Black market blues

The more I read about the FBI investigation of college basketball, the less convincing it seems.  And I wasn’t very convinced when the news first dropped.

First of all, the heart of the matter is this:  the feds are attempting to criminalize NCAA rules violations.

The charges at the core of these cases are based on an unusual legal theory that casts universities — who stood to benefit from recruits playing for wildly profitable basketball teams — as victims of fraud. What prosecutors call bribes, legal experts note, would be considered signing bonuses and referral fees in other industries. The payments are illicit only because the NCAA prohibits amateur athletes from making money from their talents and bars coaches from facilitating, and profiting from, meetings between agents and athletes.

“If you take away the NCAA rules, there’s no criminal case here,” said Randall Eliason, a former federal prosecutor and law professor at George Washington University. “There are some legitimate questions about whether this was a wise use of resources.”

There are more questions than that, it seems to me.  But that’s a good place to start.

Perhaps a good place to finish is by asking who’s been hurt.

The prosecution’s theory of the case has raised eyebrows in legal circles. Gatto, Code and Dawkins defrauded Louisville and Miami, prosecutors argue, by conspiring to pay families of top recruits to ensure they attended the schools, despite knowing this would break NCAA rules. Their scheme “created a risk of tangible economic harm,” the indictment states, because if these payments came to light, the NCAA could have penalized Louisville and Miami, potentially depriving the schools of revenue disbursements from the lucrative men’s basketball tournament.

Perhaps the most notable criticism of this theory has come from Eliason, former assistant U.S. attorney in D.C. who specialized in white collar crime and ran his district’s public corruption unit for two years.

The typical fraud case, Eliason explained in a phone interview, includes a few hallmarks: an intent to harm the victim, deception and a benefit at the victim’s expense.

“Those are all absent here. These guys didn’t want to harm the universities; they wanted to help them . . . and according to the prosecutors, they were working with top representatives of these universities’ basketball programs,” Eliason said. “How can you say the university was deceived?”

This is like the worm eating itself.

According to Haney, the lawyer for Dawkins, this theory is particularly dubious with regards to Louisville, which just became the first school in the history of the NCAA to be stripped of a men’s basketball title, over an earlier scandal in which a basketball assistant hired prostitutes to entertain teenage recruits.

“They were documented to be entertaining recruits with strippers and prostitutes, and now this same school has somehow been victimized by my client?” Haney said. “They got what they wanted: a five-star recruit. . . . They’ve made millions of dollars off of five-star recruits, and they’ve cheated to get them.”

It seems logically inconsistent to punish a criminal victim, but that’s just what the NCAA did with Louisville.  Now it’s the federal criminal system’s turn to have a crack.

The four assistant coaches arrested, accused of taking bribes to steer recruits to Dawkins, a business manager and specialty suitmaker, are scheduled for separate trials in the early 2019. Those cases involve a longer list of criminal counts — including conspiracy to commit bribery and solicitation of bribes — but NCAA rules again are central to the cases. The victims of these bribery schemes, the indictments state, are not the athletes these coaches agreed to influence but the schools, under the same legal theory that the coaches’ actions exposed Auburn, Oklahoma State, Arizona and Southern California to potential NCAA penalties.

“The criminality of all of these cases rest upon these NCAA rules,” Eliason said. “Maybe the NCAA needs to clean house . . . but should it really be the subject of this massive federal criminal investigation, when nobody was harmed?”

This is nuts.  Especially when you consider the bottom line reason this stuff goes on.

These figures may seem exorbitant for the services of a teenage basketball player, but according to one economist, they’re likely bargains. For his 2016 paper, “Paying NCAA Athletes,” David Berri, a professor at Southern Utah University, analyzed the finances of the 2014-15 Duke team that won the national championship and speculated about how much money the players would have earned if, like in the NBA, they shared about 50 percent of the team’s revenue. That Duke team generated $33.7 million, according to data the school filed with the Department of Education. If Duke had been forced to pay its players half of that, the average player would have made $1.4 million, Berri calculated.

“And that’s just average. The top players in college basketball are worth well over $2 million or $3 million per year,” Berri said. “If you’re paying $100,000 to get one of these players on campus, that’s a good deal.”

Creating a false economy and then watching things spiral out of control is peak NCAA.  Yeah, I’m sure they’ll do a great job cleaning house.

I’m looking forward to the coming bang-up job to clean up college football, too.

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16 Comments

Filed under Crime and Punishment, The NCAA

16 responses to “Black market blues

  1. Derek

    It’s not that much different that your standard “honest services fraud.”

    Corrupt state actor uses private citizens for gain. Government theorizes that the public deserves and expects state actor to play within the rules.

    For example, say the CMR is a scum bag and instead of 2 shoe companies there are dozens. CMR let’s it be known he’s looking for a new shoe contract for the team, he just wants to benefit himself along he way. Nike buys him trips to Europe, nice dinners, beach condos, sees to it that his house is remodeled and yard re-done, etc, etc…

    CMR picks Nike. Nike sells the shoes at cost to UGA is not harmed a dime. Nike makes no attempt to recoup its influence campaign costs.

    That sort of thing sends politicians and the Nike rep in my example to prison in federal court all the time.

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  2. If these payments, favors, etc. aren’t reported for tax purposes, shouldn’t the IRS go after the recipients for tax evasion?

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  3. Russ

    I don’t really care about this as long as Auburn somehow gets screwed.

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    • Mayor

      What makes you think Auburn is going to get screwed? The Barners certainly came out smelling like a rose by hiring Bruce Pearl didn’t they? We all pointed at Auburn and called the Barn names for doing hiring Pearl while they all laughed at us. And now Auburn won the SEC and UGA has once again fired its BB HC and the process repeats itself over, and over, and over……But-hey!! That’s the Georgia Way!

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    • I have a similar opinion of the special counsel investigation.

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  4. rchris

    You’re “asking who’s been hurt.” I would say most obviously all college programs that followed NCAA rules. If everyone followed the rules, perhaps Mark Fox would still have a job today.

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    • I must have missed where he was mentioned in the indictment.

      Seriously, take the time to read before you try to rebut.

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      • rchris

        I mentioned Fox because he is the topic of the day. If he were mentioned in the indictment, it would refute my implied point that he was at a competitive disadvantage because he ran a clean program. I apologize for not being more clear.

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        • You missed my point.

          The prosecution’s theory of the case has raised eyebrows in legal circles. Gatto, Code and Dawkins defrauded Louisville and Miami, prosecutors argue, by conspiring to pay families of top recruits to ensure they attended the schools, despite knowing this would break NCAA rules. Their scheme “created a risk of tangible economic harm,” the indictment states, because if these payments came to light, the NCAA could have penalized Louisville and Miami, potentially depriving the schools of revenue disbursements from the lucrative men’s basketball tournament.

          Those are your victims, according to the feds.

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  5. Snoop Dawgy Dawg

    if they paid the players more, how would they be able to afford the coaches salaries, locker rooms, putt putt golf courses, DJ sound mixing stations, lazy rivers, book stipends, and all of the other truly necessary items buried within the 170 Million dollar annual budget of the UGAAD?

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