The Club That Debt Built

game_1499272aIt was John F. Kennedy who said “The great enemy of the truth is very often not the lie, deliberate, contrived and dishonest, but the myth, persistent, persuasive and unrealistic.”

The difference between the two is stark, but the result is the same. Whereas the lie can unravel and be proved false, the nasty thing about the myth is that it often can’t because it does not depend on facts, but on a certain perception of facts.

One of the meanings given in the Oxford Dictionary is “An exaggerated or idealized conception of a person or thing.”

Exaggerated or idealised. Let’s go with that.

As everyone will be well aware, yesterday saw the Big Tax Case dismissed by a judge, in a move which has the Sevco Rangers websites cock-a-hoop. They appear to believe they’ve won something here, that a point has been made, and they are now threatening to sue everyone from HMRC to the BBC. These ludicrous jokers really make me laugh.

For a start, what are they going to sue for? They are going to sue HMRC for trying to collect taxes. They are going to sue the BBC for daring to report the news. They are going to sue Lloyds TSB for wanting its money back. They are certifiably insane if they really believe the nonsense they are spouting. You would think after the humiliation of previous weeks that the Union of Fans would want to keep their heads down, yet their statement is on the front pages of the same newspapers who backed their last dodgy scheme.

They never learn. These people never, ever learn.

No sooner was the old club dead but the new club was being shoved into its clothes, assuming its identity, taking on everything but the debts. They claimed all else; trophies, history, jersey, name and all the baggage that went with it. Part of that baggage is the sense of superiority that helped bring them down, and it was from that smug attitude that the myth has been allowed to grow. The conspiracy theory they have spun is so vast that it is instructive to take a look at it, because then you can see, clearly, the exaggeration and ideology at its root.

They believe that there was a conspiracy between HMRC, Lloyds, the SFA, the BBC and the SPL and that its intent was to destroy their club. Against those fantastic odds they survived and are now rebuilding, even as their enemies try to hinder their progress.

I don’t know how many of them do actually believe this and how many pretend they do to sell books, to promote blogs, to build “reputations” and set themselves apart from their fellow supporters, but that many of them are convinced of it is certainly beyond doubt and it does not matter that the whole thing is barmy.

Yet it still cheeses me off. Their sense of entitlement might be misplaced, their screaming today might be echoing down the wards of whatever lunatic asylum they’ve wound up in, but it annoys me all the same, because it perpetuates base untruths.

Rangers and their fans have been the victims here? Are you joking, or what?

Rangers Football Club “died for nothing”? You are having a laugh there, surely?

The Rangers their fans knew, the one that died, is The Club That Debt Built. When the banking crisis hit in 2008 there was only one way all this was going to end.

That club had not had to stand on its own two feet in over 20 years. They ran up extraordinary levels of debt during the 1990’s, because of the indulgence of the Bank of Scotland who were not only propping up their balance sheet but that of the behemoth which ran them, Murray International Holdings. MIH, Rangers and the bank went hand in hand and these were not the only companies the bosses in Edinburgh were allowing to wallow in debt. The entire scandal is still under investigation, but what we do know is that a number of directors made sure their friends were looked after and their incestuous cycle wound up with the bank in public ownership.

Whilst we ponder that it’s also worth pondering that this generosity did not extend to every one of the bank’s customers. Whilst entirely happy to give David Murray and Rangers a blank cheque, the bank, with Gavin Masterton at the helm, was willing to close our own doors over £9 million. That, by the way, is not a myth. It’s a historical fact.

One day the full scale of what happened here will be more widely known, and people will be appalled at just how twisted the whole staggering tale is.

When the crash came in 2008 the club was in deep trouble. Gordon Brown suggested that Lloyds buy HBOS without telling them precisely what they were getting their hands on. When Lloyds’ officials understood just how deep the hole was they naturally slammed on the brakes. They allowed no more over-indulgence, and they started to sift through the debt.

They were always going to balk when they got to the Murray empire and the shambles at its core, and they quickly realised that with most of the profitable arms having been sold off already to keep on the lights that what they had in their hands was the dreck. Rangers Football Club, doped to the gills, running at a near permanent loss, was a millstone around their necks.

Sevco fans still wail at what the bank did to them, but what exactly was that? The bank insisted the club would have to spend only what it earned and that any profits would have to pay down debt. Are they the only people in the country who don’t know that the banks were treating every customer in the land, big or small, in exactly the same way at that time?

Rangers had been built on credit. Over £100 million worth of debt was shuffled from their balance sheet to elsewhere in the Murray empire during a ten year period, and without the support of Masterton and others this club would have been on its knees a decade or more ago.

During the same period, Bank of Scotland represented nearly all of the professional clubs in Scotland. Not one of them was allowed to overspend in the same manner as Rangers.

Let’s be clear; even Lloyds indulged the club’s whims more than they probably should. When Rangers got millions for Bougherra the bank did not object when Smith spent every single penny – and a little more besides – on rebuilding the midfield. The notion of a bank tying the club in knots until they were strangling is a fantasy. I would go even further and call it an outright lie.

What they did do was cap the level of overspend and demand the slow and steady repayment of debt. When Bank of Scotland was no longer there to approve it, Rangers were returned to the state natural to all other clubs in the country; living within their means.

It is little wonder their fans don’t recognise it.

Let me say it again; this nonsense that the bank strangled Rangers is not a myth as much as it is a blatant lie. They did what banks are supposed to do; they looked after the interests of their own shareholders above all else, and they pursued the repayment of what they were owed. Companies all over Britain were being treated exactly the same way.

Rangers could have gone much further than they did. They could have sold top stars, cut the wage bill, got the debt eradicated, fortifying themselves against future storms.

They refused to do all this. Their board actually fought bitterly against Donald Muir, the bank’s point man in the club, when he suggested it. They wanted to carry on as before, even after the plug had been well and truly pulled.

It wasn’t the only thing that had gone wrong for them. Murray had not merely been content with bank funding to keep him going, but he had also taken the decision to operate a tax scheme which deprived HMRC and the national treasury of money, in order to spend more and sign more expensive players. The insanity of this is barely believable.

Those celebrating the “victory” of MIH in this case, as well as some of those mourning the “defeat” are missing the point, a point I’ve made on this website before, and will make again in a moment.

In light of this result I’ve been asked to “apologise” for the time I’ve spent lambasting the club over its tax affairs, and I am going to answer that demand first, with the following words; not in this lifetime.

Rangers Football Club was already spending money it didn’t have before deciding to run an aggressive tax avoidance scheme. When they graduated to that they went from taking money from bank shareholders to taking it from public services. To do it they hired clever accountants and good lawyers and, as it turns out, those lawyers and accountants dotted all the i’s and crossed all the t’s, and so what the club did turned out to be “legal.”

But what about right and wrong here? Does that not factor into this anywhere? They made a conscious decision to spend money on footballers and winning trophies instead of making a fair and equitable contribution to society, and that’s the bottom line here and it’s always been the bottom line. I wanted to see them punished for that, to see that fair share paid, as I want to see all other tax avoidance schemes turned over, and those who benefited made to pay.

On exactly what grounds are Sevco Rangers fans are threatening to sue HMRC over this? Has HMRC’s historical remit been changed without the public being told? Their job is to collect taxes. They believed Rangers, as well as several other companies, were operating outwith the law. There wasn’t a heist here, nor even an attempted one. They asked Rangers to pay, the club said no and they did what thousands of other organisations do every single day; they took it to the courts. That’s all. There was no “conspiracy”, no “witch-hunt.” They refused settlement offers because it is their policy to do that in cases where they believe there has been a manifest intent to violate the rules and they had evidence in their possession which led them to believe there had been concealment and obfuscation.

I also find myself asking the question as to why a company that was claiming innocence – and doing so loudly and publicly – ever offered to settle in the first place.

HMRC were quite right to read that as a tacit admission of guilt, and to pursue their claim with even greater vigor.

Anyone who sees a witch-hunt or a conspiracy in HMRC’s actions is a paranoid nutjob, pure and simple, and in need of psychiatric care. Sevco Rangers fans, some of you, at least, must exist on the correct side of sanity. Doesn’t it make you cringe to hear this nonsense from your own?

Furthermore the consequences to society in this being found to be “legal” are monstrous, and they are being ignored by a section of the Sevco support that wants to use this as an excuse to go on the offensive, perhaps seeing it as a way to excuse their own arrant stupidity of recent months, and get back in with the fans who simply wanted to follow their team and see them as wreckers pursuing their own agenda.

They, Murray, and sections of the press are celebrating like this clears them, like it absolves them from guilt, that it renders what they did somehow less corrupt, less debased, less horrendous.

Their gloating over it is shameful, and sickening.

The true costs of this pursuit of on-field glory, with money they did not have, are momentous.

The administrators report calculated HMRC’s claim against Rangers at a mind-bending £94,000,000, including what Craig Whyte decided not to pay. Legal or not, this money was with-held from the public purse.

That money could have funded the Sure Start Scotland program, in full. It would have paid for three years full investment in the Future Jobs Fund. It could have reduced the legacy costs of Scotland’s PFI schools budget by almost half. It could have hired 4400 fireman or 5000 police officers. There are 2153 primary schools in Scotland, and every single one of them could have received £43,600. There are 376 secondary schools, which could all have gotten £250,000. We have 370,000 children in primary school education. Every one of those kids could have received a grant of £254. We have 304,000 kids in secondary education, and we could have given all of them £300 each.

Instead, Rangers paid footballers and won trophies and their fans reveled in the “glory” of it all.

Now they are screaming blue murder about the being the victims in all this, and I find the idea offensive, both as a tax payer and as a human being.

Craig Whyte bought the club for £1, after Murray tried shopping it around here, there and everywhere, with every rogue element from Russian gangsters to Ulster loyalists looking into it and knocking it back.

HMRC is being blamed for this, but that too is a nonsense because we now know that the club itself was a financial basket case and that no rational, sane person would have taken it over intending to run it as a going concern.

People have demanded Whyte’s arrest for making the decision not to pay tax, but they overlook the stark truth that he would never have had to resort to such drastic measures had they been run right in the first place. When McCoist failed in both European competitions it left a Titanic sized hole in the balance sheet which no-one was prepared to fill for them. The club had simply run out of money, because there was no longer anyone around willing to keep on pouring it into a bottomless hole. Whyte could have folded the club there and then, but he gamely tried to keep it running until finally, by February, the well had run completely dry.

Whyte was the guy with his hand on the tiller when the ship went down, but he got it for a quid because it was already holed below the waterline. He was the only man interested in buying it, even when the price was so low, precisely because everyone knew they were running at an unsustainable level and that sooner or later the rent was going to come due.

Which of this is hard for the Sevco support to understand? Which part of it is eluding the likes of Graham and the Union of Fans? The steroids had run out. The bank had stopped looking the other way. There was no magic dust left in the box. Reality had arrived.

When the whole shattered edifice was available for a song, numerous interested parties came in, had a peek at the data and ran for the hills. Charles Green and his shadowy consortium came in, bought the lot and managed to make a tidy profit out of it all. Fair play to them, and well done. They did nothing – and neither did Whyte – that myself and others weren’t telling the Rangers fans they would. That they chose to ignore the message because they didn’t like the messenger says a lot about the mind-set that haunts Sevco Rangers to this day.

Mark Daley’s brilliant documentary peered behind the curtain of the tax case, but it also highlighted the business background of Craig Whyte, laying out his history at a time when Rangers fans could still have acted against him. They did nothing, just as they did nothing when the Celtic sites started pulling the guy apart one strand at a time. They didn’t want to hear it, didn’t want to hear any of it, especially when it came from the likes of us.

We were the first people to suss what Green and his people were all about, and we were saying it when people like Chris Graham were telling the world these guys were the real thing. They were saying similar about Graham Wallace when this website was asking how a man who had presided over hundreds of millions in losses at Man City was qualified to take on the job of raising money for the Good Ship Sevco. They were still insisting he be given time when we were asking just why in the Hell a company with less than 1000 staff and a turnover in the low tens of millions needed three months to conduct a full scale business review when the new head of Barclay’s had used the same time-frame to examine his own company with hundreds of thousands of staff, billions in assets and interests and investments worldwide.

What was Wallace doing in that time? Counting toothpicks?

The ills that befell Rangers, and forced them into the grave, were not, as their fans are shrieking today, the result of a grand conspiracy but the all too predictable consequences of being built on the shifting sands of credit and debt. HMRC did not bring down Rangers. Unsustainable spending did that, the same unsustainable spending that is powering Sevco Rangers on their “rise through the ranks.” They have learned simply nothing, and we all know that those who will not learn from history are destined to repeat it.

When the next fall comes they will blame Charles Green and the spivs for cutting the ground away from under them, ignoring the insanity of McCoist’s salary and his backroom team, and the madness of spending fortunes topping up the pension pots for the likes of McCulloch, Black, Miller and Boyd. They will point the finger at people who have tried to destabilise the club at every turn, and some, like Graham and the Union of Fans, will do it stinking of hypocrisy, having done more to harm the “Rangers brand” in the last 12 months than this website and all the other Celtic sites combined will be able to boast in a lifetime.

Some in the media will help them feed the fantasy that dark forces were at work, like those at The Sun newspaper who, today, allowed a scandalous article to run which named the “enemies” of the club with the headline “heads must roll”, next to the pictures of the “guilty”, including Peter Lawwell, Rob Petrie and Stephen Thompson, all of whom should consider suing this abhorrent rag for that slander.

It almost numbs the mind to imagine the editorial meeting where that was agreed and allowed to be published. Feeding this myth is quite literally dangerous, especially when you consider the maniacal section of the Sevco support which continues to disgrace them.

The irresponsibility of it is breath-taking.

The truth is very different. Rangers was the club that debt first built and then destroyed.

The story of Sevco is already certain to end the same way.

George Bernard Shaw said “If history repeats itself, and the unexpected always happens, how incapable must man be of learning from experience?”

It’s easy when you have a media feeding you an alternative version of that history, and when you have people determined to spin that myth into their own personal advancement and there are others still amongst you who don’t really want to face up to what has happened.

As a leftie, and someone who’s a huge admirer of Karl Marx, I hate to take issue with him on anything, but his own famous quote on the tendency of history to repeat itself isn’t one with which I agree, in the context of these events.

“History repeats itself, first as tragedy, second as farce.”

The only tragedy here is if this particular piece of history is allowed to be rewritten and bent and twisted.

However, in one aspect he was certainly 100% right.

We’re already way down the road towards the farce.

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15 comments on “The Club That Debt Built
  1. Hello James:
    I always enjoy reading your articles. They are articulate, fluent and written with intense feeling.
    I have followed this tale since its inception, on your page, that of TSFM and its predecessor, and that of Phil McG. Despite the amazing sleuthing, sagacity and knowledge exhibited on all of them, there is a certain degree of wishful thinking that I fear will never be fulfilled.
    You state that history will repeat itself, and that one day, the full scale of what occurred will be more widely known. I fervently wish that, but doubt it will ever occur. It is simply incredible how many times Sevco have been investigated, and they still come up smelling like roses. Each time, we blindly trust that their various lordships will see that justice is served, and each time, we are disappointed.
    Sevco’s accounts have been analysed to death by independent experts. Several of them now conclude that there is unreported underwriting keeping them afloat. There’s a surprise!
    The vast inter-connected legal, political, judicial and media establishment simply will not allow them to expire. A few honest mistakes this season, and they will be in the SPL next season. There is a fateful inevitability about it. And the vitriol of their followers will a major public safety issue.
    Sure, they will have short term cash flow problems. But where is the money coming from to pay for their incoming players? Each time it is alleged they are running on fumes, they acquire the services of a player from a higher league.
    In a nutshell, I am sceptical that the new rendition will undergo another insolvency event. I hope I’m wrong, but the only history that I think will repeat itself is that I will be doomed to disappointment.
    Keep up the good work.
    Iniquitous IV

  2. Thought I would look at KJ take on the result in the Daily Ranger on line (long gone since I purchased one, more evidence why I dont buy it) anyway got to the bit about Lord Doherty being a Celtic season ticket holder,what is that got to do with the tax case,end of reading,what fate awaits Lord Doherty,for being a ST at Celtic Park,mind you,they think hes done a great job,and they will all live happily ever after……………………

  3. So James what has happened, no article from you about the UTT appeal being thrown out, no article on the news, as yet unconfirmed, that Collyer Bristow have to pay out the sum of £24 million to the PLC after the fraudulent dealings of Whyte and Withey. What’s wrong James, can’t you handle the fact that The Rangers Football Club PLC acted within the law concerning the EBTs. That’s twice now James that bloggers like yourself and McGillivan have came unstuck, no title stripping can be added to that, James.

    Also we are now seeing that Whyte was the orchestrator of a massive fraud, something that you and the others like you will have to accept when he is proven to be a fraudster who cost thousands a hefty amount of money. Rangers fans can hold their heads up now James, just a shame that you can’t seem to find the dignity to admit how wrong you and many others were.

  4. You just posted on the article that answers your own questions you halfwit.

    No, I don’t apologise, at all. My reasons for it are above.

    I do not give a toss that it was “within the law.” It was financial doping. It with-held monies from the treasury that should have been spent on public services.

    Hold your heads up? For what? You should be hanging your heads in shame instead, those of you who’re trying to spin this as a victory.

    You are a disgrace. The attitude of many of your fellow fans is a disgrace. Murry’s smugness and arrogance is a disgrace.

  5. Losing the plot a bit there aren’t you, James with the personal abuse. Again i’ll state this to you. Everything that the PLC did re; the EBTs was within the law of the land, your opinion on it does not matter, simply because James you are an irrelevance in all of this. The only opinion that matters is that of the FTT and the UTT and guess what James, both times the result was found in favour of the PLC.

    Now James as hard as this is for you to bear (no pun intended) that means that there was no financial doping, Rangers did not gain any sporting advantage and the shareholders and creditors were victims of fraud on a massive scale James. Those James are the facts as put down by law lords, too bad James if you and your ilk can’t or won’t accept that.

    P.S. son, if you want to be taken seriously as a blogger a bit less of the personal abuse. Yours, a very proud Rangers supporter of many, many years.

  6. First, I haven’t lost the plot at all, but it’s clear from your response that you have.

    The argument that no sporting advantage was gained from big money signings is so transparently idiotic that only a complete moron would attempt to make it, and I don’t care whether the person making it is a law lord or a guy down the boozer. It is fundamentally and irredeemably nonsensical.

    The shareholders were victims of their own lack of scrutiny, and not just in relation to Whyte but in relation to Murray before him, and as if this wasn’t bad enough those of you who follow the NewCo have allowed yourselves to be taken for mugs all over again. If you want to be taken seriously yourself you need to do better than advance ridiculous arguments like that.

    A law lord initially blamed the Liverpool fans for Hillsborough. A Chief Justice of the Supreme Court said the Kennedy assassination was the work of one man. Interpretation of law was never the point here; the appalling selfishness of a large section of your support and the corrupt behaviour of consecutive boards was, but you won’t accept that either.

    When something looks like and smells like it, I don’t have to taste it to know exactly what it is.

    No, I’m very much with the plot here, and it’s so incredible that people in years to come will simply not believe it. It’s a shambles, and it’s a shambles of your own making. Simple scrutiny would have revealed Whyte for what he was. Celtic sites were telling you what he was almost from the day he bought the club. Your own bigotry closed your eyes and your ears and your own need to believe in fairy tale solutions did the rest.

    You are now what you ought to have been ten, fifteen, years ago – a club that lives within its means just like the rest.

    And that guarantees a long spell in the dark, because on and off the park we are miles and miles ahead of you.

  7. George Mclean,there is one certainty,long Ball Sally,and his dream team are still at Castle Greyscull,you could say ABSOLUTLEY……………..

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