Troubled former Eels boss Roy Spagnolo is facing new allegations of financial impropriety.

Troubled former Eels boss Roy Spagnolo is facing new allegations of financial impropriety. Photo: Simon Alekna

Roy Spagnolo was cast out by Parramatta after being accused of more than 30 instances of financial impropriety, from procuring free memberships and travel for family and friends, improperly paying large bonuses to executives and even allegedly using the back of a beer coaster to bill the club $30,000 for a Christmas party held at his house.

The former Eels chairman was banned from holding a directorship at Parramatta for two years after fronting the board this week.

The Star of the Sea apartments in Terrigal.

The Star of the Sea apartments in Terrigal. Photo: Supplied

On Thursday, NSW Hospitality Minister George Souris said the Office of Liquor, Gaming and Racing would investigate the contents of a 900-page report into the management practices of the former Parramatta Leagues Club administration and could refer matters to NSW police.

Spagnolo, who was defeated at the club election in May, features heavily in the audit, conducted by Russell Corporate Advisory.

The firm's findings included a series of allegations that were then put to Spagnolo, who owns an accountancy business, in a show-cause letter before his appearance before the board.

A 2004 Ford Falcon.

A 2004 Ford Falcon. Photo: Supplied

Spagnolo denied any wrongdoing on Thursday and said he had no intention of vacating the chairmanship of the Eels' junior body, the Parramatta District Rugby League Club. When contacted by Fairfax Media he said he believed he had been reprimanded by the board for ''two administration errors''. ''There is just no impropriety. I haven't done anything wrong and I'm not going anywhere,'' he said.

Among the claims are that he authorised the issue, without payment, of at least 78 memberships, including 13 in the Spagnolo family name prior to the PDRC elections in December 2012, at which he was re-elected chairman.

It is also alleged that similar issuing of free memberships - understood to be season-ticket packages - was conducted in 2010 and 2011, at a cost of as much as $22,000 to the Eels. Despite not being financial members, those people crucially gained voting rights at the election, it is claimed.

<em>Illustration: Simon Bosch</em>

Illustration: Simon Bosch

Spagnolo denies the allegations, saying the memberships were related to ''sponsorships and gratuity payments''.

Spagnolo was also accused of authorising without proper approval a $92,998 bonus to then Leagues Club chief executive Bob Bentley in May, signing off on the payment after he had failed to regain the chairmanship or a spot on the board at the PLC election that month.

It was further alleged he had earlier handed another bonus of $20,000 to Bentley in February without approval and of giving Bentley a pay increase in October 2012 without it being ticked off by the board as is required in the Registered Clubs Act.

Bentley, who was sacked by Steve Sharp's new board in July, was on a contract that contained no key performance indicators and had a clause that gave him 15 months' pay if it was terminated. The report found that Bentley directed a payroll staff member in November last year to increase his salary because Spagnolo had approved it.

Bentley's contract was signed off by Spagnolo and former board member Sid Kelly and it is claimed the terms of the deal were not made clear to Kelly.

Spagnolo says the pay rise and bonuses were contractual, and that the bonus was issued by him to Bentley after he had lost at the election because ''I hadn't paid it earlier, that's all''.

Attempts to contact Bentley yesterday were unsuccessful.

Spagnolo was also asked to explain allegations of improperly claiming money from the Leagues Club without formal paperwork. Fairfax Media understands a notable example is $30,000 he is said to have claimed for the cost of a Christmas party held at his house last year for players, Leagues Club staff and football club officials. It is understood the figure was recorded on the back of a beer coaster but without any details or particulars of how the money was spent.

Spagnolo disputes that he ever made a reimbursement claim on a beer coaster, saying instead that he used the back of a piece of paper to pen a handwritten invoice for $2000 for some of the party's costs - at the insistence of the board.

Spagnolo was also alleged to have incurred substantial costs to the Leagues Club on travel for himself, relatives and friends, including at least two stays at the Star of the Sea apartments in Terrigal in 2011.

It was claimed that no details of these trips were provided in seeking reimbursement, in contravention of the Corporations Act. Spagnolo owns a unit at the complex, where a three-bedroom apartment with ocean views can be rented for $1700 a weekend. Spagnolo said the club was invoiced because players were staying at Terrigal, including in his apartment, for a player camp and that the money was not spent on accommodation for family and friends.

The Eels' suspension of Spagnolo immediately gained the attention of the state's liquor, gaming and racing regulator on Thursday. ''I am advised that the Office of Liquor, Gaming and Racing's director of compliance is meeting with the independent auditor from Russell Corporate Advisory today,'' Souris said. ''The Office of Liquor, Gaming and Racing [OLGR] will determine any matters which fall under its jurisdiction and any potential breaches of the Registered Clubs Act.

''Any relevant matters will be fully investigated and appropriate action taken to protect the best interests of members of the Parramatta Leagues Club. Any matters outside OLGR's jurisdiction will be referred to the relevant investigative body such as NSW Police.''

 

Five key accusations, and  how Spagnolo answers the claims

THE CLAIM

That Spagnolo gave former Parramatta Leagues Club chief executive Bob Bentley a pay rise and bonuses without proper approval, including a payment of $20,000 in February and one of $92,998 in May that was allegedly signed off on by Spagnolo after he had lost the chairmanship and a board seat at the mid-year elections.

WHAT SPAGNOLO SAYS

‘‘They [the payments] were contractual. I hadn’t paid it earlier, that’s all. Sid Kelly and myself sat on what’s called the expenditure review committee and were in charge of the finances. It was part of his contract. It’s hardly a crime.’’

 

THE CLAIM

That Spagnolo issued membership packages free of charge to 78 people, including 13 sharing his surname, before the Parramatta District Rugby League Club election in December 2012 at which he was re-elected chairman. There are further allegations that there was a similar practice of memberships being issued without charge in 2010 and 2011.

WHAT SPAGNOLO SAYS

‘‘It’s not my family, they were to do with sponsorships and gratuity payments for some of the services. In October 2012 they were renewed and they were paid in May. I’ve got an email to that effect. They’re all paid. I’ve got copies of the cheques.’’

 

THE CLAIM

That Spagnolo claimed money from the club without adequate documentation, on one occasion allegedly $30,000 for a Christmas party, invoicing the club on a beer coaster.

WHAT SPAGNOLO SAYS

‘‘You know what I got reimbursed? $2000, my friend. I don’t know how much [the party] cost me.I got reimbursed for a marquee and some other hired stuff and a few bits and pieces. I’ve spent about $40,000 to $60,000 over the last five years for parties. The board insisted I get reimbursed. I just wrote it out on a sheet of paper and attached whatever bills I had and said, ‘Give me two grand’. It wasn’t a beer coaster.’’

 

THE CLAIM

That Spagnolo incurred substantial costs for the club on travel and accommodation for himself, friends and family, including at least two visits to the Star of the Sea resort in Terrigal in February 2011 and April 2011.

WHAT SPAGNOLO SAYS

‘‘Terrigal was a player camp, a camp for the boys. Someone’s got to pay for it, why should I pay for it? It’s just because the invoice had my name on it – that’s what happens. Myself and my brother-in-law both own a unit there and we gave them [the players] our units for nothing. The club got invoiced and my name was on the invoice.’’

 

THE CLAIM

That Spagnolo authorised two payments to Fuifui Moimoi in October 2012 and November 12, the latter $15,000 to buy his car for the use of an Eels staff member. It is alleged the 2004 Ford Falcon had a likely maximum sale price of $5200.

WHAT SPAGNOLO SAYS

"Fui was trying to sell his car and I was aware of it and he said he wanted $15,000. We did a valuation online [at Redbook], it was $14,200 and we agreed to give him $15,000. It had mag wheels, it had woofers. I had nothing to do with it – all I did was make Ricky Stuart and Bob Bentley aware that Fui was selling the car and that was it.’’

 

Do you know more?

chris.barrett@fairfaxmedia.com.au