Proceeds of $3.1 Billion Chelsea Sale Have Not Reached Ukraine War Victims
It was the biggest price paid for a soccer team, and for a while the biggest price paid for a sports team anywhere in the world. And the enormous proceeds were to create what would be one of the biggest humanitarian charities ever established.
But 13 months after the forced sale of Chelsea F.C. after the British government sanctioned its Russian oligarch owner, Roman Abramovich, the charity has yet to be established and not a cent of the $3.1 billion (2.5 billion pounds) has gone toward its intended purpose: providing aid to victims of the war in Ukraine.
The person picked to lead the charity, which is so far behind schedule it has yet to be given a name, has described his efforts as being “stuck in a bureaucratic quagmire.”
Months of talks with British government officials have so far failed to yield anything approximating a breakthrough even as the war rages on and the need for support has only grown, said Mike Penrose, former executive director of the U.K. Committee for the United Nations Children’s Fund, who was tapped to lead the charity. The government’s permission is required before any transfer of the money from a frozen bank account to the charity, to ensure that none of the money is funneled to Russia, or to Abramovich.
At the heart of the stalemate is the government’s insistence that any money can be spent only within Ukraine’s borders, an edict that stems from an agreement with the European Union over how funds can be distributed. Abramovich secured Portuguese citizenship in murky circumstances a few years before Russia’s invasion of Ukraine.
Penrose, backed by other nongovernmental organizations, said placing restrictions on spending to victims of the war in Ukraine would not allow the charity to provide support to millions of others affected directly and indirectly by the war, a group as disparate as refugees living in countries bordering Ukraine and those living in the Horn of Africa, in countries like Somalia, who were plunged into starvation because of a shortage of Ukrainian grain.
“We couldn’t help them under the current conditions,” Penrose said in a telephone interview.
British officials have been wary of seeing any of the proceeds of the sale make their way to Russia, or back to Abramovich, who shortly after Russia’s invasion was deemed to enjoy a “close relationship” for decades with Russia’s president, Vladimir V. Putin. The relationship between the men was not a problem for the British when Abramovich first arrived at Chelsea in 2003, or as he spent the next two decades plowing hundreds of millions of dollars into the team, lifting it to become one of the top soccer clubs in the world.
Abramovich had first proposed the charity when he put the club up for sale last year.
On May 30, when the government issued a license for the sale of Chelsea to an American-led group, it outlined its determination to “ensure that Roman Abramovich does not benefit from the sale of Chelsea Football Club in any way, and that the proceeds of such a sale are used for humanitarian purposes in Ukraine.”
“Furthermore, the Treasury will only issue a license which ensures that such proceeds are used for exclusively humanitarian purposes in Ukraine. The United Kingdom will work closely with the Portuguese Government and the European Commission when considering an application for such a license and the destination of the proceeds.”
That position undermines not only the spirit in which the charity was conceived, Penrose said, but also the law.
“All it would take is a little bit of bravery and a position from the British government that we’re going to do the right thing and help all victims of the Ukraine war, knowing full well we can’t send it to Russians and Russia or anything that people might worry about,” he said.
Publicly, the government has been mostly tight-lipped about the holdup. Pressed on the matter, James Cleverly, the British foreign secretary, said recently: “We want to make sure that the money that is released goes exclusively to the recipients it is aimed at. I need full reassurance that is the case.”
At the time of the sale last year, some of the bidders for Chelsea also expressed concerns about a stipulation set by Abramovich that the funds go toward setting up the new foundation, which he pledged would be for “all victims” of the Ukraine war.
During the months of back and forth, Penrose has communicated with civil servants but not with Cleverly, or any other ministers — the officials that would, he contends, hold the key to breaking the deadlock in a situation that appears to be as political as it is bureaucratic.
“This is one thing that I’m a bit annoyed about,” he said. “We’ve asked for even a telephone call with the ministers in charge repeatedly. And they keep saying, ‘yes, yes, yes,’ and we never get it. And I don’t know if it is priorities or they are avoiding the issue.”
A spokesman for the foreign office would only say that the funds remain frozen and a new license would need to be issued to release them to the foundation.
But it is not only Penrose and staff members linked to the foundation who have been pressing the British government: Potential recipients of the money have, too.
“It’s ludicrous that Chelsea can be sold in a matter of weeks but when it comes to releasing desperately needed funds they get stuck in the weeds,” said James Denselow, head of conflict and humanitarian policy at Save the Children in Britain.
He supported Penrose’s assessment over where and how the funds should be spent. “The consequences of war in Ukraine don’t stop on its borders,” Denselow said.
The comments come during the same week in which London is hosting a high-level international conference to discuss Ukraine’s recovery that will be addressed by Prime Minister Rishi Sunak of Britain and will include the U.S. secretary of state, Antony J. Blinken. Penrose said the event could help bring renewed urgency to the release of the stalled foundation’s funds.
Denselow warned of the risk that the funds could be subsumed by reconstruction costs rather than the humanitarian needs they were designed for.
The global charity Oxfam has also pressed for the impasse to be broken. Pauline Chetcuti, head of policy at Oxfam Britain, suggested the most urgent need was in several African countries reeling from food shortages linked to the conflict in Ukraine.
“I really do hope that there are no politics holding up the money voluntarily preventing families in South Sudan or Somalia from buying their next meal,” Chetcuti said. “It would be outrageous and scandalous.”
