A Very Scottish Scandal: How Rangers Almost Wrecked Scottish Football – Part One

ogilvie1This article is the first part of a piece I’m writing for another site I’ve just taken over, one about football in England and across Europe.

I thought it was time we moved the Rangers-Sevco debate outside Scotland, to an audience beyond our borders, perhaps in the hope of interesting the London based media in this sordid, and unbelievable tale …

To do so, it’s necessary to tell it all, exactly as it happened, without inference or bias, as a straightforward presentation of facts. That way we can give investigators their framework.

It is going to be long, easily the longest piece I’ve ever published. It’s also complicated, as the situation has been, and continues to be.

Of course, it was always my intention to publish it here as well.

It’s still being written, but it was getting too long to post as a single article, so I’m splitting it.

Part 2 will be up in the next day or two.

In the meantime, this is the backstory of the scandal that almost destroyed Scottish football.

Part One: The Introduction

Football in England is in good shape. Or bad shape. Or improving. Or getting worse.

Depending on who you are talking to, it’s all of these things and it’s none of them.

From up here in Scotland it looks pretty healthy to me, without necessarily being on a par with how things are in, for example, Germany.

But the game is in safe hands.

You only to have look at the way the FA has dealt with club owners who’ve tried to take the piss to see that.

The folk running football in England get it.

When the game down there suffered the match-fixing/betting scandal in 2013, that sent a number of people to jail, the National Crime Agency was widely praised for their role in it, but in my view the Football Association deserved enormous credit too.

Football didn’t try to cover this up.

The FA co-operated in full. Nothing was with-held and nothing was swept under the carpet.

I envy you guys leadership like that. Up here, we have none.

I’m going to tell you all the story of a cancer eating Scottish football from the inside.

I’m a Celtic blogger, and I’m telling you that upfront because this involves my club’s biggest rivals, and I want it to be clear what my background is before you carry on reading a word.

Everything I’m about to write is the truth.

All of the facts are verifiable and easy to confirm.

Fans in England have maybe heard some of the story, but I’m willing to bet the version of it you’ve been reading or hearing about isn’t exactly … complete.

There are reasons for that.

For one thing, the story isn’t complete yet and it might not be for a long, long time.

It’s also complicated, with roots going back more than fifteen years, involving a Who’s Who of characters right out of a James Bond film.

Think I’m exaggerating? I’m not.

It takes place across four continents, with scenes set in South African mansions, waterfront properties in Monaco, expensive London hotels and grubby back door boozers in Belfast.

It’s a sexy story, involving politicians, dodgy bank officials, money laundering, tax evasion, fraud and a host of other offences, and I can’t even write down all the gory details because some of them are currently the province of the courts.

But it’s also about failures of governance, a compliant and even complicit media, and corrupt practices which are widely known about up here but haven’t yet been accounted for.

It’s about a decade of cheating, and about the concerted efforts of a group of people to make sure that no-one was punished for it.

They first tried to ignore it, then tried to excuse it, then tried to buy off their critics with promises to tackle it before they made it 100 times worse.

It’s the biggest scandal in the history of sport on this island.

It’s torn Scottish football apart, but could yet turn out to be the thing that saves it.

Part Two: 2007 – The Origins Of A Scandal

This story properly begins in 2007, with a police raid on Ibrox Stadium, Glasgow, the home of my club’s biggest rivals, Rangers. The purpose of the raid was to obtain information, on behalf of the Metropolitan Police, to aid in their investigations of football corruption, involving backhanders in transfer deals and the tapping of players.

Amongst the evidence collected were computers and financial records.

One of the deals they were looking at involved the sale, by Rangers, to Newcastle United of the French defender Jean Alain Boumsong, for £8 million, a transfer that was somewhat unusual as he’d only been at Ibrox for six months, after arriving on a free.

The Newcastle manager was, of course, former Rangers boss Graeme Souness.

He wasn’t charged with anything, and in a later stage of the inquiry was cleared in relation to the matters at hand. Rangers itself wasn’t implicated in the scandal.

But there was a nasty sting in the tail for the club.

On the computers, and in the club’s books, there were details of dozens of payments made to footballers and club employees – and some ex-employees, as we’ll discuss – totalling tens of millions of pounds, payments which seemed unusual. The Met passed them on to Her Majesty’s Revenue and Customs, who examined them and concluded that they were part of a tax evasion policy the world has come to know as an EBT – an Employee Benefit Trust.

HMRC began an investigation.

It was a bad time for the Treasury, with the first ripples of the coming global financial storm already tingling the antennae of certain economists and politicians, amongst them Vince Cable who was trying to warn his parliamentary colleagues that a catastrophe was just around the corner. They largely ignored him, as a lot of those in the Square Mile ignored their own Cassandra’s.

Reality can be ignored. For a while. Then it comes crashing through the walls.

The tsunami struck less than year later, and Gordon Brown’s government was engulfed as they tried to keep the rising waters from sinking the UK economy.

Alastair Darling, Brown’s Chancellor, was soon having round the clock meetings at Threadneelde Street and the Treasury with bank officials who started out claiming their institutions were sound but eventually were forced to admit this wasn’t true, and that they badly needed government help.

One of the last banks in the UK to admit they had a problem was one of the flagship enterprises Brown and others had been so proud of, Halifax Bank of Scotland (HBOS), which had once been a sleepy, down home conservative high street institution but which over time had turned its backroom into a speculators casino.

At a dinner party, at the height of the crisis, Brown spoke privately with the head of another of Britain’s leading banking companies, Lloyds TSB, which had successfully evaded trouble by staying out of the dicier activities going on in the Square Mile, to find out if they’d be interested in taking over HBOS on the cheap.

In order to smooth the path for the deal, Brown agreed that the merger would be exempted from the UK’s competition regulations.

In one of the worst failures of due diligence in financial history, and with politicians breathing down their necks, determined to avoid a crash, Lloyds completed the deal in jig time, only to discover something appalling; HBOS was sitting on a £10 billion hole.

The big bosses at Lloyds slammed the brakes on at once, as they started to go through the disaster zone with a fine toothed comb.

Of particular interest to them were the goings on of a handful of directors, including Peter Cummings and his predecessor, a guy called Gavin Masterton.

I could write a book on these two, and in years to come others will definitely do so. Their story fits into the picture here and a bigger picture besides, which overlaps with this one. I’m not going into the full scale of it – most if has no bearing on this – but the part that does has to be laid out properly and understood, in order to comprehend how big this is.

Here’s a little history lesson, before we go on.

Part Three: David Murray & The Bank That Couldn’t Say No

Back in the 90’s Gavin Masterton was one of the most powerful individuals in Scottish football, although only a handful of people knew that at the time. His department at what was then the Bank of Scotland had on its books the debts of almost all the Premier League clubs, including Celtic’s.

In fact, in 1994, Masterton’s department came within 24 hours of closing Celtic down over a debt of £5.25 million, cash the old board couldn’t repay.

The club was saved by a Canadian supporter named Fergus McCann, who along with a group of likeminded individuals effectively put up the collateral for that debt and then paid it off entirely. According to McCann, who took over the running of the club, he and his board approached the bank 10 months later, to find out on what terms they’d be granted a loan facility.

The bank offered them £2.5 million, fully securitised, which McCann and his people regarded as an insult. They ended the club’s relationship with Bank of Scotland there and then, and he retained deep distrust of them until the day he stepped down from his role.

As a gauge of how ridiculous the bank’s offer had been, McCann later told a newspaper that shortly afterwards the club was able to obtain a £10 million loan on very favourable terms from the Co-Op bank in Manchester.

Celtic’s issues with the bank were in sharp contrast to the relationship Masterton had with the owner of Rangers, David Murray.

At that time, and for years afterwards, Murray was regarded as a true example of Scottish entrepreneurial genius. He seemed to have a flair for making money, and for courting publicity. Indeed, there’s much in his personal story that should earn him high praise. He prevailed through astonishing adversity in his early career, even coping with the loss of his legs in a car accident, to rise to become one of the shining lights of Thatcher-era business.

He took over Rangers in 1988, and immediately set about transforming the club into the biggest football operation in Scotland. First, he completed the re-development of Ibrox, turning into an all seater stadium the envy of almost every club in Britain. And, at a time when English clubs were banned from Europe, they spent lavishly on bringing the likes of Woods and Butcher and Steven to Scotland in big money deals.

But Fergus McCann and the new Celtic board were about to change the game entirely. They had arrived with a momentous business plan, one which the Canadian set about with aplomb, rebuilding the dilapidated Celtic Park into one of the biggest and best club stadiums on this island – crucially, with 10,000 more seats than at Ibrox.

After nearly a decade of being the biggest club in the land, Rangers saw their hold broken as Celtic stopped them from beating their own club record of nine in a row, on the last day of a breathless season in 1998. It had taken Fergus and his people just three years to rebuild the club into something the fans could again be proud of.

What happened next was staggering, and laden with consequences.

Murray threw more money at his team than had ever been seen in Scottish football. The knock on effects are still difficult to quantify; it ushered in an era of rising transfer fees and over the top spending at many other clubs … and to the crippling debts that came later.

Within a year, the Ibrox debt had swollen to £50 million, as Murray, with typical bombast, told a media that lapped up his every word, that “for every fiver Celtic spend we will spend a ten.”

In point of fact, he exceeded that by quite some way. The spending gap was actually far higher – a ratio of three or four to one, and was actually completely unsustainable.

Everyone assumed – because the media dared not ask – that Murray himself was footing the bill for this outrageous cash splurge. What nobody knew, until much later, was that a good deal of the money to fund these signings had come from the very same bank, and the very same people, that had almost closed Celtic down just a few years before.

In 2001, The Bank of Scotland had merged with Halifax to become HBOS, and Masterton had handed over responsibility to Peter Cummings, his protégé, who had been at his side through much of the insanity of the previous few years.

Over the next 12 months, the debt at Rangers climbed even higher until it topped £80 million. Again, the real facts were largely hidden out of sight, but we know now that in 1999 the bank had taken part ownership of Rangers during “corporate restructuring” at MIH, the umbrella organisation owned by David Murray, and which controlled 85% of the club. The banks £20 million “investment” in MIH entitled them to 12 million shares in that company and a holding in Rangers itself.

On the surface, everything looked calm. But HBOS and Murray were hiding a devastating secret, one which would be uncovered in due course. The Murray “success story” was being funded by bank loans. In 2001, they borrowed £50 million, on extremely good terms, and their exposure only increased in the years that followed.

In 2004, Murray “personally” underwrote a share issue to remove £50 million of the debt burden from the club. The papers lauded him for this largesse, but in actual fact, with the help of the bank and some clever accounting, the debt was simply transferred to another section of MIH.

By 2006, two years before the financial crash, the newly named Murray Group owed the Bank of Scotland £209 million. A year later, the debt stood at £290 million.

When Lloyds took over in 2008, they uncovered the truth, not just about the £10 billion hole but that HBOS had been effectively trading whilst insolvent, and had received a $12.5 billion emergency loan from the US Federal Reserve on the night of the takeover, and a £24.5 billion loan from the Bank of England at Threadneedle Street shortly thereafter.

Lloyds officials started to dig. They soon found out where the money had gone.

Masterton, Cummings and friends had been having a rare old time, lending money at ludicrously generous rates to their pals in business, much of it in Scotland, of whom Murray, through the ownership of Rangers, was the most high profile here.

These loans were generally acknowledged to be ridiculous, but as long as the companies they were investing in seemed solvent – and in Murray’s case high real estate prices, including Ibrox, which he had valued at nearly twice its land worth, were making it seem that way – they were able to keep a lid on the pressure cooker and the lending went on.

The HBOS affair was so toxic – and it wasn’t limited to Scotland – that it became the subject of a major criminal fraud investigation called Operation Hornet. I’ll skip the details of that, as it doesn’t apply to this story, but one fact ought to make the eyes of any reader bulge. A report commissioned by Lloyds Banking Group at the time estimated that fully 69% – worth a mind-bending £80 billion – of the money Cummings and his department lent during its roller coaster existence, fell outside of what the more conservative bank called its “risk appetite.”

The damage had been done. Saddled with this enormous hole in the balance sheet, Lloyds Banking Group – who had hitherto avoided being dragged into the swamp of the financial crash – became one of the organisations part-nationalised by the government in 2009, who took 43.3% of its shares in exchange for a bailout package.

As a consequence, most of the debts from that era were written off, at the taxpayers’ expense. Murray, and Rangers, as it turned out, were quite literally funded from the public purse.

We didn’t know the half of it.

Even as Lloyds was trying to get its house in order, turning off the lending taps and asking the recipients of HBOS loans to see the colour of their money, and as a consequence bringing Rangers into line with the rest of Scottish football, at last, in terms of spending only what they earned, the club was hit with a sledgehammer.

The 2007 investigation into the Jean Alain Boumsong transfer had provided HMRC with evidence of wholescale tax fraud at the club, and in 2010 they sent their tax bill to Ibrox, amounting to a demand for repayment of £40 million plus fines.

When the story broke it send shockwaves through Scotland. A tax bill that size, with HMRC insisting on payment on demand, was capable of wiping out any club overnight. Rangers were appealing it, so it wasn’t imminently due, but that was of little consolation to Murray who, with the bank breathing down his own neck, was no longer able to support the club as lavishly as he had with the use of his flexible friend and an unlimited line of credit.

He put Rangers up for sale, and waited for the offers to flood in.

A few people expressed interest. One was a hard-line Unionist MP, who never made it clear where he was getting the cash to buy a football club. Another was a Russian oligarch who turned out to be a vicious gangster. The News of the World ran an editorial saying Rangers fans were open to anyone, that they didn’t care where the money came from, or who the owners were, as long as the club was able to compete with Celtic.

Financial analysts and people within the club pleaded with Murray to start setting cash aside to indemnify them against a negative outcome in what became known as the Big Tax Case, but he wouldn’t hear of it. The club was still spending every penny that came in the door, as fast as it did, and in order to maintain the liquidity of his corporate empire Lloyds were still allowing him huge overdraft facilities. That allowed a certain leeway.

But the spectre of EBT use hung over the club like a killing weight. To understand how this happened you have to go back to 1999.

Part Four: Ten Years Of EBT’s

Celtic, under Fergus McCann, had just completed the shimmering new Celtic Park and Fergus had announced his departure, as per his “five year plan.”

In that time he had turned around the club, making them financially self-sustainable with the second biggest season ticket base in the UK after Manchester United. Furthermore, with 10,000 seats more than Ibrox the new ground was capable of giving the club a long-term financial advantage, provided both sides were run on a similar basis.

But of course, they weren’t and Murray was chasing more than just Scottish glory. He saw European success as a primary goal too, and that needed to be funded and even with the Bank of Scotland loaning him staggering sums he was looking at other measures.

As Fergus was preparing to exit Celtic Park, Murray told one of his media acolytes that “whoever takes over Celtic next had better have the deepest pockets imaginable.”

To be sure his were deeper still, in 1999 he and the Rangers board set up what became known as the Discounted Options Scheme, what we now refer to as “the wee tax case.” This was a highly complicated way of paying players huge lump sums on top of their salaries, so as to defeat the taxman. It was the dodgiest of dodgy schemes, like EBT’s now absolutely illegal, but at the time … well, borderline, if run right.

The scheme was opened by a Rangers director named Campbell Ogilvie, a man who was to play a huge, and important, role in what was to come. Over the four years of its existence, the Discounted Options Scheme provided remuneration packages for some of the most high-profile players in the club’s recent history, including Ronald DeBoer and Tore Andre Flo.

Part of the trouble, for Murray and his club, was that Celtic were undergoing a remarkable transformation in the early part of the new millennium. Martin O’Neill had arrived as manager and the club was on a sound financial footing, allowing him access to funds no boss at the club had ever been given before. He signed top players, like Chris Sutton, Alan Thompson and Neil Lennon, to augment the talents already at Parkhead, including Lubo Moravcik, Johan Mjallby, Stilian Petrov and, of course, the majestic Henrik Larsson.

In his first year at the club, 2001, O’Neill won the domestic treble.

Murray and the Rangers board then embarked on a level of spending hitherto unseen in football here. Their relationship with the Bank of Scotland was at its zenith, as Masterton made way for Cummings, but even that wasn’t enough. Murray slapped down the gauntlet with his notorious “for every fiver” speech and the crazy days began.

The £12 million purchase of Tore Andre Flo, a Scottish record to this day, sums up the insanity of it all. The deal made no financial sense, because it was designed to rub Celtic’s face in Rangers’ financial muscle, doubling, as promised, the £6 million we had splashed out on Sutton. The media loved it, not wondering where the cash was coming from.

The same year, Murray International opened up the Employee Benefit Trust’s at Ibrox, with the aim of paying players above and beyond their declared earnings.

The man who set up the scheme for them was a lawyer and financial whiz-kid named Paul Baxendale Walker, a colourful character with his finger in many pies, including writing, acting and TV production. He later became a writer, director and star in pornographic movies owned by one of his companies.

At the time, the only people he was interested in shafting were those at HMRC.

Over the next ten years, Rangers paid players an estimated £48 million over and above their declared salaries, through a scheme which was setup to look like it provided “soft loans” to those who applied for them. In fact, these payments were negotiated with the footballers in advance of them signing for the club, and as players and agents don’t trust handshake agreements or directors keeping their word, many of them asked for, and were given, “side contracts” to that effect.

These contracts were to pose problems when HMRC stumbled on the scheme. By their very nature, those contracts turned those “loans” into salary perks, making them taxable. Rangers knew that at the time, and so they were determined to keep them secret from all but those who were working inside the club itself.

So those contracts were stuck in a file cabinet and never declared, either to the tax authorities or to the relevant football governing bodies, whose regulations are pretty clear on the point that all paperwork relating to such matters as salary and remuneration should be presented to them post haste as part of their general licensing criteria.

In other words, without those contracts players were not properly registered.

But of course, Rangers didn’t worry about that.

They had friends in high places.

Part Five: Succulent Lamb & Friends In High Places

From 1989 until 1998, Rangers won nine league titles in a row, all of them with Murray at the helm. During that time, and with help from the bank, he filled the club with phenomenally talented, and hugely expensive, players like Brian Laudrup and Paul Gascoigne. He also courted the media as no other football chairman ever had before.

O’Neill’s success at Celtic, and the new direction of the club, was the first serious challenge to their hegemony in that decade, at least as far as what happened on the pitch went. Off the field, Murray and Rangers’ position was pretty much untouchable for years.

During the glory days, he and Rangers were not so much Scotland’s football superpower as they were a hyperpower, and this extended into the way they were treated by the media and in the influence they held within the governing bodies.

How much influence did they have? Well, by 2007 a former Rangers player ran the Players Union, another was CEO of the SFA, a former director was the Vice President there and others sat on the boards of the Premier League and other agencies of the national association … all at the same time. No other club had so many of its officials and former employees so deeply embedded in the footballing power structure.

And this had huge consequences for the game.

Before the recent scandals, the biggest crisis in our sport had been sparked by the SFA’s failure to properly register a Celtic signing, the Portuguese striker Jorge Cadete, at a crucial stage of the league campaign in 1995-96. The deal had been done just prior to the transfer deadline, but someone inside Hampden didn’t put through the paperwork.

The player missed important games including that year’s Scottish Cup semi-final match against Rangers, which the club lost 2-1. Did it also cost Celtic the league? That’s a difficult question to answer, because he missed four matches, three of which ended in draws. The following year he scored 33 times in 44 games, but then Celtic didn’t win the title that season either.

You could debate that issue all day and all night, but what was important was that McCann was incensed and believed the failure to push through the registration had been deliberate. He focussed his anger in on two men in particular; the SFA chief executive, Jim Farry, and the association’s head of registrations, Sandy Bryson.

He took the matter to the courts, and in the case that followed, Farry destroyed his career with his own words. The SFA relieved him of his duties after Celtic won at the hearing.

Afterwards, McCann told the Scottish media, “I’m not claiming there was malice but there was intent. There was a failure on his part despite the advice of FIFA and Celtic. This is a matter that goes beyond Celtic Football Club, it’s a question of somebody who has failed to follow the rules of football.”

Sandy Bryson remained in his post, and the club settled for the CEO’s head on a spike.

Years later, Scottish football would have ample cause to regret that.

In 1998, with Rangers chasing ten titles in a row, David Murray sat down with a number of senior journalists at the Scottish dailies. One of them, Jim Traynor, wrote a remarkable account of one of the most famous interviews of that era.

The published piece that followed under Traynor’s name ranks as one of the most obsequious ever penned by a supposedly serious reporter. It gave Scottish football a catch-all phrase for the hacks who fluttered around the Rangers chairman, and the stuff that they gushed out onto the page.

We now call such stories “succulent lamb journalism.”

The relevant part of the text reads as follows;

If the past 10 years have taught Murray, who is one of Britain’s wealthiest individuals, anything it is how to win and he believes Rangers will continue to grow and prosper.

“I look upon these last 10 years as a having been a great era, but it is over and Rangers are about to head on into a new era,” he said over a glass of the finest red.

He was about to take in another mouthful of the most succulent lamb – anyone who knows Murray shouldn’t be surprised to learn he is a full-blooded, unashamed red meat eater – when he put down his knife and fork.

It was like a statement of intent and looking directly across the table to make sure I hadn’t yet succumbed to the wine, he said:

“Bring on the next 10 years, there’s more to come for Rangers. Understand that I care passionately about what I’m doing with Rangers and believe that in 10 years’ time we will still be setting the pace. Too many of us have put too much into this club and we won’t let someone come along and take it all away. What I’m saying here is that no matter who buys Celtic from Fergus, they will need to have the deepest of pockets imaginable.”

Speaking, years later, to Channel 4’s crack investigator Alex Thomson, when he embarked on his own coverage of the Rangers administration and liquidation crisis, the veteran journalist Graham Spiers, who was at that famous meeting, spoke about it and the wider atmosphere that pervaded Scottish football reporting at the time.

“Succulent lamb journalism means a culture – and I hold my hand up here too – a culture of sycophantic, unquestioning, puff journalism that went on around Rangers generally and Sir David Murray particularly … Look, you are making a pact with the devil if you like. You get thrown the best scraps. You get something for the back page or whatever. But there’s a tacit deal. You don’t dig too deep. You don’t cause any trouble.”

And that was the way of it, for over ten years. Every one of Murray’s pronouncements was treated as gospel. Even the sheer flight of fancy, in 2008, whilst the financial crisis was gathering pace and his bankers were working round to the clock to stave off disaster, that £280 million was about to spent on Ibrox, making it “the first stadium in Britain to have a retractable roof and a hovering pitch”, was printed and praised without serious questions being asked.

By then, the fans of other Scottish clubs were already calling him David “Moonbeams” Murray after another of his notorious public pronouncements, in 2006, where he’d used the colourful phrase to predict that another era of untrammelled success was just around the corner.

Even when the media had a profound duty to criticise the club, they didn’t do it. For over 70 years, Rangers had operated a sectarian signing policy excluding Catholic players. Murray had shattered that, and signed a number of them, but a section of the support remained wedded to the old times, and in 2007 they were the subject of a UEFA investigation for discriminatory songs at a match in Villarreal. The SFA ignored it, refusing to take any responsibility for what went on inside their own grounds. The response of Scotland’s media was even more astonishing.

First, they tried to paint the issue as being one involving a small number of fans, which clearly it wasn’t as anyone who’d ever been to Ibrox could attest. Then, after a steer from a PR firm with links to the Ibrox club, they tried to drag Celtic into the mire, accusing UEFA of ignoring that club’s fans and their singing about the Irish wars of independence.

Finally, with pressure from Ibrox to close the debate down, some of the media outlets started to question exactly what the Rangers fans had done wrong.

This was too much for some of them to swallow, and even the aforementioned Jim Traynor was past the point of trying to make excuses. In a memorable, and explosive, debate on Radio Scotland with one of his fellow pundits, the journalist, agent and former Rangers player Gordon Smith, who was one of the men pushing this line, Traynor exploded.

“Tell me, Gordon,” he asked, “which part of fuck the Pope do you not find sectarian?”

Smith had no answer for that one, and he stuttered and stammered through an attempted justification for his view. It didn’t wash, and everyone who heard him that day knew it. What few were aware of at the time was that he’d been asked to write a chapter in a book about the club, and he duly did so, in which he accused Scottish football, and its governing agencies, of having an “agenda” against them, a quite laughable assertion.

A few months later, with the resignation of the SFA chief executive David Taylor, the SFA placed an advert in the national press asking for applications to fill the post.

The man who ran the interview process was SFA President George Peat, who a year later would be instrumental in pressuring the SPL to extend the league campaign, for the second time, to accommodate Rangers quest to win the UEFA Cup, and who offered to suspend the showpiece event of the SFA’s season, the Scottish Cup Final, in which the club was taking part, without bothering to consult either his board or Queen of the South, the other finalists.

His most valued colleague during that time was the SFA’s Vice President, former Rangers director Campbell Ogilvie, who had been so active in the creation of EBT’s.

They had a list of criteria which was very detailed and specific, yet when the new CEO was unveiled to the media he ticked precisely none of those boxes.

You’ve probably already guessed what I’m going to say next.

Yes, it was Gordon Smith himself.

Of course, none of this was of the slightest concern to the ranks of the Scottish press, who let’s Smith’s scandalous appointment pass without critical comment of any kind.

He resigned the post in April 2010, the very month in which the story about HMRC’s tax demand broke. He cited “family reasons.”

No-one bothered to ask if there was more to it than that.

Probably, that wasn’t considered “real news.”

Part Six: The Motherwell Born Billionaire

By 2010, the Lloyds Banking Group were done with Rangers, and wanted out.

They were so determined to get spending at Ibrox under control they’d placed one of their key point-men, Donald Muir, on the club’s board of directors and with other officials in place at Murray’s other companies a period of cost-cutting was finally getting underway.

Time was running out for the steel magnate, and the bank’s patience was almost at an end. They knew full well the consequences for the whole Murray empire if HMRC’s tax case verdict went against them, and anyway, they were equally sick of the sight of the man who, in 2007, had received a knighthood for “services to business in Scotland.”

He had been searching for a buyer for nearly three years, and had vowed to the club’s supporters that he would only give up control when the “right person” came along, someone with the means to take Rangers forward, someone who would “protect it” as he had.

After Russian mobsters and Unionist MP’s had failed to make their bids, and after a national newspaper had told the world that Rangers fans would accept anyone as long as that person made big promises about spending money, it was perhaps only natural that they’d attract the attention of a man like Craig Thomas Whyte.

He emerged as if from a clear blue sky with headlines screaming the unbelievable news to the world. The Daily Record was the lead-off hitter, telling its readers, on 18 November 2010, “Billionaire Scot Set To Buy Rangers For £30 million.”

As the deal neared completion, the fever inside the newsrooms spiked. Other news outlets rushed to hail the man Record “journalist” Keith Jackson had hailed the “Motherwell born billionaire” with “off the radar wealth.”

Murray’s Moonbeams were replaced by fantasies that the Rangers manager Walter Smith would be handed a “Whyte Knight Warchest” to spark a new series of big money signings.

It’s impossible to over-state how ridiculous some of this coverage was. The reports that Whyte was a billionaire were easy enough to confirm. Every year The Sunday Times extensively trawls tax returns and other financial records in the public domain to compile the definitive guide to the wealthiest people in the country – the annual Rich List. To be on it is considered the ultimate badge of honour, and Whyte had actually featured years before, earning a place on the Young Rich List when he was in his early 20’s, with an estimated wealth of around £20 million.

That year, The Rich List was so extensive that those at the bottom had wealth in the low tens of millions, similar to what his net worth had once been. He didn’t even scrape into this level, and so a lot of us knew early on that he had no “off the radar wealth” and we asked ourselves a couple of simple questions; what else were those big bold headlines hiding, and what else were our fearless crusading journalists equally unaware of?

The answer, as it turned out, was a lot.

With issues relating to the takeover, and what happened afterwards, in the legal system at the moment I’m limited in what I can write about the multi-faceted background and business history of Craig Whyte, but even the earliest, and most basic, enquiries revealed a string of failed companies and contradictions to the media narrative.

To use but one example, The Record had reported that the takeover was being plotted from Whyte’s “bases” in Glasgow and the Virgin Islands. Internet sleuths soon tracked down the registered addresses from which the bid was being run.

One was an office in Glasgow City Centre.

It was visited by an online blogger, who took photographs of a single locked room with grilles on the windows and nothing in it but a single filing cabinet, gathering dust.

The photograph another online investigator published, of Whyte’s Virgin Islands “headquarters”, was equally stunning.

It was a portacabin, in the middle of a field, surrounded by cows. That picture later appeared on the front page of The Daily Record’s sister publication, The Sunday Mail, months after the fact, when the war-chests hadn’t been delivered and everyone was asking questions.

Well before the takeover was completed there was ample information in the public domain to scotch Whyte’s credentials as a very wealthy man. His chequered business history was being discussed openly on the internet, on various Scottish football blogs. There was plenty of serious doubt about his ability to finance the club in the event that something went wrong, and it was generally known that bank was no longer prepared to.

From his “home base” in Monaco, Whyte appeared to be making ever more grandiose promises, issuing statements through a PR firm every other day, which the media was printing without doing any research. Part of the problem was the timeframe.

Rangers’ fans wanted signings made in the January window, and as that deadline came, and went, they wondered where the man with the money was.

The media, still being fed nonsense and still lapping it all up, claimed Whyte had made Murray an offer of £28 million to buy him out, but that it had been vetoed by Lloyds, who wanted the club’s debt erased before they would agree to a sale. As it turned out this, as with most other assertions in the press at the time, was nonsense. The bank hadn’t vetoed anything; what they had done was ask for certain guarantees that they’d be paid back.

The takeover was finally completed on 6 May 2011, and the first seismic shock, which ought to have given the Rangers fans pause was the purchase price; for all the talk of multi-million pound deals their club, stadium, players, history and all changed hands for £1.

Part of the SFA’s licensing regulations, on fit and proper individuals, requires the club itself to certify that its leaders are sound individuals with no blemish on their characters. It is a ludicrous policy, relying on self-policing and dishonest or disreputable individuals confessing that upon taking over and submitting their paperwork.

Whyte was hiding more than just his business history; he had also been banned from being a director at one point. His submission to the SFA included none of this information. They could have done their own digging, but they didn’t bother.

But what few people outside Ibrox were aware of was that certain directors at the club had been suspicious of Whyte from the first, perhaps alerted, in part, by the work being done by online journalists and bloggers. There was a Takeover Panel within the club to scrutinise potential candidates for ownership.

When they met the “Motherwell born billionaire” they were unimpressed by his “plans.” They then hired a private investigator to look into him, and he presented a report before the takeover was signed and sealed. That report found things that even the internet bloggers hadn’t. Did they include his directorship ban? Unknown. But the people on that panel shelved the report once he was in the boardroom. They didn’t share it with the SFA, as they had a duty to.

Boy oh boy, how they were to regret that.

(This site relies on your support, my friends. If every reader was able to make a donation that would keep the site going strong well into the future. Many thanks in advance.)

[paypal-donation]

James Forrest

James Forrest is a writer and blogger from Glasgow, and the author of two books, Fragments and Believers, which are available on Amazon.

60 thoughts on “A Very Scottish Scandal: How Rangers Almost Wrecked Scottish Football – Part One

  • 12 November, 2015 at 9:46 pm
    Permalink

    Magnificent article, probably best of all bloggers productions to date and I must have read most of them.

  • 12 November, 2015 at 9:53 pm
    Permalink

    James absolutely fantastic,roll on the second bit HH

  • 12 November, 2015 at 10:10 pm
    Permalink

    Although every thing is true the problem is that the huns won’t read this and anyone who does will say it is lies but we’re know the truth

  • 12 November, 2015 at 10:27 pm
    Permalink

    “By 2007 a former Rangers’ player ran the Players’ Union…” I presume you are referring to Fraser Wishart who played also for Motherwell, Hearts, St Mirren, Falkirk and Airdrie. In fact, he almost signed for Celtic but the deal fell through when Chris Morris re-signed. I think also that as a responsible official of the SPFU he had advised the Rangers’ players that they were free to go at the end of their contracts, and received considerable abuse from Rangers supporters for doing so.
    Accordingly, while the original statement is true, the inference that Rangers as a club (or institution) received favourable treatment from Wishart is false and misleading.

    Apart from this one statement I found this article excellent.

  • 12 November, 2015 at 10:34 pm
    Permalink

    James, I don’t know why you didn’t just hold fire on this and publish a book. Can’t wait for part two.

    It’s your ability to put it all into a time frame and create a bit of drama that makes it so readable. Us folk up here in Scotland know most of this already, but you deliver it in a way that I hope other readers in the British Isles and beyond will find interesting, if not astonishing.

  • 12 November, 2015 at 10:40 pm
    Permalink

    Brilliant writing James, can name wait for part 3!!!!!! Hail Hail

  • 12 November, 2015 at 10:46 pm
    Permalink

    Fantastic read mate. As per usual.

  • 12 November, 2015 at 10:55 pm
    Permalink

    Fantastic piece. Hopefully the few unbiased national press will pick up on this and run with this.

  • 12 November, 2015 at 11:00 pm
    Permalink

    Clear and succinct that even a sevcopologist could understand. I feel that when history tells this story the treatment of Hugh Adam, the lone ranger who tried to tell the world that murray was ‘at it’, should never be forgotten. They were well warned by a real rangers man and they mocked him. Keep up the great work, I’ve a feeling this will be a trilogy. HH

  • 12 November, 2015 at 11:27 pm
    Permalink

    Very imformative James …keep the articles coming

  • 12 November, 2015 at 11:28 pm
    Permalink

    Brilliant work James. I do not often hop off my lurking perch but this was just too good to let pass. I await Part 2 with eager anticipation. The OCD lawyer in me sees one or two minor typos but no matter – great stuff !

  • 12 November, 2015 at 11:29 pm
    Permalink

    Great piece again James ,I look forward to part 2 . Even though reading your blogs over the past few years I feel I know most of it,but it’s great to read an in depth recounting of the real facts and your right I’m mystified my self why no one south of the border seems interested in taking up the mantle and telling the folk south the facts of what would make a blockbuster of a movie.

  • 12 November, 2015 at 11:36 pm
    Permalink

    James,
    I was wondering where you’d gone for a while there. Now it’s obvious.

    You’ve drawn it together in style. Great.

  • 12 November, 2015 at 11:36 pm
    Permalink

    From the SFA’s own Registration Regulations for Non Recreational Football Players.

    All payments to be made to a Player relating to his playing activities must be clearly recorded upon the relevant written agreement. No other payments for his playing activities may be made to a Player via a third party or otherwise.

    The side contracts which we now know were never disclosed to the football authorities constitute a clear breach of this rule and all such players involved would therefore be improperly registered.

    The penalty for this is that the offending club forfeit every match 0-3 in which any such improperly registered player took part.

    Only one such player per match is necessary for this penalty to be imposed.

    I haven’t done the math as they say but the number of games must be considerable.

    Never mind stripping of titles; just apply the rules and let the arithmetic sort it all out.

    Well done James and keep up the good work.

    Remember, in order for evil to prevail it is only necessary for good men to do nothing.

  • 12 November, 2015 at 11:45 pm
    Permalink

    i am salivating waiting for more james if only the records journalists had your integrity people might still want to read it.

  • 12 November, 2015 at 11:52 pm
    Permalink

    Excellent piece once again, James.
    You wonder how the stenographers can dare show their faces in public when someone is able to put it all down so clearly as you have done.
    Thanks to you and a few other intrepid bloggers (or dolts as Jabba calls you – oh the irony) this entirely shocking episode in Scottish history would have been given a quick spin by the succulent lamb brigade and we would all have been ‘moved on’ by now.
    Thankfully, it seems that a critical mass of fair-minded football fans and hard working tax payers in general are determined that this scam will not be buried without ceremony by a shameless msm.

  • 13 November, 2015 at 12:16 am
    Permalink

    The only problem is sevco fans don’t want to know the story ! It’s no wonder there newco is going the same way with a glib and shameless liar promising his kids inheritance and a share issue / nomad , many , many , months ago !

  • 13 November, 2015 at 12:58 am
    Permalink

    Since 1992 I’ve lived in England where, as Ian Archer so memorably put it, Scottish football gets as many column inches as the lighting up times. For that reason, among others, I missed much of the build up to the events of 2012 and it was only after the bombshell of liquidation at Ibrox that I started reading the blogs to see what was going on. I bought Phil Mac Giolla Bhain’s book but was a bit disappointed by the lack of “blow by blow” narrative. This article, however, is just what I’ve been after. I look forward to the next installment. Keep up the good work and keep pushing it to the wider media. The world in general and England in particular could do with knowing more of this story.

  • 13 November, 2015 at 1:00 am
    Permalink

    fantastic piece. hope this will gather great interest outside of scotland as well.

    ”in other words,without those contracts ,players were not properly registered”. thats the obvious stand out and the cadete scandal for me .am starting to think sevco/deadco and the SFA are one and the same,both bodies need to be held in contempt of the game and kicked into another solar system.the lesser clubs need to take control of the wheel to prevent any sort of bias in the game am sure most celtic fans would agree to this.

  • 13 November, 2015 at 1:10 am
    Permalink

    An absolutely spot on, succinct and passionate piece, peeling back the layers of deceit we\’ve had to endure all these years. Really looking forward to part 2 James, a superb piece of work.

Leave a Reply

error: Content is protected !!