Leaked Contract Between Kasparov and Leong: Transparency vs. Ethics

Earlier this week a draft of a contract between Garry Kasparov and Ignatius Leong was leaked to chess media which raises ethical questions but also calls for more transparency in chess politics. Kasparov and Leong made a deal in August 2013 for the Asian region: Leong would help getting Kasparov "10+1" votes in return for large sums of money. Meanwhile, the Kasparov team has put the final version of the contract on its campaign website, stressing the importance of transparency.

Exactly one week ago an email from a "Bill Warth" was sent to several chess journalists which had "THE HUGE DEAL BETWEEN KASPAROV AND LEONG" in the subject field. Attached was a PDF document (for download here) which seemed to be a contract between Kasparov and Leong:

Through this Agreement the Parties join together in order to achieve their goal of having a real change in FIDE and the Chess World. “GK has declared his intention to run for the office of FIDE President and IL has agreed to take the position as General Secretary in the Kasparov Team. IL shall assist GK and his team at all possible levels in the preparation, planning and execution of the election campaign.”

Here are key points of the agreement:

• IL will actively work in the election campaign in close cooperation with GK and his team. He will be responsible for delivering 10 + 1 vote from his region, with the effort to deliver 15 votes (not counting China).
• IL will receive a total amount of $ 500 000 to be paid in agreed tranches between the signing of this Agreement and 1 month before the opening of the FIDE General Assembly in August 2014.
• After the election of GK as FIDE President and IL as FIDE General Secretary in August 2014, FIDE will establish a new FIDE office in Singapore headed by IL. The main function of this office will be to administer and overlook all the FIDE Commissions and their work. For this work IL shall receive an agreed upon stipend.
• GK has agreed to open an Academy in Singapore (Kasparov Chess Foundation Asia) in cooperation with ACA. The anticipated opening will take place in November 2013. ACA will organize this event and secure 5 + 1 endorsements (signed proxies) for GKs candidacy for FIDE Presidency.
• The Parties have agreed to sign a separate agreement between KCF Asia and ACA. As part of this Agreement, KCF Asia will allocate $ 250 000 for each of the four (4) years commencing in 2013. KCF Asia will allocate these funds in 2013, 2014, 2015 and 2016. The first instalment, in the amount of $250 000, will be made by November 10, 2013. The second instalment, in the amount of $250 000, will occur by July 10, 2014.
• Installments for 2015 and 2016 will be agreed upon at a later date by the Parties and are contingent upon the outcome of the 2014 FIDE elections. Should GK not be elected President of FIDE in the 2014 elections, KCF Asia is under no obligation to allocate funds to ACA for the years of 2015 and 2016, and may not be held liable for any unallocated funds for the 2015 and 2016 years.

The body of the email of this Mr Warth (who did not reply to an email) summarizes the contract, and strongly criticized the deal between Kasparov and Leong: “The national federations become a merchandise...”, “it is clear that Ignatius Leong is shamelessly using a shareholders for-profit company (ACA) to profit from an election deal within FIDE.”, “It is shameful that people from national chess federations of Asia are traded for hundreds thousands of dollars by Ignatius Leong and Garry Kasparov.”

Andrew Paulson
Interestingly, a day later the same email and PDF document was also sent to chess journalists by Andrew Paulson, the new President of the English Chess Federation and owner of AGON, which still holds the rights to organize FIDE events. Paulson, who has expressed interest in running for FIDE President himself but hasn't announced anything officially, commented:

“It has been rumoured that this document was going to be released for some time and it has finally today found its way to the internet. I don't know the exact provenance other than it is supposedly the work of Morton Sand (we'll see in the coming days if this is disputed) of the Norwegian Chess Federation who is the legal advisor to Garry Kasparov's FIDE Presidential Campaign. The overheated English prose of the commentator (in green) summarizes how much Kasparov will pay Ignatius Leong for delivering votes of the federations in his region into Kasparov's camp. In the past, one can assume that Leong did exactly the same thing for Kirsan; now Kasparov outbid Kirsan and bought him away. The compensation is a blend of guaranteed fees and success fees. It is important to note that although this document is not signed, the precondition for the terms outlined (Leong's defection to Kasparov's camp) was effected in the weeks immediately following its drafting. This document is only shocking for those who thought that Garry was in some way better than Kirsan ... and for those who feel that using the Kasparov Chess Foundation as a paying agent for buying votes is improper.”

Contract leaked
The Kasparov team initially refrained to comment, but on Monday the Norwegian lawyer Morten Sand, who is also part of the organizing committee of the Tromsø Olympiad, came with a statement (in Word here). Sand, who was the one who had drafted the contract, started by suggesting that the contract was leaked by someone who had access to Ignatius Leong's email account:

“I was asked to draft an Agreement between Garry and Ignatius based on information given to me regarding their future cooperation. On the opening day of the 2013 FIDE World Cup in Tromsø [10 August 2013 - PD], Ignatius and I understood that high FIDE officials possibly had access to the draft Agreement now circulated. I sent it to Ignatius in July, using his FIDE email account. The only way to get possession of this draft is through the administrator of the mail account in FIDE. There can only be political reasons for why this is now made public in such a way.”

On Thursday an ‘announcement’ appeared on the FIDE website written by FIDE Executive Director Nigel Freeman, which addresses this issue:

“After the article of the New York Times, concerning ethical questions regarding the contract between Gary Kasparov and Ignatius Leong, it came to our attention a statement by Morten Sand, the lawyer assisting Garry Kasparov's campaign, that a leaked contract between Gary Kasparov and Ignatius Leong was possible "through the administrator of the mail account in FIDE".

The above statement of Morten Sand is entirely false.

It is obvious that there is an attempt to drive the discussion away from the substance of this issue, i.e. whether such contracts are ethical or not. For the leaking of confidential documents, Garry Kasparov's team should perhaps look amongst themselves.”

On Twitter Mig Greengard, spokesperson for Garry Kasparov, reacted to this statement:

How do you know it's false? If you have reviewed the logs for his account, why not make them public? RT @Fide_chess: http://t.co/UQKBJ5WyRI

— Mig Greengard (@chessninja) January 23, 2014

So glad you are looking into this. I'm sure you'll be happy to welcome an independent forensic tech audit of the server & logs. @Fide_chess

— Mig Greengard (@chessninja) January 23, 2014

Unless of course you're just saying it's false as an excuse to put inappropriate campaign news on the official FIDE site. Again. @Fide_chess

— Mig Greengard (@chessninja) January 23, 2014

Ilyumzhinov: Ignatius, please resign
Meanwhile, FIDE President Kirsan Ilymuzhinov also came with a statement on the FIDE website on Thursday. Mentioning a report by the New York Times posted on Tuesday about the leaked contract, Ilyumzhinov asks Leong to resign:

“After the recent article of New York Times concerning your contract with Garry Kasparov, and the fact that Morten Sand has confirmed its authenticity, there is a serious ethical issue for FIDE and your position as General Secretary, which is damaging the image of our organisation.

In order to avoid further damage, I am asking you to resign from the position of FIDE General Secretary.”

Ilyumzhinov still supported Leong in Tallinn, Estonia at the Executive Board meeting in October 2013. A day after Kasparov announced his team, a number of FIDE Board Members asked for Leong's resignation, but back then Ilyumzhinov didn't see a reason why he couldn't continue working for him.

No personal money
Back to Morten Sand's statement of Monday, which also emphasized that there was no personal money involved:

“The final version of the Agreement was later signed on September 5^th. By the time of the signing, the Parties had agreed that all financial support was given with the explicit purpose of chess development and programs. No money was going to individuals. On October 31^st  the Kasparov Chess Foundation (KCF) made an Agreement with the Kasparov Chess Foundation Asia Pacific (KCFAP), listing how and for what purpose any transferred money could distributed and spent.

By examining these documents, it is clear that no money can or will be allocated to individuals for personal use.” [Bold by Sand - PD]

Documents published
Six days after the draft was leaked, the Kasparov team posted the final version (here in PDF) on its campaign website along with a separate document (here in PDF) that describes an agreement between the Kasparov Chess Foundation and the newly founded Kasparov Chess Foundation Asia Pacific to grant $500,000 for “promoting and encouraging the study and play of chess in East Asia, Southeast Asia and the Pacific Region, as a means of intellectual development.”

There are some differences between the leaked (stolen?) draft and the final contract between Kasparov and Leong. The latter's responsibility to “deliver” 10+1 votes from his region is still there, but the following sentence was added:

“Support from each of these above mentioned federations must materialize in the form of a written and signed statement and/or irrevocable Proxy, before the last tranche of payment takes place.”

The final contract still mentions that “IL will receive a total amount of $ 500 000 to be paid in agreed tranches between the signing of this Agreement and 1 month before the opening of the FIDE General Assembly in August 2014” but adds “as described in 4.1”, which makes it clear that the amount is not intended for Leong personally, but that it entails the agreement between the Kasparov Chess Foundation and the newly founded Kasparov Chess Foundation Asia Pacific.

The final contract also includes:

“If IL has the opportunity to deliver more federations in addition to the agreed 15, on terms as stated above, the Parties will negotiate the financial terms separately and in good faith.”

Asked why it took six days to come with the original contract, Mig Greengard sent this statement:

A campaign and, more specifically, a non-profit organization like KCF, has responsibility to its board, donors, and the signatory organizations. That is, before you make public an agreement presumed private you must notify the relevant parties on both sides. This isn’t only a courtesy, it’s an obligation, both ethical and in some places, legal.

As for rushing out a documents and statements by Morten or Garry or anyone this week, the campaign isn’t going to disrupt its many activities to meet every slander and trick from Ilyumzhinov’s gang or we’d never get anything done. We’ve seen all this garbage before, 19 years of it to be exact. The Kasparov Team wants to promote chess, promote the campaign, and stick to our positive agenda of bringing sponsorship and reform to the chess world. Spending our time responding to hysterical accusations is exactly what Kirsan’s gang hopes we for. We will continue to speak directly with the federations and answer any questions they may have, of course.

We know the old saying, “never wrestle with a pig because you both get dirty and the pig enjoys it.” It’s time to get out of the mud and organize and unite to bring new ideas, new players, and new revenue into chess. It’s time to stop taking from the federations and start listening to them and helping them. If Ilyumzhinov’s FIDE spent half the time it spends on these games to stay in power on promoting chess instead, FIDE and the chess world wouldn’t be in such a mess.

Transparency
By posting the contracts online, the Kasparov team advocates transparency. The accompanying text on the campaign website, by Morten Sand, reads: 

“This is an historic day, as for the first time in 20 years of FIDE elections a campaign team is following the principle of transparency by making public two contracts.”

Nonetheless, for many the deal between Kasparov and Leong will raise ethical concerns. At a press conference in Wijk aan Zee, Kasparov will answer questions today.

Meanwhile, it's not easy to learn more about Kirsan Ilyumzhinov's campaign budget and funds. Nigel Freeman, who is both FIDE's Executive Director Treasurer, said he is “not involved in the campaign”. Berik Balgabaev, who is Ilyumzhinov's personal assistant, did not respond to inquiries.