by Tom Bower
Jon Smith represented Bulgarian players who had already been transformed by other agents into Greek citizens and could be ‘legitimately’ sold to Scottish clubs. ‘A fabulous trade,’ Smith told his friends. ‘Money ended up in banks which had nothing to do with the clubs. I don’t think anyone acts by the strict letter of the Bible.’ In his genial manner, Smith candidly asserted a truism for many in the football business: ‘Morality was important in the past, but it’s not so important now.’ Regularly, he would be asked by chairmen or managers of famous clubs during negotiations, ‘How does the deal stack up?’ The question was code for an explanation how the chairman or manager would be paid his cut. Smith’s reply was reassuring: ‘You can introduce any third party you like into the deal, but any payment will be invoiced and presented to my auditors.’ The chairmen nodded. Shortly after a transfer was concluded, an invoice for an ‘interpreter’ was presented by First Artist to the club and the payment forwarded to an offshore bank, nominated by the club’s executive. Sums in excess of £150,000 were not unusual. In Smith’s corporate world, so long as those payments were listed in his company’s financial accounts and approved by his auditors, there was no wrongdoing. Convinced of the growing power which agents would exercise, Smith’s principal purpose was to be included in ‘the deal’ and, like his competitors, Smith was prepared to assist any participant regardless of what outsiders would deem to be a conflict of interest. Commissions in football, Jon Smith believed, were no different than a company director enjoying a night at the Royal Opera House at a client’s expense. That attitude encouraged carelessness.
The purchase of Walter del Rio from Boca Juniors was agreed with Terry Venables on the basis of a fax sent on 20 August 1998 from Buenos Aires to Steve Wicks, an employee of First Artist and a former professional footballer who had been captain of Chelsea and QPR. Written on the headed notepaper of Boca, the fax recorded that the player would be loaned to Crystal Palace for one year for a fee of $200,000 payable to Jon Smith and First Artist. Smith forwarded the fax to Mark Goldberg. Simultaneously, First Artist faxed Crystal Palace an invoice for $170,000 plus $29,750 VAT, describing the sum as a ‘FIFA agency loan and finder’s fee’. On 15 September 1998, a second invoice was presented for $317,250. Of this, $270,000 was described as a ‘FIFA agency fee representing 50 per cent of the ownership of Walter José del Rio’. The invoice also contained the phrase, ‘This fee is to be passed to the owner of the player’s rights, Tony Barradas.’ Crystal Palace were also to pay £118,317 to Marcello Houseman, the alleged Argentinian agent of the player. On the basis of those various incomprehensible invoices, First Artist received £91,000 commission. However, unknown to Mark Goldberg, Walter del Rio had been released by his club on a free transfer on 17 June 1998. There was no reason for Goldberg to pay Boca Juniors for the player. The fax purporting to come from Boca was a forgery sent from a fax machine in a shop in South America. Jon Smith’s description of del Rio’s status had been inaccurate. Smith insisted that he was also a victim of the forgery.
Jon Smith was embarrassed by the revelation of his company’s misrepresentation but his relationship with Crystal Palace was barely affected. He was not asked to repay the commission, although Goldberg’s £30 million investment was evaporating, propelled by Venables’s decision to try to buy John Hartson from West Ham for £7.5 million, an unexpectedly high sum, at the very moment that the manager had been ordered to reduce the team from forty to twenty-five players. (Hartson in fact later went to Wimbledon.) Distraught that the inevitable casualty of sliding down the league table was Crystal Palace’s expensive squad, Terry Venables resigned at the end of January 1999. His departure was cushioned by Goldberg paying six months’ salary in compensation. Venables’s appointment, admitted Goldberg, had been ‘a mistake’. The fabled manager had failed to motivate the players, conceded Goldberg, who added, ‘The club is actually in a sound financial position.’ That was inaccurate. The club’s deteriorating finances prompted Ron Noades to issue a writ for the non-repayment of a £1 million loan. Goldberg’s total debts after less than one year’s ownership were over £20 million. Two months later, in March 1999, the receivers were appointed. ‘I was a sucker,’ Goldberg conceded. His reign had lasted fourteen months. By the end of the year, Goldberg would be declared personally bankrupt and branded ‘dishonest’ and ‘a liar’ by a High Court judge. Like so many attracted to football, Goldberg’s recklessness had been self-destructive.
Mark Goldberg’s plight attracted little sympathy, although the relationships and deals during his brief ownership aroused unresolved questions about Venables’s activities within the club while disqualified by the DTI, the true value of Venables’s transfer deals, the representations of First Artist and the abrupt insolvency of a major club. Some answers might have been discovered by David Buchler, the administrator of the club’s insolvency, but he resigned citing the unpleasant working conditions. An explanation might also have been unearthed by a DTI inquiry but, to the complete astonishment of Ron Noades, the DTI investigation examined whether Goldberg had been the victim of a fraudulent valuation of the company and its assets. In March 2001 an application under the Company Directors Disqualification Act 1986 was made by the DTI for Mark Goldberg to be disqualified from acting as a company director. David Lee, a financial investigator, conducted an inquiry for the new administrators. Lee identified many riddles and provided replies to rebut the financial demands of Noades and Venables. But amid all those circumstances, there was a curious lack of interest about Crystal Palace’s fate on the part of the FA. An investigation was not even considered, despite the club’s dubious route to insolvency. The fate of the club and its management – a certain investigation for an independent regulator – barely interested the FA. Not even the vulnerability of the club to agents persuaded the FA to reconsider its nonchalance. Believing that football’s wealth would continue to soar, the FA’s officials were under pressure to resist interfering, despite Graham Kelly’s promise in May 1998 to enforce ‘the highest standard of administrative behaviour’ in football clubs. That piety was meaningless and, soon after uttering that assurance, Kelly himself became the victim of a coup within the FA.
7
FIASCOS AND DISILLUSIONMENT
Football’s magnates were intolerant of Graham Kelly and Keith Wiseman, the FA’s new chairman. Towards the end of 1998, both men were walking into a trap of their own making, condemned for ignoring the requirements of football’s rich professionals.
Keith Wiseman, a 53-year-old solicitor and coroner, was a former county tennis champion and eager football supporter. His election as the FA chairman in 1996 was unexpected. Few had anticipated that he would secure victory by embarrassing Dave Richards, the Premier League’s unimpressive candidate, and, not surprisingly, the machinations that secured Wiseman’s election sowed permanent resentment among Richards’s sponsors. Soon after Wiseman further angered the Premier League’s chairmen; he requested an annual payment of £250,000 in compensation for his loss of earnings. His request was rejected, and his reduced demand for £75,000 was also refused.
Wiseman’s agenda was to change the FA, in particular by transforming the FA from an amateur association into a commercial corporation. Among the FA’s many weaknesses he identified the antagonism between Graham Kelly, scorned as a clerk, and the self-regarding Premier League professionals personified by David Dein. Wiseman sought to broker a truce between those personalities, and between the Premier League and the other clubs in a business cursed by muddle and short-sighted self-interest. His plans and opinions were rejected.
Wiseman’s personal ambitions also aroused friction. He sought election to UEFA, the European football association, and his defeat evoked derision among members of the FA. Soon after he purchased 1,150 shares in Southampton FC valued at £1 each. After the club’s flotation, the shares were worth £1.27 million. Traditional fans were shocked by Wiseman’s so-called ‘profiteering’ and demanded answers from Graham Kelly. His response was self-
condemnatory. Despite extensive coverage in newspapers and television, Kelly denied any knowledge of Wiseman’s jackpot and refused to launch an investigation. ‘It’s nothing to do with the FA,’ insisted Kelly insensitively. ‘The FA’s rules have not been breached.’ To his critics, Wiseman’s ambitions appeared to profit himself rather than football. Despite his denials, Wiseman’s critics accused him of appearing as a would-be ‘wheeler-dealer’. In the newspapers they even castigated him as a master of ‘odious machinations’, a ‘mealy-mouthed conspirator’ and a ‘scheming, self-serving chairman’. And that was before Wiseman sought election as England’s representative to FIFA. Wiseman had reasoned that English football, excluded from influence at FIFA for so long, would be enhanced by a place in FIFA’s council, not least to promote England’s bid to host the World Cup in 2006.
In 1998, the reports of the FA’s prospects to win the competition to stage the World Cup were not encouraging. Doubts had existed ever since the bid was launched in February 1997 at a party in Downing Street hosted by John Major, featuring Bobby Charlton, Tom Finney, Tommy Lawton and other football personalities.
The bid was the brainchild of Bert Millichip, an 83-year-old who had recently retired as chairman of the FA. In Millichip’s version, he had agreed during a conversation in 1993 in Las Vegas with the representative of Germany’s FA that England would receive Europe’s block vote in support of a bid for the World Cup in 2006. Millichip’s recollection was doubted by Rick Parry, after his conversations with European chairmen. ‘England has got no chance,’ Parry told Millichip before the government’s formal announcement. ‘Thanks very much,’ replied Millichip, determined to ignore the warning. Parry was unsurprised by Millichip’s hauteur. Over the years in the FA, Millichip had been seduced by an expensive lifestyle and if England hosted the World Cup he would be guaranteed unlimited freebies until he was ninety-two.
Graham Kelly had not considered doubting his mentor’s hazy recollection of the alleged conversation in Las Vegas. In autumn 1996, Kelly had appointed Alec McGivan, a Labour activist who had managed the public relations for the successful Euro ’96 competition played in England, to organize the new bid. ‘The FA didn’t know what it was taking on,’ admitted McGivan. ‘Euro ’96 had been handed to England without competition. The bid for the World Cup would be contested by other countries.’
The first surprise was a reply to John Major’s invitation to the Downing Street launch. In a fax from Gerhard Aigner, the director general of UEFA, Graham Kelly read that the European football association was supporting a German bid, as agreed between Millichip and the German representative in Las Vegas. ‘We were gobsmacked,’ recalled McGivan; while Graham Kelly and David Davies were ‘left a bit shocked’. The suggestion of a converse agreement had been unexpected. According to the German version Millichip had agreed in 1993 in Las Vegas that in return for Germany not opposing England’s bid for Euro ’96, England would support Germany’s bid for the 2006 World Cup. Keith Wiseman, Millichip’s successor, decided to ignore Aigner’s message; the new chairman lusted for the glory. Pertinently, UEFA was unable to provide any written record to support their version, encouraging Wiseman and then Kelly to ignore what they euphemistically called ‘the gentlemen’s misunderstanding’. Over the following four years, both assumed, the disputed conversation would become unimportant. As proof of the FA’s isolation from football’s politics, neither man chose to telephone the six other European football associations represented at UEFA to verify their prejudice in favour of Germany. Instead, the FA’s executives pursued their bid, relying upon government support.
The Labour party’s election manifesto had embraced the bid but misgivings had surfaced after Alec McGivan and the FA’s organizers had spent £50,000 to lobby for support during the 1998 World Cup in France. They had managed to entertain only two FIFA executives to lunch. That embarrassment was compounded by growing qualms about the reliability of the accounts provided by the FA’s own executives. Towards the end of 1998, Tony Banks, the sports minister, was regularly encountering representatives of UEFA and European football associations who mentioned the Las Vegas ‘gentlemen’s agreement’. Repeatedly, McGivan, Kelly and Wiseman derided those assertions. ‘There are no minutes showing any agreement,’ they chanted. ‘It’s the corruption of football,’ cursed Banks. ‘One can’t commit a country on the basis of a gentlemen’s agreement. But I couldn’t, of course, say to the FA, “You’re liars.”’
Keith Wiseman barely helped the cause. In his effort to restore the influence which England had lost since the retirement of Stanley Rous in 1974, he boasted that he would lead England to ‘impose ourselves on the leading footballing nations of the world’. The occasion of his tactlessness was during the vote for a new president of FIFA in 1998. Wiseman ignored the agreement among UEFA delegates to vote for Lennart Johansson, and instead supported Sepp Blatter. Wiseman’s justification for alienating the Europeans was Blatter’s tempting promise to support England’s bid for the World Cup and galvanize sympathy for England among other football federations.
The focus of England’s bid was a new stadium at Wembley; construction had been formally agreed in 1996. Fearing that the combined bureaucracy of the FA and Sports Council would delay construction, Graham Kelly had proposed in autumn 1997 entrusting the project to Ken Bates, to ‘put a bomb under the Sports Council’ and ‘bulldoze Wembley through’. Bates’s nomination had provoked gasps of astonishment and amused applause but any criticism was silenced by Kelly’s mention of Bates’s successful transformation of Stamford Bridge into Chelsea Village. Neither Kelly nor the FA’s councillors understood the flaws of Chelsea Village’s financial model or were aware of Bates’s financial history. Graham Kelly’s endorsement of Bates as reliable was accepted by the councillors. That acquiescence symbolized many of the FA’s defects but was seized by Bates as an endorsement of his trustworthiness. At that moment, Warburgs, the City bankers, were arranging a £75 million, ten year loan for Chelsea bearing an annual interest payment of £6.85 million. The loan was approved in December 1997 and the club’s shares rose to 161 pence, valuing Chelsea at £250 million. Bates earned substantial profits by reducing his shareholding to 17.7 per cent while other offshore trusts owned by his associates reduced their stakes to 28 per cent. Bates’s status in London had been enhanced.
Over the following months, Kelly and Bates, as the chairman of the English National Stadium Development Company Ltd (later the Wembley National Stadium Ltd), negotiated with Derek Casey, the portly chief executive of Sport England (the quango responsible for distributing National Lottery money) a grant to build and manage the new stadium. In July 1998, the government approved an allocation of £120 million from the Lottery to the FA, as the principal user of Wembley, with the obligation to raise the remaining finance privately. Public money would support the country’s richest sport with the proviso that the stadium was shared by football, rugby and athletics. The Lottery grant was subject to fifty-two pages of conditions compiled by Casey. For Wembley to qualify as a truly national stadium, Casey stipulated the numbers of the public to be admitted, the seat prices and the conditions of all the FA’s commercial agreements, including those with television companies. Bates’s contempt for any restrictions was echoed by Graham Kelly. Casey’s stipulations, protested Kelly, ‘are an unnecessary interference in how we run our business’. The denunciation reflected the FA’s foolhardy manner of managing and regulating the football business towards the end of 1998.
Keith Wiseman’s strategy to win the bid for the World Cup included his plan to be elected as England’s representative to FIFA. His success required the support of the Welsh Football Association. To vote for Wiseman the Welsh FA demanded a loan of £400,000 every year for eight years. Although this was expensive, Wiseman and Kelly secretly agreed to commit the English FA to pay £3.2 million. In the international football world, buying votes was common, but in England, Wiseman’s ambitions displayed an unusual insensitivity to his own and Kelly’
s vulnerability.
The unauthorized arrangement with the Welsh FA was discovered after an invoice for £400,000 arrived at the FA’s headquarters in November 1998. Critics of Kelly and Wiseman were quick to condemn the ‘outrage’ and their ‘grave error of judgement’. English football’s turbulence precluded any tolerance of the hapless FA executives. For differing reasons, David Dein, Labour politicians and others favoured confrontation. Dein’s complaint was specific: Kelly and Wiseman had committed a terrible folly to vote for Sepp Blatter instead of Lennart Johansson as FIFA’s chief executive. ‘Johansson had worked hard to arrange England’s readmission to European football,’ said Dein. ‘That was no reward for his help.’ On 15 December 1998, the FA’s executive committee unanimously passed a vote of no confidence in Kelly and Wiseman. Kelly resigned immediately but Wiseman refused to go. Pleading that he was the victim of a smear campaign, Wiseman hoped to reverse the decision at a meeting of the whole FA on 4 January 1999. His stubbornness reminded some of his misguided opinion, voiced in 1996, that Robert Reid’s ‘bungs’ inquiry was ‘an odd residue of a difficult past’ which would not be repeated. Wiseman’s hope of a reprieve was misplaced. After a two hour meeting, his dismissal was confirmed, despite the perception that some were motivated by ambition for his job. His humiliation was complete.
