Sugar Bowl caught in HBO Real Sports investigation

Tonight, HBO airs a new episode of Real Sports with Bryant Gumbel, and presents its investigative report into the finances of the Allstate Sugar Bowl, where the Bowl Championship Series will crown the 2011 BCS National Champion on January 9, 2012.

Among the findings of the investigative report, the Sugar Bowl was shown to have made a total of $5,000 to the election campaign of former Louisiana Governor Kathleen Babineaux Blanco, a Democrat. Two other donations totaling $89.90 were made to a Political Action Committee.

Organized as a non-profit, 501(c)(3) charitable organization, the Sugar Bowl is prohibited from making such political contributions and appears to have violated federal elections law in doing so.

Here’s a segment from the show, where correspondent Bernie Goldberg interviews Football Bowl Association Spokesman Bruce Bernstien:

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Transcript:

Goldberg: According to the IRS laws regarding charities like the Bowls, are they allowed to give money to politicians and political candidates?
Bernstien: No.
Goldberg: No--period?
Bernstien: No, period.
Goldberg: The Fiesta Bowl, as you know, was caught laundering money to political candidates. And by "laundering money," I mean the Bowl didn't give money to political candidates, employees did and then the employees were reimbursed.
Bernstien: It's not a good thing, but it's an isolated incident. I have never heard of another instance of where a Bowl Organization made a political contribution.  And I ask you, Bernie, have you heard of that? Because if someone was foolish enough to do that...
Goldberg: The answer is "yes."  Let me interrupt you--the answer is "yes." Louisiana state campaign finance records show several contributions from the Sugar Bowl to the Governor of Louisiana.... You asked me a question...
Bernstien: I'm not familiar with that. But if the organization was foolish enough to have done that, it will get reported and obviously now there are two situations that have been reported.

If there was any good news in the report, it was that the Real Sports investigative team didn’t turn up anything like evidence of a $1,200 strip joint tab, tens of thousands in bogus bonuses paid to employees who funneled the money to political campaigns, a lavish birthday party for the bowl’s CEO, gold coins, cars and other bling thrown around by the Fiesta Bowl. CEO John Junker was fired and the bowl was slapped on the wrist by the BCS.

At first blush, the Sugar Bowl transgressions don’t even carry the Fiesta’s jock strap. The last political contribution shown in the records was $50 to the PAC in 2008. Former Governor Blanco decided not to run for reelection in 2007, and current Republican Governor Bobby Jindal is not shown as a beneficiary of the bowl’s political largesse.

Given the Fiesta’s slap on the wrist last Spring, you can rest assured that the BCS will thank the Sugar Bowl for not going big time.   

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With the Big 12 “done,” this was just bound to happen

Sources tell the Austin-American Statesman that Texas officials traveled to Norman, OK this week to try salvaging the sinking Big 12 Conference. However, those sources say Oklahoma and likely Oklahoma State are looking for exits, with a possible destination of the Pac 12.

“The Big 12 is done,” according to the paper’s source.

With that being the case, we did a quick scan of Ebay and what do we have here?!?

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Shocka: Fiesta and Insight Bowls both keep licenses, but get “probation.”

Via the NCAA press release.

There’s no reading between the lines necessary. The new management team of the Fiesta and Insight Bowls—which are both run by the same Arizona not-for-profit corporation—put on a dog and pony show before the Bowl Licensing Subcommittee in New Orleans last month.

They appear to have successfully baffled them with bullshit. Suffice it to say that today’s news is nothing like the BOOM I thought it might have become.

But honestly, could the NCAA have done much different? It’s May 17. The regular season starts in just about four months. Yanking either bowls’ license would have created an absolute nightmare among the bowl-conference affiliations, forcing a realignment that would have trickled down to the Non-BCS conferences—and probably hurt them the worst, since the BCS “big money” schools would have simply moved one or two steps down the pecking order, bumping some small, Conference USA or Sun Belt Team out of the IBleedCrimsonRed.com Bowl, or something.

It would also have created a mess in the BCS selection, as it would reduce the number of slots by two, which again would have hurt the Non-BCS conference schools the most.

Could they have done more? Maybe. If we know what the terms of the probation were. Go read the press release. What are the penalties, here?  Fewer off-bowl site recruiting trips? Reduced number of strip club visits? A reduction in campaign contributions from 267,489 to 125,000 over two years? How about a price cap on CEO birthday parties at the shamefully low allowance of only $10,000?

It looks like the only punishment they’ll have to endure is a return visit to the next annual subcommittee meeting in April 2012. 

Horrors.

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Fiesta Fiasco: Bowl to have sit down with NCAA licensing committee

CBSSports.com’s Tom Fornelli reported late last night that the beleaguered Fiesta Bowl will have a meeting with the NCAA subcommittee in charge of sanctioning bowl games.

At stake is not whether the Fiesta Bowl continues to be a part of the Bowl Championship Series. But whether the bowl is even sanctioned as an official post season contest in the Football Bowl Division. Having the BCS yank the Fiesta’s credentials as one of the series’ Big Dogs would be bad enough, as it would reshuffle selections for the remaining bowls. The domino effect would likely end any chance of another mid major program returning to a BCS bowl until the Fiesta either rights its listing ship or a replacement is found, relegating the once mighty Fiesta to the second tier.

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Dennis Poppe, NCAA vice president of baseball and football, told The Arizona Republic on Tuesday that the Fiesta Bowl had been invited to meet with the 11-member group.

He told the newspaper the Fiesta could potentially have its four-year license revoked, though in the past licenses had only been revoked because of financial or attendance problems.

The meeting is in response to a report commissioned by the Arizona-based game that led to the firing of its longtime president for alleged misuse of funds.

The Fiesta Bowl also released a statement in response to the meeting.

"We look forward to meeting with the NCAA to answer any questions about the Special Committee report, and to discuss the new bylaws, policies and controls that the board of directors has put in place to prevent the activities described in the report from occurring again."

I'm not sure why the Fiesta Bowl would be looking forward to this meeting seeing what the consequences could be, but what has the Fiesta Bowl done lately to prove to any of us it knows what it's doing? Though, admittedly, I don't think there's any chance that the Fiesta Bowl will have it's license revoked. Odds are that if there is any real punishment, it would end up being something like a one-year probation, which would mean a season without the Fiesta Bowl. 

According to NCAA bylaw 18.7.2.6: "The Football Issues Committee shall prepare licensing documents that require the management of each postseason bowl game to enter into a contractual agreement through the NCAA licensing program. This agreement stipulates that the bowl management agrees to comply with the NCAA's principles for the conduct of intercollegiate athletics, as set forth in Constitution 2 and relevant bylaws and interpretations, and with the restrictions on game negotiations in Bylaw 18.7 in consideration for receiving licensing of its postseason bowl game."

The NCAA could also decide to let the game be played and take 50% of the gate (pages 16-17 here). If the NCAA did decide to put the game on probation, then it would also be possible that the BCS would go ahead and replace the Fiesta Bowl with the Cotton Bowl, as some have speculated.

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John Junker, CEO of the Fiesta Bowl, was fired last month after the release of an independent committee investigation report detailing alleged political campaign finance law violations, lavish parties, exorbitant gifts and financial misconduct. On a side note, the same corporate organization also runs the Insight.com Bowl, so there might even be two gored oxes when all knives are put away.

Among some of the juicier details: A $1,200 tab at a local strip joint, tens of thousands in bogus bonuses paid to employees who funneled the money to political campaigns, a lavish $33,000 50th birthday party for Junker, Gold coins, cars… They were rock stars.

Fiesta’s fate will have to get sorted out in about six months, amid a flurry of activity by other bowls and conferences whose alliances could be affected by the loss of the Fiesta. The Cotton Bowl looms as a potential replacement in the BCS, but the Capital One could also make a run at the slot, setting up a potential bidding war between Orlando and Dallas.

That would make for a pretty darned interesting offseason, wouldn’t it?

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Fiesta Fiasco: BCS Forms task force, and the Bowl’s outlook is grim

Late yesterday, the Bowl Championship Series issued a statement on the firing of Fiesta Bowl CEO John Junker and the damning report alleging numerous instances of illegal behavior and excessive spending. The BCS is forming a task force, and will take the unprecedented step of having the Fiesta Bowl justify its existence in the series. Such a “show cause” process is a step on a slippery slope, especially if someone decides to investigate the Orange, Rose and Sugar Bowls and find similar (maybe even worse) transgressions.

The statement, in its entirety:

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We are deeply disappointed and troubled to learn of these findings related to the Fiesta Bowl.

Unprofessional, unethical or improper behavior is unacceptable. There is no place for such activities in higher education or in collegiate sports. It is expected that all parties contracted with the BCS will live up to the highest standards. We do not wish to be associated with entities that believe otherwise.

The fact that Fiesta Bowl officials have turned a spotlight on their bowl's activities is a sign that many individuals within the organization feel the same way. It is appropriate that the Fiesta Bowl conducted this investigation. The Fiesta Bowl volunteers and many others in the Phoenix area have worked hard through the years to build a tradition and provide lifetime memories for thousands of student-athletes.

Nevertheless, the BCS takes this matter seriously and will consider whether the Fiesta Bowl should remain a BCS bowl game or other appropriate sanctions. To make that determination, we are taking these actions:

1. We have appointed a task force to evaluate the bowl's findings and its recommendations.

2. We have asked the bowl to demonstrate why it should remain a BCS bowl game. The task force will evaluate the bowl's response, along with the full slate of reforms instituted by the bowl.

3. If the bowl remains a part of the BCS, its handling of this matter will be closely monitored going forward.

It is imperative that Fiesta Bowl officials take all necessary steps to fully address and correct the problems they have reported. The task force will begin its deliberations immediately.

The members of the task force are Chairman Graham Spanier, President, Penn State University; John Peters, President, Northern Illinois University; John Marinatto, Commissioner, Big East Conference; Wright Waters, Commissioner, Sun Belt Conference; Jeremy Foley, Athletics Director, University of Florida; Bob Bowlsby, Athletics Director, Stanford University; and, Richard Giannini Athletics Director, University of Southern Mississippi.

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It’s worth noting that three of the task force members are from schools or leagues that could only reach a BCS bowl through an at-large bid. It’s in their interest to see that the Fiesta Bowl remains in the mix because that’s one more slot open to them.

But it’s also worth noting that the Fiesta folks are going to have a big mountain to climb in showing cause for their existence when the IRS is filing liens, revoking tax exempt status and having former bowl officials indicted by grand juries. There are literally bookshelves of potential state and federal violations here. Some of those could result in criminal convictions and the perpetrators sentenced to real prison time. There are also civil violations as well, with the Department of Justice filing claims in civil courts.

And all of this is gonna have to get sorted out in about six months, amid a flurry of activity by other bowls and conferences whose alliances could be affected by the loss of the Fiesta. The Cotton Bowl looms as a potential replacement, but as Dennis Dodd of CBS notes, the Cotton has a three year deal with Fox Sports and the BCS Bowls are contract bound with ESPN/ABC.  The Capital One could also make a run at the BCS, and we might even see a mini bidding war between Orlando and Dallas. That would make for a pretty darned interesting offseason, won’t it?

Exit Question: Disney is all over Orlando, and Jerry is all over Dallas. And Disney owns ABC and ESPN. Could the Capital One outmaneuver Jerry?

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Fiesta Fallout: Bowl might lose its BCS membership

Updated to add the link to the Arizona Central website.

John Junker, CEO of the Tostitos Fiesta Bowl, was fired Tuesday after the release of an independent committee investigation report of alleged political campaign finance law violations, lavish parties, exorbitant gifts and financial misconduct.

Among some of the juicier details: A $1,200 tab at a local strip joint, tens of thousands in bogus bonuses paid to employees who funneled the money to political campaigns, a lavish 50th birthday party for Junker, Gold coins, cars… These people were living a lifestyle that would make Charlie Sheen proud.

The fallout could be very serious. Some of these activities and violations run afoul of a whole bookcase full of federal and state civil and criminal statutes. People could be on the hook for millions in fines, penalties and restitution and some of them might even be facing jail time.

But for college football fans, the most serious fallout could be the Fiesta Bowl losing its membership in the elite Bowl Championship Series. There are currently four bowls in the BCS: Fiesta, Orange, Sugar and Rose. The BCS National Championship game is rotated among the four bowls each year and the Fiesta hosted Auburn and Oregon last January. Could the BCS drop the Fiesta, leaving only three?

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Bill Hancock, commissioner of the Bowl Championship Series, said the Fiesta Bowl could be removed from the elite group that hosts a national championship game every four years.

"The BCS group takes this matter very seriously and will consider whether they keep a BCS bowl game, and we will consider other appropriate sanctions," Hancock told The Arizona Republic. "If the bowl does remain a BCS bowl its handling of thing will be closely monitored going forward."

In December 2009, The Arizona Republic reported on political contributions by Fiesta Bowl employees who said they were reimbursed by the organization, a potential legal violation as well as a violation of the organization's tax-exempt status. The article also described bowl lobbying efforts and spending practices, both of which could breach federal rules for nonprofits.

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It’s serious business, because the BCS is BIG business. The Fiesta Bowl has an estimated $200 to $250 million impact on Arizona. Tens of thousands of the most ardent fans on the planet visit the state and spend big bucks on lodging, food and entertainment. They’d still come if the BCS drops the Fiesta, but the Fiesta would then be stuck competing with bowls like Capital One and Outback for the teams not chosen to play in the BCS bowls.

With the NFL owners and players locked in a labor dispute that is more and more likely to bust up the 2011-12 season, college football will be a major relief outlet, so the upcoming season—and the bowl allegiances and matchups—are no doubt going to be affected by how the BCS resolves this matter. It’s going to make for a high-drama spectacle during the offseason.

What’s scarier than the prospect of no NFL football and an uncertain bowl season alignment?  Well, this is exactly the kind of stuff that Congress likes to wade into. Tax laws have probably been broken. Campaign finance laws probably have, too. There are literally billions in revenues at stake here and what appears to be an increasingly corrupt cartel lavishing it all on themselves. Congress will scarcely be able to control themselves and the pessimist in me says that they won’t.

Exit Question: Who do you think is smiling over the possibility of the BCS committee dropping the Fiesta?

 

 

 

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