Leo’s Secret Society-The Shady World of Messi’s Charitable Foundation

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Documents from the Football Leaks whistleblowing platform have raised serious questions about Lionel Messi’s charitable foundations — from annual reports filed years after the fact to the granting of possibly illegal tax exemptions to donors. By DER SPIEGEL Staff

The security guard is sitting at his desk and staring at a half-dozen monitors, his back ramrod straight. On the wall next to him hangs a sign bearing the names of 13 companies. One of them has to be the foundation belonging to Lionel Messi — this, after all, is the address that the Argentinian football star’s charity group puts in its contracts. But the foundation’s name seems to be missing from the sign all the same. Only the well-informed are able to figure out where to go: Limecu, a company belonging to Messi’s father Jorge.

The elevator creaks and groans its way up to the 11th floor, where the company is located. It is only here, where Limecu is headquartered, that one finds silver letters stuck to a wooden wall reading: “Fundación Leo Messi – elegí creer,” or “Leo Messi Foundation – I chose to believe.”

This, then, is supposed to be the nerve center of Messi’s charitable impulses, in a high-rise in the center of Rosario, Sante Fe Province, Argentina. The football magician grew up in straitened circumstances not far from the office building. Today, though, he is the highest paid player in the world, earning more than 100 million euros per year and presenting himself as someone who shares his wealth with those who haven’t been quite so lucky in life: the sick, the poor, the needy and, especially, disadvantaged children.

The foundation in Argentina is something like Messi’s bank of good conscience. Sponsors pay in millions of dollars so that the superstar can use their money to make the world a bit better. It’s a nice thought. But is it real?

No one answers the foundation buzzer. A crack next to the door provides a view of completely empty desks: no papers, no coffee cups, no family photos. The only indication of the man for whom the foundation is named is a plastic, life-sized model of Messi next to the entrance, wearing the national team uniform.

Foundations belonging to Lionel Messi are not unknown to the tax authorities. Last week, DER SPIEGEL and its partners in the group European Investigative Collaborations (EIC) revealed that the football professional paid 12 million euros in back taxes in 2016. One of the reasons for that back payment had to do with the around 7.5 million euros paid by his employer, FC Barcelona, to Messi’s Spanish foundation. The tax authorities were of the opinion that the player should have paid taxes on that money as though it had been part of his salary.

‘Hasn’t Been Back Since’

The elevator beeps and the security guard steps out looking none too pleased. In a deep voice, he says that it is prohibited to loiter on this floor. It’s private, he says, and orders us to come with him. Once he’s back at his desk on the ground floor, though, the guard becomes a bit chattier. “Sometimes someone is here for a couple of hours, but very infrequently.” The security guard taps on a monitor displaying the parking garage. “That’s the parking spot belonging to Messi’s father Jorge. He only rarely shows up and he goes to the foundation offices even less often. Usually he just parks his large BMW with tinted windows and walks into the city,” the security guard says.

Has Lionel Messi ever been here as well? “Oh yes! But that was many years ago. He didn’t even know back then what floor the foundation was on and he took the elevator to the 10th floor by accident instead of the 11th. When he got out, the women in the offices there went nuts and they all surrounded him asking for autographs and photos. He hasn’t been back since.” The security guard laughs.

Charitable institutions collect money from donors and distribute it further to those in need. It is a noble calling, and the success of the model depends on transparency. Donors, after all, are given generous tax exemptions while the foundations themselves are dependent on the trust placed in them by their benefactors.

But a closer look at the foundations and companies associated with the Messis reveals a web of organizations and companies in Spain, Argentina and Britain in addition to cash flows involving tax havens. It is a complex empire hidden behind a thick veil — and one that is managed by Lionel Messi’s brother Rodrigo and his father Jorge.

DER SPIEGEL spent months reporting this story and has examined thousands of documents pertaining to Messi’s foundations, a huge number of which come from the whistleblowing platform Football Leaks.

The story of Messi, the presumed philanthropist, begins in April 2007, when he founded the Fundación Leo Messi in Barcelona in the presence of a notary public. The player himself was listed as president, his father Jorge and brother Rodrigo were registered as assessors and the lawyer Iñigo Juárez assumed the post of director.

At the time, Juárez was one of the very few members of Messi’s inner circle who wasn’t actually a relative. Through his law firm, he helped Lionel and Jorge Messi in 2006 set up an illegal web of front companies in tax havens which were used to hide the player’s marketing revenues from the authorities. That is according to the May 2017 ruling by Spain’s highest court, which found Lionel Messi guilty of evading taxes on more than 4 million euros and Jorge Messi guilty of aiding and abetting his son.

When the foundation was set up, the notary public informed those present of their legal obligations, including that of registering the foundation with the Protectorado, the agency responsible for charitable institutions in the Spanish state of Catalonia. But Fundación Leo Messi wouldn’t actually be registered until June 6, 2013.

Which means it was under the radar for six years. How is such a thing possible?

Questionable Tax Exemptions

In response to a query from DER SPIEGEL, the Protectorado answered that the Messis lacked the necessary documentation when they first tried to register the foundation in 2007. After that, they simply ignored deadlines. According to Spanish law, the failure to register a foundation isn’t necessarily illegal. Foundations don’t have to adhere to laws governing charitable organizations until they are registered. Unregistered foundations, for example, aren’t required to spend 70 percent of their revenues on charitable projects, as Spanish law otherwise requires.

The failure to register only becomes legally relevant if the foundation takes advantage of tax exemptions or provides tax exemptions to others, by issuing donation certificates, for example.

“A Spanish foundation that is not registered can’t issue donation certificates,” says Javier Martín Cavanna, an expert in Spanish law pertaining to charitable foundations. In such cases, donors “can’t benefit from tax exemptions,” Martín says. “Issuing donation certificates without authorization could constitute a crime of document forgery.” Albert Sanchez-Graells, an economic law expert at the University of Bristol Law School, reached a similar conclusion. “By issuing tax-deductible certificates prior to 2013, Messi’s foundation would have breached Spanish tax law.”

But it looks as though that is exactly what Fundación Leo Messi did. In the Football Leaks documents, there are numerous indications that the foundation began operating long before it was officially registered — and that it proved quite successful when it came to raising money.

Parallel to the contracts that Lionel Messi signed with FC Barcelona, the team agreed to pay millions of euros to the player’s Spanish foundation. The Agencia Tributaria, the tax authority in Barcelona, has calculated the total to be slightly over 7.5 million euros just for the years from 2010 to 2013.

The Fundación apparently finally filed its annual reports for the years 2010-2012 in summer 2016 — and only after auditors requested that FC Barcelona file documents pertaining to the taxation of the millions of euros it paid out to Messi’s foundation. In its contract with FC Barcelona, the foundation had committed itself to providing the club with reports each year.

It is peculiar that aside from FC Barcelona, Messi’s Spanish foundation hardly has any other donor worthy of mention. Since 2013, it has taken in around 7 million euros in donations, with just under 6 million of that coming from the club. In 2016, FC Barcelona was the only donor. Were it interested in making money available to charity, the club could just as easily have done so directly through its own foundation.

A Risk Analysis

In April 2016, auditors once again had an appointment with FC Barcelona representatives. They were looking for detailed information about the payments made by the club to Messi’s foundation in the years prior to the foundation’s official registration.

In order to assess exactly what the public officials might have in store for them, club executives commissioned a risk analysis from an external lawyer. The attorney delivered his assessment in mid-June; DER SPIEGEL is in possession of a draft of the document. It notes that in its tax declaration, FC Barcelona had declared the millions of euros paid to the Messi foundation as donations — and took advantage of the tax benefit made available for such donations. The lawyer’s report notes that the Fundación issued donation certificates to the club in exchange.

The foundation wasn’t legally allowed to issue such certificates until 2013. The Protectorado, the Catalonian oversight agency, noted to DER SPIEGEL that an unregistered foundation “is not allowed to take advantage of special tax provisions.”

An internal club document sheds light on FC Barcelona’s role in the affair. It is the compliance report for the months of July to September 2016. It reads: “An examination of the foundation would have enabled us to discover that the Fundación Leo Messi … had not been properly registered.” Because of the ongoing audit, the report notes, the club faces a “real tax risk.” If FC Barcelona wrote off the millions it donated to the Messi foundation prior to 2013, which the Football Leaks documents seem to indicate, then the club violated Spanish tax law. The tax authority’s audit of FC Barcelona continues to this day.

Belated annual reports, possibly illegal donation certificates leading to potentially unlawful tax exemptions for benefactors: Such were the questionable methods employed by the Messi foundation in Spain until 2013.

A look to South America reveals an additional foundation belonging to the superstar — one that was apparently designed to deceive. It is called Fundación Leo Messi Argentina and was founded as an independent organization in Rosario in summer 2011. The foundation in Barcelona, which the Messi’s hadn’t yet officially registered at the time, provided start-up funding of 560,000 euros.

But why does Lionel Messi need two different foundations bearing essentially the same name?

Where Does the Money Go?

Shortly after 7 a.m., the doors open at the commercial registry in Rosario. The hallways are long and there are large holes in the ceiling plaster provisionally plugged with blue plastic bags. The staff sit behind thick glass windows at desks overflowing with binders.

A simple request for information about the balance sheets and those responsible at the Messi foundation can be a Kafka-esque experience. You get shifted from one counter to the next, with reticent bureaucrats passing forms across the counter along with instructions to wait in line again after they are filled out. A fee is charged for each form. It is a procedure that must be repeated five times before a tall man with an impressive moustache finally appears behind the glass. He glances at the form. “Ahh, Messi.” He nods and disappears. Around 15 minutes later he trots back with two file cards. They contain irrelevant information about other companies in which the Messis have holdings. “We have no information about the foundation — you’ll have to search for that on our website.”

The online registry does reveal the name of the vice president: Lionel Messi’s mother, Celia Maria Cuccittini. Otherwise there’s no listing of the board, no information about revenues or expenditures and no indication of who the donors might be. No insight at all.

The website of the Messi foundation itself, on the other hand, shows many photos of the humble superstar seeking to make life a little better for the needy all around the world.

One of the projects that Lionel Messi used to cast himself in a positive light leads to an old primary school in Rosario that is getting on in years. “Messi? Yes, yes, he had his picture painted here,” says one of the teachers. She opens the door to the schoolyard in the back revealing a wall painting, a portrait of Lionel Messi that is about 40 square meters (430.5 square feet) in size. The idea is to show children that anyone can make it to the top, regardless of where they come from. “A company provided the paint and the artist came here at Messi’s request,” the teacher says. She looks out at the image and then says quietly: “We’re a poor neighborhood and the school has many needs. That image surely wasn’t very high on our priority list.”

A hospital is located not far from the school. The foundation website indicates that Messi participated together with other partners in the $1.6 million renovation of one of the wards, though it does not make clear what share of the total sum was donated by Messi. A request to visit the renovated ward was brusquely rejected by hospital personnel. And in Rosario, hardly anyone wants to talk about Messi’s charity work.

‘Equal Opportunity for All’

Documents in DER SPIEGEL’s possession indicate that the amount of money taken in by Messi’s Argentinian foundation is substantial. In March 2011, for example, the Banco de la Nación Argentina signed an agreement with Messi’s father Jorge for a $3 million donation, with the money earmarked “exclusively for social projects undertaken by the foundation in Argentina.” Grupo Maori, a publishing house in Buenos Aires, committed to create a Lionel Messi biography that is to be sold around the world. The publisher projected revenues of around $50 million in Asia, Africa and Australia alone. Messi’s Argentinian foundation is to get around a 10 percent cut of that money as well as a guaranteed payment of 6.2 million Argentinian pesos on top of that, the equivalent of around $1 million at the time.

Two deals with the travel services provider Universal Assistance were likewise lucrative. Adorned with good intentions (“On the search for a just country with equal opportunity for all”), the deals were to bring in a total of $3 million. Yet it wasn’t clearly stipulated how much of the money would go to the foundation and how much would go to Limecu, the company that belonged to Messi’s father. The Messi foundation provided bank account details only on very few of the contracts and draft contracts that DER SPIEGEL was able to examine. On some occasions, it was noted that the foundation would provide bank details for a money transfer at a later date. On other occasions, the issue wasn’t mentioned at all. On still others, the deal called for payment to be made by check.

In terms of revenues, then, the Fundación Leo Messi Argentina brings in roughly as much as a successful mid-level company. But where does the money go? And to what purpose?

A look at the contract the Uruguayan firm Lafmur reached with the foundation in November 2012 is astounding. Under the deal, Lafmur would produce merchandising articles for the foundation and distribute them globally. Jorge Messi negotiated a 10 percent cut of revenues for the foundation as well as a one-time payment of $300,000. According to the terms of the contract, however, that lump sum was to go to the firm Limecu – Jorge Messi’s private company which, as it happens, is conveniently located right next door to Lionel Messi’s foundation in Rosario.

Lafmur paid $300,000 directly to a tax haven. A foundation employee received instructions from Messi’s lawyers in Barcelona that Lafmur should wire the money to a private Andorran bank in Luxembourg. The owner of the account was a company named Hanns Enterprises, based in the United Kingdom.

Britain, Andorra, Luxembourg: Generally, a company working together with a charitable foundation doesn’t require such a byzantine and secretive money pipeline that ends in a tax haven.

Two newspapers — La Nación in Argentina and ABC in Spain — have already followed the trail of the foundation’s dubious payments. At the time, a lawyer representing the Messis said that the $300,000 that Lafmur had paid to the Luxembourg account of the British firm Hanns Enterprises had later been correctly booked to the foundation. But he reportedly failed to provide any proof. The foundation also didn’t answer queries from DER SPIEGEL about the role played by Hanns Enterprises.

A Classic Shell Company

The trail to England could have uncomfortable consequences for the Messis — if, for example, Spanish tax investigators were to look into whether there were any links between the former tax evasion structures, for which the Messis have already been convicted, and the foundation structure. Hanns Enterprises is a classic shell company. It is tightly interwoven with a network of companies that Juárez began setting up in 2006 to hide the millions of marketing revenues earned by Messi. Under the Messis’ old tax evasion structure, sponsor money would go to the London company Sidefloor Limited — which also had an account with the same private Andorran bank in Luxembourg.

The search for Hanns Enterprises’ company headquarters leads to the borough of Camden, a less than glamorous part of London. The front door is flanked by a pub and a copy shop. The woman at the reception, in her early 20s, chews on her nails, which are covered with purple polish. Hanns Enterprises? She says she isn’t familiar with the name. She reaches under the counter and pulls out a thick binder and runs through a list containing hundreds of company names. “Oh, here,” she says. But she says she’s not allowed to share any information.

Only a few days after the visit by a DER SPIEGEL reporter, the liquidation of Hanns Enterprise began. It had only one employee, who was also listed as the director of 12 additional shell companies, all of which were located at the same address. And one of them, coincidentally, was the Messis’ old front company, Sidedoor Limited.

A former business partner of the Argentinian Messi foundation had a falling out with Jorge and Lionel Messi in 2014. As someone who had worked for the family for many years, he was an insider. He accused the Messis of misappropriating money that had been obtained for charitable purposes and a legal complaint was filed, though the Messis denied the allegations.

The investigation files landed on the desk of Dr. Ricardo Luis Farías. The judge’s office is located on the fifth floor of the Palace of Justice in Buenos Aires. Farías sits in a heavy leather chair with an Argentinian flag hanging at his side. The magistrate has small eyes and he speaks quietly. “We had to close the proceedings.” The man who had filed the complaint didn’t provide documents that substantiated suspicions of criminal activity at the foundation, said the judge. “The public prosecutors requested it from him numerous times.”

Started to Get Dangerous

And what about the dubious money flows from the foundation’s business partners to a company with an account in Luxembourg? And the shell firm in London that had such close proximity to the tax evasion structures for which both Lionel and his father Jorge Messi were convicted?

“That still doesn’t provide sufficient grounds for suspicion,” says Farías.

Did the public prosecutor’s office undertake a review of the Messi foundation’s revenues and expenditures?

“We did not request them because there were no grounds for suspicion that a criminal act took place,” Farías says.

And what about the millions held by a foundation that isn’t subjected to any public scrutiny?

“That’s the job of the province of Santa Fe, not ours,” says Farías.

During the summer of 2013, as the criminal tax proceedings took shape and things started to get dangerous for Lionel and Jorge, the Messis registered their foundation in Barcelona. Today, they spend millions on charitable projects, but they still do not reveal the names of their donors, and some of the information provided about the Argentinian foundation is misleading.

DER SPIEGEL sent Jorge and Rodrigo Messi an extensive list of questions addressing all the peculiarities surrounding the foundation. The Messis answered that it has always “duly fulfilled its legal duties,” that they have never run afoul of the law and that they have always complied with authorities’ requests for information.

Lionel’s brother Rodrigo, who is responsible for the Spanish foundation, did not answer questions pertaining to the possibly illegal donation certificates that were issued to FC Barcelona in the years prior to 2013. Addressing the questions about why the Spanish foundation remained unregistered for years or why it didn’t submit any annual reports, Rodrigo Messi wrote that “former advisers” had neglected to do so. One of those he was referring to is likely the lawyer Iñigo Juárez, a former confidant to the family. The lawyer, who DER SPIEGEL also contacted with questions, cited lawyer-client privilege in declining to respond.

A Local Watchdog

Neither Jorge Messi nor lawyer Juárez commented on the evidence that money administered by a shell company had flowed to an account in a tax haven. In its statement, FC Barcelona said that all the bank transfers made by the club to the Messi foundation had served as donations. The club did not provide comment on the possibly illegal donation certificates that Barça is believed to have received from the Messi foundation or the tax exemptions the club likely claimed as a result.

Perhaps there are reasonable explanations for all the oblique structures and dubious money flows. And perhaps the allegations made by the former business partner of the foundation in Rosario are also false. But in that case, it should have been easy for the Messis to answer the questions and clarify the inconsistencies.

FC Barcelona also made changes after the hassle it had with the tax authorities. When the club sealed an extension of Lionel Messi’s contract at the end of June in 2017, the package negotiated also included a new deal with his Spanish foundation. The donor is now FC Barcelona’s foundation. Through June 2022, it is to wire exactly 3.5 million euros to Fundación Leo Messi.

Reporting requirements for the Messis fill entire paragraphs of the contract. Clear red lines have been drawn for annual reports, with all statements of accounts for the previous year due by mid-July at the latest. For larger or more complicated initiatives, the club foundation even has the right to appoint a “local coordinator” to safeguard its interests.

In other words, if necessary, FB Barcelona can assign a watchdog on site. That says a lot about the trust that Lionel Messi gambled away with his foundation.

By Rafael Buschmann, Jürgen Dahlkamp, Gunther Latsch, Nicola Naber, Jörg Schmitt and Michael Wulzinger

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