Gordon Smith Re-Writes History of Rangers Entering Administration

A couple of quick points here, now and soon, about how issues are covered by the Scottish media relating to Rangers. I have had discussions before with journalists who say that an interview or report is usually just for getting down what the interviewee has to say, and there is no scope for pointing out that they might actually be talking rubbish.

That view has helped contribute to the “succulent lamb” ethos and has allowed stories of Motherwell Born Billionaires, and “war chests” filled with millions to be trotted out uncritically.

A year on since Administration, on 14^th February 2012, how are the media covering these issues?

First up we have the BBC. They published yesterday a report of an interview with Gordon Smith. You will recall that Mr Smith is a former CEO of the SFA and former Director of Football at Rangers, appointed by Craig Whyte and made redundant by Duff and Phelps.

His interview is mainly about how soon Rangers will be on top again and I will leave others to comment on that, if they want to.

However a part of the interview seemed not quite right.

It reads:-

He said that despite having learned from the club owner Craig Whyte that it could happen because of a potential tax liability from the so-called ‘big tax case’, when the news broke it still took him by surprise.

“It was a shock,” he added.

“I had spoken to Craig Whyte on a couple of occasions about the administration.

“He said it was a possibility, depending on the ‘big tax case’ [which Rangers eventually won in November, though Her Majesty’s Revenue & Customs is appealing that decision].

“That’s why it was a big shock to everyone when it happened, because the big tax case hadn’t been decided.

“HMRC applied first to put the club put into administration and he then approached [administrators] Duff and Phelps and got that put through.”

I may be reading too much into this, although what I comment on in my next post suggests not, but reading that one would think that the world was astonished about Rangers entering administration before the Big Tax Case was decided.

But that is not true.

There was rampant speculation that Rangers were going to run out of cash around October 2011. They did not go into administration until February 2012. How did they survive?

The answer is simple – the money which Craig Whyte withheld from HMRC for PAYE and VAT was spent on keeping the lights on at Ibrox, making sure the players were paid, and generally keeping the plates spinning.

As I have said repeatedly there has been no suggestion that Mr Whyte left Ibrox with bags stuffed with cash. If not for the money he withheld from HMRC, then Rangers would have entered administration earlier than they did, and in addition, they would not have made it, even in administration, to the end of the season.

Mr Smith was a senior member of staff. This does not mean of course that he was looking at the books, but are we expected to believe that Mr Whyte succeeded in keeping his tax strategy (pay nothing) a secret from everyone?

And Mr Smith’s memory of how Rangers went into administration may have been clouded by the passage of a year.

You will note he says – “HMRC applied first to put the club put into administration and he then approached [administrators] Duff and Phelps and got that put through.”

The first part is strictly true, but I suspect not in the way that Mr Smith intends.

HMRC did apply to put Rangers into administration before Mr Whyte did. However, the application by HMRC to do so was lodged the day after Mr Whyte stood on the steps of Ibrox and announced that Rangers would go into administration within two weeks.

HMRC acted to force his hand and to avoid the 2-week moratorium which the announcement would otherwise have given.

And Mr Smith gives the impression that it was only when HMRC pushed that Mr Whyte got in touch with Duff and Phelps. As is well known, Mr Whyte had them lined up for some time before administration kicked in.

I am not suggesting that Mr Smith is being incorrect deliberately. Despite having been CEO of the SFA and Director of Football at Ibrox, how could he be expected to be on top of these issues, even though they resulted in his redundancy?

Instead the piece is a fine example of what I mentioned above – something manifestly wrong entering the news “food chain” unquestioned.

Some tripe – I have no idea why this picture has appeared randomly in this piece…

And there are some more of the same to come!

Posted by Paul McConville