'Smoking gun' email reveals warning to Parramatta Eels officials about third-party deals
Date
May 8, 2016
Chris Barrett
Sports Writer
It's been called the smoking gun in the NRL's investigation into Parramatta and its contents can finally be revealed.
An email, sent by the club's then chief financial officer Ed Farish to chairman Steve Sharp, chief executive John Boulous and football manager Daniel Anderson last July, warns them of "exposures" around third-party deals for Anthony Watmough. The email also noted Farish's suspicions of a system of inflated invoices with club suppliers, and advises them to self-report to the NRL.
Obtained by Fairfax Media from a source close to the investigation, the details of Farish's urgent note to senior officials played a major part in the heavy sanctions handed down last week by the NRL.
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Farish explains his concerns about Watmough's deals with ScoreCube whose parent company Black Citrus had been signed by former CEO Scott Seward to a $200,000-plus contract to provide digital services to Parramatta and PJ Promotions, a company owned by the father of public relations executive Tracy McKelligott, who was a club consultant from 2013 until last July.
The officials' failure to disclose the deals when they were made aware of them, along with damning transcripts of third-party agreements being discussed at recorded board meetings, were central to the investigators' case against the club and the five current officials implicated.
"Gents, on Monday the 20th of July [NRL salary cap auditor] Jamie L'Oste Brown is due to conduct a mid-year salary cap review," Farish wrote in the email, dated July 10, 2015, with the subject line 'TPA'.
"We've identified the following exposures around potential deals on TPAs. I'm anxious to ensure that everyone is on the same page in dealing with these. If a TPA is not registered and discovered, Jamie can refuse to make it cap exempt."
Under the heading of 'registered TPA' Farish continued: "TPAs are exempt from the cap under certain conditions. The main condition is that the company is not an associated entity. We have two TPAs registered for Anthony Watmough being ScoreCube $75,000 and PJ Promotions $50,000. ScoreCube is a 100 per cent subsidiary of Black Citrus who are a supplier of PNRL. Stephen Moss is the only director and the ScoreCube website is heavily branded Black Citrus.
"PJ Promotions are associated with [club consultant] Tracy. This condition is not as obvious as the Black Citrus connection but the NRL may query why a Newcastle-based promotion company want to spend $50,000-a-year for four years on Watmough. Tracy was promised reciprocal funding by Scott but has executed a TPA for four years with no matching funding.
"In summary, my major concerns are: ScoreCube TPA is easily connected to the club and even though it's approved at the moment the rules give the NRL ample room to reverse the decision. As a minimum I feel that we should self-report ScoreCube and flag that we have investigations ongoing."
The email, which was CC'd to the club's lawyer, John De Mestre, also raises issues with the club's relationships with suppliers including Zibara and E-Group Security, outlining Farish's suspicions that invoices had been inflated.
Fairfax Media has seen proof of the lucrative four-year arrangement between the Eels and Black Citrus, signed by Seward and Stephen Moss, the son of former Macquarie Bank executive Bill Moss, to start on January 1, 2015. The agreement states that the "PNRLC shall pay Black Citrus an annual fee of $221,996 plus GST paid in quarterly instalments of $55,499 plus GST" for digital services, digital advisory fees, a player management platform and a junior league licence.
The document notes that "no party may publicise in the media the existence of this Heads of Agreement or any of its terms". Parramatta directors have said privately that the board was not told by Seward of the deal.
Eels officials spent the weekend poring over hundreds of pages of transcripts from interviews conducted by NRL investigators, including evidence given by Seward and former team manager Jason Irvine.
Sources said they were not provided with a copy of McKelligott's voluntary interview and received only a statement from Seward dated May 2, the day before NRL chief Todd Greenberg announced the Eels' 12-point deduction and $1 million fine.
An NRL spokesman said: "Parramatta have been provided with the evidence that the NRL based its decision on."
Lawyers for Sharp, directors Tom Issa and Peter Serrao, Boulous and Anderson return to the NSW Supreme Court in Sydney for a hearing on Monday. They have argued they have not received procedural fairness from the NRL.
Ian Schubert, who is leading Parramatta's bid to be cleared as salary cap compliant in time for Friday's match against South Sydney, is also due to meet with L'Oste Brown on Monday.
Sharp, Boulous, Anderson and De Mestre did not return calls on Sunday.
