Tag:Fiesta Bowl Report
Posted on: March 30, 2011 7:58 pm
Edited on: March 30, 2011 8:03 pm
 

PAC: Other BCS bowls guilty of irregular spending

Posted by Adam Jacobi

On the heels of the nightmare investigative report released by the Fiesta Bowl yesterday, there's been a great deal of consideration as to whether the Fiesta Bowl should retain its BCS status, or whether the controversy surrounding the bowl is too much for the BCS to deal with.

The BCS has established a task force on the issue and has tasked the Fiesta Bowl with proving that it deserves its BCS status, which certainly seems appropriate, but now the question is whether the rest of the BCS bowls are clean, or if the abuses are more systemic. Thus, the BCS finds itself in the difficult position of deciding whether or not to subject the other BCS bowls to heightened, public scrutiny. If the other bowls can survive an investigation, it makes the BCS look better, but if they can't we may have a house of cards situation, and one of the BCS's main priorities has always been self-preservation.

Unfortunately for the BCS, the Playoff PAC has no such compunction about whether to publicly scrutinize the BCS bowls, and recently released this statement about curious spending practices at those institutions. There's no allegations of campaign finance abuse, but if that's the best thing you can say about the bowls' case, they're not in a good spot. The release is printed in its entirety below.

The BCS's Fiesta Bowl fired its long-time CEO yesterday after an internal investigation revealed that the BCS Bowl used its charitable funds to unlawfully reimburse employees' political contributions and pay for top executives' weddings, four-day junkets to Pebble Beach, and four personal country club memberships.  The Bowl's internal inquiry was initiated to "investigate the myriad allegations raised by Playoff PAC" in the PAC's legal complaints filed with the Arizona Secretary of State and the Internal Revenue Service.

Playoff PAC co-founder Matthew Sanderson said: "In the interest of self-preservation, the BCS is now painting this Fiesta Bowl scandal as isolated misconduct. This is wrong. Public records show the BCS's Orange Bowl and Sugar Bowl are also legally and ethically troubled. Any BCS effort to expel the Fiesta Bowl would be a hypocritical act, given the documented irregularities at these other BCS Bowls. And who's to say we won't find the same type of shockingly questionable behavior when the curtain is peeled back at the BCS's Orange Bowl and Sugar Bowl?"

THE BCS'S ORANGE BOWL AND SUGAR BOWL IRREGULARITIES

Playoff PAC found the following with respect to the BCS's Orange Bowl and Sugar Bowl, which have both organized themselves as public charities to obtain federal tax benefits:

  • The Orange Bowl sponsors an annual Caribbean Cruise that the Bowl itself describes as a "complimentary getaway" for Bowl staff and college football officials that features no business meetings.
  • One out of every $10 that the Sugar Bowl takes in ends up in the hands of its top 3 executives.
  • Sugar Bowl Exec. Dir. Paul Hoolahan received $645,386 in FY 2009, a year in which the Sugar Bowl lost money despite receiving a $1.4 million government grant. Mr. Hoolahan collected $25,000 more than the Rose Bowl's top three executives combined.
  • BCS Bowls use charitable funds to fly Bowl execs and spouses first-class, pay private club dues, and foot the bill for employees' personal income taxes. The Orange Bowl, for example, spent 756,546 on travel in FY 2009 for its personnel.
  • The Orange Bowl spent $331,938 on "parties" and "summer splash" in FY 2004, $42,281 on "golf" in FY 2004 and FY 2006, $535,764 on "gifts" in FY 2006, and $472,627 on "gifts" in FY 2008.
  • The Sugar Bowl benefited its insiders by paying six-figure sums for Bowl meetings and an average of $432,723 for "Football Committee" expenses the past three years.
  • The Sugar Bowl spent $201,226 on "gifts and bonuses" and $330,244 on "decorations" in FY 2008.   

Aside from these expenses, both BCS Bowls repeatedly describe expenses with vague verbiage. Given the Fiesta Bowl's revelations yesterday about questionable expenses that were once tagged with similarly indistinct labels, both BCS Bowls should fully account for these items.

  • The Sugar Bowl spent $710,406 in FYE 2007 and FYE 2008 on a mysteriously vague category called "special appropriations."
  • The Orange Bowl spends over $100,000 per year on "postage and shipping" (ten times the amount that other BCS Bowls spend annually).
  • The Orange Bowl spent $1,189,005 on unspecified "entertainment" and "catering" in FY 2009, $1,017,322 on undifferentiated "event food" and "entertainment" in FY 2008, and $75,896 on "recruitment" in FY 2008. 

QUESTION OF THE WEEK: WHICH BCS "TASK FORCE" MEMBERS ATTENDED FREE BOWL JUNKETS?

After the Fiesta Bowl scandal, the BCS trumpted a new task force to investigate the Bowl's findings. Records obtained by Playoff PAC show that at least one task force member (So. Mississippi's Richard Rianni) received a "complimentary getaway" in the Caribbean from the BCS's Orange Bowl last year--the same type of trip that will be the subject of any Fiesta Bowl investigation.

  • Will Mr. Rianni recuse himself from the BCS task force's deliberations?
  • Which other BCS task force members have accepted free trips from BCS Bowls, such as the Fiesta Bowl's annual "Fiesta Frolic"?

QUOTES OF THE WEEK: "FULLY COMPLIANT"

  •  "I'm disappointed because I just think it's a waste of state resources and our time as well." -- Fiesta Bowl Chairman Duane Woods, commenting in July 2010 on news that the state Attorney General would investigate the Bowl based on Playoff PAC's legal complaint. 
  • "The Fiesta Bowl is confident that it has always fully complied with tax laws and rules in its operations and activities." -- Fiesta Bowl statement in September 2010, reacting to Playoff PAC's filing of a tax-law complaint with the IRS.
Posted on: March 29, 2011 5:08 pm
Edited on: March 29, 2011 5:56 pm
 

Bill Hancock: Fiesta Bowl could lose BCS status

Posted by Adam Jacobi

In the wake of the Fiesta Bowl's investigative report released today -- and its immediate firing of CEO John Junker thereafter -- there's bound to be mountains of scrutiny on the Fiesta Bowl going forward. Today, BCS chairman Bill Hancock announced that the BCS would consider stripping the Fiesta Bowl of its BCS status.

"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 [sic] will be closely monitored going forward."

There's no timetable for these sanctions, nor any indication that the BCS is actively pursuing that level of punishment as yet, but the fact that it's even on the table should be terrifying for Fiesta Bowl officials. This isn't an idle threat, either; George Schroeder of the Register-Guard is reporting that the BCS will establish a task force and is asking the Fiesta Bowl to demonstrate why it should remain a BCS bowl .

The obvious beneficiary of this uncertainty is the Cotton Bowl, which is currently located in Jerry Jones ' otherworldly Cowboys Stadium and has been looking to re-establish its former glory. A BCS bid would be enough to make that happen. The only major barrier to that bid, if the Fiesta Bowl does indeed have its bid stripped, is television; the Cotton Bowl is currently televised by Fox, while the BCS has a contract with ESPN . That can likely be negotiated away, though.

There's also the issue of what would happen to the Cotton Bowl Classic in its current state -- as in the January 7 game pitting the Big 12 No. 2 and the SEC's No. 3, No. 4 or or No. 5 against each other -- but that's about 12 steps down the line, and we're still waiting for step two.


Posted on: March 29, 2011 3:55 pm
Edited on: March 29, 2011 3:58 pm
 

Fiesta Bowl report details widespread malfeasance

Posted by Adam Jacobi

Back in December 2009, the Arizona Republic dropped a bombshell about the Fiesta Bowl: that employees were allegedly routinely repaid for making donations to bowl-friendly politicians, skirting campaign finance laws. CEO John Junker denied any wrongdoing, and a brief investigation last year corroborated Junker's story.

Today, however, a new, independent investigative report was released that not only confirms the Arizona Republic's report, but paints an even starker picture: that Fiesta Bowl employees -- from Junker on down -- were also treating the bowl like some sort of personal piggy bank, racking up exorbitant expenses for parties and favors to politicians.

The 276-page report can be found here at the Fiesta Bowl's website, and the amount of inappropriate behavior uncovered by the investigation is staggering. The most serious charge is that 12 different employees told investigators that they were made part of a contribution scheme that funneled at least $46,500 to different politicians over the years, and many also said they were pressured into lying about or otherwise covering up the scheme.

Among the other misdeeds found by the investigators are a $33,000 birthday party for Junker, paid for by the bowl, and a $1,200 strip club tab. Moreover, the bowl would pay employees' entire credit card bills every month, then leave it up to employees to reimburse the bowl for whatever on the bill had been a personal expense, a practice ripe for abuse. Junker, in particular, would frequently omit receipts and merely write down what certain charges were -- one anecdote in the report alleges that Junker simply wrote down that a $200 charge was for a "taxi" and let the bowl foot the bill. 

“We are extremely disappointed and angered by the findings of the Special Committee’s investigation. While the Special Committee Final Report speaks for itself, I must say that the actions undertaken and orchestrated by John Junker and others are shocking and completely unacceptable,” said Duane Woods, Chairman of the Fiesta Bowl Board of Directors. “Their actions, unfortunately, have tainted the stellar reputation that the Fiesta Bowl has worked so hard to maintain for more than 40 years.

Junker has been terminated with cause by the Fiesta Bowl, and according to the New York Times, it's not out of the realm of possibility that he might face criminal charges, though it doesn't specify which aspects of the report could be criminal in nature. The firing shouldn't be terribly surprising to Junker, who was placed on administrative leave by the Fiesta Bowl board of directors six weeks ago after refusing to comply with the investigation.

The Fiesta Bowl's BCS status going forward isn't addressed in this report, but its tax-exempt status certainly is; the report makes note of two $100,000, tax-free, interest-free loans to two bowl executives that were later paid off with bonus money, and some uncertainty over whether those loans will threaten the Fiesta Bowl's status as a charity. 

 
 
 
 
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