Tax furore puts new cloud over Serie A

Rule one of Italian football is that whenever Italy are due to compete in a major tournament, a big scandal will break in the previous six months.

Tax furore puts new cloud over Serie A

Based on their World Cup wins in 1982 and 2006, and their performance in Euro 2012, there is a theory a scandal could even be essential for Italy to do well, prompting the manager to circle the wagons and create an ‘us-against-them’ mentality.

If so, Antonio Conte will be offering a quiet vote of thanks to the prosecutors of Naples for the indictment of no fewer than 64 people for tax fraud in cases involving most of Italy’s top clubs, 35 in all.

The alleged miscreants include Milan chief executive Andrea Galliani, Napoli president Aurelio De Laurentiis, Lazio president Claudio Lotito, and the former Juventus director Jean-Claude Blanc, together with 17 players and various agents, among them familiar names such as Adrian Mutu and Alessandro Moggi.

Italy’s Guardia di Finanza — or tax ‘guards’ — who are the armed wing of the finance ministry, duly swooped on addresses in towns and cities across the country, seizing documents and impounding goods. The indictments allege a deeply rooted and pervasive system of tax evasion, relating to transfers, wages and benefits, image rights and even scouting.

It sounds like a scandal to rival even Calciopoli, the tsunami which broke on the eve of the 2006 World Cup and is still causing ripples almost 10 years later.

But look more closely and the amounts of money involved seem remarkably small, especially in a country where tax avoidance and fraud is endemic.

Also this is a simple scandal, especially by Italian standards. No one has ever got to the bottom of the Calciopoli corruption story – nor of the intricate intrigue involved in the betting scandal that broke four years ago. This new scandal is about false accounting and undeclared payments, practices that are familiar to anyone who’s involved in business transactions, and not just in Italy.

The Naples prosecutors laboured for four years, and the inquiry covers the period 2009-2013. Most of the cases date from 2012; But the largest single accusation against a club official involves €240,000, a lot by ordinary standards but not for the boss of Milan.

Not surprisingly Galliani has basically shrugged it off, while the accusations against Napoli, involving the transfers of six players, were dismissed by De Laurentiis as “fluff… and it’s an old story”.

So is this a storm whipped up by prosecutors determined to justify a long and essentially fruitless investigation, or is it the tip of an iceberg?

Ruggiero Palombo of the Gazzetta dello Sport, one of the main men involved in exposing Calciopoli, goes with the iceberg thesis. He thinks the prosecutors have pursued the easy targets rather than the network of football agents and intermediaries involved.

The sheer number of transactions involved, especially those involving foreign players and agents, suggests he is right. And the implications extend well beyond Italy. Colossal sums are being paid to agents – or intermediaries, as they are now known since Fifa changed the regulations. A record €168 million by Premier League clubs in the 12 months to the end of September 2015 – of which more than €83m was paid by just five clubs. Championship clubs paid out almost €34m.

English football is the wealthiest in Europe , but these are only the declared payments. Most intermediaries are honest, but transfer wheeling and dealing has become so involved that the agent, or agency, directly concerned may often be one link in a chain.

Paradoxically, Fifa may have made the situation worse by deregulation. Clubs are now responsible for ensuring the bona fides of intermediaries, so the big clubs will naturally opt for the agents they know and trust, putting more and more power and wealth in the hands of a few. The effect is to inflate the market, and also the amounts being siphoned off.

We’ve seen an extreme example this past two weeks with the explosion of transfer activity from China, chiefly for South American players. In the process even more money is passing through the hands of go-betweens, and out of sight of the tax authorities.

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