English football clubs at a young age; the moves are because English employment law allows 16-year-olds to sign contracts, whereas in Spain players can only sign when they are older (see October 10, 2007 and February 23, 2011).
Jaroslav Hastik, sports director at first division Czech football club Synot, calls referee Vaclav Zejda to offer him a bribe to influence today’s game between Synot and Blsany. Zejda agrees to take CZK 120,000 (approx. £2,000) to help Synot win the game, and to share the money with other officials. The telephone call is monitored by the police, who are aware that Hastik is corrupt. Zejda then informs his assistant Bohuslav Kratky and the fourth official Josef Dvoracek of what is to happen, and Synot wins 3-1. [MladÃ¡ fronta Dnes, 5/14/2004] The police will also monitor the handing over of the bribe (see December 2, 2003).
Jaroslav Hastik, sports director at the Czech first division club Synot, hands over a CZK 120,000 (approx. £2,000) bribe to referee Vaclav Zejda in return for Zejda influencing a recent game between Synot and Blsany (see November 22, 2003). The handover takes place in an underground garage at a shopping center in Smichov, Prague, and is filmed by police. Later the same day, Zejda calls Jaromir Hlavac, another first division referee, and ask him to distribute half of the bribe among some of the other officials who were in charge of the match. Assistant Bohuslav Kratky is to get CZK 30,000, fourth official Josef Dvoracek is to get CZK 10,000, and referee assessor Pavel Sisak is to get CZK 20,000. This call is also monitored by the police. Although the others will be charged with corruption, Sisak will not, as the police will be unable to prove he accepted the money. [MladÃ¡ fronta Dnes, 5/14/2004]
A CIA program to kill and capture al-Qaeda leaders (see Shortly After September 17, 2001) is terminated, and then revived under a new code name and surreptitiously outsourced to the private military corporation Blackwater. [Washington Post, 8/20/2009; New York Times, 8/20/2009]
Outsourcing Kidnappings and Assassinations - The public will not learn of the program until 2009 (see August 19-20, 2009). The reason for the move is that key officials leave the CIA’s Counterterrorist Center, which had run the program, and go to work for Blackwater. A retired intelligence officer intimately familiar with the assassination program will say of the reason for using Blackwater, “Outsourcing gave the agency more protection in case something went wrong.” According to the Washington Post, the contract goes to Blackwater “in part because of its close ties to the CIA and because of its record in carrying out covert assignments overseas.” [Washington Post, 8/20/2009] Blackwater is given operational responsibility for targeting terrorist commanders, including planning and surveillance, and is awarded millions of dollars for training and weaponry. Blackwater executives help the CIA in planning, training, and surveillance exercises for team members. It remains unclear whether Blackwater’s role is merely for training and surveillance, or if Blackwater employees are slated to actually carry out kidnappings and assassinations. A former official will say that the Blackwater phase involves “lots of time spent training,” mostly in the US. The teams reportedly simulate missions that often involve kidnapping. “They were involved not only in trying to kill but also in getting close enough to snatch,” the official will say. Blackwater does not have an official contract with the CIA; instead, individual executives, such as its founder and CEO Erik Prince, have contracts with the agency. [Washington Post, 8/20/2009; New York Times, 8/20/2009]
Program Never Implemented - Although the CIA spends several million dollars on the program, no one is actually captured or killed, and most of the program’s elements are never implemented. According to a former official, there is “much frustration” among team members at this. [Washington Post, 8/20/2009]
Program Termination - The assassination program began in 2002, after the 9/11 attacks, and will continue until 2009, when then-CIA Director Leon Panetta will terminate it. Blackwater’s role in the program will be terminated much sooner (see (2005-2006)). In 2009, government officials will tell the New York Times that the CIA’s efforts to use what the newspaper calls “paramilitary hit teams” to kill al-Qaeda operatives “ran into logistical, legal, and diplomatic hurdles almost from the outset.” [New York Times, 8/20/2009; Time, 8/21/2009] Despite an initial prohibition from Vice President Dick Cheney (see 2002), the program will later be briefed to Congress (see June 24, 2009). The fact that Blackwater became involved in it is one of the reasons Congress is notified. The New York Times will report that “government officials said that bringing outsiders into a program with lethal authority raised deep concerns about accountability in covert operations.” In addition, a private contractor involved in an operation would not have the same diplomatic immunity as a US government employee. [New York Times, 8/20/2009]
Former CIA Agent: Director 'Horrified' at Use of Mercenaries - In 2009, former CIA agent Robert Baer will write: “Panetta must have been horrified that the CIA turned to mercenaries to play a part in its dirty work. It’s one thing, albeit often misguided, for the agency to outsource certain tasks to contractors. It’s quite another to involve a company like Blackwater in even the planning and training of targeted killings, akin to the CIA going to the mafia to draw up a plan to kill [Cuban dictator Fidel] Castro.” Baer believes that the Blackwater contracts were more about “bilking the US taxpayer than… killing Osama bin Laden or other al-Qaeda leaders.… [A]s soon as CIA money lands in Blackwater’s account, it is beyond accounting, as good as gone.” Baer will note that Blackwater is involved in a number of highly questionable actions, including the apparent murder of several Iraqi and Afghan civilians, and will ask “what the CIA saw in Blackwater that the public still has not.” Baer will conclude by speculating, “Even more troubling, I think we will find out that in the unraveling of the Bush years, Blackwater was not the worst of the contractors, some of which did reportedly end up carrying out their assigned hits.” [Time, 8/21/2009]
The BBC current affairs program Panorama runs a documentary entitled “Father and Son” about Manchester United manager Sir Alex Ferguson and his son Jason, a football players’ agent. The documentary alleges that Jason has exploited his father’s position to set up transfer deals and make financial gain from them. Jason will not be found guilty of any wrongdoing, but Sir Alex will refuse to speak to the BBC for a number of years. [Guardian, 11/30/2010]
The European Union announces it has begun a preliminary investigation into the sale of Real Madrid’s training ground to the city council in 2001 (see (May 8, 2001)). The sale netted €480m, which wiped out the football club’s €290m debt and enabled it to buy players such as Zinedine Zidane, Ronaldo, Luis Figo, and David Beckham. “We believe Madrid’s regional authorities may have overpaid,” says Tilman Luder, the EU’s competition spokesman. He also warns that the club may have to pay back some money if the price exceeded the market value. “We have sent a questionnaire to the Spanish government: to find out why they bought this land, at what price, and if they can prove it was at the market price. We suspect that the purchase price was influenced by the fact that this property had been reclassified, which increased its value,” says Luder. If Spain’s response to the questionnaire is not satisfactory, the EU may launch a formal investigation. [Independent, 3/4/2010] The EU will later drop the matter (see (November 9, 2004)).
Jaroslav Hastík, sports director at the Czech first division football club Synot, enters the referees’ dressing room at half time in a league game between Synot and Sparta Prague. “If you help us keep the result the way it is, we’ll give you CZK 175,000,” (around £3,700) Hastik tells assistant referee Stanislav Hruska. Hruska agrees to take the bribe and Synot go on to win the game. However, the dressing room is bugged by the police, and Hastik and Hruska will be arrested as the money is being handed over (see April 20, 2004). [MladÃ¡ fronta Dnes, 5/14/2004]
Czech police arrest Jaroslav Hastik, the sports director of first division club Synot, and Stanislav Hruska, an assistant referee, on corruption charges. The arrest is made late at night at an Agip gas station near the town of Vyskov, as Hastik is about to hand over a CZK 175,000 bribe to Hruska for fixing the outcome of a game between Synot and Sparta Prague (see March 27, 2004). [MladÃ¡ fronta Dnes, 5/14/2004]
The European Union drops a competition probe into a transaction in which football club Real Madrid received hundreds of millions of Euros from the Madrid city council in return for its training ground (see (May 8, 2001) and March 3, 2004). The commission concludes that no state aid for Real was involved in the transaction and no government resources were transferred to it. [Sports Illustrated, 11/9/2004]
Greece admits it joined the euro single currency in 2001 on the basis of figures that showed its budget deficit to be much lower than it really was. Eurozone states are expected to have deficits below 3 percent of gross domestic product, but revised data show Greece has exceeded that limit since 1999. Greek press reports suggest the country’s budget deficit in 1999 was 3.38 percent. The problem was discovered by Eurostat, the EU’s statistics agency, when it visited Athens last week to examine Greece’s current budget figures. Greece had already said that its public deficit breached the European Union cap between 2000 and 2003, as the cost of hosting the 2004 summer Olympics reached €7bn. But Greece’s finance ministry had claimed that the country’s 1999 deficit, on the basis of which Greece was allowed to join the euro in 2001, was below the limit. “It has been proven that Greece’s budget deficit never fell below 3 percent since 1999,” finance minister George Alogoskoufis now admits. Katinka Barysch, chief economist at the Centre for European Reform, says the announcement will not be a surprise for Brussels insiders. “Quite a few member states did something similar because of the political imperative to join the euro as soon as possible. Greece has just gone a bit further,” she says. [BBC, 11/15/2004]
The Spanish government passes what will become known as the “Beckham Law.” The law grants a tax break to wealthy foreigners earning over €600,000 who work in Spain—they will pay only 24 percent income tax, whereas Spaniards earning the same amount pay 43 percent. The initial aim is to attract talented executives, but the biggest effect is on Spanish football, as the tax break allows Spanish clubs to attract high-paid players from elsewhere in Europe where there are higher tax rates. The law gets its nickname from Real Madrid midfielder David Beckham, who joined the club shortly before the tax break came into operation. A later Spanish administration will announce the end of the law’s application (see November 4, 2009). [Xinhua News Agency (Beijing), 11/4/2009]
Cofer Black, former chief of the CIA’s Counterterrorist Center, joins Blackwater. He becomes the company’s vice chairman. [Boston Globe, 11/2/2007]
The center-right Greek government raises taxes on alcohol and tobacco in an effort to combat the country’s large budget deficit. The price of the cheapest pack of cigarettes will rise from €0.80 to €1.40, whereas taxes on spirits will be raised by 20 percent and the rate on ouzo will go up 10 percent. The changes are announced by Greek Minister of Finance Giorgos Alogoskoufis and will also apply to previously tax-free holiday resorts such as Rhodes. In addition, the main VAT rate will rise from 18 percent to 19 percent. Officials hope the increases will boost public revenues by €500m. The Greek budget deficit is 6.1 percent of GDP, well over the 3 percent permitted by Eurozone rules, and was increased by the massive cost of hosting the 2006 summer Olympics. Together with spending cuts, the government hopes the measures will rein in the deficit to 3.5 percent of GDP this year. According to the Greek government, the tax rises are the only way of avoiding cuts in health and education spending. [Guardian, 3/30/2010]
FIFA vice president Jack Warner makes around $1 million touting tickets for the 2006 World Cup for fans of England, Mexico, and Japan. Warner and his son Daryan use a travel company they own, Simpaul, to strike secret deals to sell thousands of room-and-ticket packages to agents around the world. One group of 900 tickets is sold to England fans for that country’s first round matches, and similar packages are made available to 1,500 Mexico fans and 3,000 Japan supporters. [Daily Mail, 9/12/2006]
Rob Richer, formerly the deputy head of the CIA’s directorate of operations, joins the private military contractor Blackwater, becoming vice president of intelligence. Richer announced his resignation from the agency at the beginning of September (see September 2, 2005), but was still there later in the month (see September 21, 2005). According to Harper’s journalist Ken Silverstein, Richer joins Blackwater “immediately” after leaving the agency. Richer is close to Jordan’s King Abdullah (see 1999) and, after being hired, helps Blackwater land a lucrative deal with the Jordanian government to provide the same sort of training offered by the CIA. Silverstein will comment, “Millions of dollars that the CIA ‘invested’ in Jordan walked out the door with Richer—if this were a movie, it would be a cross between Jerry Maguire and Syriana.” One of Silverstein’s sources will say: “People [at the agency] are pissed off. Abdullah still speaks with Richer regularly and he thinks that’s the same thing as talking to us. He thinks Richer is still the man.” [Harper's, 9/12/2006]
Serbian-American businessman Milan Mandaric sells Portsmouth FC to Franco-Russian businessman Alexandre Gaydamak for £32 million. [London Times, 9/15/2008; Daily Mail, 9/23/2008] The sale will later become controversial as speculation appears suggesting that Gaydamak’s father Arkadi, wanted for questioning in France over gunrunning during the Angolan Civil War, is the real owner. [Daily Mail, 9/23/2008]
Real Madrid logo. [Source: SoccerFiesta (.net)]Deloitte publishes its Football Money League rankings for the 2004-2005 season. The rankings of the top 20 European clubs and their football earnings are:
(1) Real Madrid (€275.7m)
(2) Manchester United (€246.4m)
(3) Milan (€234.0m)
(4) Juventus (€229.4m)
(5) Chelsea (€220.8m)
(6) Barcelona (€207.9m)
(7) Bayern Munich (€189.5m)
(8) Liverpool (€181.2m)
(9) Internazionale (€177.2m)
(10) Arsenal (€171.3m)
(11) Roma (€131.8m)
(12) Newcastle United (€128.9m)
(13) Tottenham Hotspur (€104.5m)
(14) Schalke (€97.4m)
(15) Lyon (€92.9m)
(16) Celtic (€92.7m)
(17) Manchester City (€90.1m)
(18) Everton (€88.8m)
(19) Valencia (€84.6m)
(20) Lazio (€83.1m) [Deloitte, 2/2006 ]
Entity Tags: Celtic F.C., Fussball-Club Gelsenkirchen-Schalke 04, Real Madrid Club de FÃºtbol, Tottenham Hotspur F.C., Valencia, FC Barcelona, Newcastle United F.C., Bayern Munich, Arsenal F.C., Milan, Roma, Manchester City F.C., Everton F.C., Manchester United F.C., Chelsea F.C., Internazionale, Deloitte, Lazio, Juventus, Olympique Lyonnais, Liverpool F.C.
Timeline Tags: Football Business and Politics
Randy Lerner, the American owner-in-waiting of Aston Villa, increases his potential shareholding in the football club to 85.5 percent. Lerner was set to own 59.69 percent of the club after his conditional £62.2m takeover offer in August, and now seems likely to take full control. However, he must still reach 90 percent stakeholder support by 18 September, until which time Villa’s existing board of directors remains in place. [BBC, 9/5/2006]
According to Harper’s magazine columnist Ken Silverstein, the private miltiary corporation Blackwater makes an “aggressive” attempt to recruit Jose Rodriguez, director of the CIA’s National Clandestine Service. Other CIA officers currently at Blackwater at this time include Enrique “Ric” Prado, with whom Rodriguez served in Latin America and who is currently Blackwater’s vice president of special programs, and Cofer Black, the company’s vice chairman, who, like Rodriguez, had been chief of the CIA’s Counterterrorist Center. [Harper's, 9/12/2006]
FIFA’s newly established ethics committee holds its first meeting. [BBC, 1/10/2011]
FIFA and the International Federation of Professional Footballers (FIFPro) sign a memorandum of understanding stating that FIFA and FIFPro have agreed to introduce FIFA’s proposed “6+5” regulations over the course of several seasons. Under the plan each club side would have to have six players qualified to represent the national association to which the club belonged at the start of each match. The other five and all the substitutes could then be foreigners. The plan is controversial because it is a clear breach of regulations on the free movement of labour set out in Article 39 of the Treaty of Rome, which governs the operation of the European Union. [World Sports Law Report, 12/6/2006]
FIFA president Sepp Blatter makes a speech to the Soccerex conference in Dubai about a range of current topics. On the issue of video replays, he says he will never allow matches to be halted as long as he remains FIFA president. However, he remains open to goalline technology, provided it delivers an instant answer, and he thinks it may be ready for introduction at the Club World Championship in Tokyo in December 2007. Blatter also dicusses his “6+5” proposal to limit the number of foreigners clubs field. “We believe six plus five will give more incentive to young players,” says Blatter. “All the big clubs have youth departments but there is no chance for these players to play in the first team.… The big clubs with a lot of money can afford to buy the best players. They have 20, 25, sometimes 30 on their list but only 11 can play. What are the others doing? Waiting? Recuperating? Or taking away the chance for other teams to have a better starting eleven? What these rich clubs are doing is taking the best out of market, then not letting them play. Look at the results in some European leagues. Some clubs are already far away after a third of the season, the others can only play to avoid relegation, not for the title. Something is wrong about this.” Blatter also warns of foreign investors buying English clubs, saying: “England must be a very attractive league for investors to take over whole clubs. As long as they are promoting the game in a sensitive way, we are not concerned. But if they are arriving to take the best out of football, rather than to serve it, again something is wrong because when you have so much money, it leads to a distortion as far as the other clubs are concerned.” [Daily Mail, 11/27/2006]
FIFA president Sepp Blatter gives an interview to the German magazine Kicker on a number of reforms for the world game. Blatter thinks that the football season should begin in late February and finish at the end of November, with the longer winter break being used for national team games. “I’ve just proposed to the clubs: play through the summer, make the season like the calendar year,” says Blatter. “This would leave enough time for players to recover and there could be blocks of three weeks of qualifying games in winter.” He claims, “This idea is supported by big European clubs.” In addition, in World Cup qualifying he wants more European groups with less teams qualifying from each group; this would lead to fewer games for national teams, which is what big clubs want. Blatter also expresses support for his “6+5” idea to limit the number of foreigners club teams field. “The ‘6 5’ is coming, for sure,” he says, although it is only to be applied in Europe. “First, it will bring a higher identification between clubs and fans. Second, it would raise the opportunities for talents. And third, the clubs’ finances would benefit if they take players from their own schools.” Such a rule is controversial, because it is contrary to well-established European Union regulations on the free movement of labour. Therefore, Blatter appeals to the EU to stay out of football, although he would like government help creating more transparency in financial structures in international football and its transfer market. Blatter also rejects calls for a salary cap. [Associated Press, 12/4/2006]
Deloitte publishes its Football Money League rankings for the 2005-6 season. The rankings of the top 20 European clubs and their football earnings are:
(1) Real Madrid (€292.1m)
(2) Barcelona (€259.1m)
(3) Juventus (€251.2m)
(4) Manchester United (€242.6m)
(5) AC Milan (€238.7m)
(6) Chelsea (€221.0m)
(7) Internazionale (€206.6m)
(8) Bayern Munich (€204.7m)
(9) Arsenal (€192.4m)
(10) Liverpool (€176.0m)
(11) Lyon (€127.7m)
(12) Roma (€127.0m)
(13) Newcastle United (€124.3m)
(14) Schalke (€122.9m)
(15) Tottenham Hotspur (€107.2m)
(16) Hamburg (€101.8m)
(17) Manchester City (€89.4m)
(18) Rangers (€88.5m)
(19) West Ham United (€86.9m)
(20) Benfica (€85.1m) [Deloitte, 2/2007 ]
Entity Tags: Benfica, Fussball-Club Gelsenkirchen-Schalke 04, Real Madrid Club de FÃºtbol, Tottenham Hotspur F.C., West Ham United, FC Barcelona, Rangers, Bayern Munich, Arsenal F.C., Newcastle United F.C., Roma, Manchester United F.C., Hamburg SV, Milan, Chelsea F.C., Internazionale, Deloitte, Liverpool F.C., Juventus, Manchester City F.C., Olympique Lyonnais
Timeline Tags: Football Business and Politics
Chelsea announces the club lost £80.2m in the 2005-06 season. The loss is far less than the season before, when it was around £140m, but is still the third largest loss in the history of English football. Total losses over the three years since Roman Abramovich bought the club now exceed £300m. [Reuters, 2/19/2007] Chelsea turned over €221m in the 2005-06 season (see February 2007).
David Dein leaves Arsenal’s board of directors over a dispute on the football club’s future direction. Dein, who owns 14.5 percent of shares, wants US investor Stanley Kroenke to take control of the club, but this proposal does not find sufficient support among the other board members, and Dein departs. [BBC, 8/31/2007]
Leeds United enters administration due to debts of £35m that it cannot pay. In return, the Football League imposes a 10-point penalty on the club. Before the points deduction, it was all but mathematically certain that Leeds would be relegated from the Championship to the third tier of English football, as the club required a series of freak results on the last day of the season to stay up. However, relegation to League One is now a mathematical certainty. Had Leeds gone into administration after the last game of the season, the penalty would have been applied at the start of the next term. The auditing firm KPMG is appointed Leeds’ administrators and immediately agrees to sell the club back to chairman Ken Bates without the debt burden. The Independent writes of the administration and sale, “in effect Leeds could wipe out most of their £35m debt at a stroke, and suffer no meaningful penalty.” [Independent, 5/5/2007] However, due to a breach of league rules governing the conduct of the administration, the club will be deducted a further 15 points at the start of next season (see August 3, 2007).
Former Thai Prime Minister Thaksin Shinawatra loges a £81.6m formal takeover bid for football club Manchester City. The offer is made through a company called UK Sports Investments, a vehicle indirectly controlled by Shinawatra, his son, and his daughter. [BBC, 6/21/2007] Since he was overthrown by a military coup last September, Shinawatra has been dogged by allegations covering assorted instances of corruption, human rights abuses, and running death squads as a part of his government’s war on drugs. [Daily Mail, 6/22/2007] Thai prosecutors have already filed corruption charges and frozen some of his assets. [BBC, 6/21/2007]
Former Thai Prime Minister Thaksin Shinawatra completes his takeover of Manchester City. Shinawatra, who was allegedly involved in corruption, human rights abuses, and death squads in his native Thailand, made a formal offer the previous month (see June 21, 2007). Shinawatra now owns 74.03 percent of shares through his UK Sports Investments vehicle, very close to the 75 percent he needs to take the football club off the stock market. The previous shareholders, including former chairman Francis Lee and the Rupert Murdoch-controlled BSkyB, were wary of selling to Shinawatra because of the allegations against him, but have been reassured. The only bar to Shinawatra assuming full control of the club is that he now has to pass the Premier League’s “fit and proper person” test (see Shortly After July 6, 2007). [BBC, 7/6/2007]
Former Thai Prime Minister Thaksin Shinawatra passes the Premier League’s “fit and proper person” test and receives the green light to take full control of football club Manchester City. Shinawatra has already purchased a majority of shares (see July 6, 2007) and this is the last hurdle his takeover has to cross. Allegations that Shinawatra was involved in various instances of corruption, human rights abuses, and death squads (see June 21, 2007) apparently do not prevent him from passing the test. On July 11, one civil servant at the Foreign Office (FCO) will send an e-mail, later obtained by the Telegraph by Freedom of Information Act request, saying that the Premier League thinks that Shinawatra would probably pass the test on that day, and asking if the FCO has any information it could share on him. The FCO also says that the League never follows up on the request, although the League comments: “What we were told by the government was, as these were only allegations, they could offer no comment or advice that was not already in the public domain. Had they offered any form of briefing we would, of course, have accepted.” [Daily Telegraph, 3/13/2008]
The Football League imposes a 15-point penalty on Leeds United due to irregularities in its administration. However, Leeds will be allowed to play in League One, the third tier of English football, in the coming season. The club had entered administration at the end of last year, incurring a 10-point penalty that was meaningless because the club was virtually certain of relegation at that time (see May 4, 2007). [BBC, 8/3/2007]
Alisher Usmanov, a Uzbek-Russian businessman of dubious repute (see September 2, 2007), becomes a leading shareholder in Arsenal. Together with his associate Farhad Moshiri, a London-based Iranian, Usmanov purchases a 14.5 percent interest in the football club through the company Red & White Holdings for £75m. The stake is purchased from David Dein, who left the club’s board in April when he fell out with other directors over the lack of foreign investment in Arsenal (see April 2007). Dein was previously close to Arsenal manager Arsene Wenger, who is now reported to approve of the transaction. The deal makes Red & White Holdings the third largest shareholder in Arsenal, behind Danny Fiszman (24.11 percent) and Nina Bracewell-Smith (15.9 percent). The US businessman Stan Kroenke holds 12.9 percent; nobody else has more than 5 percent. [BBC, 8/31/2007]
Former British ambassador to Uzbekistan Craig Murray accuses new Arsenal shareholder Alisher Usmanov (see Shortly Before August 31, 2007) of a string of crimes in a piece posted to his blog. [Craig Murray, 9/2/2007] Murray learned of Uzbek affairs during his time as ambassador in 2002-2004, but was removed from his position under a cloud after he complained too loudly about the use of torture in the “war on terror.” [Grey, 2007, pp. 152-169] In a no-holds-barred post entitled “Alisher Usmanov, Potential Arsenal Chairman, is a Vicious Thug, Criminal, Racketeer, Heroin Trafficker, and Accused Rapist,” Murray sets out Usmanov’s many alleged sins, including his activities as an underworld boss, influence peddling with Uzbekistan’s ruling clan, bribery, and a “particularly atrocious rape.” [Craig Murray, 9/2/2007]
Alisher Usmanov, an Uzbek-Russian businessman who has just purchased an interest in the London football club Arsenal (see Shortly Before August 31, 2007), uses the law firm Schillings to shut down discussion of his controversial past on the Internet. Shortly after Usmanov became an Arsenal shareholder, former British ambassador to Uzbekistan Craig Murray published a blog post saying that Usmanov had committed numerous crimes (see September 2, 2007). Schillings now contacts several independent Arsenal supporters’ websites and blogs to make them remove postings referencing Murray’s allegations. The law firm tells them that repeating the allegations is “false, indefensible, and grossly defamatory.” Most sites comply. Although Schillings forces Murray’s webhost to remove the post, it does not contact Murray himself. [Guardian, 9/13/2007]
Arsenal shareholder Alisher Usmanov temporarily shuts down the website of Boris Johnson, the Conservative candidate for major of London, in a dispute between Usmanov and former British ambassador to Uzbekistan Craig Murray. Usmanov has numerous other websites shut down as well. Following the purchase of an interest in Arsenal by Usmanov, an Uzbek-Russian businessman (see Shortly Before August 31, 2007), Murray made numerous allegations against him (see September 2, 2007), and Usmanov used the law firm Schillings in an attempt to shut down discussion of them on the Internet (see Shortly After September 2, 2007). Schillings now pressures Murray’s webhost, Fasthosts Internet, to act against Murray, and it responds by cutting off services to Murray and numerous other bloggers who simply share some technical services with him, even though they had not written about Usmanov or been the subject of a complaint by him. Johnson calls the action “a serious erosion of free speech,” adding: “This is London, not Uzbekistan.… It is unbelievable that a website can be wiped out on the say-so of some tycoon. We live in a world where Internet communication is increasingly vital, and this is a serious erosion of free speech.” Bob Piper, another affected blogger and local Labour Party politician in Birmingham, calls the situation “outrageous.” [Guardian, 9/20/2007]
FC Barcelona wins a £2.1 million lawsuit against Fran Merida, a player who left the football club when he was 16, later joining Arsenal FC. Merida is found not to have honored a pre-contractual agreement he had with the Catalan giants. Spanish clubs cannot sign youth players until they are 18, whereas clubs in England can sign 16-year-olds under British law, meaning that some Spanish players sign for English clubs on turning 16. [Daily Telegraph, 10/11/2007] Arsenal will decide not to appeal the ruling and pay the fine for Merida. Reportedly, this decision is taken to improve relations between the two clubs, which have been poor since a similar problem with Cesc Fabregas’s move to London in 2003. [Daily Mail, 10/31/2009]
John McBeth, a former chairman of the Scottish Football Association, says that Jack Warner, a top FIFA executive and president of the Trinidad and Tobago Football Association, asked for a fee for an international friendly match in 2004 to be paid into his personal bank account. “Trinidad and Tobago came to play Scotland at Hibernian’s ground in Easter Road in Edinburgh,” says McBeth. “And after the game he asked me to make a check out to his personal account for the game. And I said ‘We don’t do that, it should go to the association.’ I then found out later that he’d approached several other staff in my organization—to do exactly the same thing.” Warner denies the allegations. McBeth had previously been withdrawn as a potential FIFA executive committee member after making comments alleging corruption in football circles in Africa and the Carribean. [BBC, 10/29/2007]
UEFA approves several changes to the Champions League and other competitions it runs.
The final of the Champions League will take place on a Saturday, instead of a Wednesday, from 2010. UEFA justifies the change by saying more children will be able to see the game. “I also hope that playing the UEFA Champions League final on a Saturday will give families, especially children, the chance to see the game,” says UEFA president Michel Platini. [BBC, 11/30/2007] The change of game day also means that the match, which is played in the late evening in Europe, is at a much more attractive time for the US market—2:45 p.m. Eastern Standard Time on Saturday. This means that the game will become one of only a few such club football games ever shown live on US network television. [FoxSoccer, 5/17/2010] The cheapest child ticket for the 2011 Champions League final will be £113, will have to be purchased together with an adult ticket costing £225, and will be subject to a £26 “administration fee” (see February 17, 2011).
Qualification for the Champions League is altered, making it harder for a fourth team from the three leading countries to qualify, to the benefit of smaller countries.
The group stage in UEFA’s second most important club competition, the UEFA Cup, is altered, and there will now be 12 groups of four teams before the knockout stages.
UEFA’s third-string competition, the Intertoto Cup, is abolished. [BBC, 11/30/2007]
Deloitte publishes its Football Money League rankings for the 2006-2007 season. The rankings of the top 20 European clubs and their football earnings are:
(1) Real Madrid (€351.0m)
(2) Manchester United (€315.2m)
(3) FC Barcelona (€290.1m)
(4) Chelsea (€283.0m)
(5) Arsenal (€263.9m)
(6) AC Milan (€227.2m)
(7) Bayern Munich (€223.3m)
(8) Liverpool (€198.9m)
(9) Internazionale (€195.0m)
(10) AS Roma (€157.6m)
(11) Tottenham Hotspur (€153.1m)
(12) Juventus (€145.2m)
(13) Olympique Lyonnais (€140.6m)
(14) Newcastle United (€129.4m)
(15) Hamburg SV (€120.4m)
(16) Schalke 04 (€114.3m)
(17) Celtic (€111.8m)
(18) Valencia (€107.6m)
(19) Olympique de Marseille (€99.0m)
(20) Werder Bremen (€97.3m) [Deloitte, 2/14/2008 ]
Entity Tags: Roma, Tottenham Hotspur F.C., Valencia, Celtic F.C., FC Barcelona, Real Madrid Club de FÃºtbol, Bayern Munich, Arsenal F.C., Olympique de Marseille, Fussball-Club Gelsenkirchen-Schalke 04, Milan, Hamburg SV, Newcastle United F.C., Chelsea F.C., Internazionale, Deloitte, Liverpool F.C., Manchester United F.C., Olympique Lyonnais, Juventus
Timeline Tags: Football Business and Politics
Chelsea announces a loss of £74.8m for the 2007-08 football season. The figures show a 25 percent increase in turnover, to £190.5m, making the club second only to Manchester United in the Premier League, but the loss fell by only 7 percent compared to the previous season (see February 19, 2007). Chief executive Peter Kenyon allows that the club’s aim of breaking even by 2010 is “ambitious,” but adds: “I don’t think it’s something we are postponing, but it’s always been ambitious. We are determined to meet it, or get as close as we can.” [Guardian, 2/22/2008] The club will actually make a loss of over £70m in the 2009-10 season (see January 31, 2011).
Alisher Usmanov, a Uzbek-Russian businessman of dubious repute (see September 2, 2007) who now owns a 24 percent stake in Arsenal (see Shortly Before August 31, 2007), says he only plans to increase his interest by a small amount. According to Usmanov, the investment vehicle Red & White Holdings, of which he is a co-owner, wants a blocking stake in the football club, which would be 25 percent plus one share. This would give it a veto on major club issues. [Reuters, 2/27/2008]
The United States Federal Reserve has lent Wall Street’s largest investment bank billions of dollars, as the credit crisis threatens to spiral into a full-blown banking crisis. In developments currently rocking the world’s financial markets, the Fed and rival Wall Street bank, JP Morgan Chase, are funneling emergency loans to Bear Stearns, whose exposure to battered credit markets has led to a crisis of confidence in its ability to continue trading. In accelerating numbers, clients and trading partners are pulling business from Bear Stearns, after rumors of its solvency began circulating. During a last-minute conference call with investors, management at the investment bank warned that its emergency lending facility with the Federal Reserve has failed to staunch the bleeding. “We have been subject to a significant amount of rumor and innuendo in the past week,” says Bear Stearns chief executive Alan Schwartz. “We attempted to provide some facts but, in the market environment, the rumors intensified and a lot of people wanted to act to protect themselves first from the possibility that the rumors were true, and wait till later for the facts.” Bear Stearns appears most fragile of Wall Street’s major investment banks, since the July 2007 collapse of two internal hedge funds, providing initial clues about the scale of the unfolding credit crisis. Shares across the banking sector plunge as analysts fear that the Fed’s willingness to intervene suggests that Bear’s future is pivotal to the banking system, and that its failure precipitates losses that may cascade through its trading partners. Bear Stearns stocks are in freefall, closing down 47 percent. Pierre Ellis at New York’s Decision Economics said, “Clearly the Fed is addressing what they feel is a systemic risk very aggressively.” [Belfast Telegraph, 3/15/2008]
On the eve of a crucial European Parliament vote on FIFA’s “6+5” rule to limit the number of foreigners fielded by football clubs, the organization’s president Sepp Blatter holds a roundtable with journalists to promote the regulation. Blatter says that the rule is intended to “protect minors, protect youth training, adapt the transfer system to today’s realities, and ensure tighter control over the actions of players’ agents.” In addition, it will help keep national teams strong and allow youth players to play for their original clubs. Blatter says the rule does not conflict with well-established European Union legislation on the free movement of labor, because “[c]lubs will still be free to take on as many foreign players as they want. When a match kicks off however, they will have to have six players on the pitch who are eligible for the national team of the country in question.” Blatter is critical of UEFA’s 4+4 “home-grown player rule,” as it “does not protect players who are eligible for the national team of the club in question,” and under this system “the richest clubs would merely have to buy players at an even younger age than they are currently doing.” He also points out that on average the five main European leagues (Germany, England, Spain, France, and Italy) already mostly comply with the “6+5” rule, so it would not make much difference to them anyway. Blatter claims that 80 percent of revenues generated by the Champions League go to the competing clubs, and that the “6+5” rule would lead to more equitable distribution, although the mechanism by which this would occur is unclear. Blatter acknowledges that there will be problems implementing the rule, but cites support from other sports organizations and says FIFA needs “to convince the world and the media.” [FIFA, 5/7/2008] The European Parliament vote will go against the “6+5” rule 518 to 49 (see May 8, 2008).
The European Parliament votes 518 to 49 against allowing football authorities to implement the “6+5” proposal, which would limit the number of foreigners fielded by football clubs. The “6+5” rule was championed by FIFA, in particular its president Sepp Blatter (see November 27, 2006 and December 4, 2006). However, the parliament approves the “home-grown player rule” pur forward by UEFA. The “home-grown player rule” is different in that it is the country in which the player was trained, not his nationality that is decisive. Opposition to the “6+5” rule is grounded in the fact that it is in clear conflict with European Union legislation on the free movement of labour (see November 2, 2006). [Independent, 5/9/2008]
FIFA’s 58th Congress votes 155-5 to support the organization’s “6+5” proposal to limit the number of foreigners appearing for football clubs. In addition to supporting the proposal’s aims, the congress asks the presidents of FIFA and UEFA to continue to try to find ways of implementing the rule in Europe. A number of speakers at the congress also express support, although UEFA president Michel Platini points out that “6+5 is considered illegal within the European Union.” At this time the proposal is planned to be phased in, meaning a maximum of seven foreigners in club teams’ starting lineups in 2010-2011, six the next season, and five the season after that. [FIFA, 5/30/2008]
UEFA’s control and disciplinary body rules that the Portuguese champions FC Porto will not be admitted to the Champions League next season, due to allegations of bribery of referees in Portuguese domestic matches in 2003/04. In two cases, the Portuguese champions were recently deducted a total of six points and fined €150,000 by the Portuguese league’s disciplinary committee. Under UEFA rules, clubs may not be involved in any activity aimed at arranging or influencing the outcome of a match at national or international level, otherwise they will not be allowed into European competition. [UEFA, 6/4/2008]
The Royal Bank of Scotland (RBS) predicts “a full-fledged crash in global stock and credit markets over the next three months as inflation paralyzes the major central banks.” RBS credit strategist Bob Janjuah says, “A very nasty period is soon to be upon us—be prepared.” Bolstering Janjuah’s dire predictions, the RBS bank research team warns that the Wall Street equities index, Standard & Poor’s (S&P) 500 index is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from what the Daily Telegraph describes as “the excesses of the global boom, with contagion spreading across Europe and emerging markets. Such a slide on world [markets] would amount to one of the worst bear markets over the last century.” Janjuah also warned of the credit crisis in 2007. RBS predicts that Wall Street would rally a little in early July before quickly fizzling out. “Globalization was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point,” Janjuah says. RBS debt market chief Kit Jukes says Europe will not be immune from the problems: “Economic weakness is spreading and the latest data on consumer demand and confidence are dire.” [Daily Telegraph, 6/19/2008]
An Israeli newspaper publishes a list of the assets of fugitive gun runner Arkadi Gaydamak indicating that they include Portsmouth FC. The claim is made in an article called “Look What I’ve Got,” published by the tabloid Yedioth Ahronot. [London Times, 9/15/2008] The asset listing includes “Soccer Abroad: Portsmouth FC, in England’s top league… managed by Gaydamak’s son, Sacha [Alexandre].” [Guardian, 9/23/2008] The article’s publication follows claims that Arkadi is in financial difficulties and is to show that his position remains strong. Previously, the football club reported it was owned by Arkadi’s son, Alexandre. The difference is significant because Arkadi may not pass the Premier League’s “fit and proper persons” test due to the warrant for his arrest on gunrunning charges. [London Times, 9/15/2008] The league will commence an investigation into the claims (see September 22, 2008), but drop it when Portsmouth assures it Alexandre is the real owner (see September 23, 2008).
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