Over the last week, someone operating an anonymous twitter account and an anonymous email account has claimed repeatedly that the Offshore Game withheld evidence in our report. He/She/It also claimed that because we did not immediately reply to his/her/its accusations, we were not committed to ‘transparency’. Seriously? But we do think it’s useful to discuss the evidence, when people have obviously put a lot of time and thought into engaging with our report, so here’s the claim, and why it’s wrong.
The anonymous claim
In summary, the accusation relates to an email between Keith Sharp, Financial Accountant at the SFA and Ken Olverman, the Financial Controller at Rangers. In the email, Sharp says that UEFA have verbally indicated that they ‘are satisfied with [Rangers’] submission in respect of Overdue Payables as at 30 June’.
Claim 1: The email is said to undermine our case that the Rangers did not “meet the rules” with regard to their UEFA submission, because our anonymous he/she/it is working on the premise that all that is required is some form of declaration to UEFA in order to meet the rules.
Claim 2: In addition, it has been suggested that the email was omitted from our report because it undermined the case we were making.
The response
Both claims are wrong. The report already reflects the content of the email; and the contents of the email do not change the case.
In the report we show that the declaration to the UEFA committee, as accepted, was entirely misleading. (As we’ll reiterate at greater length, in the following section, what UEFA require by is a correct declaration.)
To be absolutely clear, for benefit of him/her/it: The report does not suggest that Rangers did not make a declaration. We clearly state that they did. In fact, we even publish the declaration made by Rangers to the SFA on March 31st 2011, because it is quoted in an email from Stewart Regan to Rangers which we include in the annexes to our report. That declaration characterises the liability under the DOS scheme as ‘potential’.
This is what we wrote (emphasis added):
By March 31st, the deadline for reporting an overdue tax liability, Rangers did report that they had a ‘potential’ liability to HMRC arising out of the DOS scheme in their declaration to the SFA. The SFA issued a UEFA licence to Rangers on the basis that the ‘potential’ liability was not an overdue payment under the terms of the UEFA rules.
Unsurprisingly, the board of Rangers thought Stewart Regan’s later suggestion of making that claim public was ‘crazy’ - as indeed it would have been, given that HMRC were at the time of the correspondence taking legal action over non-payment. Releasing that statement might have provoked more difficult questions about how the license was awarded in the first place, for both Rangers and the SFA. In the words of Ramsay Smith, “They [the SFA] will only cause issues for themselves as well as Rangers”.
The claim that we have somehow excluded evidence that was relevant does not therefore stack up. The report states clearly that a declaration was made, and that Rangers were allowed to enter European competition on that basis (i.e. the declaration was accepted). Our report states that the declaration was misleading, and we stand by that claim 100%. Here’s what we wrote:
This description of the liability being ‘potential’ appears to be at the very least misleading. The liability went back 10 years. Rangers were aware of their liability since at least 2005 when they attempted to conceal the payments. Rangers had been in discussions over the amount due since later 2010 and the club had been advised the settle the matter by their barrister before 31st March. It appears that the club had taken that advice and told HMRC that they accepted the liability either before or shortly after 31st March.
For the record, though, we are grateful for all the engagement on the detail of the report - anonymous and otherwise. It may be useful for some to provide a little wider context.
Implications of misleading declarations
The correspondence we’ve had with our anonymous friend suggests some confusion over the operation of UEFA’s rules on declaring overdue payables. We’re grateful to a (different) anonymous correspondent who highlighted this UEFA report from the Club Financial Control Body (CFCB), which details the organisation’s response to false declarations.
First, here’s the review of the relevant season:
During the 2011/12 season, 237 clubs in total submitted the required overdue payables information as on 30 June 2011. The amount of overdue payables declared amounted to €57m. As a result, 31 clubs were requested to provide an update as on 30 September 2011.
From the Sharp-Olverman email, we know Rangers was not one of the 31 - although it did include some, such as Bursaspor, which like Rangers had already been knocked out by 30 September.
Out of the 31 clubs under monitoring, ten clubs – AEK Athens FC (GRE), Beşiktaş JK (TUR), Bursaspor (TUR), FK Crvena zvezda (SRB), PFC CSKA Sofia (BUL), Gaziantepspor (TUR), Panathinaikos FC (GRE), PAOK FC (GRE), FK Partizan (SRB) and NK Varaždin (CRO) – were referred to the UEFA Control and Disciplinary Body in December 2011 as the Investigatory Chamber alleged that they were in breach of the enhanced requirement on overdue payables as laid down in the 2010 UEFA Club Licensing and Financial Fair Play Regulations.
In February 2012, UEFA Control and Disciplinary Body fined the above-mentioned clubs and imposed the following sporting sanctions:
- straight exclusion from the next UEFA club competition for which the club would otherwise have qualified in the next three or four seasons; or
- suspended exclusion from the next UEFA club competition for which the club qualified in the next three/four seasons, subject to certain conditions (settlement of past and current commitments) being met by March 2012. […]
Where UEFA investigated after initially accepting declarations, and found breaches relating to overdue payables, the sanctions were severe. The CFCB also sent out a pointed reminder to all clubs:
Further to the review of overdue payables declarations by the clubs since June 2011, the Investigatory Chamber would remind clubs that:
- At its own discretion and/or based on complaints received, the Investigatory Chamber can ask a compliance audit to be performed on the declarations submitted by the clubs. Should the information submitted by a club be considered as incorrect or misleading, due to overdue amounts being incorrectly disclosed as “deferred” or “in dispute” and/ or being concealed by a club, the case will be automatically referred to the Adjudicatory Chamber for appropriate measures to be taken. In fact, five out of eleven compliance audits performed during the 2011/12 and 2012/13 seasons were referred to the competent body due to incorrect or misleading information. The Investigatory Chamber expects full transparency as well as true and accurate declarations from clubs. Therefore, the submission of false or inaccurate information by a club is considered by the Investigatory Chamber as unacceptable behaviour for which harsh sanctions will systematically be imposed.
- The Investigatory Chamber noticed in several cases that the interpretation of a “deferred” overdue payable was inconsistent. In particular, it wishes to emphasise that for an overdue payable to be considered as validly “deferred” in accordance with Annex VIII of the Club Licensing and Financial Fair Play Regulations, the debtor must propose a deferral agreement which must be accepted in writing by the creditor before the applicable deadline (i.e. 30 June or 30 September for the monitoring process).
Finally, note that the CFCB found a number of licensing bodies (i.e. football authorities of various member countries) to be in breach, although at this point they had not looked at the Scottish FA. One to ponder…