87th FIDE Congress; FIDE's financial situation

The very latest International round up of English news.
Angus French
Posts: 1619
Joined: Thu May 15, 2008 1:37 am
Contact:

87th FIDE Congress; FIDE's financial situation

Post by Angus French » Sat Jul 30, 2016 2:37 am

The congress takes place in Baku between 11 and 13 September (coinciding with the final rounds of the Olympiad).

The agenda and supporting documents are available here.

From a cursory inspection of the documents I noted:
1. FIDE’s financial situation looks dire (more on this below). See annexes 1 – 5.
2. The ASEAN Chess Confederation is currently suspended and this affects 10 national federations and their players. See annexes 14 & 15.
3. The European Chess Union is proposing to suspend the Bulgarian Federation from ECU membership over alleged financial irregularities. Annex 59 has the details and runs to 371 pages.

I didn’t see a proposal to impeach FIDE President Ilyumzhinov, which Silvio Danailov has been signposting recently.

On FIDE’s finances:
- The 2015 accounts show that FIDE made a loss 955K euros. This is against a budgeted loss of 390.5K euros. Reserves now stand at just 332K euros.
- I think it's worth reading the Verification Commission’s report on the accounts. An extract is shown below.
- Some expenditure figures I noted from the accounts: Legal costs - 187K euros (9.25% of income); President’s travel - 183K euros (9%); journalists awards - 47K euros (2.3%).

Extract from the Verification Commission's report:
Annex5Extract.png
Annex5Extract.png (702.25 KiB) Viewed 2138 times

Nigel Short
Posts: 292
Joined: Sun Dec 21, 2008 9:14 am

Re: 87th FIDE Congress; FIDE's financial situation

Post by Nigel Short » Sat Jul 30, 2016 5:19 am

Itwebia Chess OU, based in Estonia, appears to be George Mastrokoukos - the lackey of Yiorgos Makropoulos. Over 30,000 euros of unbudgeted expenditure there. How convenient.
Last edited by Nigel Short on Sat Jul 30, 2016 9:47 am, edited 1 time in total.

User avatar
JustinHorton
Posts: 6631
Joined: Mon Aug 04, 2008 10:06 am
Location: Somewhere you're not

Re: 87th FIDE Congress; FIDE's financial situation

Post by JustinHorton » Sat Jul 30, 2016 7:47 am

South Koreans?
"Do you play chess?"
"Yes, but I prefer a game with a better chance of cheating."

lostontime.blogspot.com

Mick Norris
Posts: 7599
Joined: Tue Apr 17, 2007 10:12 am
Location: Bolton, Greater Manchester
Contact:

Re: 87th FIDE Congress; FIDE's financial situation

Post by Mick Norris » Sat Jul 30, 2016 8:33 am

Thanks for that Angus, it looks like a complete mess

Can anything be done about this, in practical terms?
Any postings on here represent my personal views and should not be taken as representative of the Manchester Chess Federation www.manchesterchess.co.uk

NickFaulks
Posts: 5183
Joined: Sat Jan 02, 2010 1:28 pm

Re: 87th FIDE Congress; FIDE's financial situation

Post by NickFaulks » Sat Jul 30, 2016 10:06 am

Mick Norris wrote: Can anything be done about this, in practical terms?
The figures show that FIDE's underlying business remains viable. Verification Commission seems to have put its finger on a number of issues, which sadly seem to be the same ones as a year ago.

1. There are still too many frivolous and generally unbudgeted expenses. Some of them appear to be connected with the online project, although this is not made clear.

2. There has been a disastrous currency mismatch. This could of course have gone the other way, but we all know they never do. This could be handled, something I mentioned last year.

3. I also queried why the provision for legal expenses was so low. It is evident that suing FIDE ( and losing ) is now established as a cottage industry.

4. It remains a mystery to me that federations organising FIDE events somehow manage not to make payments as and when required under their contracts - even though they do generally do seem to pay up in the end.

I hope that some 2016 figures will be available in Baku, and that they will show a happier picture.

Roger de Coverly
Posts: 18198
Joined: Tue Apr 15, 2008 2:51 pm

Re: 87th FIDE Congress; FIDE's financial situation

Post by Roger de Coverly » Sat Jul 30, 2016 11:35 am

Angus French wrote: 3. The European Chess Union is proposing to suspend the Bulgarian Federation from ECU membership over alleged financial irregularities. Annex 59 has the details and runs to 371 pages.
There's been a fair bit about this on the forum.

http://www.ecforum.org.uk/viewtopic.php ... =Bulgarian

I'm a little surprised the 371 pages (on a scroll through) doesn't investigate more on the ersatz ECU in Delaware which seems to have pocketed the Bulgarian Federation's money and indirectly that of Bulgarian state support for chess.

Angus French
Posts: 1619
Joined: Thu May 15, 2008 1:37 am
Contact:

Re: 87th FIDE Congress; FIDE's financial situation

Post by Angus French » Sat Jul 30, 2016 2:23 pm

JustinHorton wrote:South Koreans?
The description in the audited accounts is 'South Koreans Abu Dhabi Congress 2015' and the notes say 'Invited by the President'. That's it. Could there be a connection with the 2018 Winter Olympics in Pyeongchang? Unbudgeted expenditure was 24,871 euros.

Mike Truran
Posts: 2392
Joined: Wed Apr 11, 2007 3:44 pm
Contact:

Re: 87th FIDE Congress; FIDE's financial situation

Post by Mike Truran » Sat Jul 30, 2016 3:27 pm

The figures show that FIDE's underlying business remains viable.
Nick, that may or may not be true, but unless FIDE takes action to fix the areas that make the present position unviable, it will very rapidly become insolvent.

On a specific, unless FIDE believe that federations organising FIDE events will default on the amounts they owe, those amounts will be included as income receivable in the accounts. So as the Verification Commission's report rightly says, this is just a cash flow point. Collecting the amounts in question will not change the accounts. Failing to collect them will result in a further deterioration of the position.

NickFaulks
Posts: 5183
Joined: Sat Jan 02, 2010 1:28 pm

Re: 87th FIDE Congress; FIDE's financial situation

Post by NickFaulks » Sat Jul 30, 2016 3:55 pm

Mike Truran wrote:
The figures show that FIDE's underlying business remains viable.
Nick, that may or may not be true, but unless FIDE takes action to fix the areas that make the present position unviable, it will very rapidly become insolvent.
I don't think that will be difficult. A major source of damage has been unbudgeted items which went through on the nod. Following the current scare, I think that PB will now be much more likely to turn them down, particularly if the Treasurer says they cannot be afforded.

One way or another, I doubt that the currency losses will recur. As to the cost of defending frivolous lawsuits, I would suggest that FIDE should recognise that these are now a fact of life, put a substantial allowance in the budget and raise federations' fees explicitly to pay for it.

Nigel Short
Posts: 292
Joined: Sun Dec 21, 2008 9:14 am

Re: 87th FIDE Congress; FIDE's financial situation

Post by Nigel Short » Sat Jul 30, 2016 9:49 pm

Why not ask Kirsan to pay the $20 million he promised? Bermuda turned down $10 million of hard cash from Rex Sinquefield in favour of the Deluded Kalmuck's pie-in-the-sky. How about that for gross irresponsibility?

User avatar
JustinHorton
Posts: 6631
Joined: Mon Aug 04, 2008 10:06 am
Location: Somewhere you're not

Re: 87th FIDE Congress; FIDE's financial situation

Post by JustinHorton » Sat Jul 30, 2016 10:45 pm

Probably because nobody in the entire world believed either promise.
"Do you play chess?"
"Yes, but I prefer a game with a better chance of cheating."

lostontime.blogspot.com

shaunpress
Posts: 75
Joined: Mon Oct 18, 2010 3:41 am

Re: 87th FIDE Congress; FIDE's financial situation

Post by shaunpress » Sat Jul 30, 2016 11:13 pm

NickFaulks wrote: The figures show that FIDE's underlying business remains viable. Verification Commission seems to have put its finger on a number of issues, which sadly seem to be the same ones as a year ago.
So in summary, FIDE is basically sound as an organisation, it just needs to be run by better people. Is there a process for making this happen?

Nigel Short
Posts: 292
Joined: Sun Dec 21, 2008 9:14 am

Re: 87th FIDE Congress; FIDE's financial situation

Post by Nigel Short » Sun Jul 31, 2016 9:42 am

JustinHorton wrote:Probably because nobody in the entire world believed either promise.
Rubbish. And wrong. As usual...

GeorgeMastrokoukos
Posts: 1
Joined: Sun Jul 31, 2016 12:00 am

Re: 87th FIDE Congress; FIDE's financial situation

Post by GeorgeMastrokoukos » Sun Jul 31, 2016 10:13 am

Hi everyone,

I have been working on various FIDE projects since 2003, so I was also surprised yesterday when I saw this year's Verification Report mentioning my company's services, among other items, as an "unbudgeted item". I contacted Nigel Freeman, the FIDE Executive Director, and he assured me that it was an administrative oversight regarding the 2014 budget and it has already been corrected.

To make a long story short, when I moved to Tallinn in 2014 my fees were removed from the "Secretariat" item of the FIDE budget but at the same time they were not moved to another column. It is a gross amount of about €30k in total (€24k net), which includes working for, consulting or preparing on behalf of FIDE various events: WCC match, Candidates, Grand-Prix, Women's World Championship, Women's Grand-Prix, Olympiad, just to mention a few. This amount is approximately the same for 2014, 2015, 2016, etc., so no extra burdening of the FIDE accounts occured. Of course, the Verification Commission is right in mentioning the obvious mistake in FIDE's budget structure but it is not an overspending nor a new expense as it is a repeating expense, year after year, always approved by the FIDE Treasurer and the FIDE Auditors.

On another note, I think that Nigel Short is being unfair when describing me as a "lackey" of anyone, when he knows that I have also worked with people from his camp as well. Chess is not only politics but also continuous work on projects and new events. I am sure that Nigel Short also feels this way, probably even much more as he is an active top GM and chess promoter himself. Nobody believes that FIDE is perfect (by the way, ask Andrew Paulson or Nigel Freeman about my fights with Makro on various issues) and we all have much more to share than divide in the chess world. Anyway...

Thank you all for your time reading this. As a new member of this forum, I will be happy to reply to any questions you might have or discuss any new ideas. As a regular visitor of London (for other business commitments), I will also be happy to meet any of you guys in person!

Best regards,

George Mastrokoukos
IM & International Organiser
Tel.: (+372) 6683120
Facebook: http://facebook.com/mastrokoukos
Twitter: http://twitter.com/gmastrokoukos
Last edited by GeorgeMastrokoukos on Sun Sep 02, 2018 1:06 pm, edited 1 time in total.

NickFaulks
Posts: 5183
Joined: Sat Jan 02, 2010 1:28 pm

Re: 87th FIDE Congress; FIDE's financial situation

Post by NickFaulks » Sun Jul 31, 2016 10:50 am

JustinHorton wrote:Probably because nobody in the entire world believed either promise.
That does seem to have been the general view.

Post Reply