Guest Blog by Auldheid
When helping write up the previous blog on the matter of the (mis) commissioning by Harper Macleod, lawyers to the then SPL and current SPFL, of the Lord Nimmo Smith’s investigation into side letters arising from EBTs issued by Rangers FC from July 1999 (https://sfmarchive.privateland.net/an-honest-game-convince-us/ ) .
I had it in mind that only the SFA had something to hide as a result of their President Campbell Ogilvie being fully aware of the history and distinction between the two illegal Rangers Employee Benefit Trust (REBT ) ebts of wee tax case fame not declared to Harper Macleod and the more widely known Murray Group Management Remuneration Trust (MGMRT) Big Tax Case ebts which were declared and on which LNS focussed after (wrongly)treating both types as regular.
The idea that I think most bought into in terms of the registration matters LNS investigated was that no one in football except players with side letters had participated in those schemes and that football authority, both SFA and SPL were unaware of them until their existence became public in Feb 2012. This is when the Sun first published a side letter and the possibility of mis-registration was raised, notably on Celtic Quick News then more widely particularly following an interview between Alex Thomson of Ch4 News and Hugh Adam an ex Rangers Director.
However when you think of the world of Scottish football where players socialise with each other and with journalists, then it does seem stretching it a bit to think that no one in football authority ever heard any gossip or had any enquiry and decided not to investigate the matter before 2012.
Well Rangers Administrators Duff and Phelps thought so and their lawyers Biggart Bailie asked Harper Mcleod in March 2012 why the SPL had not investigated a lot earlier on the basis that
- There had been entries every year since 2000 in Rangers Annual Accounts of sums of money being placed in employee benefit trusts
- HMRC had written to the SPL at some unknown point in the past to ask about the existence of side letters in players’ contracts.
The first argument on annual accounts was one made once public awareness of ebts widened but it was dismissed on the grounds that no one knew much about ebts in those early years and in any case properly administered ones, which they would have been presumed to have been, did not have side letters.
However it does seem likely that having written to MIH/Rangers in 2005 to enquire about the existence of side letters to De Boer and Flo (which MIH/Rangers denied holding even though they did) HMRC would have written to the SFA or SPL sometime after 2005 whenever they first became aware of side letters in players contracts with regards to the MGRT ebts of Big Tax Case fame..
That the SPL had been contacted two or three years previous to 2012 by HMRC was confirmed at a SPL Board meeting in March 2012 as a result of a question being asked by Celtic, who were unaware in 2012 that such an HMRC enquiry had been made in 2009 or 2010. It is possible of course that the connection to misregistration was not made then by the SPL executive asked, but had it been history could have been so different.
How that HMRC enquiry and what it contained was handled by the SPL executive perhaps explains not only why the SPL were so keen to take the lead on the investigation but why they were unaware of the different types of ebts at play, the enquiry in 2009/2010 presumably relating only to the MGMRT type.
The motivation of the SPL executive can be read into their advice to the SPL Board on 23rd February 2012 to instruct an immediate inspection and investigation of the financial records of Rangers with respect to the ebt payments under SPL Rule F1 and under Section G of the Rules on the basis that such an inspection and investigation might reveal prima facie evidence of a breach of SPL Rules independently of any Administrator decision or the outcome of the FTT.
The SPL Board were further advised that taking the lead on such grounds would also go some way to forestalling any attempt by the SFA to include any dependency on the outcome of either Rangers Administration (which they entered on 14th February) or the result of the FTT, (which came in November 2012.)
The desire and benefits of delinking what was at heart a registration enquiry from the much more serious use of tax evasion methods to pay players was obviously not lost on those giving the advice.
In fact in directing LNS in the way the SPL did (possibly unaware that tax evasion had already occurred with Flo and De Boer) it avoided focus on the real and still unresolved issue, were players paid by unfair means from 1999 from which sporting advantage would naturally accrue with no need for proof that it had. You cannot say this had not been thought through in the advice given.
It was also the SPL’ stance that matters concerning player payments had traditionally been considered to be for leagues.
The narrative emerging here is one of the two football authorities keeping from public gaze what individuals in both, if not the whole organisations corporately, knew about the history of ebts; the SFA knowing the history of both types from 1999/2000 onwards and the SPL possibly only knowing something of the MGMRT ebts and side letters from 2009/10 as a result of HMRC asking them questions.
Thus it suited the SFA that the SPL take the lead as much as it suited the SPL to do so but for different reasons. The SFA to keep the existence of the wee tax case ebts hidden from public view and LNS scrutiny and the SPL to avoid answering any “when did they know and why did they not act” questions.
Also if the SPL were indeed unaware of the two distinct types of ebts at play (and they may indeed have been), it explains why they never picked up that the earlier illegal ebts were missed/concealed from them by Rangers Administrators.
Perhaps the SPL and SFA were aware of the benefits to them of focusing only on the registration aspect. This could be presented as an administrative error (which LNS basically decided) rather than the possible illegal nature of the big tax case ebts after the FTT (and which might still arise from the UTT) which would present both with much more difficult and unwelcome consequences to manage and certainly would have changed the nature of the investigation from the outset had the full evidence been provided.
However unless the questions put to the SPFL in the previous blog are answered, we will never know who did what and why, but we at least will know that the LNS Investigation and its findings were a sham from the outset and should be set aside.
Perhaps BDO who are investigating the role and behaviour of Duff and Phelps according to the latest report on their work should be asking Duff and Phelps about the circumstances surrounding the concealment of vital evidence from the LNS Commission?
Och why not?
To the BDO partner investigating. Dated 9th June by web site e mail
“ I see that BDO are carrying out a probe into the conduct of administrators Duff & Phelps. Does that cover the failure to supply SPL with full documentation requested to investigate side letters in 2012?
See http://www.tsfm.net/an-honest-game-convince-us/ for background. Missing evidence is available. ”
PS: I did try to ascertain if HMRC did indeed write to the SPL and when, but they were unable to confirm or deny that they had. The enquiry and response follow. The question on who is responsible for HMRC policy in respect of collection of tax from football clubs was not given but probably due more to an oversight than any attempt to stop the question being answered.