[media-credit name="© Scotzine" align="alignleft" width="300"][/media-credit]Rangers currently stand accused of breaking the registration procedures of the SFA by giving players two contracts. One of which is the ‘official’ contract lodged with the SFA and the second ‘hidden’ contract lays out payments the player will receive from Rangers’ Employee Benefit Trust scheme. If guilty of this then every player who benefited under the EBT scheme would be improperly registered and thus would have been ineligible to play for Rangers, something which would have catastrophic consequences for Rangers Football Club.
Firstly, let’s look at the rules. Section 4 of the SFA’s official registration procedures states that: “All payments to be made to a player relating to his playing activities must be clearly recorded upon the relevant contract and/or agreement. No payments for his playing activities may be made to a player via a third party”.
Simply put, Rangers and only Rangers may pay the Rangers players for their playing activities and all payments must be included in the player’s contract.
If Rangers were to have given their players a second contract laying out the payments they would receive from Rangers’ EBT scheme and the EBT scheme paid the Rangers players then Rangers would be guilty of breaking both parts the above rule. All payments would not have been clearly recorded on the relevant contract and/or agreement and a third-party (The EBT scheme) would have made payments to players for their playing activities.
The BBC claims to have seen evidence of 45 side letters promising payments to the players from the EBT scheme. This is the smoking gun evidence needed to prove that Rangers have indeed broke section 4 of the SFA’s official registration procedures. Recipients of these side letters range from Barry Ferguson to Pedro Mendes to current Rangers’ player and captain Steven Davis and many more.
If these side letters promise payments to the Rangers players via the EBT scheme (as the BBC claim they do) then there now exists a case, far stronger than just prima facie one, that Rangers have been fielding players that were improperly registered and therefore ineligible over the past decade.
A quick look at Rangers Scottish Cup victories over the past 10 years show the impact that some of the players benefiting from these EBTs had.
In the 2002-03 Scottish Cup Final, Rangers beat Dundee by a single goal to lift the trophy. That goal was scored by Lorenzo Amoruso, a player who received £639,000 by way of the EBT scheme and a recipient of one of the side-letters the BBC has evidence of.
The year prior, Rangers beat Celtic 3-2 in the 2001-02 Scottish Cup Final. The goalscorers for Rangers on that day were Peter Lovenkrands and Barry Ferguson. Recipients of £902,000 and £2,500,000 respectively from the EBT scheme. The BBC has evidence of side letters for both these players as well.
In the 2007-08 Scottish Cup final Kris Boyd scored two of Rangers’ three goals in a 3-2 victory over Queen of the South. Boyd received £215,000 for Rangers’ EBT scheme and is another recipient of the side-letters that the BBC have evidence of.
In 2008-09 Rangers beat Falkirk 1-0 in the Scottish Cup final thanks to a goal by Nacho Novo. Another EBT beneficiary, this time for the amount of £1,200,000 and another recipient of the side letters that the BBC have evidence of.
Rangers came dangerously close to being ejected from the SPL due to charges levelled at the club and Craig Whyte last month which included bringing the game into disrepute amongst other charges. At that point the judicial panel gave serious consideration to ejecting Rangers from Scottish football and they opined that “only match fixing in its various forms might be a more serious breach”.
However, in that case they were wrong, if Rangers are proven to have given players second contracts and fielded these players for over a decade then that too is a worse breach than the disrepute Rangers brought upon the game earlier this season. They stand accused of financial doping for over a decade. Fielding ineligible players they could not afford if not for the EBT scheme which HMRC classed as a tax avoidance scheme.
After coming so close to ejection once, it is hard to see how Rangers could avoid it if they are found guilty of providing second contracts and paying their players via a third-party (the EBT scheme). Further to their ejection, any match which an ineligible player was part of would be forfeit by Rangers. The consequences of that would lead to the loss of 4 Scottish Cups, 6 Scottish League Cups and 5 SPL titles.
Furthermore, Rangers would be liable to claims by opposition teams for loss of earnings. In the 2005-06 Anorthosis Famagusta were beaten by Rangers in the 3rd qualifying round of the Champions League. Dado Prso and Thomas Buffel both scored in the second leg of the tie to secure Rangers progression to the group stage of the Champions League and the millions of pounds prize money that came with it. Both Prso and Buffel are beneficiaries of the EBT scheme and recipients of the side-letters which the BBC have evidence of. If the players who benefited from the EBT scheme are found to be improperly registered and thus ineligible then Anorthosis Famagusta would have a claim against Rangers for the millions of pounds in revenue they lost due to not making the Champions League group stages that year.
The second contract issue casts a very dark shadow of the past and future of Rangers. If found guilty it is nigh on impossible to see how they could continue in the top flight of Scottish football and also retain the trophies won by the players who were in receipt of the second contracts. (15 trophies in total). What is very clear is that the SFA will need to be prompt in dealing with this situation. Once the First Tier Tax tribunal verdict is in regarding the use of the EBT scheme I would expect the SFA to act as quickly and efficiently as possible in trying to clean up the mess left behind by a decade of financial doping and effectively cheating by Rangers Football Club.
Written by Daniel Brown