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'It should not be seen as the government having sold out': Ross's message to officials before FAI bailout

There was a lot of back and forth before the government agreed to bail out the FAI in late January.

Image: Sam Boal/Rollingnews.ie

PRIOR TO THE restoration and doubling of State funding to the Football Association of Ireland, Minister for Sport Shane Ross told the chair of the FAI and his own department officials it was important that it didn’t look like the government had “sold out” by bailing out the FAI.

During a high level of meeting of department and FAI officials at the beginning of the year, Ross’s special advisor also emphasised the “political context to the discussion” as well as “the need to avoid the narrative the FAI is receiving a bailout from the government”.

At this meeting in late January, Ross was told that unless a financial rescue package was guaranteed, the FAI board was set to meet in a matter of days to consider whether it could continue “as a going concern”. 

A financial rescue package – which amounts to some €30 million when the restoration of previous government funding is factored in was announced – was announced by Minister Ross on 30 January, just over a week before the general election.

Documents released to TheJournal.ie via the Freedom of Information Act show details of the correspondence between the FAI and the department in the weeks and days prior to the bailout that helped to secure the organisation’s survival.

Financial turmoil

The financial plight of the FAI came to light last year. A series of articles in the Sunday Times shone a spotlight onto the affairs of the association and matters related to its then-CEO John Delaney.

The Sunday Times’ initial story in March 2019 of a €100,000 payment from Delaney to the FAI – which Delaney was said was a “once-off bridging loan” to aid “a very short-term cash flow issue” – triggered a string of revelations about the association.

It led to Delaney’s resignation as CEO and move to a newly-created role of executive vice president, before he left the FAI altogether later in the year.

Due to the concerns that State body Sport Ireland had about the FAI’s finances, it suspended its €2.9 million funding to the association in April last year. 

A number of independent reviews were also ordered into the affairs of the FAI. One of these – the KOSI report – deemed that the FAI was not fit to receive public monies under its leadership.

It became clear over the course of 2019 that the FAI was facing severe financial difficulties and the extent of this was laid bare at a grim press conference in December.

The association’s debts were said to be roughly €62 million and the discourse around the turn of the year centred on a government bail out to prevent the FAI from failing. 

Speaking to reporters at Christmastime, the Taoiseach said that the government was working on a plan that “avoids the taxpayer being asked to provide a blank cheque to pay for the mistakes of the past”.

With a general election looming, Minister Shane Ross wrote to FAI Chair Roy Barrett on 8 January. This correspondence was released under Freedom of Information.

He said the government would play its part in what lies ahead for the FAI but any support “would be appropriate and would not be without conditions”. 

“I should also add that while the government cannot and will not ‘bail out’ the FAI, we would be prepared to take appropriate action to join you and your fellow directors in pursuit of a solution that ensures the future health of Irish football,” Ross said.

‘Explain the support’

Barrett met with Minister Ross, his special advisor and some senior civil servants at the Department of Sport on 23 January.

He outlined changes, in terms of personnel and practices, that had been made at highest level of the FAI in recent times. According to a note of the meeting, “he said that investment could throw up good results and, if the FAI can sort the issues at the top, beneath that is a game that absolutely wants to thrive”. 

Minister Ross said there were two important issues from the government’s perspective. One was that – if the government would provide funding – “we have to be certain we can explain this support”. 

“An accurate and transparent narrative is necessary, particularly where the funding goes beyond the development of sport and could be mistakenly seen as facilitating the repayment of creditors,” according to Ross.

The other issue was that granting the funding would be contingent on the FAI implementing the reforms deemed necessary.

Also at this meeting, his special advisor said there was a need to “avoid the narrative that the FAI is receiving a bailout from government”. 

“She underlined that the pre-election period is a sensitive where concerns are heightened in this regard,” according to the note of the meeting. She also said there was an “open door to try to help the FAI but that much greater caution is necessary to progress the matter at this time”.

The note goes on: “She said that the question of how the funding package is portrayed could not be overemphasised.

Minister Ross also said that he understood there are influential people within football who are ready to pounce in this regard.  Whatever support is provided should not be seen as the government having sold out; the minister reaffirmed that an accurate and transparent narrative is essential.

Requirements

In a letter to Ross on 27 January, FAI Chair Roy Barrett aimed to drive home how significant a situation the FAI was in.

He said: “I cannot stress strongly enough how imperative it is that, if a solution is to be found, that it is done so as soon as possible. Absent an agreed solution in the next week or so, as a Board, we will have to consider whether the organisation can continue as a going concern.”

Barrett outlined that the FAI’s finances depended on support from Uefa and from its arrangements with Bank of Ireland and that there was a “high level of interdependency” here. In other words, each party – the government, Uefa and BOI – were willing to make an agreement with the FAI on the basis that all of them were. 

He asked for the government to immediately restore the €2.9 million a year Sport Ireland funding and also double it to €5.8 million. It also asked for the money previously withheld by Sport Ireland following the FAI’s scandals coming to light – some €800,000 – be reinstated to the organisation

This, however, wouldn’t remedy the problems in the FAI’s finances, according to Barrett. He said that Ireland was due to host four games of Euro 2020 – now delayed until June 2021 due to the coronavirus – and this would have a significant positive impact on Dublin, creating jobs and boosting money to the exchequer by €30 million.

“Arguably these numbers may all be higher, and, in recognition of this event, I would ask that the Government provide €7.5 million to €8.0 million in funding to the FAI, given its role in securing this event,” he said.

Information related to “additional support” to be provided by Uefa to the FAI was redacted in the information supplied under Freedom of Information.

Financial rescue

Ahead of a meeting of Cabinet on 29 January, Ross was sent a note by a senior civil servant in his department advising it would be “very useful” to speak with Minister for Finance Paschal Donohoe “on the margins” of the meeting before it started.

The final version of the proposal to be approved by the government was largely in line with what the FAI had asked for.

It had its Sport Ireland funding reinstated and doubled to €5.8 million a year.

And it was provided with €7.63 million from the government. However, this took the form of an interest-free loan that would be repayable from 2024.

In bringing a memorandum of understanding to government on the week beginning 28 January, the proposal from the Department of Sport emphasised that the “matter is extremely urgent, and in the circumstances, requires an urgent decision by government”. 

The government also insisted on a number of essential actions that would need to be taken by the FAI as part of the agreement to provide the funding.

That memorandum of understanding – seen by TheJournal.ie – states the FAI must fully implement all the recommendations of the KOSI report by the end of this year. The FAI must also commit to protecting all low to middle-income earners employed at the FAI from compulsory redundancy for a period of 18 months.

When announcing the financial rescue package had been agreed on 30 January, Ross said the measures within them “will ensure that Irish football has a secure future”.

At 10pm the night before announcing the bailout, the most senior civil servant in the Department of Sport emailed the minister.

He said he understood that Ross was planning “quite a bit of media engagement” around the announcement and he wanted to make sure that – less than 10 days away from the general election – his officials weren’t engaging in anything “political” as the minister announced the measures aimed at saving Irish football. 

An hour later, Ross’s special advisor replied that they were “acutely aware of the need for caution” but added the media had been consistently interested in the story and “any failure to present the plan or be transparent could be detrimental to [the FAI] and their recovery”. 

€30,833,800

In terms of the monies given to the FAI, the package provided by the government amounted to €19.23 million. That’s made up of an extra €2.9 million as it doubled the Sport Ireland funding over four years, and the €7.5 million interest-free loan. 

When you factor in that – prior to the scandals at the organisation – it already received €2.9 million a year from the State, it means through all the measures proposed that the FAI would be receiving €30,833,800 from the government up to 2023.

After its lengthy discussions with the FAI in recent months leading up to the association ultimately receiving a bailout from government, senior officials at the Department of Sport appeared keen to move on and leave matters to statutory body Sport Ireland from hereon.

One senior official told colleagues: “It will be important for all of us that Sport Ireland lead the government’s engagements with the FAI on matters from today onwards. I am very impressed with the new leadership, at board and executive levels, and I have no doubt that they will make a great impact.

However, given the close engagement over the past couple of weeks, which is no longer required, it would be good to lay down early markers, if needed, that Sport Ireland will take things from here.

With reporting from Gavin Cooney

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Sean Murray

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