Quebec Soccer Federation scandal

[Ansem]

http://www.journaldemontreal.com/2017/02/23/une-firme-informatique-achetee-avec-largent-des-parents

***Translation

A computer firm bought with parents' money

The Soccer Federation is paying a company with registration money

The Quebec Soccer Federation, which receives parents' money from 185,000 young sportsmen and women, has just bought a computer company led by one of its former directors for nearly $ 825,000.

No other large sports federation in Quebec owns a computer company. The Soccer Federation of Quebec (FSQ) has no experience in this field either. Prior to acquiring TSI Sports, the Soccer Federation gave the company its largest IT contracts for more than 10 years. The founding President of TSI Sports, Mario Discepola, is familiar with the non-profit organization FSQ. He served on the Federation's Board of Directors from 1993 to 2010, including the last year on the Governance and Ethics Committee.

In addition, TSI Sports belonged to Alex Miklos, a businessman whose name and address appear in a vast leak of secret documents on tax havens, discovered our investigative office. This man is the secretary and only other shareholder of TSI Sports. Mysteriously, in the annual records of the Quebec Business Register, his name has changed over the years. It was Alex Amikos, Alex Milkos and Alex Miklos, it is found.

It was in November, before the purchase was completed, that our investigation office began to question the FSQ about this transaction. The new director general of the FSQ, Stéphane Arsenault, agreed to meet us on Wednesday. He was not in the position at the time of the transaction and he seemed surprised when we revealed the disturbing details of the deal. Mr. Arsenault was not able to answer all our questions. He refused to tell us if Mario Discepola had filed declarations of interest when discussing his business at FSQ meetings. Before being bought by the FSQ, TSI Sports was responsible for the IT management of the Federation for more than 10 years, as an official partner for registration, statistics and schedules. The company reports annual revenues of approximately $ 800,000, largely from the FSQ.

 

According to the investigation by the International Consortium of Investigative Journalists, the address and the name of the shareholder of TSI Sports Alex Miklos appear on the opening of an account in the Virgin Islands through the company Commonwealth Trust Ltd., which has helped thousands of companies open offshore entities. The Commonwealth Trust Ltd. Was used as an intermediary "for fraudsters in the securities sector, promoters of the Ponzi system ..., arms traffickers and members of criminal networks," Le Monde reported in 2013. By searching the TSI Sports website, we also discovered that the firm indicates not only to be registered in Quebec, but also in the United States, in Carson City, Nevada. This state is recognized for its fiscal flexibility. The TSI Sports office in Nevada is actually a ghost address that houses several other businesses. One of them was also cited in the Panama Papers tax scandal. On the phone, Mr. Discepola hung up after saying that this was a "private transaction".

 

The director general of the FSQ, Stéphane Arsenault, was unaware that the new acquisition of his organization had a phantom office and a shareholder identified in a tax haven investigation. In office since February 6, he met our investigative office on Wednesday.

"I am not able [...] to go into more detail on how the process was conducted in a precise manner. I can not comment on the information you give me. It must be noted, "said Mr. Arsenault, obviously surprised when confronted with the findings of our investigation. On several occasions, he recalled that the purchase of TSI Sports had been made by the Board of Directors (C.A.) and that the DG was not involved. We had also sought the presence of the president of the C.A. since 2011, Martial Prud'homme, but it was not available Wednesday. The AC had "very good intentions", according to Mr. Arsenault. "Whether these factors (findings of the investigation) have been verified ... I could not say." Mario Discepola, who was a director in addition to being a shareholder of TSI Sports had to withdraw when it was about the company to C.A. Mr. Arsenault does not want to make it clear.

 

Even though the CA is a judge and a party to the transaction, Mr. Arsenault does not see any moral problem and replies that the file respects the "legal, fiscal and legal" aspects. He explained that the FSQ has created a "totally independent entity" to manage the computer company.

However, in searching, we note that this independence is rather relative, since the president of this new entity is Martial Prud'homme while the only shareholder is the FSQ. The DG justifies the purchase of TSI Sports on the basis of an analysis by C.A. concluding that it was more profitable to buy the business than to risk that it was purchased by a third party who could modify the rates. The Federation says that switching suppliers could have cost three to four times more. However, our Board of Inquiry discussed with competitors from TSI Sports who say they have never been called to bid. These companies, which wanted to remain anonymous, strongly disagree with the claim that dealing with them would cost more.

 

Both Executives and Subcontractors

The Fédération de soccer du Québec (FSQ), which spends 42% of its budget on administrative expenses, sees no problem in having its directors be shareholders of companies to which it contracts. Our Board of Inquiry found three cases:

1 - Mario Discepola was a TSI Sports shareholder while serving on the Board of Directors of the Federation. The FSQ says it has complied with all ethical rules.

2 - The FSQ's former general manager (2012-2016), Patrick Esparbes, is a shareholder of the TVGO company, created in 2008. This television production box did business with the Fédération during the period when Mr. Esparbès was DG. The FSQ emphasizes that a strict process has been established, that the competition rules have been respected, that Mr. Esparbès has retired as a director of TVGO and sold shares in order to be a minority shareholder during his time at the FSQ . Having left soccer this fall to become Deputy CEO at Judo Canada, Mr. Esparbès refused to answer our questions and wrote that he would not hesitate "to undertake any procedures if your work as a journalist seeks only To smear a reputation ".

3 - The President of the FSQ, Martial Prud'homme, is a shareholder of Prud'homme Groupe conseil, a human resources firm that has obtained FSQ mandates for the recruitment of personnel. FSQ CEO Stéphane Arsenault did not want to tell us whether Mr. Prud'homme's firm had been paid for these mandates. "I do not have this information that is confidential on internal management."

 

The FSQ is the sports federation that spends the most for its administration among the Québec federations of hockey, baseball and soccer. *

Quebec Soccer Federation
◾ Expenses: $ 6.7 million
◾ Administration: $ 2.8 million (42%)

Hockey Quebec
◾ Expenses: $ 8.4 million
◾ Administration: $ 2 million (23%)

Baseball Quebec
◾ Expenses: $ 2.3 million
◾ Administration: $ 630,000 (27%)

* Year 2015-2016, according to organizations

 

 

 

 

 

 

[Ansem]

This is the troubling part here:

The FSQ is the sports federation that spends the most for its administration among the Québec federations of hockey, baseball and soccer. *

Quebec Soccer Federation
◾ Expenses: $ 6.7 million
◾ Administration: $ 2.8 million (42%)

Hockey Quebec
◾ Expenses: $ 8.4 million
◾ Administration: $ 2 million (23%)

Baseball Quebec
◾ Expenses: $ 2.3 million
◾ Administration: $ 630,000 (27%)

* Year 2015-2016, according to organizations

 

 

[Ansem]

2 minutes ago, Ansem said:

This is the troubling part here:

The FSQ is the sports federation that spends the most for its administration among the Québec federations of hockey, baseball and soccer. *

Quebec Soccer Federation
◾ Expenses: $ 6.7 million
◾ Administration: $ 2.8 million (42%)

Hockey Quebec
◾ Expenses: $ 8.4 million
◾ Administration: $ 2 million (23%)

Baseball Quebec
◾ Expenses: $ 2.3 million
◾ Administration: $ 630,000 (27%)

* Year 2015-2016, according to organizations

 

 

So the soccer federation making that much money and spends 42% on admin expenses...double what Hockey Quebec spends in percentage. Yet, the quality between both programs are light years away from being comparable.

WTH?????  WTF?????

Just like Hockey Canada did in the 90s, the CSA MUST step in and take control. The illusion that there's no resources in Canada for soccer is a myth. There's a serious management of those resources in Canada and the CSA must step up and either take it over or act as the top of the food chain and make those provincial bodies accountable. 

God knows what's happening in other provincial bodies as soccer rarely get any media attention

[Kent]

This is disturbing news. Thanks for posting this @Ansem. I'm glad Le Journal de Montreal investigated this. Let's hope some meaningful changes are made to get rid of this kind of corruption. That money could either have stayed in the kids' parents' pockets, or at the very least be used more wisely for the betterment of soccer in Quebec and Canada.

[Blackdude]

TSI Sports also works with the CSA. (Look at Nationals) I doubt that the CSA will step in because well, they have an history with them. So, while it looks bad for the FSQ, I think it also looks bad for the CSA, because they have worked with them. 

[Blackdude]

By the way, here's their answer.