A Guest Blog for TSFM by Auldheid
It has been some six months since we drew readers’ attention to documents that should have been provided by Rangers administrators Duff and Phelps in March 2012 to Harper MacLeod who acted on behalf of the then Scottish Premier League to investigate the use of side letters and employee benefit trust payments made by Rangers from the inception of the SPL in July 1998. You can read the previous blogs/correspondence for background at
In the latest letter below sent to Harper MacLeod and SPL Board members on 5th September 2014, you will find the story of what happened when the LNS Decision was delivered to the SPL Board and how the withholding of those same documents not only meant The Commission was misled from the outset in its terms of reference, but how the SPL Board were also incorrectly advised as a consequence of the same concealment.
It is a matter of some regret that secrecy, concealment and non-accountability continues to be the order of the day, not only in Scottish football but in the media coverage of this particular part of its history, but if this series of blogs does nothing else it will bring out the truth not only about the use of ebts but the deceitful attempts thereafter to try and minimise the damage caused. The Inaction will also stand as an indictment against all those responsible in the game and the media who cover it.
Letter to Harper MacLeod
Dear Mr McKenzie
We write further to our letters of 19th February, 29 March and reminder letter of 18th May 2014 to ask if the SPFL are now , after studiously ignoring for 6 months the correspondence and evidence provided, going to reconsider their position in respect of the Lord Nimmo Smith Commission and Decision of 28 February 2013?
In the detail of our letter of 29 March we suggested that It may be prudent to wait for the results of HMRC’s appeal to the UTT concerning the regularity or otherwise of ebt payments made under the MGMRT arrangement before embarking on any premature decision on the integrity of the LNS Commission Decision with regard to the true nature of the REBT payments being concealed from it.
The UTT have ruled and we know that payments under the MGMRT ebt arrangement are, for the time being and until the Court of Sessions re-examine the case at some future date , “lawful” or “not irregular” in tax terms.
However convenient as that may be to put off addressing the wider issue of the true nature of the MGRT ebts used by Rangers, it is no reason in terms of the LNS Commission, not to examine the effect of the concealment from yourselves as commissioners and the SPL of ebt payments made from 2000 to 2002/03 under the REBT arrangements to Tor Andre Flo and Ronald De Boer which were already ruled irregular by a separate FTT investigating the use of the same Discounted Option Scheme by Aberdeen Asset Management.
We remind you that in the earlier undated letter sent on 19th February we provided irrefutable evidence that
- Yourself, acting as the investigating agent for the SPL, was not provided with all the documentation you requested on 5th March 2012
- That documentation clearly demonstrated that in the case of two players named on the Commission list (Ronald De Boer and Tor Andre Flo) payments were made via an irregular ebt mechanism that subsequently rendered them subject to tax which HMRC has been trying unsuccessfully to collect since May 2011, a year before the commissioning process commenced.
- That in both cases side letters concealed from both football and tax authorities were a feature, whilst later relevant documentation revealing their true irregular nature was not provided as directed by yourselves to the Commission itself.
It is now our firm contention that
- The findings of Lord Nimmo Smith from paras 104 to 106 of his Decision that no sporting advantage accrued must be set aside where now known irregular payments have occurred. Using Lord Nimmo Smith’s argument sporting advantage had to accrue from season 1999/2000 to 2002/03 and the SPFL need to address that truth and consequences for our game to move on.
- Whilst it is unclear which SPL/SFA rules would have been breached by making irregular payments, it was not the rules the Commission was directed to examine as, according to the Lord Nimmo Smith Decision para 88 “ There may be extreme cases in which there is such a fundamental defect that the registration of a player must be treated as having been invalid from the outset “
- Payment by irregular means clearly constitute such a fundamental defect and so an extreme case. These payments should not have been conflated with other payments which are for the time being not irregular and to allow an investigation to stand that wrongly treated them under the same rules as the Commission did for regular payments would be a clear miscarriage of justice caused itself by apparent deception of the Commission by those whose very behaviour it was commissioned to investigate! (If we were using lay man terms we could say that the SP(F)L clubs and their supporters were and are being treated like mugs by those governing our game.)
On the matter of that apparent deception we can even go further on its impact. It is a fact that the SPL never made any public announcement as a Board of acceptance of the Lord Nimmo Smith decision. There was one individual statement but no official SPL Board announcement.
We understand that the matter of making an appeal was raised by the SPL Board on 28 Feb 2013 during a telephone conference meeting, not a face to face one, to discuss the most serious issue ever facing Scottish football and that a decision was delayed for 7 days by which time the date for lodging an appeal was about to end.
During the discussions by e mail some Board members expressed dissatisfaction at the token nature of the punishment for what Rangers had been found guilty of (basically misregistration of players) but also concerns about how no sporting advantage had been obtained through the use of ebts with side letters.
The Board were persuaded by your good self that Rangers had a sound argument that no sporting advantage had accrued. The Board were told that Rangers in effect had said that if the EBT details were required to be disclosed, the reason they did not disclose them was because of an error by Rangers in understanding what was required to be disclosed and that in any event they had secured no competitive advantage from not disclosing since the tax position would have been the same whether they disclosed to the SPL/SFA or not.
Given our opening points we suggest that during the investigation had you had in your possession the withheld evidence we supplied in our letter of 19 February 2014 (and notwithstanding the point re different terms of reference resulting) you would have been able to demonstrate the flaw in this argument to the SPL Board when they were asking your advice on the legal position in early March 2013.
It is difficult to accept that there was an error in understanding that side letters should not be disclosed as part of player registration when our supplied evidence shows that in 2005 Rangers deliberately concealed the existence of side letter for De Boer and Flo from HMRC.
Far from suggesting an error in understanding, this suggests that Rangers understood that to reveal the existence of such letters would remove the tax advantage that ebts gave them and that this advantage depended upon side letters being kept secret from authority and that includes football authority, lest informing them alerted HMRC to their existence. The QC advice contained in the withheld documents is that this deliberate concealment in 2005 demonstrated Rangers true intention of putting cash in the hands of player as part of their remuneration package.
It is also clear that revelation of these particular side letters and their circumstances would indeed have changed the tax position since HMRC have billed Rangers for the tax due on the payments to De Boer and Flo.
HMRC have not done so for Moore because the absence of a side letter puts the tax due on that transaction outside the extended time limit rules that allowed them to pursue payment for Flo and De Boer, but regardless of this and regardless of whether it was notified to the SFA, Moore was paid by an irregular means not available to other clubs..
The questions for yourself Mr McKenzie is had you been in possession then of the information supplied by TSFM would you at the time of investigation been in a better position to either refute the case Rangers made in their defence or to advise the SPL Board that the evidence of deliberate concealment from HMRC in 2005 of what transpired to be irregular payments, gave the SPL Board reason for entering an appeal?
Did the very absence of that material, which was not your fault, prevent you from briefing the SPL Board in a way that you might have done had you had all the evidence to hand?
We think the original evidence supplied and the questions raised now as a result of more fully appreciating what was hidden from the then SPL Board (and so SPL clubs) in March 2013 requires that the SPFL conduct a new cleansing investigation into :
- The apparent deception by Duff and Phelps of the SPL led Commission ,
- Why the SFA President, Campbell Ogilvie, did not advise or correct Lord Nimmo Smith or The SPL and
- The implications of the use of now revealed irregular payments by Rangers FC during seasons 1999/2000 to 2002/03.
This letter has been sent by e mail to the current SPL Board members and also by mail or e mail to the then Board Members who, whilst no longer in position might have their own views on what needs to be done on this issue to restore integrity to the very processes Scottish football relies on to ensure fair play.