Saturday 21 October 2017

EXCLUSIVE: Lifting the lid on Pat Hickey and a controversy of Olympian proportions

 

FACING DOCK: Pat Hickey must have seemed like a genius to his OCI colleagues when the first deal was signed
FACING DOCK: Pat Hickey must have seemed like a genius to his OCI colleagues when the first deal was signed
Pat Hickey. Photo: Reuters
Kevin Doyle

Kevin Doyle

In his first big pitch for business to OCI president Pat Hickey, the millionaire businessman boasted that as the owner of Ipswich Town Football Club his company was "acutely aware" of the need for a full-time press office to be in place for when things go badly.

It was July 2009 when Marcus Evans emailed Mr Hickey referring to a meeting they'd had over dinner. His correspondence was much more than a follow-up though.

It was an application to become the official ticket and hospitality partner of the Olympic Council of Ireland for the Games in 2012, 2014, 2016, 2018 and 2020.

"The group is probably the world's largest corporate hospitality organiser and therefore partnership with us provides a unique opportunity to maximise corporate revenue as well as generating income from the general public," Mr Evans wrote.

The offer included a proposed 'rights fee' of $100,000 for London 2012, rising to $125,000 for Rio 2016.

Overall, the tycoon reckoned his company could generate income in excess of $600,000 for the small-time Olympic body.

Mr Hickey informed the OCI's executive committee of the proposal, before spending the next few months hammering out a dramatically more impressive deal.

And on March 1, 2010, the two men signed a contract worth $1m. This was to secure the rights only to the 2012 and 2014 Games in Sochi, with an option to renew for 2016 and 2018.

Pat Hickey. Photo: Reuters
Pat Hickey. Photo: Reuters

By the time the OCI's executive committee was formally notified eight days later, the $1m was already in its bank account. To his colleagues, Mr Hickey must have seemed like a corporate genius. Nobody could have imagined it was to be the moment that the well-known Dubliner became embroiled in what would develop into one of the most controversial issues in Irish sport.

Even before the London Games where Katie Taylor boxed her way to gold, Mr Evans's company, THG, had applied to be the OCI's ticketing agent for Rio 2016.

This time, THG offered only $600,000 to seal the deal but the minutes of an OCI meeting in December 2011 show that "in the present difficult economic circumstances the current offer was considered very satisfactory". Added to this was the credible expectation that there would be less demand from Irish supporters for tickets to an event 8,500km away.

However, the final contract said the money was subject to THG having access to the same allocation of tickets in Rio as it did in London.

By late 2014, THG was getting a little pushy with the OCI. Having reviewed the London Games, it concluded that more tickets could be sold. Bizarrely, the company believed that "demand for Rio will be even stronger than London as many nationals see the games as an alternative to their usual holidays".

THG wanted 400 tickets for the opening ceremony and 300 for the closing ceremony, with 70pc of these to be in the two top-price categories on the basis that those travelling "have looked to buy the best tickets available".

Despite the horse-trading, everything was still on course until January 30, 2015, when Mr Hickey received an email from the Rio Organising Committee which indicated that it was not happy with THG but would work "with you to make sure that fans in your territory have a fair chance to be part of Rio 2016".

If that didn't sound alarm bells, another email to David Gilmore of THG three days later certainly did. It said the Rio organisers needed to clarify "some doubts and questions".

Mr Gilmore took exception to the "innuendo" as did Mr Hickey who took it upon himself to write to the Rio team about the "very serious overtones".

The Rio committee had issued guidelines to every country, noting that the Brazilian government had "enacted specific legislation" which would make selling tickets at a price higher than face value a criminal offence. The consequences, it warned, would be "serious".

Furthermore the use of tickets for hospitality packages was tightly controlled.

Judge Carroll Moran's report says it is clear from subsequent correspondence that Rio's concerns related to allegations THG had sold tickets outside its territory during the London Games.

It went deeper though. There was also a suspicion that THG was involved in selling tickets above market value during the 2014 World Cup - which also happened to be in Brazil.

Mr Hickey went into battle on behalf of THG to "defend very strongly" its reputation, telling Mr Evans in one email that he was "lobbying hard" and "quietly confident".

But Rio produced documents backing up some of its claims and Mr Hickey concluded in another email to Mr Evans that THG's agents "were sloppy". He spoke of "playing his aces in the background" and that "we will have to be careful".

It didn't work because in March 2015 Rio rejected THG's bid to be Ireland's Authorised Ticket Reseller (ATR).

A 'Plan B' was hatched whereby the OCI would itself become an ATR, using THG as a sub-agent - but Rio was still creating problems.

The organising committee wrote in late April 2015 to the International Olympic Committee (of which Mr Hickey was a member) informing it that THG was selling "hospitality packages for sporting events and ceremonies" at the Olympics.

Mr Hickey was angry with everybody. He told Rio he was "appalled" at part of the email but also briefed Mr Evans that Rio "are incensed on the brochure as they guess very well for that price a ticket has to be included and this is one of the major reasons for blocking you".

The brochure in question advertised a 10-person package costing $159,500, plus a 24pc service charge. In return, the group would get lunch with a celebrity speaker, a full bar and transfer (if required) to the Olympic Stadium.

Mr Hickey said they would have "to put our thinking caps on as to how THG could operate" without the approval of Rio.

He asked Mr Evans if another agent could be brought on board that THG had a "good relationship" with.

On May 6, 2015, the businessman wrote to Mr Hickey using the subject line 'My Thoughts'. On this occasion, he proposed that the OCI set up its own company to take on the role of ticket reseller but then enter into agreement with a third party that would manage that company.

That didn't happen and by May 22 Mr Evans had a new plan. He emailed Mr Hickey a link to the website of Pro10, a company that had been registered two days earlier.

Exactly a month later, Mr Hickey received a proposed ATR agreement from Pro10 with similar terms to that of the THG deal.

However, the fee was greatly reduced to $100,000 - with half paid up front and half on receipt of tickets.

Read More: OCI paid $1m by ticketing firm for London and Sochi Games

In July, Mr Evans emailed Mr Hickey suggesting that he should try to get an increase in tickets for the opening ceremony, the men's football final, basketball final and men's 100m final. In return, there would be "add-ons of $475,000 which gets back to near the original deal".

A few weeks passed with various updates on ticket allocation, when Mr Evans again emailed the OCI president directly with an idea. While wondering when they would formally sign off on the Pro10 deal, he pondered whether Mr Hickey might have "more bargaining power" with Rio "if you can say you need more premium tickets to persuade a replacement ATR".

In effect, he was asking if the OCI should pretend it needed some sweeteners to attract a new ticket agent so late in the game.

Mr Hickey replied: "Thanks Marcus… I will hold off on the appointment of the new ATR as it gives me more negotiating power."

It was October before the wheels were put fully into motion for Pro10 with a business plan that claimed the five-month-old company had "vast experience in arranging tours for clubs and their supporters across Europe".

"We have for many years been servicing the Irish market in terms of their needs for attending events in Ireland and abroad. This involves ticketing, travel and accommodation," it said, adding that Pro10 had "longstanding relationships" with international hotel chains.

Rio asked some questions of Pro10 including the background to its relationship with the OCI. Mr Evans and Mr Hickey discussed this question over email with Mr Evans saying: "No names will be mentioned unless asked."

Ultimately it was Mr Hickey who approved a response to Rio which outlined that Pro10 had been trying to secure tickets from the OCI's original ticket agents for the football at the Olympics when it learnt of the sporting body's predicament.

The company saw an opportunity "for Pro10 to strengthen its brand" and "negotiations concluded pretty quickly".

Throughout the inquiry report, various OCI executives, including treasurer Kevin Kilty, distanced themselves from the manoeuvring, saying Mr Hickey kept them out of the loop.

Honorary general secretary Dermot Henihan said: "Like we were just happy that someone was giving us a good fee to do this…"

On the flip side, Willie O'Brien, the OCI's first vice president, told the judge: "Pat never hid anything. If you asked Pat anything, you got the answer."

Ireland made an initial application for 2,138 tickets for the general public to attend Rio 2016. Of these, 1,728 (81pc) were for high-demand events and 350 (16pc) were for ceremony tickets. Just 60 (3pc) were for low-demand events.

Astonishingly the application excluded sports like boxing, golf, rowing and sailing where Ireland actually had medal chances.

Confusion seemed to reign over the final allocation, with the judge saying "it was difficult to ascertain with any certainty the exact position regarding tickets and the exact numbers and costs involved".

On top of an estimated 1,428 general tickets, the OCI received 938 National Olympic Council (NOC) family tickets, which are reserved for people with links to the OCI such as sponsors, volunteers and coaches.

In February 2016, Rio wrote to the OCI in relation to the arrangements for "pick up" of the tickets. The OCI's sports director did not contact Pro10, instead writing to David Gilmore at THG requesting that he "ask the lads to return the required form".

Meanwhile, in the background, it seems Mr Hickey and Mr Evans were maintaining their relationship, with the Dubliner flying to Geneva on the millionaire's private jet in April.

The tickets were collected by Michael Glynn of Pro10 in late May 2016 from Arkansas.

The inquiry heard that 178 of the NOC family tickets were given to Pro10 on the instruction of Mr Hickey because the OCI didn't require them.

However, Mr Justice Moran said the transfer of the tickets "was something which was considered a long time in advance" of their receipt.

During the Games, OCI staff kept a number of tickets in a safe in the Olympic Village. While all this was happening, families of the Irish athletes were complaining about an inability to secure tickets and a "dearth of information" from Pro10.

The management of tickets was messy to say the least but nobody expected what happened next.

On the night of the opening ceremony, August 5, Pro10's representative in Rio, Kevin Mallon (who was also a director of THG), was arrested and a number of tickets seized.

The inquiry was not able to ascertain the exact number of tickets, although it did obtain photocopies of 20 general public tickets, two NOC tickets and one ticket linked to the Guatemalan delegation.

Earlier in the day, Mr Evans had flagged some concerns in an email to Mr Hickey, noting that Rio officials had turned up at a THG event to raise questions about the validity of Pro10 tickets.

"Clearly old hands trying to cause a problem when everything is valid," he said.

On August 7, Mr Hickey received an email from Greg Harney of Cartan Global, another ticket agent, which said: "…as you may have heard from Marcus already, one of his guys got busted and thrown in jail on Friday at one of our hospitality venues. An ugly scene on opening night to say the least."

He concludes: "Also, I have told Marcus that we can be part of the solution for him but not his defence as requested."

The following day, Mr Hickey and Mr Evans discussed the wording of a press statement to be sent out by THG. Mr Hickey was also directly involved in a media release on behalf of Pro10.

As the story grew legs in Ireland and around the world, the OCI moved to set up its own inquiry.

On August 15, a Brazilian judge issued a warrant for the arrest of Mr Evans and three other THG executives.

Two days later, police swooped on Mr Hickey at the five-star Windsor Marapendi hotel, allowing him to filmed in a bathrobe at 6am.

He is awaiting trial on charges of ticket touting, forming a criminal association/cartel and illicit marketing. He denies all charges against him.

Sunday Independent

Editor's Choice

Also in Irish News