The murky world of secret payments to rugby league players to circumvent the salary cap is haunting the Parramatta Eels, with Eddie Obeid jnr admitting to financially assisting troubled star Chris Sandow, providing a discounted apartment to Darcy Lussick and offering real estate advice to Will Hopoate.
Mr Obeid jnr, the son of disgraced former Labor powerbroker Eddie Obeid, is alleged to have organised for Sandow’s estimated $550,000 salary to be topped up by as much as $200,000 a year and for Hopoate, who earns about $750,000, to be paid an extra $50,000 to $100,000 a year in deals not registered with the National Rugby League.
Eddie Obeid jnr.
Eddie Obeid jnr. Photo: Nic Walker
In what has been described as a massive conflict of interest, a Fairfax Media investigation can reveal that for years the controversial former Eels chairman Roy Spagnolo directed a number of third-party player payments, including money owed to Jarryd Hayne, into front companies he had set up for his own property development deals.
Mr Spagnolo, who controlled the club from 2009 to 2013, was recently found to be “not a fit and proper person” to run a registered club. This follows a lengthy investigation into the club’s governance by the Independent Liquor and Gaming Authority.
Sources close to the Parramatta club have claimed that off-the-book payments, which could total more than a million dollars, were made during the Spagnolo regime. The extent of the problem has been coming to light in recent times.
Jarryd Hayne. Photo: Mark Nolan
One example is a payment of $18,000 in September 2012. Although the payment was ostensibly for financial services, a handwritten notation on the back of the invoice indicates the money was for then player Luke Burt.
Fairfax Media can reveal the payment from the club went to a company formerly run by an employee of Mr Spagnolo’s and controlled by a close associate. Mr Burt, who was personally managed by Mr Spagnolo, retired at the end of 2012. He is now on the Eels coaching staff.
One unregistered third-party payment to star player Hayne went into a Spagnolo-controlled company, Abdullah Pty Ltd, even after Hayne had left the Eels to play American football with the San Francisco 49ers.
Despite no paperwork, in December 2014 the Parramatta Leagues Club paid $26,000 to Abdullah Pty Ltd on Hayne’s behalf.
Another payment for $26,000 was made to Hayne’s manager, Wayne Beavis, in April this year.
Fairfax Media does not suggest any of the players knowingly breached the salary cap.
Mr Beavis expressed alarm when informed this week that Mr Spagnolo was behind the mysterious company into which some of his client’s money was being invested.
“If I had known that, we would have made sure it didn’t happen. You can’t have that conflict of interest,” said Mr Beavis.
Mr Beavis said the agreement was reached with the recently departed chief executive Scott Seward. “We reached a third-party agreement to keep Jarryd current with the company and we sent them two invoices and they were both paid,” he said.
Mr Beavis said that the payments weren’t registered “because I never got any paperwork off the club. That’s not my fault. That’s the club’s fault,” he said.
Mr Seward was unable to comment due to a confidentiality agreement and Mr Spagnolo did not return calls.
Mr Spagnolo’s cousin, Roy “Billy” Spagnolo, Hayne’s accountant, told Fairfax Media that “Abdullah is an investment company” into which Hayne’s third-party payments were paid.
However, a bitter legal battle between Roy Spagnolo and his former close friend and business associate, George Gaitanos, has revealed that it is Mr Spagnolo himself who controls Abdullah Pty Ltd, which is demanding a $4.3 million payment from Mr Gaitanos over soured property deals.
Mr Gaitanos is accusing his former friend of misleading and deceptive conduct and claims that by getting investors to put money into Abdullah, Mr Spagnolo was running an unregistered investment scheme.
When asked if Abdullah was a registered investment scheme, Billy Spagnolo said he couldn’t answer any more questions. “Are you sure you are not calling from the tax office?” he asked.
Club insiders say that Sandow’s manager, Isaac Moses, recently demanded the club honour payments promised to his client by Mr Obeid jnr but the club is refusing to accept responsibility for what appear to be unregistered deals previously negotiated by the former regime.
Mr Moses, who denied making the demand, said he never comments on client’s contracts.
As for Mr Obeid jnr, he initially declined to comment on allegations he had being paying Sandow between $100,000 and $200,000 per year.
He also declined to answer questions about rumoured payments to Hopoate, but he was happy to confirm that his family’s company had sold Lussick a discounted unit in Top Ryde.
“Yes, that’s true. I don’t have any issue with that. I helped him with his unit,” said Mr Obeid jnr.
The following day, Mr Obeid jnr said that as “a property developer and friend” he had provided advice to Hopoate about the property market.
He also said he “personally helped Chris [Sandow] in a small capacity financially from time to time as a friend”, but that his attempts to secure third-party deals for Sandow via business associates had failed.
“Given Chris’s continual issues both on and off the field, companies felt it was not in their best interests to hire Chris’s services. It was just too hard, given his circumstances,” said Mr Obeid jnr.
As to Mr Obeid’s motivation, he said the answer was simple. “I love the club. If asked, I will always help anyone associated with the Parramatta Eels.”
He went on to have swipe at the new management.
“In my opinion, good people have come and gone at the board and administration level - smart, honest business people who have the contacts, experience and business acumen to deliver the Eels safely into the future. Sadly, they have been moved on because they wouldn’t bend on their business principles.”
The National Rugby League sets salary caps for the clubs; players can earn unlimited amounts of money outside the club, but there are rules.
Players can receive money from corporate sponsors who are not associated with the club and who do not use the game’s intellectual property, such as club logos, jerseys or emblems. These third-party arrangements have to be approved and registered by the NRL.
The TPAs, as they are known, may not be negotiated by the club as an incentive for a player to sign a contract, nor can they be guaranteed by the club.
But there is a shadowy world where the salary cap is breached through players receiving money off the books. Common methods include paying for holidays, cars, offering free rent or organising discounted property purchases.
Read more: > http://www.smh.com.au/rugby-league/parramatta-eels/jarryd-hayne-eddie-obeid-jnr-the-parramatta-eels-and-the-murky-world-of-secret-player-payments-20150723-giib8b.html#ixzz3gkKuMwYd
I guess if the Bulldogs Raiders and Melbourne have done it, and Parra are doing it, then clubs like the Broncos, Roosters Souths etc etc arent.