The SFA have so far brought disrepute charges against Rangers and Craig Whyte. At the moment as I understand it these charges relate solely to events which took place during Whyte's period in charge though further investigations appear to be ongoing. The victims of Whyte's brief "ownership" of Rangers fall into two broad categories. The first are those owed money, the creditors. The administrators are court appointed agents whose primary priority is dictated by the law to be recovering as much money as possible for the creditors. In other words the legal framework which exists to protect these people has rightly come into play.
Secondly we have Rangers Football Club and its fans. Nobody would deny Rangers had significant issues but, if we set aside the still to be decided Big Tax Case, Whyte took over as Rangers won their third successive title and the debt to Lloyds had been reduced to £18million. Almost a year later we are in administration and trying to avoid liquidation. Meanwhile Whyte is utterly discredited and facing a police investigation into his time at Ibrox. Only now have the SFA finally ruled that Whyte is not a "fit and proper" person. It seems fair to question the worth of such a rule if it is only acted upon when it is far far too late. I can think of no other situation where the victim is charged along with the perpetrator of the crime by the very body whose job it is to prevent the wrong occurring in the first place.
If the Whyte era is an open and shut case what of the Murray era? It is this period that is providing ammunition to those demanding an ever increasing wish list of punishments. The accusations here require to be considered in two ways.
Financial wrong doing and the football implications
Football currently has no concept of financial fair play. Platini knows this always makes for a good sound bite but even a hero of the great libertarian republic knows better than to really seek to level the playing field. European law ensures there is no question of a salary cap. Champions League TV money will still be distributed on the basis of TV audience rather than merit thereby doubly handicapping big clubs in small countries. How can any organisation whose premier tournament operates a system where a club finishing second, and qualifying from the group stage, can earn less TV revenue than the team who finishes bottom really claim to be concerned with financial equality? This last week has seen Messi and his Barcelona team mates rightly lauded for their results and, just as importantly, the incredible football they play. In amongst the slabbering though I don't remember too many taking issues with Barcelona's £400m debt. If they were £400m in debt would Bayer Leverkusen have had a better chance of progressing to the last eight of the Champions League? "Cheat, cheat, cheat"?
UEFA has sought to make much of their new financial regulations designed to ensure clubs live within their means but Man City's stadium sponsorship deal immediately signalled how concerned football really is with this new morality.
The issues with Rangers though go beyond simply being in debt. Let me be crystal clear, if I have to pay my tax on my 9 to 5 each day then naturally I expect every other individual and corporation to do the same. The Rangers story has woken a great many people up to the reality of what actually goes on as regards Scotland's corporate and insolvency norms. When any company of any size finds itself in financial trouble they will be advised to stop paying anything other than the bills essential to continue trading (the delicious irony is the accountant advising them to do so will often have become involved with the company in trouble at the behest of one of our many tax payer funded banks). In Rangers case they would cease paying everything other than player wages and say policing costs. In simple terms EVERY company that enters administration will owe HMRC. That I am afraid is the reality of how insolvency works.
What of the EBTs? Currently Rangers's former owner contends that the EBT scheme was operated in a perfectly correct fashion. Whether SDM is right and it was tax avoidance (legal) rather than tax evasion (illegal) will be decided by the tribunal dealing with the Big Tax Case. As ever, if the law has been broken then it is only right that the proper punishments laid out in the existing laws are applied to the company and, more importantly, the directors responsible. They will contend that they were following expert third party advice. That remains to be seen and in any case it is irrelevant in terms of whether you have to pay tax.
Ultimately though the impact of not paying your tax and running up debt in a football context are the same, you have extra funds and are therefore able to put a better team on the park than you would otherwise have been able to. As I have illustrated in football spending money you don't have is a norm for even our most celebrated of clubs.
This though is not a state of affairs which can exist in perpetuity. Eventually you will find yourself with a team on the park worse than your support could rightly expect from your resources. This is the situation Rangers face because, in the absence of a Middle Eastern bid being any more than (discredited) paper talk, the current situation where players are paid a % of their wages will not persist. Arguably Rangers footballing punishment began the day of administration. Let us not forget we were only 4 points behind Celtic at that date. It would be childish not to acknowledge the excellent unbeaten run Celtic achieved or to accept they were the form team. Equally though it should not be forgotten Rangers have in recent years turned around a 4 point deficit post split never mind in February.
The title was lost that day with a court order and not on the football pitch. The punishment started there and then though it continues with the current purgatory of administration and, at best, the future prospect of a playing squad far short of the quality needed to mount a meaningful challenge in Scotland and no European football.
In a strictly footballing context the cry of "cheat, cheat, cheat" is no more applicable to Rangers than it is to any other club who have lived beyond their means. You enjoy greater than normal success and then endure the punishment of greater than normal failures.
The SFA rules regarding payments to players state "All payments made to a player relating to his playing activities must be clearly recorded upon the relevant contract and/or agreement. No payment for his playing activities may be made to the player through a third party."
For a legal EBT scheme to have operated it would have required Rangers to make payments to a third party trust. The trust would then decide whether or not it makes loans to a player. If properly operated then the player has been loaned money by a third party. By definition therefore Rangers would not have made payments to a player through a third party which is not recorded on his contract since the player has ultimately only been loaned the money. That is no mere technicality is goes to the heart of this issue.
At face value then it would seem that if Rangers lose the Big Tax Case and it is ruled they did not properly run an EBT scheme then they would have breached the SFA rules. I am not so sure though. Rangers would have been given advice on the operation of the scheme. If the directors of a club have taken expert advice that there is no need to disclose this scheme would that offer a defence? Not from the point of view of paying tax it wouldn't. At best you would attempt to sue your advisors for the wrong advice though that is highly unlikely to be successful. As regards the football regulations I am not convinced that the directors behaviour could be held to be wrong if they have been provided with, and can document, such independent third party advice. It strikes me they did what directors do every day in board rooms across the land with tax rules, in simple Glasgweigan terms they thought they could be a wee bit fly. I remain unconvinced they wilfully set out on a fraudulent course of action. Time will tell, documents will be published and the truth will out.
I believe the SFA's letter this week requesting all clubs disclose any payments made in the last 10 years they are not certain are within the rules is highly significant. Clubs do not simply submit contracts they also submit their annual accounts. A quick glance at Rangers' 2004 Annual Report shows wages and salaries of £20.6 million and contributions to employee benefit trusts of £7.3 million. As with the fit and proper test I would suggest that the SFA have been found lacking. It does not strike me as unreasonable to suggest that whoever is responsible for approving a football club's accounts might notice such a disclosure in the notes and seek to establish whether it needed to be, and had been, disclosed in the relevant player contracts. The opportunity to make a full disclosure now seems to be a tacit admission of this.
Why all clubs? Is this not simply about Rangers? That has been the consistent message through out. Certainly Celtic fans have been very clear that the only Celtic player ever to benefit from an EBT was Juninhio. He had an existing EBT with Middlesborough but after a couple of payments made in the initial months of his employment Celtic scrapped the arrangement and all relevant tax and NI was paid. Quite right too. Who then was the recipient of £765,000 of EBT payments disclosed in the 2006 annual report given he left in 2005? Presumably not playing staff. Presumably not directors who also sit on SFA/SPL boards. I am sure the necessary disclosures were all made and there is no issue. What of Hearts? What of Dundee during the Cannigia era? Much has been said of the use of EBTs by clubs in England. Arsenal cut a deal on this issue with HMRC and at least 8 EPL clubs are on their radar. Little though has been said about their use in Scotland. The SFA's statement looks like a fairly significant hint the issue may not simply be about Rangers.
These matters will not be resolved any time soon and nor should they be. They must be resolved properly and fully and that will not be a quick process. As ever I, and the vast majority of Rangers fans, will accept whatever punishment is laid out in the existing football rule book(s) for whatever existing rules have been breached. What will not be acceptable, and will not amount to justice, is being treated any differently to other clubs. We will not be singled out for policies applied by clubs elsewhere under UEFA's jurisdiction. We will not allow statements we breached player payment arrangements to go unchallenged when that is still to be proven. We will not accept the SFA's incompetence and complicity as regards the EBT arrangements being ignored. We will not allow existing regulations to be re-written or reinterpreted. We will not accept football punishments without precedent and without basis.