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As tempest rages, questions cloud air ANNE DAVIES and MALCOLM KNOX | The Sydney Morning Herald | April 24, 2010 We still don't know how far the subterfuge went, write Anne Davies and Malcolm Knox. As the initial shock of the Storm's abrupt demotion from the competition subsides, the question of who knew will quickly be replaced with another question: who should have known? In the early phases of this latest crisis in rugby league, the name of the game is to blame a few wayward executives. The chief executive of News Ltd, John Hartigan, called it ''a couple of rats in the ranks'', naming the former Storm chief executive, Brian Waldron, as the ''architect of the whole shooting match''. David Gallop, the chief executive of the NRL, backed Hartigan's assessment. But Waldron, who has now gone to ground, has claimed ''there were people on the board who knew about everything that was going on'', arguing that the Storm was merely following a widespread practice in the league of topping up salaries. In the case of the Canterbury Bulldogs, whose salary cap infractions were exposed by the Herald in 2002, the entire board of the football club and some of the Leagues Club board were aware that players' salaries were being topped up. They even noted the top-ups in board minutes. What some directors may not have known was how the extra payments were being funnelled to players. The most egregious of these were promotional payments to the players from the Oasis development, a massive casino-style club being undertaken by the Leagues Club with Liverpool Council. Despite their disgrace, the Bulldogs recovered, rebuilding because of the loyalty and depth of its fan base. But the Storm is different. Uniquely, it is only partly a football club. It is also a wing of the NRL's and News Ltd's corporate strategy. Had it been just a football club, left to survive on its merits from gate-takings, sponsorship, membership and the palette of grants on which other clubs get by, the Storm would have been puttering along near the bottom of the NRL for the past 12 years. But the corporate strategy - to expand the game into Victoria, to provide the illusion of a ''national'' rugby league for the purpose of securing a more lucrative television rights deal - demanded that the Melbourne Storm be a successful club. Underwritten by the co-owner of the league itself in News Ltd, the Storm won three premierships and appeared in two other grand finals without any fear of financial failure, because the owners of the code were committed to expansion. When News announced its intention to pull out of the game and the NRL announced moves to transfer league's control to an independent commission, Melbourne opened (one set of) its books and the other clubs discovered that the Storm had been spending far less than they had thought on the wider development of the game in Victoria, and far more than they had thought on recruiting and keeping champions such as Cameron Smith, Greg Inglis and Cooper Cronk. News's request for ongoing funding of $30 million over five years to keep the Storm going after it exited the NRL seemed, to the other clubs, excessive. Why, they asked, should they be subsiding Melbourne to beat them? Little did they know that the open and legal payments to the Storm's football department were only the start of it. Which brings us back to who knew, or who should have known about the second lot of illegal payments. As yet, there is no reason to question the statement by the Storm chairman, Rob Moodie, that he did not know of the breaches until April 13, or Hartigan's shock and surprise. But the question remains: should they have known? The board of a football team is there not just as its chief boosters, but its legal brain, whose responsibilities include signing off on the company's accounts. As the owner of the club, with representatives on the board, News also has responsibilities for its running, and indeed received quarterly internal audits and an annual external report by Ernst & Young. The irregularities in the club's accounts piqued the interest of the salary cap auditor, Ian Schubert, six months ago. He was concerned about the payment in the club's books of $20,000 for each time the club used a marquee at Olympic Stadium. In fact, Storm got it as part of the grounds rental. But that only yields about $240,000 calculated on 12 home games. We know that the club spent $700,000 extra on players this year, which means there were other rorts as well. These are said to be a system of pumping up payments for services, perhaps with the collaboration of outside figures or sponsors. Until we know the details of how the subterfuge was pulled off, we cannot answer who should have known. .

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