According to The New York Times, when Chinese clothing company Li-Ning swooped in and offered to sponsor Kenya’s famed runners, Nike panicked, officials say.
After hearing that the Kenyans wanted to end their deal with Nike — in 2009, Kenyan officials accused Nike of treating Kenya as a “dumping ground” for substandard Nike clothing — a Nike executive wrote to a former employee of Kenya’s athletics federation and said, “Can we talk about the situation?”
According to The New York Times, email exchanges, letters, bank records and invoices, provided by a former employee of Kenya’s athletics, have led to a major scandal in Kenya. Several years ago, Nike agreed to pay hundreds of thousands of dollars in honorariums and a one-time $500,000 “commitment bonus,” which the former employee called a bribe.
The sum is a staggering figure in Kenyan shillings, especially for a country with a GDP per capita of only 1,245 USD, as of 2013. The GDP per capita in the United States is 53,041 USD, as of 2013.
The money, originally designated to help train and support poor Kenyan athletes, was immediately withdrawn from the federation’s bank account by a handful of Kenyan officials and kept off the books, according to The New York Times.
While Nike has denied any wrongdoing, its statement only confirmed the brand’s position: that the payments were supposed to help struggling athletes.
Here’s the juicy bit from The New York Times:
But the Kenyan authorities are suspicious. They have opened an extensive investigation, and all three Kenyan athletics officials accused of taking money from Nike have been suspended. Investigators with Kenya’s Directorate of Criminal Investigations said they had repeatedly asked Nike to provide more information. So far, they say, Nike has refused.
“Why was such a huge sum of money paid as commitment?” said one of the detectives, who spoke on the condition of anonymity because he was not authorized to speak publicly. “It’s only Nike who can tell us.”
John Githongo, one of Kenya’s leading voices against corruption, said the American government should pick up this case and “run with it.”
Nike Inc. has been paying the Kenyan national runners’ association millions of dollars for over 20 years in order to adorn Kenyans with swooshes. Just some of the world records that Kenyan athletes hold right now are the 800 meters, 1,000 meters, 3,000 meters, 20,000 meters, 25,000 meters, 30,000 meters, half-marathon, and marathon.
Interestingly, according to The New York Times, Ethiopian runners have a sponsorship agreement with adidas, but an official there said their contract contained no commitment bonus. Moreover, many professional runners have never heard of such a large one-time bonus for a national federation.
When Kenyan athletes found out that hundreds of thousands of dollars of Nike money had been stolen by their officials they protested at their headquarters in Nairobi with signs that read “blood sucers.”
Kenyan detectives are trying to discover whether Nike facilitated the pocketing of the money by Kenyan officials.
When Kenyan officials, after complaining to Nike, signed a sponsorship deal with Li-Ning nearly $200,000 was sent to Athletics Kenya, and almost immediately after arrival, a top official withdrew the sum. Terminating the Nike deal was more difficult than the Kenyan officials thought.
After they received a letter from a Nike lawyer saying there were no legal grounds to terminate the contract, the Kenyan officials abruptly changed course. They negotiated a new contract in which Nike agreed to pay Athletics Kenya an annual sponsorship fee of $1.3 million to $1.5 million — plus $100,000 honorariums each year and a one-time $500,000 “commitment bonus.” –NYTimes
Nike executives have refused to discuss the contract.
I urge everyone to read the full story here at The New York Times, as there is much more…shadiness involved. After you’ve read the full story, let’s discuss down below; do you think Nike bribed the Kenyans?