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FOUR CORNERS



Investigative TV journalism at its best





Final Whistle?



How Australian soccer on the field has been throttled by the performance of administrators off it.

QUENTIN McDERMOTT, REPORTER: In four days time, the biggest sporting event in the world will begin.



For the first time, Asia will host the World Cup.



It will feature the best soccer teams on the planet -- Italy, France, Argentina, Brazil.



But Australia won't be there.



JEFF KENNETT, FORMER PREMIER OF VICTORIA: We should have been participating.



QUENTIN McDERMOTT: For years, the game on the field in Australia has been marred by the performance of the administrators off the field.



DAVID HILL, CHAIRMAN, SOCCER AUSTRALIA 1995-1998: The politics of soccer are like a sewer.



QUENTIN McDERMOTT: It's got so bad that most of Australia's top soccer clubs are virtually broke.



And Soccer Australia, the code's governing body, is itself facing extinction.



Are you intending to wind up Soccer Australia?



DOMINIC GALATI, MANAGING DIRECTOR, IEC: Look, we've gone down one path at this point in time.



If this path doesn't give us a certain outcome, then, you know, we will -- we will take that avenue when it comes.



QUENTIN McDERMOTT: Last November, the Socceroos were crushed by Uruguay, once more failing to make the World Cup finals.



COMMENTATOR: And that says it all.



The hanging head of Frank Farina.



It's all over.



Four years hard work.



QUENTIN McDERMOTT: This crucial game was played just three months after a bloody boardroom coup at Soccer Australia.



TONY LABBOZZETTA, FORMER DIRECTOR, SOCCER AUSTRALIA: Betrayed, I think, is an understatement.



ROBBIE SLATER, FORMER SOCCEROO: There has been so much hate and bitterness and jealousies that you just can't go forward.



They're too busy fighting each other to worry about going forward.



And that is -- just a great shame to all the kids who play it.



QUENTIN McDERMOTT: Tonight on Four Corners, can Australian soccer stage a recovery in extra time?



Or is it facing the final whistle?



REPORTER: And in this fine German seaport, the inhabitants have already coined a new phrase for the Australians.



They just could not get their tongues around the word 'Socceroos' and they've changed it to the phrase 'der Kickaroos'.



CROWD: Australia!



Australia!



QUENTIN McDERMOTT: 1974, Germany.



COMMENTATOR: This must sound like Wentworth Park to the boys out there.



QUENTIN McDERMOTT: For the first time ever, the Socceroos step out to take part in the World Cup finals.



It's a feat Australia has never repeated.



ROBBIE SLATER, FORMER SOCCEROO: The feeling was immense, you know, and the respect they got while they were there was unbelievable.



The unfortunate, I think, if you talk to the boys from '74, is that when they came back, it was a bit of a let-down.



You know, there was this expectation that the code would kick on from there and it never really did.



QUENTIN McDERMOTT: Three years after the 1974 World Cup, soccer became the first football code to form a national league in Australia.



Since then, hundreds of thousands of kids have played the game.



Australia's youth squads are highly rated internationally.



But all that grassroots enthusiasm has failed to translate into punters on the terraces.



For years, soccer's administrators have failed to deliver a game attractive to a mass audience.



And for every hero on the field, there's a villain off it.



In 1994, Four Corners exposed the darker side of the game.



KIMON TALIADOROS, PLAYERS' UNION: Well, we believed for some time, there's been some corruption and we do believe that the game is riddled with it.



REPORTER: Riddled with it?



KIMON TALIADOROS: Yes.



REMO NOGAROTTO, SOCCER OFFICIAL: It is happening and it ought not be happening.



REPORTER: Do you want to name names?



REMO NOGAROTTO: I'd rather not.



QUENTIN McDERMOTT: The 1994 Four Corners questioned a series of player transfers, one of which involved Tony Labbozzetta, a Soccer Federation commissioner and president of Club Marconi.



REPORTER: He initialled this official player transfer form for the Belgian club, certifying Paul Okon had been sold by Club Marconi for $515,000.



Yet as club chairman, he told his board the net figure received by the club was $240,000.



QUENTIN McDERMOTT: The mystery of what happened to the missing money has never been resolved.



Following the program, the Australian Soccer Federation commissioned an inquiry.



Justice Donald Stewart's recommendation was that Labbozzetta should cease to be a Soccer Federation commissioner and that he shouldn't in future hold office in the organisation or in any other soccer body.



TONY LABBOZZETTA, FORMER DIRECTOR, SOCCER AUSTRALIA: I'm not trying to be disrespectful to Justice Stewart, but certainly a number of foes of mine went and just gave evidence.



They walked off the street to go out of their way and give evidence and simply say, "Well, this Tony Labbozzetta, you know, he's a bad man, he's this, he's that."



QUENTIN McDERMOTT: One of Labbozzetta's foes who gave evidence to the Stewart Inquiry was Remo Nogarotto who had featured in the 1994 Four Corners exposing the role of agents in player transfers.



A past chairman of soccer at Club Marconi, he had once challenged Tony Labbozzetta for the club presidency.



They have been enemies ever since.



REMO NOGAROTTO: Tony and I had had our differences.



I think that they're a matter of public record.



QUENTIN McDERMOTT: In 1995, the clubs and State federations elected a new chairman of Soccer Australia -- David Hill, former head of the ABC.



As Hill became chairman, Tony Labbozzetta stood down from the board.



One of Hill's main aims was to move the clubs beyond their ethnic roots.



But the speed at which he moved upset some clubs and Tony Labbozzetta.



TONY LABBOZZETTA: Far too aggressive, but more importantly, without any consultation.



Ah, I have an old saying -- "Make me thirsty and I'll go to water and drink.



But don't force me to drink."



QUENTIN McDERMOTT: David Hill's dream was to turn Australian soccer into a mainstream sport.



He hired former England soccer coach Terry Venables to get the Socceroos into the World Cup finals and plundered Soccer Australia's coffers to do it.



Was it a gamble worth taking?



DAVID HILL, CHAIRMAN, SOCCER AUSTRALIA 1995-1998: Oh, very much so.



It wasn't really a gamble.



We -- I don't mind saying we paid Terry Venables £200,000 a year, which by international coaching standards is ridiculously cheap.



QUENTIN McDERMOTT: Under Venables, the Socceroos went through the 1997 World Cup qualifying contest unbeaten.



But on the night of November 29 in the final qualifying game against Iran, the dream evaporated.



A win or a goal-less draw would have got them through.



COMMENTATOR: Pre-game checks from the referee who is used to the big occasion.



But even he will be excited at the prospect of this goal here at the MCG.



QUENTIN McDERMOTT: One of the players who gave their all that night was Robbie Slater.



COMMENTATOR: Slater burst out on the right-hand side.



A great move from Australia.



Awkward cross.



Kewell is working his way to the rear post but it's clearly a corner.



ROBBIE SLATER: It's one of those moments in Australian sport -- whichever code you supported, you know what happened that night.



We were leading 2-0 with, I think -- with about 12 minutes to go and they got two goals back which effectively eliminated us from France '98.



So we, uh -- To say that we had it in our grasp is, you know, a bit of an understatement.



COMMENTATOR: The referee looking at his watch again.



The match -.



(WHISTLE BLOWS.) COMMENTATOR: -- is over.



Heartbreak for Australian soccer.



DAVID HILL: I had to go down to the dressing room, which is probably the worst scene I've ever seen in sport, the Australian dressing room afterwards.



People were comatose.



People were sick.



That was the worst part of it -- not failing to make the World Cup, but the players, they played their hearts out, and that was really awful.



GEORGE NEGUS, DIRECTOR, SOCCER AUSTRALIA 1995-1999: In a funny way, our darkest hour was also our finest moment.



I mean, 92,000 people at the Melbourne Cricket Ground to see us fail to get into the World Cup even though we didn't get beaten in one qualifying match.



I mean, that's when sport can get really nasty.



QUENTIN McDERMOTT: Nine months after the failure against Iran, the knives were out for Hill and he resigned.



JEFF KENNETT, FORMER PREMIER OF VICTORIA: When we failed against Iran to make the World Cup, it all just unravelled, dramatically unravelled.



And he'd used the resources that soccer had built up -- the sponsorship, the goodwill -- and therefore, immediately he exited, it was as though you'd just pricked an inflated balloon.



It just popped and vaporised.



QUENTIN McDERMOTT: The World Cup campaign had been expensive and it left Soccer Australia with a $2.3 million shortfall.



Just before he left, Hill sold soccer's television rights to Channel Seven in a 10-year deal worth $24 million.



His consultancy fees, approved by the board, totalled $100,000.



DAVID HILL: Soccer Australia's finances were in far, far better shape when I left than when I got there.



But I'm not surprised at all that, uh -- the politics of the sewer of Soccer Australia would be suggesting otherwise.



QUENTIN McDERMOTT: David Hill's departure left the door open for the return of Tony Labbozzetta to the board of Soccer Australia.



TONY LABBOZZETTA: I was happy that he was gone.



But it was another sad chapter of where somehow we got it wrong in either choosing the right person to lead us -- another, shall we say, indictment on the game where we somehow missed out again.



DAVID HILL: We actually threw him out of Soccer Australia.



And he -- he resurges.



He's back.



I think that's a terrible indictment of soccer and soccer administration that that could happen.



QUENTIN McDERMOTT: With David Hill gone, his deputy Basil Scarsella became chairman and Tony Labbozzetta returned to the board.



By now, Soccer Australia was severely strapped for cash.



As the game's governing body, it funds a young players' program and several national teams.



It also controls the league.



In early 2000, Soccer Australia needed new sponsors.



In desperation, they did a deal with the International Entertainment Corporation.



IEC paid a $1 million advance against gate receipts for Socceroo games.



IEC also got marketing revenue from the national league in return for more cash.



So they got $1.3 million up front?



DOMINIC GALATI, MANAGING DIRECTOR, IEC: Up front.



QUENTIN McDERMOTT: And you brought in sponsors.



Correct.



DOMINIC GALATI: I mean, in the way that worked, there's a -- They needed money for cash flow so we said, "OK, here's the $1.3 million."



And we brought on Qantas at $1.5 million and Telstra at about another $800,000.



TOM DOUMANIS, PRESIDENT, NSW SOCCER FEDERATION: Well, I suspect the contract was entered into at a time when Soccer Australia did not have a dollar to its name.



QUENTIN McDERMOTT: A confidential analysis obtained by Four Corners says deals with other companies which the board entered into during this period have led to serious legal and administrative headaches.



IAN KNOP, CHAIRMAN, SOCCER AUSTRALIA: I think we sold our Internet rights four times.



QUENTIN McDERMOTT: The Soccer Australia document produced this month says, "The plethora of confused and overlapping agreements with the holders of soccer's assets makes administration a nightmare for management and the board."



It warns that, "Many corporate sponsors are disappointed with Soccer Australia and have withdrawn support."



And it says that in the past, "A total lack of formal policies, processes and procedures across the company led to errors, confused responsibilities and a lack of accountability."



Management consultant Ian Knop is the new chairman of Soccer Australia and the man charged with restoring the ever-worsening reputation and finances of the game.



IAN KNOP: When I took over as chairman on 4 August, I would say that we were literally on the financial precipice.



QUENTIN McDERMOTT: Soccer Australia's new broom represents a break with its political past.



Where David Hill and one-time Soccer Australia president Neville Wran stood in Labor's camp, Ian Knop and Remo Nogarotto, the new league chairman, bear a strong Liberal pedigree.



But the story of how they arrived in their current roles is like a revenger's tragedy.



In February 2001, Tony Labbozzetta, the man Justice Stewart said shouldn't hold office in any soccer organisation, was elevated to chairman.



But the board he headed was divided.



TOM DOUMANIS: You had a clash of personalities and ultimately, the code paid the price because administration came to a halt.



TONY LABBOZZETTA: In June, I called upon the stakeholders, significantly a number of them, and I said, "Well, look, guys, this is not working.



I cannot produce what I believe are the best interests of the game because I'm involved in this political bickering which is really making life extremely difficult."



QUENTIN McDERMOTT: A special meeting was called.



Labbozzetta believed he had the numbers to change the board.



And he thought he had the full support of his friend Ian Knop.



Letters signed by the two men were sent out to the club owners asking for their support.



Knop was on the league executive and had previously been chairman of Canberra Cosmos before it went under.



Now, what was Ian Knop telling you during this period?



TONY LABBOZZETTA: Well -- I mean, this is the -- this is the crazy part.



I mean, Ian has been the advocate of this change.



Ian was organising all the phone hook-ups.



QUENTIN McDERMOTT: So you were conferring very closely with Ian Knop?



TONY LABBOZZETTA: Well, I put it to you this way -- he was the only guy that was invited to my 60th birthday.



QUENTIN McDERMOTT: But, unknown to Labbozzetta, a plot was being hatched to unseat him.



TONY PETTY: I felt that Tony had probably gone past the point of no return.



Um, Ian Knop and I were on the board of the NSL together at the time and I think we'd decided enough was enough.



So yes, I suppose I was involved in the coup.



QUENTIN McDERMOTT: Another conspirator was Vince Morizzi, an old enemy from Club Marconi.



VINCE MORIZZI: My role was to -- to make sure the truth -- a bit like 'The X-Files' -- the truth is out there.



My role was to make sure that the stakeholders knew the truth about Labbozzetta.



QUENTIN McDERMOTT: By August, an array of prominent figures was secretly lobbying to topple Labbozzetta, including high-profile soccer supporter Jeff Kennett.



JEFF KENNETT: The reality is we agitated, we spoke to people and ultimately, we got the outcome that occurred.



DAVID HILL: I made a couple of phone calls.



But I must tell you that there was a much, much wider move to topple Labbozzetta than me.



QUENTIN McDERMOTT: On 4 August, Labbozzetta's fate was sealed.



The meeting, at which he believed he was going to bring Ian Knop onto the Soccer Australia board as his right-hand man, became the meeting at which he himself was ousted.



It fell to Tony Petty to propose Ian Knop as the next chairman of Soccer Australia.



How did Tony react to that?



TONY PETTY: I think he was stunned.



I think he was just knocked -- knocked over.



TONY LABBOZZETTA: We had Ian Knop that tried and came to shake hands with me and I said, "Please leave me alone."



And then he went to the table and said goodbye to some of the other guys and I understand one of the guys made some comments about Judas that died 2,000 years ago and is obviously resurrected.



So, er -.



QUENTIN McDERMOTT: One of Tony Labbozzetta's friends called you a Judas.



Did you betray him?



IAN KNOP: I think there's lots of people that could have said that to Tony over the years.



I -.



Look, you know, whether someone called -- That was in the heat of the day and that person subsequently apologised.



TONY LABBOZZETTA: He would have to be one of the -- one of the people that I will never forget as long as I live.



QUENTIN McDERMOTT: But you felt betrayed?



TONY LABBOZZETTA: Betrayed, I think, is an understatement.



I mean, you just -- You could almost say that the guy has been like a brother to me.



IAN KNOP: I gave him absolute loyalty.



And that's all I wish to comment.



QUENTIN McDERMOTT: You see, he talks of you as if you were like a brother to him.



IAN KNOP: Um, that's nice.



I don't bear any malice to Tony.



I think he's a great guy.



I like him a lot.



And regardless of what other people say, he has worked passionately and tirelessly for the game.



QUENTIN McDERMOTT: After the meeting, the group who had carried out the coup received a call from Jeff Kennett.



Vince Morizzi was present.



And what were his actual words?



VINCE MORIZZI: His actual words were that, "Now that you've killed him," -- 'Cause that was the whole plan was to make sure that he's out -- "Now that you've killed him, make sure you decapitate him."



QUENTIN McDERMOTT: In January, Tony Labbozzetta attempted a comeback by running for president of the New South Wales Soccer Federation.



Just before the election, an expenses claim was leaked to the press, together with a cash receipt from the Ancient China House of Tea.



The press reports claimed the Ancient China House of Tea didn't exist, and that Oceania delegates entertained by Labbozzetta had gone to a massage parlour at Soccer Australia's expense.



Following the leak, Labbozzetta lost the election.



How did you entertain them?



TONY LABBOZZETTA: Well, we went out for dinner, and, uh -- we went out, uh -- to, um -- restaurants, as I recall, and we subsequently went to, um -- have a few drinks, here and there.



And this was over a weekend.



It was over a period of Friday, Saturday and Sunday.



QUENTIN McDERMOTT: Just to spell it out, that the reports that appeared in the press suggested that these three delegates had gone to a brothel and that the, uh -- the bill for this was $995.



Did that happen?



TONY LABBOZZETTA: A lie.



QUENTIN McDERMOTT: How can you be sure?



TONY LABBOZZETTA: It's a fabrication.



I know.



QUENTIN McDERMOTT: Because you were with them?



TONY LABBOZZETTA: I was with them.



I did not pay any of those bills.



QUENTIN McDERMOTT: And have you ever heard of the Ancient China tea-house?



TONY LABBOZZETTA: As a matter of fact, I'm still today trying to find out where it is.



QUENTIN McDERMOTT: With Ian Knop in charge of Soccer Australia, and Remo Nogarotto Chairman of the League, soccer has tried to present a new face to the world.



But some old faces remain on the board.



And Remo Nogarotto has his own history to deal with.



Two years ago, he resigned as director of the New South Wales Liberal Party, after a failed election campaign ran up more than $3 million in debts.



But before that, Nogarotto had started up a brand-new soccer club in Sydney.



REMO NOGAROTTO, FORMER CHAIRMAN, NORTHERN SPIRIT: So it was really a desire, a policy desire, I suppose, on the part of Soccer Australia, to have a franchise in an important geographic location of Sydney.



QUENTIN McDERMOTT: On October 9, 1998, Northern Spirit was born.



A record 19,000 fans watched the opening game.



Socceroo star Robbie Slater joined the team.



ROBBIE SLATER: The atmosphere was -- was electric.



Uh -- we were cool.



We were the -- we were the hip things, you know.



In the schools on the North Shore, you know, all the young kids were talking about Northern Spirit.



Friday nights, North Sydney Oval was the place to be.



REMO NOGAROTTO: There's no rocket science in what we're doing.



What we're doing is mainstreaming the game for all Australians, and adopting a community approach to marketing.



We're not exclusive.



We're inclusive.



DAVID HILL: Northern Spirit got off to a flashing start.



The first couple of seasons were just absolutely terrific.



QUENTIN McDERMOTT: Northern Spirit was a product of the Hill era.



One of the key investors was a London soccer club owner.



RENE LICATA, FORMER DIRECTOR, NORTHERN SPIRIT: Crystal Palace was owned by a man called Mark Goldberg, and Mark Goldberg had made a lot of money through the stock markets through his interests in business, and launched his company on the stock market and made millions out of it.



QUENTIN McDERMOTT: Mark Goldberg invested $1.5 million in the new club.



He asked his brother-in-law, accountant Allan Novis, to become the club's finance manager, with Nogarotto at the helm.



ALLAN NOVIS, FORMER FINANCE MANAGER, NORTHERN SPIRIT: He got the crowds.



He got the momentum.



I think he understood the science of marketing, specifically from his -- his career in politics.



But I think he just overspent.



We just didn't have the money that he was spending, to spend.



QUENTIN McDERMOTT: Nogarotto was Liberal Party State director.



He recruited fellow Liberals Kathryn Greiner and local member Kerry Chikarovski -- soon to be Opposition Leader -- onto the board.



GEORGE NEGUS: Politicians from the other side of politics -- Kathryn Greiner and Remo Nogarotto and Kerry Chikarovski, etc, you know, went to Northern Spirit like bees around a honey pot, I mean, because they could see, you know, the potential of soccer in all sorts of ways.



QUENTIN McDERMOTT: Did you see it as a kind of a political alliance, because in a sense it was, wasn't it?



REMO NOGAROTTO: Well, I didn't see it as a political alliance.



I mean, it's not completely remarkable for a football club to invite its local member to be a participant in its affairs.



Um -- that, in itself, probably rates one out of ten in terms of remarkability.



QUENTIN McDERMOTT: But despite the club's huge potential, cracks were already appearing.



ALLAN NOVIS: I was just concerned that the cash burn was going at such a rapid rate that if we carried on the way we were, we wouldn't be there by January or February.



QUENTIN McDERMOTT: And how long after you'd started was this?



ALLAN NOVIS: Approximately eight weeks.



QUENTIN McDERMOTT: In the second half of the season, the crowds were dwindling.



By the end of the first year, things were looking grim.



And Kathryn Greiner and Kerry Chikarovski were less attentive to company business.



RENE LICATA: We were heading for, I think, losses of about $1 million.



QUENTIN McDERMOTT: Now, what were the other high-profile directors doing at this time?



Were they still coming to board meetings?



Were they giving their own advice?



Or were they kind of disappearing into the background?



RENE LICATA: No, they were disappearing.



In the second year, they never attended any board meetings.



QUENTIN McDERMOTT: The biggest blow came when Mark Goldberg, the owner of Crystal Palace and Northern Spirit's largest shareholder, went bankrupt.



It meant there would be no further investment from him.



REMO NOGAROTTO: It was clear that, er, he wasn't able to go on with it.



And, er, local shareholders had to basically capitalise the business moving forward.



QUENTIN McDERMOTT: Nogarotto told Robbie Slater about Goldberg.



But he left the door open for Slater and three fellow employees to invest -- former Socceroo Graham Arnold, former England international Ian Crook, and former Socceroo physio Bill Collins.



ROBBIE SLATER: He said, "Oh, there's so many investors that wanna get involved, and -- and, er, we're talking to this one, that one and all these ones.



I said, "Oh, well, Rem, you should, you should get me involved, you know, me and Arnie and that," as a joke.



And, ah, as it turned out, he, sort of, turned around and looked at me and said, "Oh, that's not a bad idea."



And it grew from there.



QUENTIN McDERMOTT: Did you persuade them to invest?



REMO NOGAROTTO: They sought independent advice on that investment.



QUENTIN McDERMOTT: But were you encouraging them?



REMO NOGAROTTO: No.



They quite fittingly sought and procured independent advice.



It's not my role to cajole or convince people.



It is my role to ensure that they seek independent advice, which I indeed encouraged them to do and which they procured.



QUENTIN McDERMOTT: Did you warn them that the club was in trouble?



REMO NOGAROTTO: I encouraged them to seek independent legal advice.



They were obviously aware of certain issues involving Mark Goldberg.



Um, that invitation to seek leg -- legal advice was undertaken and, ah, yeah, I encouraged them.



QUENTIN McDERMOTT: Slater, believing his money would help secure the club's future, took out a loan and bought shares worth $210,000.



He's still paying off that loan, and his shares are worthless.



ROBBIE SLATER: We found out, later on, that, ah, our money went in, went into the club and virtually, a few days later, went out of the club.



QUENTIN McDERMOTT: Where did it go?



ROBBIE SLATER: To pay creditors.



QUENTIN McDERMOTT: Why?



ROBBIE SLATER: Because the club -- as we found out later -- was in, you know, massive -- had massive problems, massive debts.



ALLAN NOVIS: I don't know what was said to them or whatever, but they did put money into the club.



And essentially it went in retiring debt.



QUENTIN McDERMOTT: So the money -- They were persuaded to invest.



They put their money in and it went straight out again to pay the debts?



ALLAN NOVIS: Yes.



QUENTIN McDERMOTT: What happened to their investment when they made it?



REMO NOGAROTTO: Well, their investment, as with the investment of every shareholder, went into the, er, running of the club.



QUENTIN McDERMOTT: Well, we've been told that it went straight out again to pay the debts.



REMO NOGAROTTO: Well, it went into the running of the club.



Whether some of that cash went towards retiring creditors, ah, whether some of it was used as working capital moving forward, ah, it went into the running of the club.



QUENTIN McDERMOTT: Just after he made his investment, club physio Bill Collins had a rude awakening.



BILL COLLINS, DIRECTOR OF FOOTBALL, NORTHERN SPIRIT: It was the following day that, er, a member of staff at that particular time come up and said to me, "Bill, don't -- I hope you haven't put any money in here.



I hear that you're gonna invest in the club."



And I said, "Well, yes, I have."



And he said to me, "Look, the financial state that this club's in at this particular time," he said, "I would advise you not to do that."



But unfortunately it was too late at that stage.



QUENTIN McDERMOTT: What transpired in that conversation?



ALLAN NOVIS: Well, basically, he just asked me some questions.



I don't remember specific questions.



And, um, well, I was just surprised that he made an investment.



QUENTIN McDERMOTT: Internal accounts obtained by Four Corners show that when Slater and Collins bought their shares, the club was making heavy losses.



The club made a loss of $2.8 million between June 1998 and May 1999.



Shareholders equity, then, was minus $1.1 million.



Those losses were pretty large, weren't they?



REMO NOGAROTTO: Ah, not large or remarkable by the standard of losses currently being generated in the National Soccer League at the moment, no.



ALLAN NOVIS: If the loss is funded and creditors are getting paid, then the company's not insolvent.



QUENTIN McDERMOTT: But it would be true to say that some of the bills were not being paid until Robbie and his friends invested in the club.



ALLAN NOVIS: Yes, from memory, that would be true.



QUENTIN McDERMOTT: Remo Nogarotto insists that all the club's creditors have now been paid off.



REMO NOGAROTTO: Robbie Slater and every other player has been paid.



QUENTIN McDERMOTT: Have they been paid their wages?



REMO NOGAROTTO: They have been paid their wages.



QUENTIN McDERMOTT: In full?



REMO NOGAROTTO: In complete settlement.



QUENTIN McDERMOTT: In full?



REMO NOGAROTTO: In f-f -- Well, I'm saying to you, Robbie Slater has been paid his wages and is -- has accepted settlement of his wages, yes.



QUENTIN McDERMOTT: But he hasn't been paid the full amount?



No, he has accepted a settlement of his wages.



Yes.



QUENTIN McDERMOTT: Robbie Slater's settlement was, in fact, $12,000 out of the $27,000 he was owed.



Former club physio Bill Collins is still owed $19,000.



The troubled Northern Spirit now belongs to the Scottish club Glasgow Rangers.



Remo Nogarotto insists it's a good outcome.



REMO NOGAROTTO: Reality is that the Northern Spirit did not fall apart.



It was sold.



QUENTIN McDERMOTT: But a further cloud hangs over Northern Spirit.



REPORTER: He and Jacques Denolf went to a Sydney bank and withdrew hundreds of thousands of dollars in cash.



QUENTIN McDERMOTT: In an uncanny echo of the 1994 Four Corners, a suitcase full of cash lies at the centre of the transfer of a Northern Spirit player overseas.



Last year, Mark Rudan joined the German club Alemannia Aachen on a free transfer after buying out the remainder of his contract from Northern Spirit.



The transfer took place after Rangers had taken over the club.



BILL COLLINS: Several months after that, I got a contact from, um, a sponsor of a club in Germany who asked us if -- asked me if I could, er, give them the copy of the appropriate documentation to say that we received the transfer money for Mark Rudan.



And I said to them at that stage, "Well, look, you've got to realise we didn't receive any money at that stage.



There was no transfer fee given."



QUENTIN McDERMOTT: Bill Collins, who is director of football at the new Northern Spirit, was amazed to hear that the German club's sponsors believed he had visited Germany and picked up the transfer fee in cash.



They told you that someone purporting to be you had picked up 290,000 deutschmarks in a suitcase.



BILL COLLINS: Yep, they said that people that were representing Mark Rudan appeared at the office in the football club or -- or the sponsor's office, either/or, and signed for the money, the 290,000 deutschmarks, and it was handed over in a suitcase.



QUENTIN McDERMOTT: These are the transfer documents which the German club sent to Bill Collins, and this is the signature which they believed was his but was actually a copy of his secretary's.



So she hadn't actually signed it?



BILL COLLINS: She'd never even seen the document.



She didn't even realise that this was going on at the particular time but somebody has obviously taken that and imagined that was a copy of my signature.



QUENTIN McDERMOTT: A company seal belonging to the old Northern Spirit had been stamped on papers bearing the new club's letterhead.



Collins says that couldn't have happened if the transfer had been legitimate, because the new owners, Rangers, wouldn't have had the old company seal.



Mark Rudan was arrested in Germany and later released without charge.



The investigation in Germany is proceeding.



BILL COLLINS: The German police then investigated that, um, and they investigated that my passport didn't have a stamp on it to say I was in Germany at that particular stage, which I wasn't, and that money in actual fact wasn't given to me.



QUENTIN McDERMOTT: Remo Nogarotto gave evidence about questionable transfers to the Stewart Inquiry.



He says the Rudan transfer must be followed up here.



Do you believe that that transfer should be investigated?



REMO NOGAROTTO: Oh, absolutely.



QUENTIN McDERMOTT: Here in Australia?



REMO NOGAROTTO: Absolutely.



Without a question of doubt.



Ah, I believe that the one stain that continues on our game is the manner in which certain transfers are transacted.



I have a long historical position on this matter.



Um, and I believe the circumstances surrounding the Rudan transfer warrant a complete and absolute investigation.



QUENTIN McDERMOTT: I understand that police investigation is going on in Germany into the Mark Rudan transfer.



Is Soccer Australia going to investigate it?



IAN KNOP: The I think the key phrase is -- "the police are investigating in Germany".



If anything comes out which we need to -- has repercussions here in Australia, we'll investigate it if it gets here to Australia.



But I think we need to let the investigations take place in Germany and let the process take place under German law.



I don't think we should interfere with that at all.



QUENTIN McDERMOTT: The Northern Spirit experience illustrates how the same cash crises and transfer irregularities persist in Australian soccer.



Even now, Australia's most successful clubs are struggling to break through and struggling to break free of controversy.



Perth Glory is the most high profile club in the country with supporters drawn from every section of the community.



PERTH GLORY SUPPORTER: There's Irish, there's Italians, there's Greeks, there's Germans, there's English.



We all wear the Glory gear.



We go and sing in unison.



There's no -- there's nobody there who, who would try and sing 'Croatia', for instance.



It's far from it.



We're here to support the Glory, and that's it.



That's what brings everybody together.



That's why we've got 43,000 people here.



QUENTIN McDERMOTT: A fortnight ago, the fans converged on Subiaco Oval to watch the grand final.



Perth Glory and its supporters know how to put on a good show.



NICK TANA, CHAIRMAN, PERTH GLORY: Our advertising and marketing spend is in the vicinity of $1 million.



Now, that is one of the reasons why we lose the million dollars that we'll lose this year.



And we do it willingly on the basis that we're hoping that the rest of the league will follow suit and start the change.



QUENTIN McDERMOTT: All's not well, however, at Perth Glory.



The club knew last year it would be making a loss and forecast a bank deficit this year of $1.7 million.



What's more, a bitter dispute has been festering between Chairman Nick Tana and his deputy, Paul Afkos, who intends to sell his share of the club.



PAUL AFKOS: On the day, we're all about winning the game and I'm certainly focused.



REPORTER: Do you think you'll have a handshake with Nick Tana after it?



PAUL AFKOS: It's not likely.



But I will enjoy the champagne with the boys.



COMMENTATOR: Here's a chance for Ante Milicic.



He lines up the shot -.



Ante Milicic draws first blood in the grand final!



QUENTIN McDERMOTT: Alas for Perth, the champagne is on ice for another year after the Olympic Sharks won the grand final one-nil.



COMMENTATOR: The Sharks silence the Subiaco crowd.



QUENTIN McDERMOTT: A league investigation into the club hasn't helped either.



In February the club sent a cheque to Soccer Australia for $84,000 because it had failed to pass on some of the proceeds from two semifinals played at the WACA in 1999.



The business plan from Soccer Australia obtained by Four Corners confirms that, in fact, money is tight for every club.



It says the clubs in the league are undercapitalised, and most clubs are close to insolvent.



REMO NOGAROTTO: They remain solvent because they have some very generous benefactors.



They remain solvent because these people believe in the game, and basically continue to write personal cheques to fund losses.



IAN KNOP: We have been administered in a very tardy manner in the past, and since 4 August we've gradually and dynamically tried to change how we undertake our business.



QUENTIN McDERMOTT: How much change is going on, though, is open to question.



In December, a new board member from Soccer Australia gave a presentation to the State Federation Presidents.



He offered them a stark choice -- "Do we choose to raise equity in cash, or do you choose for Soccer Australia to die?"



They were told that if they didn't help implement a rescue plan, the board will need to consider placing Soccer Australia under voluntary administration.



But those words could soon become redundant.



Soccer Australia's marketing partner, IEC, now holds its fate in its hands.



When Four Corners interviewed managing director Dominic Galati recently, there were already rumours of impending legal action.



Are you intending to wind up Soccer Australia?



DOMINIC GALATI: Look, we've gone down one path at this point in time.



If this path doesn't give us a certain outcome, then, you know, we will take that avenue when it comes.



QUENTIN McDERMOTT: Now, Soccer Australia is claiming that you owe them money.



Is that true?



DOMINIC GALATI: No.



I mean, if I owed them money, wouldn't it be the other way around, that they'd be taking me to court today?



Instead, it's me taking them.



QUENTIN McDERMOTT: Last Friday, IEC went to court to seek leave to wind up Soccer Australia, claiming it's owed around $3 million in payments.



If this does go through, and you are able to wind up Soccer Australia, won't that have an absolutely destructive effect?



DOMINIC GALATI: Well, we've tried to do everything possible for Soccer Australia to resolve the problem, and it's got to a point where we've had to take this action.



QUENTIN McDERMOTT: What will you do if IEC tries to wind up Soccer Australia?



IAN KNOP: Well, they're trying to do that now, and we are defending that action.



QUENTIN McDERMOTT: If soccer's governing body is wound up, it could lose its FIFA accreditation and effectively be out of the next World Cup as well.



TOM DOUMANIS: If Soccer Australia goes down, there is the prospect that we may be ostracised from the international community for three years.



Now, nobody but nobody would want that to happen.



QUENTIN McDERMOTT: Tom Doumanis is one of those who believes that soccer's administrators have turned the corner -- but only if the dispute with IEC is resolved.



TOM DOUMANIS: There is a seachange taking place within Soccer Australia.



And those of us who have read the current business plans and the forward financial plans that the board has released will take great comfort in knowing that there is, at last, a strategy in place which is not focused exclusively on qualifying for the World Cup.



QUENTIN McDERMOTT: Others, though, aren't so sure.



Jeff Kennett has a vision for soccer's future.



It isn't shared by all, but it's inspired, in part, by what he sees as the bankruptcy of soccer's administration.



JEFF KENNETT: I think there is one common factor through our failure to perform, and that is the administration of soccer, unfortunately, for the last 20 years has been degenerating to the condition that it's in now, and it's terminal.



QUENTIN McDERMOTT: Jeff Kennett's road map for the future involves getting rid of Soccer Australia and replacing it with an independent commission.



JEFF KENNETT: There are people of goodwill, in commerce and elsewhere, who would be only too happy to serve -- people with good accounting backgrounds, commercial experience, marketing experience, sporting experience.



They're all there.



They're all ready to serve -- but they've got to be given the opportunity.



MAN: Take him, take him, son!



Let's go!



Up again, up again!



Let's go!



QUENTIN McDERMOTT: Kids play soccer on the beach, oblivious to the lack of sponsors, the court battles, the political infighting, dreaming, perhaps, of scoring the winning goal in the World Cup Final.



Now, more than ever, it's a distant dream.



SOCCER FAN: We were told, when this change came over, and the new board was elected, that everything will be open, all this -- What a lot of crap.



It hasn't happened.



It's not going to happen as long as you've got people who are self-interest only.



They've got to think about soccer for the whole general public.



We are in a situation that soccer should be the number one sport in Australia, regardless of anything.



QUENTIN McDERMOTT: It's the real stakeholders, the supporters, who've been betrayed by soccer's administrative shambles.



SUPPORTERS: We're gonna win it.



We're gonna win it large.



We're gonna win it so large it's obscene.



http://www.abc.net.au/4corners/stories/s565607.htm

Australian Broadcasting CorporationHow Australian soccer on the field has been throttled by the performance of administrators off it.QUENTIN McDERMOTT, REPORTER: In four days time, the biggest sporting event in the world will begin.For the first time, Asia will host the World Cup.It will feature the best soccer teams on the planet -- Italy, France, Argentina, Brazil.But Australia won't be there.JEFF KENNETT, FORMER PREMIER OF VICTORIA: We should have been participating.QUENTIN McDERMOTT: For years, the game on the field in Australia has been marred by the performance of the administrators off the field.DAVID HILL, CHAIRMAN, SOCCER AUSTRALIA 1995-1998: The politics of soccer are like a sewer.QUENTIN McDERMOTT: It's got so bad that most of Australia's top soccer clubs are virtually broke.And Soccer Australia, the code's governing body, is itself facing extinction.Are you intending to wind up Soccer Australia?DOMINIC GALATI, MANAGING DIRECTOR, IEC: Look, we've gone down one path at this point in time.If this path doesn't give us a certain outcome, then, you know, we will -- we will take that avenue when it comes.QUENTIN McDERMOTT: Last November, the Socceroos were crushed by Uruguay, once more failing to make the World Cup finals.COMMENTATOR: And that says it all.The hanging head of Frank Farina.It's all over.Four years hard work.QUENTIN McDERMOTT: This crucial game was played just three months after a bloody boardroom coup at Soccer Australia.TONY LABBOZZETTA, FORMER DIRECTOR, SOCCER AUSTRALIA: Betrayed, I think, is an understatement.ROBBIE SLATER, FORMER SOCCEROO: There has been so much hate and bitterness and jealousies that you just can't go forward.They're too busy fighting each other to worry about going forward.And that is -- just a great shame to all the kids who play it.QUENTIN McDERMOTT: Tonight on Four Corners, can Australian soccer stage a recovery in extra time?Or is it facing the final whistle?REPORTER: And in this fine German seaport, the inhabitants have already coined a new phrase for the Australians.They just could not get their tongues around the word 'Socceroos' and they've changed it to the phrase 'der Kickaroos'.CROWD: Australia!Australia!QUENTIN McDERMOTT: 1974, Germany.COMMENTATOR: This must sound like Wentworth Park to the boys out there.QUENTIN McDERMOTT: For the first time ever, the Socceroos step out to take part in the World Cup finals.It's a feat Australia has never repeated.ROBBIE SLATER, FORMER SOCCEROO: The feeling was immense, you know, and the respect they got while they were there was unbelievable.The unfortunate, I think, if you talk to the boys from '74, is that when they came back, it was a bit of a let-down.You know, there was this expectation that the code would kick on from there and it never really did.QUENTIN McDERMOTT: Three years after the 1974 World Cup, soccer became the first football code to form a national league in Australia.Since then, hundreds of thousands of kids have played the game.Australia's youth squads are highly rated internationally.But all that grassroots enthusiasm has failed to translate into punters on the terraces.For years, soccer's administrators have failed to deliver a game attractive to a mass audience.And for every hero on the field, there's a villain off it.In 1994, Four Corners exposed the darker side of the game.KIMON TALIADOROS, PLAYERS' UNION: Well, we believed for some time, there's been some corruption and we do believe that the game is riddled with it.REPORTER: Riddled with it?KIMON TALIADOROS: Yes.REMO NOGAROTTO, SOCCER OFFICIAL: It is happening and it ought not be happening.REPORTER: Do you want to name names?REMO NOGAROTTO: I'd rather not.QUENTIN McDERMOTT: The 1994 Four Corners questioned a series of player transfers, one of which involved Tony Labbozzetta, a Soccer Federation commissioner and president of Club Marconi.REPORTER: He initialled this official player transfer form for the Belgian club, certifying Paul Okon had been sold by Club Marconi for $515,000.Yet as club chairman, he told his board the net figure received by the club was $240,000.QUENTIN McDERMOTT: The mystery of what happened to the missing money has never been resolved.Following the program, the Australian Soccer Federation commissioned an inquiry.Justice Donald Stewart's recommendation was that Labbozzetta should cease to be a Soccer Federation commissioner and that he shouldn't in future hold office in the organisation or in any other soccer body.TONY LABBOZZETTA, FORMER DIRECTOR, SOCCER AUSTRALIA: I'm not trying to be disrespectful to Justice Stewart, but certainly a number of foes of mine went and just gave evidence.They walked off the street to go out of their way and give evidence and simply say, "Well, this Tony Labbozzetta, you know, he's a bad man, he's this, he's that."QUENTIN McDERMOTT: One of Labbozzetta's foes who gave evidence to the Stewart Inquiry was Remo Nogarotto who had featured in the 1994 Four Corners exposing the role of agents in player transfers.A past chairman of soccer at Club Marconi, he had once challenged Tony Labbozzetta for the club presidency.They have been enemies ever since.REMO NOGAROTTO: Tony and I had had our differences.I think that they're a matter of public record.QUENTIN McDERMOTT: In 1995, the clubs and State federations elected a new chairman of Soccer Australia -- David Hill, former head of the ABC.As Hill became chairman, Tony Labbozzetta stood down from the board.One of Hill's main aims was to move the clubs beyond their ethnic roots.But the speed at which he moved upset some clubs and Tony Labbozzetta.TONY LABBOZZETTA: Far too aggressive, but more importantly, without any consultation.Ah, I have an old saying -- "Make me thirsty and I'll go to water and drink.But don't force me to drink."QUENTIN McDERMOTT: David Hill's dream was to turn Australian soccer into a mainstream sport.He hired former England soccer coach Terry Venables to get the Socceroos into the World Cup finals and plundered Soccer Australia's coffers to do it.Was it a gamble worth taking?DAVID HILL, CHAIRMAN, SOCCER AUSTRALIA 1995-1998: Oh, very much so.It wasn't really a gamble.We -- I don't mind saying we paid Terry Venables £200,000 a year, which by international coaching standards is ridiculously cheap.QUENTIN McDERMOTT: Under Venables, the Socceroos went through the 1997 World Cup qualifying contest unbeaten.But on the night of November 29 in the final qualifying game against Iran, the dream evaporated.A win or a goal-less draw would have got them through.COMMENTATOR: Pre-game checks from the referee who is used to the big occasion.But even he will be excited at the prospect of this goal here at the MCG.QUENTIN McDERMOTT: One of the players who gave their all that night was Robbie Slater.COMMENTATOR: Slater burst out on the right-hand side.A great move from Australia.Awkward cross.Kewell is working his way to the rear post but it's clearly a corner.ROBBIE SLATER: It's one of those moments in Australian sport -- whichever code you supported, you know what happened that night.We were leading 2-0 with, I think -- with about 12 minutes to go and they got two goals back which effectively eliminated us from France '98.So we, uh -- To say that we had it in our grasp is, you know, a bit of an understatement.COMMENTATOR: The referee looking at his watch again.The match -.(WHISTLE BLOWS.) COMMENTATOR: -- is over.Heartbreak for Australian soccer.DAVID HILL: I had to go down to the dressing room, which is probably the worst scene I've ever seen in sport, the Australian dressing room afterwards.People were comatose.People were sick.That was the worst part of it -- not failing to make the World Cup, but the players, they played their hearts out, and that was really awful.GEORGE NEGUS, DIRECTOR, SOCCER AUSTRALIA 1995-1999: In a funny way, our darkest hour was also our finest moment.I mean, 92,000 people at the Melbourne Cricket Ground to see us fail to get into the World Cup even though we didn't get beaten in one qualifying match.I mean, that's when sport can get really nasty.QUENTIN McDERMOTT: Nine months after the failure against Iran, the knives were out for Hill and he resigned.JEFF KENNETT, FORMER PREMIER OF VICTORIA: When we failed against Iran to make the World Cup, it all just unravelled, dramatically unravelled.And he'd used the resources that soccer had built up -- the sponsorship, the goodwill -- and therefore, immediately he exited, it was as though you'd just pricked an inflated balloon.It just popped and vaporised.QUENTIN McDERMOTT: The World Cup campaign had been expensive and it left Soccer Australia with a $2.3 million shortfall.Just before he left, Hill sold soccer's television rights to Channel Seven in a 10-year deal worth $24 million.His consultancy fees, approved by the board, totalled $100,000.DAVID HILL: Soccer Australia's finances were in far, far better shape when I left than when I got there.But I'm not surprised at all that, uh -- the politics of the sewer of Soccer Australia would be suggesting otherwise.QUENTIN McDERMOTT: David Hill's departure left the door open for the return of Tony Labbozzetta to the board of Soccer Australia.TONY LABBOZZETTA: I was happy that he was gone.But it was another sad chapter of where somehow we got it wrong in either choosing the right person to lead us -- another, shall we say, indictment on the game where we somehow missed out again.DAVID HILL: We actually threw him out of Soccer Australia.And he -- he resurges.He's back.I think that's a terrible indictment of soccer and soccer administration that that could happen.QUENTIN McDERMOTT: With David Hill gone, his deputy Basil Scarsella became chairman and Tony Labbozzetta returned to the board.By now, Soccer Australia was severely strapped for cash.As the game's governing body, it funds a young players' program and several national teams.It also controls the league.In early 2000, Soccer Australia needed new sponsors.In desperation, they did a deal with the International Entertainment Corporation.IEC paid a $1 million advance against gate receipts for Socceroo games.IEC also got marketing revenue from the national league in return for more cash.So they got $1.3 million up front?DOMINIC GALATI, MANAGING DIRECTOR, IEC: Up front.QUENTIN McDERMOTT: And you brought in sponsors.Correct.DOMINIC GALATI: I mean, in the way that worked, there's a -- They needed money for cash flow so we said, "OK, here's the $1.3 million."And we brought on Qantas at $1.5 million and Telstra at about another $800,000.TOM DOUMANIS, PRESIDENT, NSW SOCCER FEDERATION: Well, I suspect the contract was entered into at a time when Soccer Australia did not have a dollar to its name.QUENTIN McDERMOTT: A confidential analysis obtained by Four Corners says deals with other companies which the board entered into during this period have led to serious legal and administrative headaches.IAN KNOP, CHAIRMAN, SOCCER AUSTRALIA: I think we sold our Internet rights four times.QUENTIN McDERMOTT: The Soccer Australia document produced this month says, "The plethora of confused and overlapping agreements with the holders of soccer's assets makes administration a nightmare for management and the board."It warns that, "Many corporate sponsors are disappointed with Soccer Australia and have withdrawn support."And it says that in the past, "A total lack of formal policies, processes and procedures across the company led to errors, confused responsibilities and a lack of accountability."Management consultant Ian Knop is the new chairman of Soccer Australia and the man charged with restoring the ever-worsening reputation and finances of the game.IAN KNOP: When I took over as chairman on 4 August, I would say that we were literally on the financial precipice.QUENTIN McDERMOTT: Soccer Australia's new broom represents a break with its political past.Where David Hill and one-time Soccer Australia president Neville Wran stood in Labor's camp, Ian Knop and Remo Nogarotto, the new league chairman, bear a strong Liberal pedigree.But the story of how they arrived in their current roles is like a revenger's tragedy.In February 2001, Tony Labbozzetta, the man Justice Stewart said shouldn't hold office in any soccer organisation, was elevated to chairman.But the board he headed was divided.TOM DOUMANIS: You had a clash of personalities and ultimately, the code paid the price because administration came to a halt.TONY LABBOZZETTA: In June, I called upon the stakeholders, significantly a number of them, and I said, "Well, look, guys, this is not working.I cannot produce what I believe are the best interests of the game because I'm involved in this political bickering which is really making life extremely difficult."QUENTIN McDERMOTT: A special meeting was called.Labbozzetta believed he had the numbers to change the board.And he thought he had the full support of his friend Ian Knop.Letters signed by the two men were sent out to the club owners asking for their support.Knop was on the league executive and had previously been chairman of Canberra Cosmos before it went under.Now, what was Ian Knop telling you during this period?TONY LABBOZZETTA: Well -- I mean, this is the -- this is the crazy part.I mean, Ian has been the advocate of this change.Ian was organising all the phone hook-ups.QUENTIN McDERMOTT: So you were conferring very closely with Ian Knop?TONY LABBOZZETTA: Well, I put it to you this way -- he was the only guy that was invited to my 60th birthday.QUENTIN McDERMOTT: But, unknown to Labbozzetta, a plot was being hatched to unseat him.TONY PETTY: I felt that Tony had probably gone past the point of no return.Um, Ian Knop and I were on the board of the NSL together at the time and I think we'd decided enough was enough.So yes, I suppose I was involved in the coup.QUENTIN McDERMOTT: Another conspirator was Vince Morizzi, an old enemy from Club Marconi.VINCE MORIZZI: My role was to -- to make sure the truth -- a bit like 'The X-Files' -- the truth is out there.My role was to make sure that the stakeholders knew the truth about Labbozzetta.QUENTIN McDERMOTT: By August, an array of prominent figures was secretly lobbying to topple Labbozzetta, including high-profile soccer supporter Jeff Kennett.JEFF KENNETT: The reality is we agitated, we spoke to people and ultimately, we got the outcome that occurred.DAVID HILL: I made a couple of phone calls.But I must tell you that there was a much, much wider move to topple Labbozzetta than me.QUENTIN McDERMOTT: On 4 August, Labbozzetta's fate was sealed.The meeting, at which he believed he was going to bring Ian Knop onto the Soccer Australia board as his right-hand man, became the meeting at which he himself was ousted.It fell to Tony Petty to propose Ian Knop as the next chairman of Soccer Australia.How did Tony react to that?TONY PETTY: I think he was stunned.I think he was just knocked -- knocked over.TONY LABBOZZETTA: We had Ian Knop that tried and came to shake hands with me and I said, "Please leave me alone."And then he went to the table and said goodbye to some of the other guys and I understand one of the guys made some comments about Judas that died 2,000 years ago and is obviously resurrected.So, er -.QUENTIN McDERMOTT: One of Tony Labbozzetta's friends called you a Judas.Did you betray him?IAN KNOP: I think there's lots of people that could have said that to Tony over the years.I -.Look, you know, whether someone called -- That was in the heat of the day and that person subsequently apologised.TONY LABBOZZETTA: He would have to be one of the -- one of the people that I will never forget as long as I live.QUENTIN McDERMOTT: But you felt betrayed?TONY LABBOZZETTA: Betrayed, I think, is an understatement.I mean, you just -- You could almost say that the guy has been like a brother to me.IAN KNOP: I gave him absolute loyalty.And that's all I wish to comment.QUENTIN McDERMOTT: You see, he talks of you as if you were like a brother to him.IAN KNOP: Um, that's nice.I don't bear any malice to Tony.I think he's a great guy.I like him a lot.And regardless of what other people say, he has worked passionately and tirelessly for the game.QUENTIN McDERMOTT: After the meeting, the group who had carried out the coup received a call from Jeff Kennett.Vince Morizzi was present.And what were his actual words?VINCE MORIZZI: His actual words were that, "Now that you've killed him," -- 'Cause that was the whole plan was to make sure that he's out -- "Now that you've killed him, make sure you decapitate him."QUENTIN McDERMOTT: In January, Tony Labbozzetta attempted a comeback by running for president of the New South Wales Soccer Federation.Just before the election, an expenses claim was leaked to the press, together with a cash receipt from the Ancient China House of Tea.The press reports claimed the Ancient China House of Tea didn't exist, and that Oceania delegates entertained by Labbozzetta had gone to a massage parlour at Soccer Australia's expense.Following the leak, Labbozzetta lost the election.How did you entertain them?TONY LABBOZZETTA: Well, we went out for dinner, and, uh -- we went out, uh -- to, um -- restaurants, as I recall, and we subsequently went to, um -- have a few drinks, here and there.And this was over a weekend.It was over a period of Friday, Saturday and Sunday.QUENTIN McDERMOTT: Just to spell it out, that the reports that appeared in the press suggested that these three delegates had gone to a brothel and that the, uh -- the bill for this was $995.Did that happen?TONY LABBOZZETTA: A lie.QUENTIN McDERMOTT: How can you be sure?TONY LABBOZZETTA: It's a fabrication.I know.QUENTIN McDERMOTT: Because you were with them?TONY LABBOZZETTA: I was with them.I did not pay any of those bills.QUENTIN McDERMOTT: And have you ever heard of the Ancient China tea-house?TONY LABBOZZETTA: As a matter of fact, I'm still today trying to find out where it is.QUENTIN McDERMOTT: With Ian Knop in charge of Soccer Australia, and Remo Nogarotto Chairman of the League, soccer has tried to present a new face to the world.But some old faces remain on the board.And Remo Nogarotto has his own history to deal with.Two years ago, he resigned as director of the New South Wales Liberal Party, after a failed election campaign ran up more than $3 million in debts.But before that, Nogarotto had started up a brand-new soccer club in Sydney.REMO NOGAROTTO, FORMER CHAIRMAN, NORTHERN SPIRIT: So it was really a desire, a policy desire, I suppose, on the part of Soccer Australia, to have a franchise in an important geographic location of Sydney.QUENTIN McDERMOTT: On October 9, 1998, Northern Spirit was born.A record 19,000 fans watched the opening game.Socceroo star Robbie Slater joined the team.ROBBIE SLATER: The atmosphere was -- was electric.Uh -- we were cool.We were the -- we were the hip things, you know.In the schools on the North Shore, you know, all the young kids were talking about Northern Spirit.Friday nights, North Sydney Oval was the place to be.REMO NOGAROTTO: There's no rocket science in what we're doing.What we're doing is mainstreaming the game for all Australians, and adopting a community approach to marketing.We're not exclusive.We're inclusive.DAVID HILL: Northern Spirit got off to a flashing start.The first couple of seasons were just absolutely terrific.QUENTIN McDERMOTT: Northern Spirit was a product of the Hill era.One of the key investors was a London soccer club owner.RENE LICATA, FORMER DIRECTOR, NORTHERN SPIRIT: Crystal Palace was owned by a man called Mark Goldberg, and Mark Goldberg had made a lot of money through the stock markets through his interests in business, and launched his company on the stock market and made millions out of it.QUENTIN McDERMOTT: Mark Goldberg invested $1.5 million in the new club.He asked his brother-in-law, accountant Allan Novis, to become the club's finance manager, with Nogarotto at the helm.ALLAN NOVIS, FORMER FINANCE MANAGER, NORTHERN SPIRIT: He got the crowds.He got the momentum.I think he understood the science of marketing, specifically from his -- his career in politics.But I think he just overspent.We just didn't have the money that he was spending, to spend.QUENTIN McDERMOTT: Nogarotto was Liberal Party State director.He recruited fellow Liberals Kathryn Greiner and local member Kerry Chikarovski -- soon to be Opposition Leader -- onto the board.GEORGE NEGUS: Politicians from the other side of politics -- Kathryn Greiner and Remo Nogarotto and Kerry Chikarovski, etc, you know, went to Northern Spirit like bees around a honey pot, I mean, because they could see, you know, the potential of soccer in all sorts of ways.QUENTIN McDERMOTT: Did you see it as a kind of a political alliance, because in a sense it was, wasn't it?REMO NOGAROTTO: Well, I didn't see it as a political alliance.I mean, it's not completely remarkable for a football club to invite its local member to be a participant in its affairs.Um -- that, in itself, probably rates one out of ten in terms of remarkability.QUENTIN McDERMOTT: But despite the club's huge potential, cracks were already appearing.ALLAN NOVIS: I was just concerned that the cash burn was going at such a rapid rate that if we carried on the way we were, we wouldn't be there by January or February.QUENTIN McDERMOTT: And how long after you'd started was this?ALLAN NOVIS: Approximately eight weeks.QUENTIN McDERMOTT: In the second half of the season, the crowds were dwindling.By the end of the first year, things were looking grim.And Kathryn Greiner and Kerry Chikarovski were less attentive to company business.RENE LICATA: We were heading for, I think, losses of about $1 million.QUENTIN McDERMOTT: Now, what were the other high-profile directors doing at this time?Were they still coming to board meetings?Were they giving their own advice?Or were they kind of disappearing into the background?RENE LICATA: No, they were disappearing.In the second year, they never attended any board meetings.QUENTIN McDERMOTT: The biggest blow came when Mark Goldberg, the owner of Crystal Palace and Northern Spirit's largest shareholder, went bankrupt.It meant there would be no further investment from him.REMO NOGAROTTO: It was clear that, er, he wasn't able to go on with it.And, er, local shareholders had to basically capitalise the business moving forward.QUENTIN McDERMOTT: Nogarotto told Robbie Slater about Goldberg.But he left the door open for Slater and three fellow employees to invest -- former Socceroo Graham Arnold, former England international Ian Crook, and former Socceroo physio Bill Collins.ROBBIE SLATER: He said, "Oh, there's so many investors that wanna get involved, and -- and, er, we're talking to this one, that one and all these ones.I said, "Oh, well, Rem, you should, you should get me involved, you know, me and Arnie and that," as a joke.And, ah, as it turned out, he, sort of, turned around and looked at me and said, "Oh, that's not a bad idea."And it grew from there.QUENTIN McDERMOTT: Did you persuade them to invest?REMO NOGAROTTO: They sought independent advice on that investment.QUENTIN McDERMOTT: But were you encouraging them?REMO NOGAROTTO: No.They quite fittingly sought and procured independent advice.It's not my role to cajole or convince people.It is my role to ensure that they seek independent advice, which I indeed encouraged them to do and which they procured.QUENTIN McDERMOTT: Did you warn them that the club was in trouble?REMO NOGAROTTO: I encouraged them to seek independent legal advice.They were obviously aware of certain issues involving Mark Goldberg.Um, that invitation to seek leg -- legal advice was undertaken and, ah, yeah, I encouraged them.QUENTIN McDERMOTT: Slater, believing his money would help secure the club's future, took out a loan and bought shares worth $210,000.He's still paying off that loan, and his shares are worthless.ROBBIE SLATER: We found out, later on, that, ah, our money went in, went into the club and virtually, a few days later, went out of the club.QUENTIN McDERMOTT: Where did it go?ROBBIE SLATER: To pay creditors.QUENTIN McDERMOTT: Why?ROBBIE SLATER: Because the club -- as we found out later -- was in, you know, massive -- had massive problems, massive debts.ALLAN NOVIS: I don't know what was said to them or whatever, but they did put money into the club.And essentially it went in retiring debt.QUENTIN McDERMOTT: So the money -- They were persuaded to invest.They put their money in and it went straight out again to pay the debts?ALLAN NOVIS: Yes.QUENTIN McDERMOTT: What happened to their investment when they made it?REMO NOGAROTTO: Well, their investment, as with the investment of every shareholder, went into the, er, running of the club.QUENTIN McDERMOTT: Well, we've been told that it went straight out again to pay the debts.REMO NOGAROTTO: Well, it went into the running of the club.Whether some of that cash went towards retiring creditors, ah, whether some of it was used as working capital moving forward, ah, it went into the running of the club.QUENTIN McDERMOTT: Just after he made his investment, club physio Bill Collins had a rude awakening.BILL COLLINS, DIRECTOR OF FOOTBALL, NORTHERN SPIRIT: It was the following day that, er, a member of staff at that particular time come up and said to me, "Bill, don't -- I hope you haven't put any money in here.I hear that you're gonna invest in the club."And I said, "Well, yes, I have."And he said to me, "Look, the financial state that this club's in at this particular time," he said, "I would advise you not to do that."But unfortunately it was too late at that stage.QUENTIN McDERMOTT: What transpired in that conversation?ALLAN NOVIS: Well, basically, he just asked me some questions.I don't remember specific questions.And, um, well, I was just surprised that he made an investment.QUENTIN McDERMOTT: Internal accounts obtained by Four Corners show that when Slater and Collins bought their shares, the club was making heavy losses.The club made a loss of $2.8 million between June 1998 and May 1999.Shareholders equity, then, was minus $1.1 million.Those losses were pretty large, weren't they?REMO NOGAROTTO: Ah, not large or remarkable by the standard of losses currently being generated in the National Soccer League at the moment, no.ALLAN NOVIS: If the loss is funded and creditors are getting paid, then the company's not insolvent.QUENTIN McDERMOTT: But it would be true to say that some of the bills were not being paid until Robbie and his friends invested in the club.ALLAN NOVIS: Yes, from memory, that would be true.QUENTIN McDERMOTT: Remo Nogarotto insists that all the club's creditors have now been paid off.REMO NOGAROTTO: Robbie Slater and every other player has been paid.QUENTIN McDERMOTT: Have they been paid their wages?REMO NOGAROTTO: They have been paid their wages.QUENTIN McDERMOTT: In full?REMO NOGAROTTO: In complete settlement.QUENTIN McDERMOTT: In full?REMO NOGAROTTO: In f-f -- Well, I'm saying to you, Robbie Slater has been paid his wages and is -- has accepted settlement of his wages, yes.QUENTIN McDERMOTT: But he hasn't been paid the full amount?No, he has accepted a settlement of his wages.Yes.QUENTIN McDERMOTT: Robbie Slater's settlement was, in fact, $12,000 out of the $27,000 he was owed.Former club physio Bill Collins is still owed $19,000.The troubled Northern Spirit now belongs to the Scottish club Glasgow Rangers.Remo Nogarotto insists it's a good outcome.REMO NOGAROTTO: Reality is that the Northern Spirit did not fall apart.It was sold.QUENTIN McDERMOTT: But a further cloud hangs over Northern Spirit.REPORTER: He and Jacques Denolf went to a Sydney bank and withdrew hundreds of thousands of dollars in cash.QUENTIN McDERMOTT: In an uncanny echo of the 1994 Four Corners, a suitcase full of cash lies at the centre of the transfer of a Northern Spirit player overseas.Last year, Mark Rudan joined the German club Alemannia Aachen on a free transfer after buying out the remainder of his contract from Northern Spirit.The transfer took place after Rangers had taken over the club.BILL COLLINS: Several months after that, I got a contact from, um, a sponsor of a club in Germany who asked us if -- asked me if I could, er, give them the copy of the appropriate documentation to say that we received the transfer money for Mark Rudan.And I said to them at that stage, "Well, look, you've got to realise we didn't receive any money at that stage.There was no transfer fee given."QUENTIN McDERMOTT: Bill Collins, who is director of football at the new Northern Spirit, was amazed to hear that the German club's sponsors believed he had visited Germany and picked up the transfer fee in cash.They told you that someone purporting to be you had picked up 290,000 deutschmarks in a suitcase.BILL COLLINS: Yep, they said that people that were representing Mark Rudan appeared at the office in the football club or -- or the sponsor's office, either/or, and signed for the money, the 290,000 deutschmarks, and it was handed over in a suitcase.QUENTIN McDERMOTT: These are the transfer documents which the German club sent to Bill Collins, and this is the signature which they believed was his but was actually a copy of his secretary's.So she hadn't actually signed it?BILL COLLINS: She'd never even seen the document.She didn't even realise that this was going on at the particular time but somebody has obviously taken that and imagined that was a copy of my signature.QUENTIN McDERMOTT: A company seal belonging to the old Northern Spirit had been stamped on papers bearing the new club's letterhead.Collins says that couldn't have happened if the transfer had been legitimate, because the new owners, Rangers, wouldn't have had the old company seal.Mark Rudan was arrested in Germany and later released without charge.The investigation in Germany is proceeding.BILL COLLINS: The German police then investigated that, um, and they investigated that my passport didn't have a stamp on it to say I was in Germany at that particular stage, which I wasn't, and that money in actual fact wasn't given to me.QUENTIN McDERMOTT: Remo Nogarotto gave evidence about questionable transfers to the Stewart Inquiry.He says the Rudan transfer must be followed up here.Do you believe that that transfer should be investigated?REMO NOGAROTTO: Oh, absolutely.QUENTIN McDERMOTT: Here in Australia?REMO NOGAROTTO: Absolutely.Without a question of doubt.Ah, I believe that the one stain that continues on our game is the manner in which certain transfers are transacted.I have a long historical position on this matter.Um, and I believe the circumstances surrounding the Rudan transfer warrant a complete and absolute investigation.QUENTIN McDERMOTT: I understand that police investigation is going on in Germany into the Mark Rudan transfer.Is Soccer Australia going to investigate it?IAN KNOP: The I think the key phrase is -- "the police are investigating in Germany".If anything comes out which we need to -- has repercussions here in Australia, we'll investigate it if it gets here to Australia.But I think we need to let the investigations take place in Germany and let the process take place under German law.I don't think we should interfere with that at all.QUENTIN McDERMOTT: The Northern Spirit experience illustrates how the same cash crises and transfer irregularities persist in Australian soccer.Even now, Australia's most successful clubs are struggling to break through and struggling to break free of controversy.Perth Glory is the most high profile club in the country with supporters drawn from every section of the community.PERTH GLORY SUPPORTER: There's Irish, there's Italians, there's Greeks, there's Germans, there's English.We all wear the Glory gear.We go and sing in unison.There's no -- there's nobody there who, who would try and sing 'Croatia', for instance.It's far from it.We're here to support the Glory, and that's it.That's what brings everybody together.That's why we've got 43,000 people here.QUENTIN McDERMOTT: A fortnight ago, the fans converged on Subiaco Oval to watch the grand final.Perth Glory and its supporters know how to put on a good show.NICK TANA, CHAIRMAN, PERTH GLORY: Our advertising and marketing spend is in the vicinity of $1 million.Now, that is one of the reasons why we lose the million dollars that we'll lose this year.And we do it willingly on the basis that we're hoping that the rest of the league will follow suit and start the change.QUENTIN McDERMOTT: All's not well, however, at Perth Glory.The club knew last year it would be making a loss and forecast a bank deficit this year of $1.7 million.What's more, a bitter dispute has been festering between Chairman Nick Tana and his deputy, Paul Afkos, who intends to sell his share of the club.PAUL AFKOS: On the day, we're all about winning the game and I'm certainly focused.REPORTER: Do you think you'll have a handshake with Nick Tana after it?PAUL AFKOS: It's not likely.But I will enjoy the champagne with the boys.COMMENTATOR: Here's a chance for Ante Milicic.He lines up the shot -.Ante Milicic draws first blood in the grand final!QUENTIN McDERMOTT: Alas for Perth, the champagne is on ice for another year after the Olympic Sharks won the grand final one-nil.COMMENTATOR: The Sharks silence the Subiaco crowd.QUENTIN McDERMOTT: A league investigation into the club hasn't helped either.In February the club sent a cheque to Soccer Australia for $84,000 because it had failed to pass on some of the proceeds from two semifinals played at the WACA in 1999.The business plan from Soccer Australia obtained by Four Corners confirms that, in fact, money is tight for every club.It says the clubs in the league are undercapitalised, and most clubs are close to insolvent.REMO NOGAROTTO: They remain solvent because they have some very generous benefactors.They remain solvent because these people believe in the game, and basically continue to write personal cheques to fund losses.IAN KNOP: We have been administered in a very tardy manner in the past, and since 4 August we've gradually and dynamically tried to change how we undertake our business.QUENTIN McDERMOTT: How much change is going on, though, is open to question.In December, a new board member from Soccer Australia gave a presentation to the State Federation Presidents.He offered them a stark choice -- "Do we choose to raise equity in cash, or do you choose for Soccer Australia to die?"They were told that if they didn't help implement a rescue plan, the board will need to consider placing Soccer Australia under voluntary administration.But those words could soon become redundant.Soccer Australia's marketing partner, IEC, now holds its fate in its hands.When Four Corners interviewed managing director Dominic Galati recently, there were already rumours of impending legal action.Are you intending to wind up Soccer Australia?DOMINIC GALATI: Look, we've gone down one path at this point in time.If this path doesn't give us a certain outcome, then, you know, we will take that avenue when it comes.QUENTIN McDERMOTT: Now, Soccer Australia is claiming that you owe them money.Is that true?DOMINIC GALATI: No.I mean, if I owed them money, wouldn't it be the other way around, that they'd be taking me to court today?Instead, it's me taking them.QUENTIN McDERMOTT: Last Friday, IEC went to court to seek leave to wind up Soccer Australia, claiming it's owed around $3 million in payments.If this does go through, and you are able to wind up Soccer Australia, won't that have an absolutely destructive effect?DOMINIC GALATI: Well, we've tried to do everything possible for Soccer Australia to resolve the problem, and it's got to a point where we've had to take this action.QUENTIN McDERMOTT: What will you do if IEC tries to wind up Soccer Australia?IAN KNOP: Well, they're trying to do that now, and we are defending that action.QUENTIN McDERMOTT: If soccer's governing body is wound up, it could lose its FIFA accreditation and effectively be out of the next World Cup as well.TOM DOUMANIS: If Soccer Australia goes down, there is the prospect that we may be ostracised from the international community for three years.Now, nobody but nobody would want that to happen.QUENTIN McDERMOTT: Tom Doumanis is one of those who believes that soccer's administrators have turned the corner -- but only if the dispute with IEC is resolved.TOM DOUMANIS: There is a seachange taking place within Soccer Australia.And those of us who have read the current business plans and the forward financial plans that the board has released will take great comfort in knowing that there is, at last, a strategy in place which is not focused exclusively on qualifying for the World Cup.QUENTIN McDERMOTT: Others, though, aren't so sure.Jeff Kennett has a vision for soccer's future.It isn't shared by all, but it's inspired, in part, by what he sees as the bankruptcy of soccer's administration.JEFF KENNETT: I think there is one common factor through our failure to perform, and that is the administration of soccer, unfortunately, for the last 20 years has been degenerating to the condition that it's in now, and it's terminal.QUENTIN McDERMOTT: Jeff Kennett's road map for the future involves getting rid of Soccer Australia and replacing it with an independent commission.JEFF KENNETT: There are people of goodwill, in commerce and elsewhere, who would be only too happy to serve -- people with good accounting backgrounds, commercial experience, marketing experience, sporting experience.They're all there.They're all ready to serve -- but they've got to be given the opportunity.MAN: Take him, take him, son!Let's go!Up again, up again!Let's go!QUENTIN McDERMOTT: Kids play soccer on the beach, oblivious to the lack of sponsors, the court battles, the political infighting, dreaming, perhaps, of scoring the winning goal in the World Cup Final.Now, more than ever, it's a distant dream.SOCCER FAN: We were told, when this change came over, and the new board was elected, that everything will be open, all this -- What a lot of crap.It hasn't happened.It's not going to happen as long as you've got people who are self-interest only.They've got to think about soccer for the whole general public.We are in a situation that soccer should be the number one sport in Australia, regardless of anything.QUENTIN McDERMOTT: It's the real stakeholders, the supporters, who've been betrayed by soccer's administrative shambles.SUPPORTERS: We're gonna win it.We're gonna win it large.We're gonna win it so large it's obscene.

