By David

For many years I’ve consulted the same Wellington lawyer. He is a most disconcerting fellow. He’s forty-five years old but looks about seventeen. He deals knowledgably with a person like me, but I bet has never taken part in any organized sporting event. His voice is high pitched and squeaky but the words, when they need to be, are hard and mean and tough. I was talking to him on the phone recently and, to my surprise, he confessed to being a regular Swimwatch reader. He also said an accountant friend of his knew the Chairman of Swimming New Zealand, Murray Coulter. The accountant told my lawyer this amazing story.

Three years ago Swimming New Zealand was insolvent. It had just lost $331,000, it owed $522,000 and there was the grand sum of $221,000 in the bank to pay for it all. Any normal company would have long since called in the receivers. And if it hadn’t, the directors would be in the gun for trading a company known to be insolvent and could become personally liable. But, in the midst of all this financial chaos, Coulter had not a care in the world. Discussing his lack of concern with my lawyer’s accounting friend, Coulter said, all was well. If SNZ’s debtors demanded their money, the organization’s Regions would be required to dig into their reserves; to bail out the parent “company”. Just three years ago Coulter was blissfully plotting to use the “amateur” Region’s cash to pay for his organization’s “professional” profligacy. And now he’s hell bent on seeing the same Regions into oblivion. It is disgusting.

The story got me thinking. Coulter is a money-man. He works for a bank. Was there a financial motive to Project Vanguard? Perhaps this wasn’t about better communications or improved results. Perhaps this was just a good old fashioned Brierley asset stripping heist. Instead of looking on Project Vanguard as a swimming coach, what would happen if I put on my old corporate hat? Which Coulter was leading the charge towards Project Vanguard, the corporate raider, or the sport’s administrator? Were New Zealand’s swimming Regions a source of cash or providers of a swimming service? In the words of the Watergate whistleblower, what would happen if I just “followed the money”.

And here is what I found. Please excuse the non-accounting arrangement of the financial tables used in this report. I’ve had to modify their format to fit with the layout constraints of the Swimwatch blog.

First of all I consolidated all the Region’s Balance Sheets. These are shown in the table below. Very limited financial information was available from Counties, Eastern Districts, Wanganui or Wairarapa. The information I did find in respect of these Regions has been consolidated under “Other” in the table.

So what does this tell us? Are the Regions a succulent financial plum? Is it worth Coulter, Byrne and Cameron going through the whole Project Vanguard exercise in order to close the Region’s down; in order to secure a financial windfall. You just bet your life that’s their game. If Project Vanguard is approved Coulter and SNZ’s “hole in the wall gang” make a financial killing. Just take a look at the figures.

Pride of place goes to $1,083,277 of hard cash held in the bank accounts of the Regions. Accept Project Vanguard and all that money gets transferred to SNZ’s Wellington bank account. Coulter and Byrne can spend it as they like. These are the same guys who were insolvent three years ago; who relied on state emergency financial aid from SPARC to get themselves out of trouble. And now they want your million to spend on their own grand schemes and on Cameron’s bottomless Millennium pit. I spoke to a Regional administrator on the phone today. She said to me, “We spend all our money on the swimmers in our Region.” Under Project Vanguard that will be a thing of the past. The Regions have a million dollars. For the love of this sport, don’t give it to SNZ.

Accepting Project Vanguard will also mean SNZ will inherit $397,399 worth of fixed assets. That’s all the computers, touch pads, score boards, desks, honours boards and chairs that the Regions have accumulated; bought not with state aid but with the proceeds of a thousand sausage sizzles, raffles and car wash mornings. This fixed asset value however is what is called the depreciated value. The purchase cost of the Regions collective fixed assets is $1,077,311. No wonder Coulter is pushing to get Project Vanguard accepted; forty-five votes at the AGM and he scores a million dollars worth of goodies and another million dollars in cash.

SNZ has a current value of $277,315 made up as shown in the table below.

The Regions have a combined value of $1,444,961. In one Project Vanguard heist Coulter plans to increase the value of his empire fivefold from $277,315 to $1,722,276. And he plans to do it at your expense.

The annual revenue windfall from Project Vanguard will not be as generous to Coulter and his cohorts; but it won’t be too bad either. The table below summarizes the Region’s consolidated revenue statements. Annual income to the Regions is $1,469,764; that includes income from membership fees, grants and donations, sausage sizzles, raffles, car washes and meet entry fees.

SNZ won’t be better off by the full $1.5 million. However acceptance of their Project Vanguard scheme will net them a tidy sum. Here is what I expect will happen.

1. SNZ’s income will increase by the amount of the membership fee currently paid to the Regions. That is $21 for 22,202 members or $466,242. So already Project Vanguard will benefit the Coulter gang by close to half a million dollars each year.
2. A Project Vanguard run SNZ will see the Regional income from local fund raising activities almost disappear. Clubs will still host raffles and sausage sizzles, but the incentive to run Regional fundraising events will be a thing of the past. Close to $200,000 raised by these events will be lost to the sport. Unfortunately the pain of that loss will be felt most by those who can afford it least – the sport’s grass roots. You see, that is the sector that benefits most by from the Region’s fundraising work.
3. Grant’s, donations and sponsorships of about $500,000 paid to the Regions will also disappear. That income also benefits young swimmers. Auckland’s Junior League is an example of a sponsored event providing benefits to a huge number of young swimmers; not in the Project Vanguard world it won’t.
4. In the Project Vanguard era most of the $300,000 in meet entry fees paid to the Regions for local swim meets will end up in SNZ’s bank account. I suppose SNZ will still hold Provincial Championships, for example. I think it is safe to assume SNZ will hold on to $250,000 from this source.

What all this means is that each year SNZ will receive $500,000 from membership fees and $250,000 from meet entry fees that is currently paid to the Regions; $750,000 in total. Money lost to the sport altogether will be $50,000 of meet entry fees, $500,000 of grants and donations and $200,000 raised by small fundraising events; also $750,000 in total. The Region’s work with the grass roots members of the organization will be worse off by three quarters of a million dollars. Your junior swimmers will be worse off under Project Vanguard. SNZ will not look after them the way you do.

So where has the Deep Throat Watergate advice of “follow the money” taken us? Is there a financial motive to the hand-wringing support of Project Vanguard that we see coming out of SNZ’s Wellington office. Of course there is. Coulter and Hemsworth have managed this as a straight forward assets stripping commercial venture. At no cost to themselves the table below shows what they will strip out of the Regions.

As near as it doesn’t make any difference, $3,000,000 stripped from the Regions for Coulter and Byrne and Cameron to spend or use as they like. And all they need to do is find 45 votes and they get the lot. I just really hope there are not 45 votes out there that are silly enough to fall for the deception. For about 110 years the real value in SNZ’s business has been built by the Regions. It is not ours to give away; certainly not to the likes of them.

And if by some chance there is still a small doubt in your mind – “just follow the money.”