Resolution 12: Proving Their Resolve

by | Nov 27, 2016

“Resolution 12” was a simple query about granting one licence to one club in 2011, when they did not apparently qualify for that licence. It has dragged on because that simple query remains unanswered. Resolution 12 to Celtic plc’s November 2013 AGM asked Celtic’s board to: refer to the Uefa Club Financial Control Body (CFCB), the licensing administration practices of the SFA, requesting the CFCB undertake a review and investigate the SFA’s implementation of UEFA & SFA license compliance requirements, with regard to qualification, administration and granting of licenses to compete in football competitions under both SFA and UEFA jurisdiction, since the implementation of the Club Licensing and Financial Fair Play Regulations 2010.

On April 1st 2011, Rangers revealed a potential £2.8m debt to HM Revenue and Customs (HMRC). And the Scottish Football Association (SFA) granted Rangers a “Uefa club licence” for participation in 2011/12 Uefa club competitions, despite Uefa regulations denying such licences to clubs owing “social taxes,” unless bills were genuinely disputed or a “time-to-pay” agreement existed with national tax authorities. Rangers’ licence could have been withdrawn if they couldn’t prove at 30th June that they met the required criteria. And contemporary publicly-available documentation suggested that they couldn’t. Internet bloggers charting Rangers’ financial demise raised questions. Scotland’s football media didn’t. And after Rangers’ financial demise, some Celtic shareholders sought, through official channels, to clarify the SFA’s role in Rangers maintaining their licence. They still seek.

Matters weirded out this June 20th, when an article by STV’s Grant Russell, headlined “Uefa won’t investigate ‘Resolution 12’ claims,” reinforced a misconception so oft-repeated that it is increasingly hard to attribute to honest journalistic mistakes. “Questions centred on whether (Rangers) fully disclosed the details of an unpaid £2.8m tax bill to HMRC,” Russell wrote, incorrectly. He added: “Rangers’ three-year exclusion from playing in Europe after…liquidation was the major factor in a case not being pursued.” A “Uefa spokesperson” said Uefa didn’t “need to investigate” after Rangers collapsed in 2012, “since the club was “ineligible to apply for a licence…for three seasons,” “the club was not granted a licence” for 2012/13, “the club entered the fourth tier of Scottish football and was not able to play in UEFA competitions for…three years in any event.” Translation: Rangers went pop, so they were appropriately sanctioned anyway.

However, Resolution 12 was not about sanctioning Rangers. And when asked if “they were satisfied the correct procedure was followed,” what Resolution 12 was precisely about, “Uefa…had no further comment.” Russell’s “mistake”…if that’s what it was, surprised some observers. He is among the best of Scotland’s football press (damned…faint praise…etc…). His article was otherwise impressively detailed and when he claimed he questioned Uefa over a period of weeks, even critics believed him (“Credit to STV, who at least called Uefa,” noted the Celtic Quick News [CQN] website).

Russell did not reveal what he asked Uefa. But resolution requisitioners were more accommodating. CQN referenced “awkward questions, some of which have now been answered by UEFA in a formal letter addressed to solicitors,” adding “Jaws would have been on the floor when Uefa’s letter was read. The PR panic button would have sounded.” The requisitioners had to “avoid the temptation to respond to what remains an issue under legal guidance.” Two weeks later, CQN published an “official update.” This said: “Regrettably but not unexpectedly, no meaningful or satisfactory replies were forthcoming from the SFA.” But it focused on Uefa’s formal response to their solicitors, dated 8th June, when Russell claimed to be questioning Uefa. It declared: “Uefa’s response, set against and contrasted with other information in the public domain, previous replies and public statements from the SFA, raises further significant…unanswered questions that shareholders feel should be drawn to (Uefa’s) attention.”

“Regrettably but not unexpectedly,” Scotland’s football press universally ignored it all, while others focused too heavily on Uefa’s Head of Club Licensing Andrea Traverso labelling of post-2012 Rangers as a “new club/company” in Uefa’s letter. In the “Uefa spokesman’s” statement in Russell’s article, all “new club/company” references appeared as “club.” Some claimed Russell edited them, or let them be edited, to fit the narrative of a 144-year-old Rangers. He angrily refuted this claim, for which no direct evidence emerged. But journalistic instincts seemed to temporarily desert him, as he neither questioned the changes, nor pressed Uefa on the implications of Traverso’s terminology. The issue is a circular argument, lacking definitive rulings from relevant authorities. Such rulings would be a journalistic scoop. Russell was easily winning the race for them. He stopped running.

“Resolution 12” has been a complex, energy-sapping tale, for protagonists and readers alike (as you may be discovering). But it was recently re-energised when the full correspondence since July 2015 between the requisitioner’s solicitors, the SFA and Uefa was published, including the Uefa letter about which CQN waxed lyrical The correspondence exposed a tortuous process to get any questions answered. From the get-go, SFA Corporate Compliance Officer Andrew McKinlay insisted queries be addressed to them “by Celtic,” as their “duties” were to “member clubs,” as did Uefa, although solicitors found “nothing in Uefa’s rules” saying so.

Remarkably, McKinlay added: “We have no duties to individual shareholders or supporters, no matter how concerned about and engaged they are in the game.” One to remember. “That said, the SFA clearly wishes all stakeholders…to be satisfied that it is being managed and run appropriately,” McKinlay added unconvincingly. “This prevarication is not the behaviour of an organisation claiming to be trusted and transparent,” the solicitors noted. They gave McKinlay a “to-do” list in July 2015, demonstrating, with documents, Rangers’ informal acceptance of the tax liability on March 21st 2011 and HMRC’s formal payment demand letter on May 20th. Citing relevant Uefa articles, they asked how the SFA let Rangers “retain a licence…despite these events being in the public domain.” They also queried SFA CEO’s Stewart Regan’s “public assertions” on the matter.

It was dry stuff, even without referencing Uefa’s own “Article 50.” However, it merited detailed responses. Instead, McKinlay told Celtic in March 2016: “Our own external advisors (are) clear that this grant was a legitimate exercise of the powers of the SFA.” And…er…that was it. By April, legalese couldn’t mask the solicitors’ frustrations. McKinlay’s letter to Celtic was “clearly written several months after our initial correspondence” and provided no “explanation in relation to the substantive enquiries raised…some considerable time ago. Our clients have always believed the initial grant of the licence to be valid. Your letter appears to miss the point.”

McKinlay’s next response was unintentionally illuminating. He told Celtic in March that “licensing falls into two distinct parts, the licence grant (under the auspices of the SFA) and the monitoring period (under the auspices of Uefa).” He told the solicitors in April that the monitoring period “starts on submission by the licensor of the list of licensing decisions to Uefa and ends at the end of the licence season.” And he “did not accept that…the information your clients brought to our attention was not before us in 2011,” even though solicitors “were told following enquiries by Celtic in August 2014, that the SFA did not have” the 20th May letter “in their files.”

The solicitors contacted Uefa in May. They asked if/when the 20th May letter was disclosed to, and forwarded to Uefa by, the SFA; if the SFA saw “a written agreement between Rangers and HMRC” on “extending the deadline for payment” (which may have facilitated the licence grant); and if the SFA had defined the monitoring period correctly. Despite a “general policy” of only dealing with FAs and clubs, Uefa were “happy to provide” very key details. They revealed that the SFA only granted Rangers’ licence on 19th April and only informed Uefa on 26th May; that the SFA’s 2012/13 assessment ran “in parallel” with 2011/12’s monitoring period and “at an unspecified date during 2011/12 it became apparent to the SFA/Uefa that Rangers ceased to meet the criteria for holding a Uefa Licence.” Revealing precisely when Rangers ceased to “meet the criteria” (rather than it dawning on “the SFA/Uefa”) would have tested the SFA’s story (and informed the solicitors’ claims, based on a similar case in Greece, that Rangers could have been denied Uefa club competition entry in 2011/12). But the dates Uefa specified drilled huge holes in it.

In July 2015, the solicitors said Regan’s “explanation to Celtic in December 2011” did not appear “comprehensive,” with Celtic informed that the licence was granted on 31st March. This led Celtic to believe the process was more properly conducted than it was. On 1st June 2016, a week before Uefa’s letter, Regan claimed that “the requisitioners…have no issues with the granting of the licence.” True then, maybe. But not now. Rangers’ potential tax liability became public knowledge when they published interim accounts on 1st April. So the SFA may not have known of it on 31st March. By 19th April, three weeks’ of Rangers tax-based media coverage later, they surely did.

Perhaps mischievously, the solicitors cited a Daily Record newspaper article by Rangers’ current “PR-adviser,” James Traynor, saying the bill “must be paid” and that Rangers’ then-chairman Alastair Johnson labelled it “a cashflow issue someone has to pay for.” Submitting Scottish football media ‘evidence’ may have made requisitioners uneasy, given how badly the media covered Rangers’ demise. But it made this individual point well. The new information also questioned Regan’s insistence on 1st June that the SFA “complied with Uefa requirements immediately following March 2011.” The SFA told solicitors that the monitoring period began when they “(submitted their) licensing decisions to Uefa.” Uefa said they were told of the SFA’s Rangers’ decision on May 26th. So solicitors naturally wondered “where responsibility for monitoring lay” in-between times. The SFA also told solicitors that the monitoring period finished “at the end” of the relevant season. The European club season ended with the Champions League Final on May…28th.

So…the SFA’s story is: Licensing period ended 19th April. Monitoring period started 26th May. Monitoring period ended 28th May. And from 19th April to 26th May, when plenty happened, neither the SFA nor Uefa were responsible for anything. Reasons for the “review and investigation” for which Resolution 12 calls right there. The requisitioners cannot take matters further. The SFA dare not (they’ve already “let slip” enough). So the onus is entirely on Celtic. A leading requisitioners’ representative reported that in 2013, Celtic CEO Peter Lawwell said “if we provide a ‘silver bullet’ he would fire it.” Celtic have been lambasted for apparently dragging their feet. But waiting for firmly-established facts was a reasoned stance. However, the rep considered the newly-published information “an arsenal from which Mr Lawwell can select numerous “’silver bullets.’”

On June 1st, Regan also said: “If there is still an issue (and) the requisitioners take it up with Uefa, we’ll fully cooperate and comply with any requests for information from Uefa,” although he said so confident that Uefa would only deal directly with the SFA or Celtic. There “is still an issue.” And more. And if Celtic press it, as requested three years ago, Regan’s “information” will be fascinating. “Resolution 12” campaigners have carried their resolve through countless attempts to discredit them. Some filed Russell’s article in this column. Uefa’s June letter was labelled a fake (one grammar-resistant Ranger insisting “new club/company” made a “distinction” between “club” and “company”).

The Guardian newspaper agreed to run a campaign advertisement, then “the world’s leading liberal voice” changed their mind and tied themselves in knots excusing their volte-face, including farcical claims that the advert was erroneously submitted in French. And campaigners were accused of personally benefitting from surplus fund-raising; a slur countered stylishly when the “Mary’s Meals” charity thanked Celtic fans for donating the surplus, £7,930, to their Liberian schools projects and tweeted a photo from the “Mary’s Meals Centre, Kholoni, donated by Celtic Quick News.” If “Resolution 12” has long-entered “sledgehammer-to-crack-nut” territory, that has hardly been campaigners’ fault. And the resistance to their simple question only shows how right they were to ask it.

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