Main | Bringing Down The Government Transcript »
Tuesday
Sep252012

Robbing Peter To Pay Pat Transcript

The expression "Robbing Peter to pay Paul" first came into usage in the Middle Ages, although etymologists remain divided as to exactly when. Certainly it was coined at a time when almost all English people were Christian and would have been well used to hearing Peter and Paul paired together. Both were apostles of Christ, both were martyred in Rome and both were celebrated in the annual Feast Day of June 29th. Although this commemoration now passes by with little mention, it certainly wouldn't the case in mediaeval England.

Of course, the essence of "Robbing Peter to pay Paul" is the pointlessness of taking from one person only to give to another. It's safe to say that no Christian apostles were ransacked in the making of this expression, but that alliteration probably contributed greatly towards the expression finding purchase in the English lexicon.

An intrinsically related phrase also heard is "Borrowing from Peter to pay Paul". The implication here is that, at some point, Peter is expecting to get his money back, unlike in the original "robbery"- unless the meaning of robbery has changed recently, but I can't recall news reports of people being mugged in the street where their assailants threw back promises of "I'll get this back to you next week" while rummaging through the contents of the forcibly procured handbag.

At the risk of sounding like, as the author and journalist, Will Self, described him, "that air guitarist of political rhetoric, that walking auto-cue in a sensible suit", Tony Blair, what if there was a middle way? What if it were possible to actually rob someone, steal their silver, pilfer from their pecuniary assets and make some mumbling, hazy hints that they might get it all back at some point? That, it would appear to me, would be fist-clenchingly, sphincter-tighteningly worse - and by some order of magnitude.

While Shakespeare's Polonius offers us the salient, "Neither a borrower nor a lender be; For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry.", there is more acceptance in the honest need for a loan secured on the promise of eventual, timely return than in cold, despicable theivery.

However, with robbery there is some ambiguity as to the moral condemnation we are compelled to apply. Certainly, yes, from a legal standpoint, the theft is abhorrent. But - and as a deliberately leading example - if theft is required to feed a starving child, our moral compass starts to waver somewhat from the punitive certainty of true north. Is it really theft? And what if we flip the argument on its head to consider those operating within the law but are using it to their own, morally questionable purposes? The law cannot prosecute on the unpredictability of morality, but, more often than not, we do.

So it is with this in mind that we must look again at the UCI and the lamentable furrow it has ploughed to appropriate that which was meant for other uses, manipulate it at the hopeful service of their own gain, and believe that amorphous whispers serve as justification for their actions.

As has become the norm lately, the UCI published its annual report for the previous year, while the World Championships raced, this time, around the Dutch province of Limburg, providing exciting counterpoint to the ennui of governing body business. Nestling towards the back of this tedious tome are details on the UCI's race organisation business, Global Cycling Promotion. Incidentally, no criticism of the UCI is inferred in describing their annual report as tedious. All such documents are. I believe their secondary purpose is to provide onanism fodder for aspiring, teenage accountants. At roughly the same period in our lives, the rest of us are reaching for a lingerie catalogue or....well, whatever it is that girls find serviceable on such occasions! However, I digress.

Global Cycling Promotion was set up by the UCI Management Committee in September 2009 in order to support its globalisation strategy for road cycling. That one of the companies directors just so happens to be UCI President Pat McQuaid, and would personally benefit from profits made, is merely a coincidence. Is coincidence the right word? Probably not. It could also be argued that a governing body of a sport has no business (pun intended) being in the race organisation game when it decides which races go into the top-tier World Tour. This blatant conflict of interest is proven by the fact that despite never haven seen some much as a skinny, professional leg being thrown over a top tube, both GCP's races, the Tour of Beijing and the now postponed Tour of Hanzhou, were immediately given positions in an already crowded calendar.

As I reported last year, €445,000 of the ProTour Reserve Fund were used by GCP in 2010. CHF177,000 the year before. This amounts to a substantial amount of money that has gone into the coffers of a private company; a company that has no seeming accountability to the UCI. As detailed in the report for 2011, GCP has helped itself to a further €136,000 so that the outstanding amount now stands at €758,000.

For those that don't know, the ProTour Reserve Fund was set up in order to ensure that any team or race finding themselves in short-term financial difficulty would have a place to turn to. The teams provide the bulk of the money put into the fund. For example, the 2010 financial report showed that the teams' contribution was 1,350,000 while the UCI put in 445,000. A significant difference. But that is to be expected since the fund exists, primarily, for their benefit.

The question that should be immediately springing to mind is, why, after having set the company up with ProTour Reserve Fund money is the UCI having to come back, year on year, for more? The answer is, because without the financial assistance of the fund, GCP would be bankrupt.

GCP reported a modest loss of CHF10,000 in 2011. Without the aid provided to it by the Reserve Fund, its losses would have totalled CHF175,000. Losses are not unusual for new companies. Businesses can operate for years on end without reaching the dizzying heights of actually making money. But where is the business plan that this for-profit company, replete with directors and shareholders, is basing its business operations on? When the bank-rolling of the company was approved, what assurances were given that, at some point, as Pat McQuaid has promised, profits from these globe-trotting exploits would be invested back into the sport? Business plans are notoriously subject to the vagaries of circumstance, but surely GCP has some projection as to when this might be? However, nothing but a simple profit and loss statement has ever been forthcoming.

So, the three quarters of a million Euros that GCP has spent of the ProTour Reserve Fund: Is it theft or a loan?

We can categorically rule out this money being a loan to the company from the UCI. At no point in any of the UCI's rules is there mention, nor provision, for money spent from the ProTour Reserve to be paid back to the ProTour Reserve Fund. The assertion that the money was ever going to be paid back was as far-fetched as Team Sky being able to support Yellow and Green Jersey ambitions for this year's Tour.

Right, it must be theft, then? The UCI have stolen money from the ProTour Reserve Fund, yes? Actually, no. Careful examination of the regulations provide the loophole that McQuaid can jump through with aplomb. Article 2.15.244 states that "When the reserve fund reaches a sum equivalent to CHF 9,000,000, the surplus shall be paid into a fund for solidarity and for the development of cycling.". Article 2.15.249 tells us that, "Any UCI WorldTour partners (UCI, ProTeam, organiser) may submit a project to the UCI WorldTour council.", while 2.15.250 goes on to say that, "Should the Professional Cycling Council accept the principle of the project, it will appoint a study commission to report back to it. The study commission may include or consult specialists depending on the type of the project.The final decision shall be taken by the council.".

All clear, then? All above board and no devilish dishonesty to be found in the detail. So why do feel that murine clawing at the hollow pit of my stomach when it comes to Global Cycling Promotion? I suspect we need to go back to the morality that finds the Pat McQuaid setting up a private company within the confines of a not for profit governing body. As we can see, the rules have not been broken, but it's hardly surprising when it's the UCI who make the rules in the first place. In the same way that Switzerland could never have conceived of the quasi-business that FIFA and other sporting bodies were to become when they offered them generous tax breaks, so it is with the UCI regulations being used at the service of GCP. The ProTour Reserve fund was never set up to facilitate this kind venture. But it is not the regulation or law that is being broken, it is its spirit. The only saving grace in blatant conflict of interest is that the Directors have not been able to reap vast dividends from its operation. Yet.

The efforts of Global Cycling Promotion thus far have been a disaster. The Tour of Beijing may have raked in CHF3 million, but it cost a quarter of a milion more than that in expenses. The Tour of Hangzhou, as previously mentioned, has been cancelled (or "postponed" in UCI speak) and may cause GCP to dip into the Reserve Fund yet again.

While, according to its own rules, the UCI may not have robbed the ProTour Reserve Fund to pay Global Cycling Promotion, the teams, who contribute the most, certainly have cause to feel they are being mugged.