777 Partners, Everton and the Murky World of Multi-Club Ownership in Football.

In recent weeks, Everton Football Club, based in Liverpool, England, is being taken over by an American investment firm called 777 Partners. 777 has a murky history and was at the center of a Washington Post article detailing its exploitative business practices that are not dissimilar to payday loans with extremely high-interest rates. 777 also has been buying up football clubs from around the world rapidly. The head of 777, Josh Wander, also has a colorful history; according to the Post article, in his student days, he was charged with drug trafficking after allegedly opening a package containing cocaine that the federal government was tracking. He pleaded no contest and avoided prison time but was sentenced to 14 years on probation, but surely that will be a black mark against the Premier League’s recently beefed up Owners and Directors Test has any teeth to it. One has to feel for longtime Everton supporters who have had to deal with their club struggling both on and off the pitch and could be taken over by a charlatan.

The backdrop to 777 & Everton is the growth of multi-club ownership in football, where one person, or usually an investment group, buys into several clubs worldwide. There are numerous examples, the most famous of which is the City Football Group (CFG), who owns Manchester City and clubs in Australia, the U.S., and elsewhere. According to an article in ESPN, one of the main benefits of owning several clubs is that if one club gets relegated, the financial impact won’t be as profound if the others in the network are performing strongly. Another reason that multi-club ownership is widespread is because it allows big clubs to loan out young players to smaller clubs within their network. However, there are also numerous downsides, and chief among them is a loss of identity and a corporatization of the football ecosystem, particularly in Europe. In my view, the multi-club models are bad for the future of sport because they whittle clubs down to investments and not what clubs should represent; they should represent civic pride and, most importantly, the values of their supporters.

SBF Colleague Admits Fraud.

Yesterday in the trial of Sam Bankman-Fried, Gary Wang, the co-founder of FTX, admitted that SBF had directed him to commit financial crimes. According to an article in The San Jose Mercury, Wang’s testimony will detail the acts of fraud both he and SBF committed while running FTX. Wang stated that he committed wire, securities, and commodities fraud at FTX while having a stake in Alameda Research, the hedge fund that SBF’s girlfriend ran. According to a report in US News, Wang is the first of a trio of former high-ranking executives that will testify against SBF. The trial continues.

The Failure of the healthcare system in Ohio.

In Today’s Washington Post is a lengthy article on the fall of life expectancy in Ashtabula County in Ohio (A place I visited earlier this year). At its heart, this story is not about corruption but political neglect in middle America. Republican governors in states like Ohio since the 1980s have decided that it is not worth putting money into improving state healthcare systems. As a result, life expectancy has plummeted in places like Ashtabula, with Ohioans having life expectancy akin to those in nations like Slovakia and Ecuador. This is mainly due to high rates of smoking-related diseases such as Lung Cancer and alcoholism. This sad state of affairs has no signs of abating as long as Republicans continue to hold on to the levers of power in states like Ohio.

(Disclaimer: the article I reference in this piece is behind a paywall.)

Bankman-Fried’s Fraud Trial Gets Underway.

The trial of disgraced former FTX CEO Sam Bankman-Fried started today in New York City. SBF is accused of fraud and conspiracy to commit fraud. According to a report by CNN, prosecutors claim that SBF stole billions of dollars in customer deposits at FTX to cover enormous losses at Alameda Research, a crypto-driven hedge fund run by his then-girlfriend Caroline Ellison, who pleaded guilty to similar offenses in December of last year. Before its infamous collapse, FTX had developed a well-known reputation by featuring celebrity endorsers such as Tom Brady in Super Bowl commercials. According to an article in Politico, SBF’s trial could have significant ramifications on future legislation regarding the regulation of the industry. Michael Lewis will be smiling somewhere as his book on SBF comes out today; nothing beats a bit of free publicity.

The Fraud Trial of Trump Begins.

The civil fraud trial of Donald Trump began today in New York. This trial centers on allegations that Trump inflated the value of his assets in New York, such as Trump Tower. This is a civil trial, meaning that Trump will not be jailed if found guilty. According to an article by PBS, the New York state Attorney General Letitia James lawsuit claims that Trump purposefully lied to banks and insurance companies about the actual value of real estate and golf course holdings in New York. An article by The New York Times states that there are several New York-based properties that Trump could lose control over if he is guilty, namely Trump Tower, as well as several hotels and golf courses. It is unclear how long this trial will last, but a guilty verdict would only increase the legal pressure on Trump during the run-up to the Republican primaries.

Senator Menendez Accused of Bribery, Corruption.

Democratic Senator Robert Menedez of New Jersey was indicted on bribery charges today. According to an article in The New York Times, Menendez, the chairman of the Senate Foreign Relations Committee, is alleged to have used his considerable influence to pass on classified U.S. government documents to contacts in the Egyptian Government. Menendez also attempted to influence the trials of two New Jersey businesspeople. According to a report in the Washington Post, Menendez tried to pressure the Biden administration to nominate as New Jersey Attorney General, a man he thought would be able to stop a federal fraud trial involving a businessman friend of Menendez. This is not the first time allegations of corruption have swirled around Menendez; he faced bribery allegations in 2017, but it ended in a hung jury, so he escaped prison. This time that might be more difficult because investigators found $500,000 in cash and gold bars at his house and have pictures of said items, which will take some explaining from Menendez.

Paxton Acquitted in Impeachment Trial.

Over the weekend, The Attorney General of Texas, Ken Paxton, was acquitted of corruption charges by the Texas Senate after a lengthy impeachment trial. According to a report by PBS, Paxton enjoyed the perks that came with the Attorney General’s job; in particular, he took vacations to Europe and the Caribbean that cost Texas taxpayers more than $90,000, as well as a $45 cake that was meant to be for the whole office for himself. He appeared to revel in taking foreign trips to the World Cup in Qatar and dinners with high-ranking political officials from the Republican party. According to an article in the New York Times, this impeachment divided the far right flank of the Republican Party led by the likes of former President Trump and Steve Bannon, who support Paxton, and (slightly) more moderate Republican figures such as Karl Rove, arguing that he should be removed from office. The phrase have one’s cake and eat it too seems an apt description of Paxton’s actions here, literally as the case may be.

Head of China Life Insurance Sentenced to Death on Corruption Charges.

The former Chairman of China’s most prominent life insurance firm Wang Bin today was sentenced to death with a two year reprieve after being found guilty on corruption charges. This is the latest conviction of a well-known figure in China’s financial services industry, as President Xi clamps down on corruption. According to a report from CNN, Mr. Wang had taken $44 million in bribes and had stashed $7 million away in a bank account in Hong Kong. It is unclear who could have bribed Mr. Wang; it could be anyone within the Chinese business community or someone from abroad. According to a report in the Independent, when Wang was arrested in 2022, China’s anti-corruption body stated he failed to institute policies within his company that would mitigate financial risks. Likely, this will not be the last time a prominent figure in the Chinese financial industry will be charged with corruption.

Ukraine’s ongoing crusade against Corruption.

This week, the Ukrainian government under President Zelensky has been making further efforts to eradicate societal Corruption in Ukraine. Several outlets, including Reuters, have reported that a delegation of Ukrainian officials has met with Jake Sullivan, the U.S. national security advisor, about improving anti-corruption efforts. Along with that is a report from the BBC that Ihor Kolomoisky, a well-known Ukrainian oligarch, is to be held in custody for two months on fraud and money laundering charges. Arguably, the most critical corruption story to come out of Ukraine is that President Zelensky has fired his defense minister, Oleskii Reznikov, because of allegations of Corruption. A report by the Washington Post suggests that Rustem Umerov, the former head of the State Property Fund of Ukraine, will take over. While there is a long way to go, it is clear that the Ukrainian government is making strides in stamping out governmental malfeasance.

Bongo Deposed in Gabon.

This week, the president of Gabon, Ali Bongo, was deposed in a military-led coup. According to an article from the BBC, the military stepped in after Bongo had been announced as the recent election winner. Bongo had been in power for nine years after taking over from his father, who had been in power since the 1960s. Gabon has had a long history of corruption primarily due to its numerous natural resources, such as oil, being exploited by the Bongo family. According to the Washington Post, Gabon is the seventh country in Africa that has experienced a military coup in the last two years. Another report by the BBC suggests that Brice Nguema is an unlikely coup leader because he is reported to have close links to the Bongos. I fear Gabon will go the way of Niger and Mali, where the military coups have not led to meaningful change but more political instability.