by Lisa Albergo reporting for AFANA from Chicago
Saint Kilda may be subjected to a financial audit covering the period of former CEO Brian Waldron's tenure from 2002 to 2004. Current North Melbourne financial officer Cameron Vale, who served as financial officer of the Storm under Waldron, could also come under investigation. According to one Storm insider, Vale and Waldron did not get along. The insider described Waldron as a "bully". Vale left the Storm to become chief financial officer of the Kangaroos in 2008.
In 2003, AFL Investigator Ken Wood questioned Waldron regarding a settlement which former player Peter Everitt had been seeking after he was traded to Hawthorn. Nothing came of the case then but the AFL has not ruled out readdressing the issue.
Waldron left St. Kilda after a falling out with then president Ron Butterss and was appointed CEO of powerhouse rugby team Melbourne Storm. He left the Storm in January to become CEO of another rugby team, the Rebels. A recent audit of the Storm revealed massive salary cap breaches which Waldron masterminded. The league auditor found a second set of books which listed illegal payments to a number of Storm players. At least four other former club officials, including Vale, have also been implicated in the scandal. Waldron has since resigned his position with the Rebels. Melbourne Storm's acting CEO Matt Hanson, who worked with Waldron at St Kilda, has also stepped down.
The breaches amount to $1.7 million and include incremental $15,000 payments and game day benefits to star players. It is as yet unknown which players received the illegal payments. The Storm are already $700,000 dollars over the league's $4.1 million cap this year. Waldron recently commented that "everyone was doing it" and that it was necessary to retain high profile players for sustained success.
The Storm has been heavily penalized. They have been stripped of their 2007 and 2009 premierships, stripped of their minor premierships (finishing in first place 2006-2008), fined $500,000, must return several million dollars in prizemoney, will not be allowed any premiership points during the 2010 season games, have been stripped of their 2010 premiership points to date, and must bring player payments back to salary cap level. Club officials and players and their managers could also face criminal charges under taxation laws as well as charges of falsifying financial documents. Penalties for this could include jail time as well as heavy fines. Several club sponsors have already canceled their support of the Storm.
Club chairman Dr. Robert Moodie said he and the club board were kept in the dark regarding Waldron's actions but admitted that he should have known something was amiss. John Hartigan, the CEO of Rupert Murdoch's News Limited, which owns the Storm, said his company was also unaware of the breaches until the story broke. Hartigan has already ordered further auditing of the club's financial affairs.
The ramifications go deeper than the penalties which have been meted out. Storm fans are completely devastated and some face betting losses due to wagers lost. There is also concern that match attendances, especially in Melbourne where attendances are traditionally low, could drop even further as fans feel there is nothing to be gained as the club won't be allowed premiership points for wins. One person said it would be like attending a Harlem Globetrotters game.
North Melbourne's Cameron Vale issued a statement on April 23. He said that he was never involved in any fraudulent behavior and would cooperate with any AFL or NRL investigations. He also denied allegations that he was the one who alerted authorities to the salary cap breaches. Kangaroos' CEO Eugene Arocca had nothing but the highest praise for Vale, saying Vale was a man of great integrity and has done excellent work with North Melbourne.
On Tuesday, April 27, Wlaldron made a public statement, alleging that salary cap cheating had been going on at many rugby clubs for years before he joined the Storm. Someone close to Waldron said the former CEO said that News Limited as well as NRL chief David Gallop were aware of what was going on. According to the source, a former official with the Newcastle Knights told Waldron in 2007 of salary cheating there and Waldron then contacted Gallop with suspicions that such cheating was widespread within the league.
Waldron is alleged to have suggested to Gallop that all clubs be granted an amnesty for admitting to cheating and then start over with a clean slate. However, Gallop is said to have stated that such action and making the breaches public would be damaging to the sport's reputation. Gallop, when contacted, refused to confirm or deny any such conversation with Waldron and denied any recollection of said conversation.
Waldron said he would like to have a public hearing to tell what he knows. He further stated he had legal advice to say no more. His only further comment was praise of the club and its players for whom he had "...the highest regard..." as "...the most courageous group I have ever seen run onto the field of play" and who would be "...remembered for the wrong reason."
Source: theage.com.au, heraldsun.com.au, afl.com.au, sen.com.au; Heath O'Loughlin, North Melbourne Media Release
Article last changed on Monday, May 03, 2010 - 3:35 AM EDT