The Clubs and FIFA Must Lead Change in the FAI
Brendan Menton was Honorary Treasurer of the FAI from 1996 to 2000. In this outstanding article, Brendan clearly outlines how the FAI’s rules were gutted thus allowing John Delaney to have way too much power and the reforms that are essential to the new FAI that emerges from this mess.
The article first appeared on Medium.com here
Football in Ireland is facing a catch 22 situation. The only internal power for change lies with the delegates at general meetings. This is the body that appointed the current council, which, in turn, appointed the current board and elected the officers. This is the body, which adopted a set of totally inadequate rules as recently as February this year. This is the body, which has had no questions for its leaders over the last ten years. Can someone tell me when last there was a competitive election within the FAI? These yes men won’t change or support change unless they are forced to do so. This is the conundrum facing Irish football.
Let us not downplay the fact that the FAI is a member of FIFA. FIFA rules stipulate that its members must be independent and free from government interference. Any action by the government to force change would lead to an immediate suspension of Ireland from all international football activities, including its underage team and its clubs. It would lead to a suspension of funding and that would have a disastrous impact. I trust everyone agrees that this must be avoided at all costs.
I notice a comment from the Chairperson of Sports Ireland, Kieran Mulvey, on radio over the weekend that: ‘I (Mulvey) think they (the FAI) are beginning to come clean with us, but I don’t think they know themselves fully the nature of the transactions that have taken place in the FAI in the last four or five years, I think that is the difficulty.’
I hope this is not an apology for the failures of the remaining Board members of the FAI. If true, the statement is justification for the instant dismissal of the directors. What questions did the FAI board members, individually or collectively, ask over the last fourteen years? It is evidence of their mismanagement of the Association and the abrogation of their fiduciary responsibilities.
I suspect that the Board of the FAI and its Finance Committee have been kept in the dark for a lot longer than four to five years. Collective and individual responsibility of the FAI directors cannot be excused by lack of knowledge. Ignorance is no excuse. What they did not know, they should have known. Directors in any corporate body must ask the requisite questions to ensure they have the information required to carry out their corporate and fiduciary duties. If they don’t, they are failing in their duty as directors. Subservience is not an appropriate characteristic for directors. All FAI directors, for an extended period of time, appear to be equally culpable.
The current situation would not have arisen in the pre-Genesis era of the FAI. There appears to have been a systematic dismantling of rules, procedures and checks and balances during the Delaney reign, facilitated by the partial introduction of the Genesis report. The Board of the FAI obviously approved this weakening of its controls and governance. Proclaiming from a pulpit about transparency and governance does not make it a reality!
According to the rules of the FAI, the Honorary Secretary, Michael Cody was, de facto, its compliance officer. Rule 19 states that: ‘The Honorary Secretary shall keep himself appraised of football rules, FIFA/UEFA directives, company, employment and other appropriate legislation.’ Mr, Cody, despite his resignation, must take prime responsibility for the serious lapses in corporate governance. Requests by newspapers to Mr Cody for comments have been responded to, on his behalf, by a firm of solicitors. As a key player throughout John Delaney’s reign, I hope Mr Cody does not hide behind the excuse of ‘legal reasons’ in the forthcoming investigations. Probity was one word used in the statement issued on behalf of Mr. Cody by his solicitors. I trust Mr. Cody’s probity will compel him to put the interests of Irish football ahead of those of Delaney, the FAI or indeed his own self-interest.
FAI Rules and Financial Policies
The rules of the FAI are totally inadequate. Let me give just two examples. The roles and responsibilities of the Chief Executive are nowhere defined. Where the decision-making powers lie is very unclear. The rules, de facto, provide ’carte blanche’ to the Chief Executive. The Board has allowed itself to be emasculated. The rules are much weaker than those of the Association twenty years ago, which, while not perfect, had a good system of checks and balances between the different elements of the Association and a clear definition of roles for everyone involved.
As a former Honorary Treasurer of the FAI in the late 1990’s, I am astounded that former FAI Treasurer, Eddie Murray, could be unaware of the FAI’s €100,000 cheque repaying Delaney’s ‘loan’. This could not have happened twenty years ago. It suggests a systematic undermining of internal financial controls by the subsequent finance committees and FAI boards. A cheque of that magnitude (and indeed a much smaller amount) would have to have been signed by the Honorary Treasurer and one other Honorary Officer. Cheques above a minimal amount had to be reported to and explained at subsequent finance committee meetings.
Thus, the Finance Committee have approved changes to internal policies which have weakened financial control. The board would have to have endorsed these changes. What amazes me, even more, is that the Honorary Treasurer wasn’t a signatory to the €100,000 Cheque. The Bank mandate would have to have been changed to exclude the Honorary Treasurer. Come on!! I find it difficult to believe that the FAI’s bankers would have accepted that. Perhaps this is another area that merits investigation.
The €60,000 ‘professional’ fees controversary that emerged in the Sunday Times on 21st April would have to be reported and explained to the Finance Committee in a previous era. It has recently been reported that members of the FAI Finance Committee are expressing concerns about how their business was operated. Sorry! That is no excuse. They were appointed to the Finance Committee to ask questions about how their business was operated. They obviously failed spectacularly.
The excuse that they (the finance committee members) were only given financial reports during meetings is ridiculous. Did they not realise that they could not inform themselves adequately of the finances of a €50m company in advance of the meetings if they had no information? Did they once protest that they were being prevented from carrying out their duties? They acquiesced and thereby failed in their responsibilities. If they were unhappy, they had the option to resign; which some good people chose to do. They are now trying to exonerate themselves after the ‘shit has hit the fan’.
Personal expenditure on a FAI credit card is a change of financial policy from that of twenty years ago, when such expenditure was prohibited. Which finance committee and which Board changed this policy and why? The investigation into expenditures on FAI credit cards should go back in time and cover every person who has held a credit card since John Delaney became Chief Executive in 2005. It must also include the role of the FAI Finance Directors, Honorary Treasurer, Finance Committee, Audit Committee and Auditors. It is a collective failure. All unrecouped personal expenditure should be reclaimed. This is not FAI’s officials’ money; it belongs to the members of the Association.
At the Dail Committee on Tuesday 16th April, John Treacy of Sports Ireland stated that good governance of sporting bodies depends on a proper division of responsibilities between the board and the secretariat. This has been absent in the FAI since the adoption of the Genesis report in 2003. Sports Ireland enthusiastically endorsed the Genesis Report at that time.
Genesis was introduced to the FAI by John Delaney and the report was his baby. Its partial introduction facilitated his exercise of control over the FAI. For the first time, the Chief Executive became a voting member of the Board. This is unique in football associations and is contrary to FIFA guidelines.
The size of the board was reduced from 21 to 10. Now everyone is clamouring for increased representation for various football interests (I approve). The reduced board size facilitated control of the association by a small cabal led by Delaney, Cody and Murray, abetted by a few other acquiescent acolytes. The League of Ireland clubs’ direct representation on the board was removed. Historically these clubs were the most vocal and most likely to ask pertinent questions. To represent their interests, they were replaced by one board member agreeable to Delaney. The recommended independent directors were never appointed. Questioning and possible dissent were stifled.
Previously, the minutes of all meetings were provided to the FAI Council to keep the members informed. This has been replaced by a quarterly report on activities from the Chief Executive. Thus, Delaney controlled the flow of information to those charged with monitoring the governance and activities of the Association. This required a rule change.
The members, at a general meeting, voted to deny the FAI Council, the people they appointed as their watchdogs, the information they needed to fulfil this role. I suspect the FAI leadership strategy was: ‘if we don’t tell them, they won’t be able to ask questions and, accordingly, they will have nothing to worry about as they enjoy the perks of their positions.’ The adage of growing a mushroom comes to mind: Keep them in the dark and feed them shite.
Listening to the Dail Committee deliberations on Tuesday 14th April, I feel that the Minister for Sport and Sports Ireland are seriously underestimating the current financial risks of the FAI. Did not one Senator, a financially qualified one, say that the evidence suggested the FAI was insolvent. The organisation has had cash flow problems for a lengthy period and has a significant portion of its funding suspended. It has large bank debts and possibly other major creditors. What happens if the FAI defaults on the next tranche of its debt payments?
What security has the FAI afforded to its bank creditors? The only bankable ‘assets’ of the FAI are the income streams from tickets for national team matches and UEFA television rights. Have these been pledged? The FAI does have some property interest in United Park (Drogheda), St Colman’s Park (Cobh) and the Athletic Union League complex in Clonshaugh, close to Dublin airport. The FAI is a 50% owner of the (Aviva) Stadium Company Ltd. Are these assets at risk if the FAI goes into receivership? One thing I am sure of is that the Banks will get paid before FAI staff and grassroots programmes.
Could the FAI lose its stake in the Aviva Stadium? What happens if there is a default on its debt? What happens if it can’t fund the ongoing losses (up to end 2017 at least) in the stadium operations. As Honorary Treasurer of the FAI, I vehemently opposed the Eircom Park Project in the late 1990’s. The FAI is a football organisation, and should never be a property management company, despite the hubris of its leaders. Most FAI revenue over the last decade has gone to managing its stadium debt rather than being invested in football development. The pipe dream of unlimited resources after 2020 was never going to happen.
Does the FAI currently have the financial management skills to cope? A head in the sand attitude, awaiting disaster to happen and then reacting is not good enough. Sports Ireland, and I know it is outside their direct remit, must ensure an assessment of the FAI’s current financial stability is carried out. The consequences for football and its stakeholders of a financial collapse are too severe to do otherwise.
It has been reported that Sports Ireland made early payments of its grants to the FAI on a number of occasions in recent years. Was this not a strong signal to Sports Ireland that something was amiss financially in the FAI? What questions did they ask? Was the code of omertà at AGMs not another signal that the real situation was different from the PR spin?
Given Delaney’s renowned expertise at political schmoozing, what was the relationship between Sports Ireland and FAI? This is a question that has not been asked. Were there elements of regulatory capture in the relationship?
It has been reported that Sports Ireland has complained about the drip feeding of information from the FAI. If the information had not leaked, how would Sports Ireland have found out about the problems? Sports Ireland was obviously not asking the appropriate questions.
The drip feeding of information is pointing the investigators in the appropriate directions. If there is more, then let it come out as soon as possible. The FAI has been concealing its true situation for years. Let it not be hidden from public view in confidential reports. My experience suggests that such reports are frequently circumscribed for legal reasons.
Listening to the Dail Committee deliberations on Tuesday 16th April, I believe the timescale — just three months until the AGM in July — for renewal of the FAI is totally unrealistic, given the magnitude of the investigations and the degree of change required. Perhaps a ‘quick fix’ suits the soon to be retiring leadership of Sports Ireland.
The timescale is even shorter if allowance is made for appropriate notification of the delegates and discussion and approval of the changes at grassroots level. How long are delegates and their organisations going to get to discuss these major reforms? Three months for completion is impossible! Is allowing the same bodies to approve the changes likely to lead to a different result? Is rushing the major renewal required the correct approach? The current directors will likely use any tactic to preserve their positions and rushing reform could assist them in this.
International Match Tickets
I am amazed that the Sunday Times exposé of 14th April on the ticketing agreements between the FAI and Marcus Evans Ltd has received so little attention. It reminds me so much of the FAI’s US World Cup ticketing scandal (Merriongate) in 1996. Just because the ticketing arrangement was in the form of corporate agreements with Marcus Evans Ltd, rather than a surreptitious hand shake with George the Greek, doesn’t change the ethics of the situation.
The FAI has the responsibility to ensure that no Irish International match ticket is touted. Can they state categorically that this was the case? Or did they abet such activities through these agreements? I would argue that the FAI Finance Committee members and the FAI Board members who approved these agreements should be sanctioned.
Giving 12.5% of away match tickets and 25% of European Championships and World Cup tickets to a corporate hospitality company is a breach of trust with the Irish fans. I would like the Grant Thornton review to be extended to cover the ticket distribution by the FAI, particularly with regard to Euro 2012 in Poland/Ukraine, the 2010 World Cup in South Africa and, if the agreements were renewed, the 2016 European Championships in France. Where did the tickets go? Who benefitted financially? In football, control of tickets is power! In football, control of tickets has long been a source of problems and exploitation.
I hope that the terms of reference for the Mazar’s and other reviews of corporate governance is extended to include the FAI’s membership structure and its affiliated leagues and bodies. Focusing on only one part of the organisation will not bring change. A comprehensive restructuring, ab initio, is required. Otherwise, the new FAI will be a reincarnate of the old.
Unless the FAI becomes fully democratic with the grassroots clubs at its base able to demand the implementation of change, little progress will be made. The current affiliate structure and hence attendance at general meetings is unwieldy with overlapping strands. It suits what I call the ‘seat warmers’, who rise up the organization through endurance and acquiescence.
The FAI membership and representation structure leads to the establishment of cabals, who then control significant block votes at the FAI council and general meetings. This must change. The four provincial associations, allied to the junior council, is one such cabal, which has been in existence since time immemorial. They control 21 votes (36%) of the 59 member FAI council. As shown by their recent press release, they are staunch Delaney supporters. This illustrates how difficult it will be at achieve change.
The base of power must belong to the clubs, not political cliques. The voting power at general meetings must lie with the clubs. The number of clubs entitled to attend general meetings must be increased significantly. Only the clubs should have a vote and not the leagues, provincial associations and councils. The election of the President, Vice President, Honorary Secretary and Honorary Treasurer should be transferred from the politically controlled FAI Council to the AGM. This, hopefully, would achieve greater accountability.
The strategy of the current directors reminds me of the Merriongate saga of 1996. The Officers of the Association resigned and then sought re-election. Three out of five officers survived, one or two of them rightfully so. This cannot be allowed to happen with the current directors. They have failed. They need to be removed for good. They remind me of Nero; they have imbibed (power) and fiddled while Irish football has crashed and burned.
The media have indicated that a ‘reform’ group is emerging within the current FAI, led by President Donal Conway and Niamh O’Donoghue of women’s football. Conway has been a member of the board since 2006 and O’Donoghue has been around the top echelons of the FAI even longer. I would categorize them as ex-Delaney supporters. I notice that O’Donoghue’s name has been mentioned in relation to the position of Chief Executive. They went along for the ride until Delaney’s halo slipped. It is a politically astute time to jump a sinking ship. What significant questions have they asked over the years at FAI board, council or general meetings? None? They should not be forgiven their previous complicity.
There are two proposals that would resolve issues for football. The first is internal and may be difficult to achieve given the likely resistance to change from many stakeholders. The second, which I favour, is an international solution and would require leadership from the President of the FAI.
In the internal solution, I would propose that an interim board and an interim General Secretary be appointed for a period of 1 year, with the AGM in 2020 the target for renewal. If carried out appropriately, this would be consistent with FIFA Regulations. The new directors, or at least the majority of them, should be from outside football and hence have no self interest in the process. At the end of the process, all the interim directors and the interim General Secretary should stand aside to doubly ensure their independence.
This extended period would also allow new leaders to emerge within football. If the process is rushed, the FAI will end up with leaders from the same strata and with the same structures to those from which the current directors emerged. Is the French phrase: ‘Plus ça change, plus c’est la même chose’ going to apply to FAI reform?
When the new structure is in place, there must be strict time limits on the tenure of the honorary officers and that of the General Secretary/Chief Executive. This is a good principle that the Government has applied in certain areas. It promotes new thinking, renewal and change. Bodies that don’t change leadership, can easily become moribund.
The key question, returning to my opening paragraph, is how to achieve change at forthcoming general meetings. I am calling for a revolution at grassroots level led by the clubs. There are plenty of able, younger people capable of leading the charge. The FAI rule book states that an EGM can be called by 50 representatives entitled to vote at a general meeting. The clubs must band together to ensure an EGM is called, which demands the immediate removal of all the directors and the appointment of an interim board of directors until the AGM in 2020.
Arguments about creating a leadership vacuum are spurious. There has been no evidence of leadership from the current directors.
This EGM could happen before the end of May. The Clubs must instruct the delegates from their leagues and provincial associations to support such proposals. The leaders in the leagues and associations will quickly change their views if they feel the winds of change blowing from below. To the clubs I say: ‘The power ultimately lies with you, Take back control of your football’.
There is another solution. The FIFA statutes state (Article 8.2) that: Executive bodies (the Board) of member associations may under exceptional circumstances be removed from office by the Council in consultation with the relevant confederation (UEFA) and replaced by a normalisation committee for a specific period of time.
The Council referred to above is the strategic and oversight body of FIFA, in effect its Executive Committee.
We have exceptional circumstances: the FAI board is under investigation for possible criminal conduct re its fiduciary responsibilities.
I make a plea to the President of the FAI, Donal Conway, who I know, although we have not spoken in perhaps 16 years. Please, show leadership and in the interests of Irish football, go to FIFA, explain the situation and all the investigations under way and ask them to establish a normalisation committee for Ireland for a period of 15 months. If the appropriate people are appointed to such a committee, it would lead to the best outcome for Irish football. Hopefully, a new, much changed and invigorated FAI can be re-established within football by the AGM in July 2020.
The international approach would have the added benefits of removing football from Irish political machinations and would likely bring support and investment from FIFA in the restructuring of the FAI.
22nd April 2019
The author was a development consultant for FIFA from 2009 to 2014, specialising in developing the statutes and structures of football associations.
He was Director of Member Associations at the Asian Football Confederation (AFC) from 2003 to 2009. He had responsibility for the structure and development of the member associations of AFC and was sponsored by UEFA in that role.
He was General Secretary of the FAI from 2000 to 2002.
He was Honorary Treasurer of the FAI from 1996 to 2000.
He was Acting General Secretary of the FAI during the Merriongate crisis in 1996.
He is author of the Book: ‘Beyond the Green Door’ detailing his experience of six years inside the FAI.
He has a long family association with Home Farm FC and is currently a trustee of the club.
Prior to working in football, he was Chief Economist for AIB.