Saturday 1 October 2016

FAI must explain the reasons for secrecy over bizarre 'dig-out'

Published 11/06/2015 | 02:30

Delaney’s attempts to justify what appears to world soccer a bizarre payment reminded me of
Bertie Ahern’s various stories about his finances; such as winning it on ‘de horses’ and stuff
Delaney’s attempts to justify what appears to world soccer a bizarre payment reminded me of Bertie Ahern’s various stories about his finances; such as winning it on ‘de horses’ and stuff

THE buzzwords in Parliament this week are "corporate governance". The Oireachtas committee on sport wants John Delaney to account for his clandestine FIFA/FAI actions, and in the Dáil chamber they're clamouring for IBRC inquiries into debt deals.

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Let's not complicate this - corporate governance is dead simple. It boils down to internal oversight of executives. If you're a company director, you're prepared to be part of the awkward squad; asking questions about the CEO's remuneration package and other such touchy issues. Ultimately, it's about biting the bullet in hiring and firing the CEO.

The top brass of the FAI (president, honorary treasurer and finance director) have been invisible as their CEO floundered in the face of the furore over Sepp Blatter's €5m payoff.

It's not a good idea to keep changing your story. Delaney's first justification for the payments was "Henry's hand" and referee Hansson's error. Then came our legal case before the international Conciliation and Arbitration Board (CAB); followed by "seeding" announcements for the World Cup Final groups at South Africa 2010. Finally, it was Sepp Blatter's skit about Ireland being "33rd" team at the finals.

Even cursory analysis of these explanations cannot conceal that Ireland's entitlement to any form of cash compensation was non-existent. In all sports, the referee's decision is final - even in the case of the blatant hand of Maradona scoring the illegal goal in the 1986 World Cup quarter final between England and Argentina, before going on to win the trophy.

Delaney's attempts to justify what appears to world soccer a bizarre payment reminded me of Bertie Ahern's various stories about his finances; winning it on "de horses" and stuff.

There's no similarity in trousering cash. Delaney's revelations of bank transfers last Friday night confirmed that there was zero personal gain, unlike the Fifa allegations involving Chuck Blazer or Jack Warner. There was no such issue with Delaney.

But the culture of the dig-out is worthy of consideration. Obviously, post-Celtic Tiger crash the FAI was in severe financial straits in managing its €72m liabilities on the Aviva Stadium. The collapsing sales of 10-year Vantage tickets and the crash in corporate hospitality revenues created a massive black hole in FAI budgets. They desperately needed a bailout from international soccer. Delaney brought home the bacon with a €10m loan from Uefa and effectively grant-in-aid from FIFA. If he presented all the payments transparently, and demonstrated them as being vital to help secure financial stability, he'd have some credibility. But the details and the terms of the loan or payment were not made known publicly.

And let's face it, secrecy has never been the friend of any organisation. Directors must always make their voices heard, loudly.

The political imperative to rush probes into the sulphurous Siteserv sale is probably because of Denis O'Brien's involvement as purchaser, through Millington. Methinks key public interest issues are actually to do with the seller rather than the purchaser. Why was the management of the insolvent company allowed to conduct the sale, rather than through a receiver? How come shareholders netted almost €5m when their credit ranking as equity holders would rate behind all creditors? An interim judicial report can expedite early resolution/justification of these issues. Beyond O'Brien, there seems little appetite to confront wider, deeper issues of potential conflicts of interest in the wind-down of distressed loan books amongst nationalised banks. All debt deals require equal scrutiny.

AIB and Nama contained the most toxic property debt write-offs, beyond IBRC's 40 cases which amounted to €1bn.

The Department of Finance seems to dictate agendas. Their documented hostilities with IBRC hardly justify the absurd exclusion of transactions involving the special liquidators, subsequent to their appointment in February 2013, with €22bn of deals. It's wrong to adjudicate on IBRC decisions without direct contemporaneous comparisons in AIB and Nama. Departmental actions and their missing files must be part of the inquiry.

Enda Kenny rushed to judgment to defend Delaney; he said there was no need for an Oireachtas committee probe into FAI finances, despite €190m of public funds to co-finance the Aviva Stadium.

Given the abysmal failure of the FAI blazers to raise any overtures of doubt about agreeing to extensive secrecy clauses with Blatter, and auditors Deloitte's lack of notes on annual accounts explaining FIFA/Uefa transfers, it's imperative John O'Mahony's committee conducts public hearings into these matters, including with FIFA representatives as to how these payments weren't explicitly revealed in FAI accounts, nor to their top executives/vice presidents (like Jim Boyce).

In typical bravura style, Delaney sealed his disdain for his critics with a most public kiss with Emma at the England friendly match. Expect John to be heralded shoulder high at July's FAI agm.

Irish Independent

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