Report: Billy Hunter sought $7 million-plus NBPA investment to bank with ties to son
According to an exhaustive Yahoo! report, Billy Hunter sought a $7 to $9 million investment from the union into Interstate Net Bank of Cherry Hill of New Jersey, a financial institution that "federal and state banking regulators had slapped with debilitating cease-and-desist orders.
Another ball has dropped in the brewing NBA Players Union battle. To cut to the chase: According to an exhaustive Yahoo! report, Billy Hunter sought a $7 to $9 million investment from the union into Interstate Net Bank of Cherry Hill of New Jersey, a financial institution that "federal and state banking regulators had slapped with debilitating cease-and-desist orders," according to the report.
The story starts with Pat Garrity, the former treasurer of the NBPA, and his curiousity into the union's financial dealings.
On the weekend of the 2009 All-Star Game in Phoenix, Pat Garrity, the treasurer of the National Basketball Players Association, walked into a conference room inside the Sheraton Phoenix determined to make one final stand in his decade of service to the union. Garrity had warned peers and NBPA executive director Billy Hunter prior to the '09 executive committee meeting that he planned to challenge Hunter on business practices, and several players purposely steered clear of the confrontational scene.Hunter's dealings with his family have already been called into question with a Bloomberg report detailing almost $5 million the union has paid to Hunter's family for services. Hunter reponded to the New York Times to those charges of nepotism, dismissing them entirely.
In the aftermath of the U.S. banking crisis in 2008, Garrity had grown increasingly suspicious of an investment bank project that Hunter had been pitching to the executive committee and player representatives. For Garrity and some peers in the NBPA, the investment made no sense.
But as Yahoo! has uncovered, this thing gets pretty deep. It's not just about involving Hunter's children and family in the dealings of the union. It's about a conflict of interest.
“Let me say this to you: My children are highly credentialed,” Hunter said. “In many instances, they’re being paid at or below the market….
“There’s nothing illegal,” Hunter said, “and you’re not going to find anything illegal, you or anybody else, if that’s what you’re looking for. I’m not afraid of that.”
You might be asking, "So what?" Here's the issues that Derek Fisher is trying to expose now, and that Garrity attempted to before him. It comes down to whether Hunter delayed the idea of the union decertifying during the lockout, while his family raked in cash from lawyer and consulting payment, you could extrapolate that to the idea -- the idea -- that Hunter may have delayed or at least hardballed against the decision to come to a new collective bargaining agreement with the NBA. All just to help his family earn some steady paychecks during 2011. Obviously extremely serious charges.
As NBA players lost $400 million in salary during last summer's lockout – and $3 billion over the course of the new 10-year collective bargaining agreement – Billy Hunter, his family and the entities that employed them made approximately $3,430,953 from July 1, 2010, to June 30, 2011, according to labor filings.
"The real issue here is whether these potential conflicts were disclosed and the failure of someone who has a fiduciary duty [to union members] to make that disclosure presents a compelling question," Ronald Shechtman, managing partner and chair of Pryor Cashman's Labor and Employment Group, told Yahoo! Sports. "Not only is there a duty to disclose, there is a duty to explain the rationale for routing the business that way so that the fiduciaries [players] can make a judgment that the decision is based on good reason or good cause other than the fact that someone is a relation."
These were central themes to Garrity's objections in February 2009 in Phoenix: Due process for hiring, and the appearance of Hunter's family ties impacting union business and finances. Garrity wanted answers about Hunter's motivation for investing into a small New Jersey bank that the Philadelphia Business Journal reported, "was a toxic mix of brokered deposits, construction and land development loans and questionable management."
Pat Garrity made this connection on his own, well before the 2011 lockout, simply by going online, as the report says, to Interstate Net Bank's website and finding bio information on Hunter's son being on the bank's board. As mentioned, Garrity raised these questions, was immediately ignored and eventually left the union without his questions answered.
Fisher called for a similar audit, which is what escalated this showdown between him and Hunter. Hunter immediately called for Fisher's resignation, and pushed the union's executive committee to vote 8-0 to ask for it. Fisher though, released a statement saying he would not back down.
"The allegations that are now being directed at me are defamatory," Fisher said in a statement on Friday. "But I urge our members to order an independent review beginning immediately and that will be proven along with finding out definitively if there are any issues with the NBPA's business practices and finances."
The report states that before Fisher has asked for this review, Garrity was the last to do so and was "shouted down" while Fisher and others did nothing to back him on it. "Fisher kept saying it wasn't the time or place for such a discussion," the report says.
Guess the there's a time and place now for it.
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