This piece, on what I see more and more as the utter absurdity of the FBI attempting to criminalize the NCAA rule book, is so damned good. Here’s the lengthy prelude:
Last September, the U.S. Department of Justice announced that federal charges had been brought against major figures in college basketball. A group of 10 assistant coaches, agents and sneaker executives were indicted with conspiracy to commit bribery, solicitation of bribes, mail fraud and wire fraud. The defendants are accused of paying—“bribing”—some of the nation’s most heralded high school basketball players, along with their families.
The purported bribes had a simple objective: persuade star recruits to attend a particular college and embrace the sneaker company sponsoring that college. A year or two later, those players would turn professional and pursue the National Basketball Association (NBA). At that time, the players would hire agents who had previously partaken in the conspiracy to bribe them. Through those agents, the players would sign multi-million dollar contracts with NBA teams and also lucrative endorsement deals with their alma mater’s sneaker company.
It was a multi-year, multi-step transaction in which everyone seemingly gained: the player and his family, who might be economically disadvantaged, received five or six-figure payments; the college matriculated a star player who would help the basketball program win games and, in turn, generate broadcasting, merchandise and ticket revenue; the agent earned valuable commissions as well as professional recognition; and the shoe company secured the endorsement of a young and marketable phenom who would help the company sell products.
NCAA Amateurism Rules as the Foundation for Criminal Charges
There’s a reason why many regard this sequence of mutually beneficial events as unseemly or even criminal. It’s the same reason why the sinister-sounding “bribe,” rather than the evenhanded “trade” or “exchange,” is the noun most typically used to describe payments to high school recruits. That reason: the National Collegiate Athletic Association, a.k.a. the NCAA.
The NCAA is a voluntary organization that features nearly 1,300 members, most of whom are colleges and college athletic conferences. Founded in the early 20th century to make college sports safer, the NCAA now claims to aid college athletes in balancing their “academic, social and athletics” experiences. To that end, the NCAA has promulgated numerous rules that fall under the umbrella of “amateurism.”
In its broadest conception, amateurism refers to the principle that college athletes ought to be clearly distinguished from professional athletes. College athletes are, after all, students, whose studies presumably take priority over sports. If sports agents and financial temptations distract students, they might lose their academic focus. They might also become less connected to their classmates and squander the traditional college experience.
There’s the romance and the foundation for the romance. Now comes the economic consequence.
With building frustration over the inability of star college athletes to fully reap the value of their labor and identity, it is not surprising that a “black market” for paying recruits has materialized. But in reality, such payments are hardly a revelation—they have, much to the NCAA’s dismay, been taking place for decades. The NCAA simply has limited resources to police interactions with recruits.
Human nature, for the win. The heart wants what the heart wants, and as long as there are sources of money and kids with valuable services to acquire, there’s only so much the NCAA can do about it.
Enter the FBI. Enter the absurdity.
The government’s theory of crime stresses the harm caused when colleges enroll bribed athletes on scholarships. The government claims a stake in this harm given that it funds colleges through grants, loans, financial aid guarantees and other instruments. Colleges that enroll ineligible scholarship athletes could have used those same scholarships to recruit eligible athletes. Those colleges also become at risk of serious NCAA penalties. In that sense, the government is something of a partner to colleges in ensuring that college athletes play by the rules. Further, when bribes take place across state lines and use the Postal Service and wires, fraud charges are possible.
Attorneys for the indicted defendants dismiss this theory as implausible and disingenuous. First, they stress the absence of supporting case law—when has it ever been a crime to offer financial incentives to a high school student to attend a college? They also contend the Justice Department is attempting to criminalize NCAA amateurism rules. Further, the alleged victims—the colleges—may actually benefit: a star recruit joins a school and helps that school win games and generate assorted kinds of institutional value, be it revenue, increased student applications, enhanced alumni relations and greater alumni giving. To that end, as my late and esteemed colleague Cheryl Hanna once wrote in the Harvard Law Review, “the purpose of criminal law is to serve the greater public good.” A sensible read of the situation suggests that the Justice Department has its work cut out.
The supposed “wrongness” of payments to recruits should also be questioned. As acknowledged above, amateurism may provide a good deal for many college students. But for the superstars who generate considerable revenue and who attend college mainly to hone their athletic skills, the deal doesn’t appear so good. This is particularly apparent when viewed in conjunction with eligibility requirements for the NBA and the National Football League (NFL). The NBA and NFL require that players wait one and three years, respectively, after high school before they are eligible. While young basketball stars can bypass college to sign contracts in other (albeit inferior) professional leagues, football players are essentially stuck. There is no substitute for Division I college football for college-age players.
If these athletes’ special talent were instead in music or acting, there would be no “age restriction” to turning pro. If they excelled at different sports, like hockey, golf, tennis, or baseball, they could turn pro right out of high school, if not sooner. The reality is they thrived in the two sports where the college game is a de facto minor league for the pro leagues.
The only reason this is a problem is because the schools, through their voluntary association known to us as the NCAA, have created the structure that has allowed it to fester. The FBI’s presence doesn’t change that.
So, yes, that’s absurd, but you know what may be even more absurd? Expecting the same actors to reform the structure in a way that doesn’t benefit them. You want an example? Okay, I’ve got one for you.
The Big East knows it doesn’t have the leverage to force the NBA to do something straight-up about its one-and-done rule, so it’s come up with a suggestion for a power play over the group with whom it does have leverage.
The Big East’s plan calls for the elimination of the NBA’s one-and-done rule, which prohibits its teams from drafting players until they are at least 19 or a year removed from high school.
Two-or-none would be an NCAA policy requiring basketball players who decide to go to college to commit for at least two seasons. Meanwhile, high school players who declare for the NBA draft would forfeit future college eligibility.
Tough luck, then, if you’re a high-schooler who submits his name to the NBA and doesn’t get drafted. There’s no logic to that, other than to force kids who, remember, can’t consult with advisers and retain college eligibility, to stay in school for two years.
Also, keep in mind there’s no legal way the schools can enforce such an arrangement on their own. A player leaves after his first year of school for the NBA and what’s the school gonna do about that? In other words, the only way this proposal works is for the NBA to agree to abide by it as well. Thus, the Big East’s reform amounts to nothing more than an agreement between the schools and the NBA to collude actively to prevent student-athletes from being paid for their skills for a longer period than is already the case now. If you can explain to me how that benefits the student-athlete or how it curtails the black market the schools have created, I’d love to hear it.
Oh, and don’t miss that the Big East also thinks it would be a swell idea for the NCAA to regulate agents. Oy. It’s hard to tell whether these people are bigger idiots or assholes. One thing’s for sure — they’ll never miss an opportunity to look out for themselves. Remember that, FBI.
44 responses to “Crime may not pay, but amateurism does.”
Money changed hands. The IRS has a hand in the FBI investigation. It aint all about the NCAA violations.
Money changing hands isn’t a criminal act, per se.
If there weren’t NCAA rules in play, what exactly would have been the criminal activity here?
No it is not, Why would the IRS care? Were the taxes paid? That would be criminal activity, according to the IRS. All I’m saying is, there is more to this than being reported.
Why charge an assistant coach or an agent with a crime because a player didn’t pay his taxes? If you don’t pay your taxes, should your boss be arrested and charged?
There may be some tax laws broken but I don’t see any criminal laws being broken by the agents or coaches or shoe companies. I’ve been asking since day one of this story what the “crime” was the FBI was investigating and no one can seem to come up with an answer.
18 USC 1346 is your answer. See below.
Taxes would be due from the giver of the funds, not the recipient. This isn’t income.
Maybe both parties–giver and recipient– have conspired to hide the payments
So, if you give me money for some action on my part, YOU are responsible for paying the taxes? How is this not income?
What if you gave the money to a recruit’s parents? What if the recruit doesn’t sign with the school?
I guess if I tried to write the payment off of my taxes I would somehow owe taxes if I gave the money to the parents. If I don’t claim it as an expense, do I have any obligation tax wise? If I were to simply hand you $50,000 because I like you and did not try and claim it as any sort of expense or write off, would I have any tax obligation? I’m asking because I really don’t know the legality of that. It seems to me if I gave you after tax dollars as a gift, the onus is on you to declare the income if the amount is over $14,000.
I would imagine the money wouldn’t be paid to anyone until the recruit signed with the school.
That’s not how it works. The amount over $14k is still a gift.
Unless it came from you and your spouse, at which it becomes $28K per individual, say over $100K per 4 person family. Of course, yiou cannot expect services in return.
FBI/absurdity has become redundant this century, imo. Once revered agency has become a joke.
It may seem facially silly, unique or absurd, but it is the government we’re talking about.
Boiled down this is pretty standard “honest services fraud” involving a public employee. If it were a private university involved, they may get a pass. Public employees cannot accept or participate in kickback or bribery schemes because they are said to owe the public their “honest services.” No evidence of financial harm is necessary. In fact, even if the state beniffitted financially from the scheme, that’s no defense.
If a shoe company and a kid did this entirely seperate and without the knowledge ot participation of a public employee, I would agree that they don’t have much of a case. The lynchpin is going to be the public employee. If a head or assistant coach is involved, they are all at risk.
Here are, in part, the 11th Circuit Pattern Instructions on honest services fraud:
“It’s a Federal crime to use [the United States mail] [a private or commercial interstate carrier] to carry out a scheme to fraudulently deprive someone else of a right to honest services.
The Defendant can be found guilty of this crime only if all the following facts are proved beyond a reasonable doubt:
(1) the Defendant knowingly devised or participated in a scheme to fraudulently deprive the public of the right to honest services of the Defendant through bribery or kickbacks;
(2) the Defendant did so with an intent to defraud the public of the right to the Defendant’s honest services; and
(4) the Defendant used [the United States Postal Service by mailing or by causing to be mailed] [a private or commercial interstate carrier by depositing or causing to be deposited with the carrier or transmitting or causing to be transmitted] some matter, communication or item to carry out the scheme to defraud.
A “scheme” means any plan or course of action intended to deceive or cheat someone.
To “deprive someone else of the right of honest services” is to violate a duty to provide honest services to the public by participating in a bribery or kickback scheme.
Public officials and public employees have a duty to the public to provide honest services. If an [official] [employee] does something or makes a decision that serves the [official’s] [employee’s] personal interests by taking or soliciting a bribe or kickback, the official or employee defrauds the public of honest services, even if the public agency does not suffer any monetary loss.
Bribery and kickbacks involve the exchange of a thing or things of value for an official act by a public official. Bribery and kickbacks also include solicitations of things of value in exchange for an official act, even if the thing of value is not accepted or the official act is not performed. That is, bribery and kickbacks include the public [official’s] [employee’s] solicitation or agreement to accept something of value, whether tangible or intangible, in exchange for an official act, whether or not the payor actually provides the thing of value, and whether or not the public official or employee ultimately performs the requested official act or intends to do so.”
So if you’ve got a phone or a computer involved and a public university’s coach and the coach is in it for the player, they have problems.
This all still begs the question.
I’m just addressing whether or not a player, a shoe company and a coach at a public university can get together for their mutual benefit and avoid the clink. Under current law, they can’t. Unless you can convince me that extending a scholly isn’t an “official act.”
As to any other issues or questions, of which there are numerous, I’ve made it clear where I stand on the whole thing. Burn it down and play college sports with college students. Let the pros fend for themselves.
The problem I have with your analysis — aside from the fact that private schools would appear to have a hole big enough to drive a Mack semi through — is that you have to strain a bit with the honest services. I thought this was a pretty good rebuttal:
That’s why I said the other day it’s a strain to argue that schools like Louisville are the victims here. The only way you can argue that, which is what the feds are doing, is to say that NCAA rules have put these schools in jeopardy because of the player payment scheme. And whose fault is that? The fucking schools themselves.
I get it. I do. Seen it. Been there. It says it right there in the instructions. The public need not never actually have been harmed and no harm need be contemplated.
A private institution would be treated differently but that’s because their employees don’t owe the public anything including their “honest services.”
If ACME, Inc. says to Georgia Governor, i’d really like to get a state contract. I can beat the price of your current vendor. And the governor says, well of course you can son, 50% of that’s coming to me!
ACME says, what do we gotta do to earn your business? We’re gonna save the taxpayers tons of money!
Governor says, well I got this project going on down at my St. Simons estate. You get with Bob the contractor and makes sure everything goes the way it should “wink wink.”
ACME takes care of Bob, the Governor is estatic and gives the contract to ACME saving Georgia taxpayers millions!
They’re both going to jail if anyone finds out.
I personally have thought that the private business people should get a pass on these things but the courts and the gubmit don’t agree.
To the Senator’s point (and the rebuttal), many more HS students–non-athletic students as well as athletes– are offered scholarships than the universities could ever actually fulfill. This is standard practice because they know they won’t get everyone, yet they have to assign the money they have. If ever there was a cohort where everyone offered said “yes,” the u. would have an issue. Would the scholarship staff go to jail for that? I’m genuinely curious.
There’s nothing secret or untoward about the fact that football has 85 total schollies and can give out no more than 25 a year.
What you wouldn’t know is whether adidas paid to make sure one of their guys was one of them. Which by itself wouldnt be criminal IF the coaches had no idea about it.
Yeah, but what about offering 300 scholarships when only 40 can be honored (considering returning ones)? That’s not a misrepresentation perpetrated by the university itself?
I guess the extension of your argument would be that any coach in any sport that was determined to be guilty of any NCAA violations should also be prosecuted in criminal court? I’m not attacking you, I’m still trying to figure out exactly what “crime” the FBI is investigating. It seems to me the FBI has become the investigative arm of the NCAA in this case and nothing more. I know if I were on a jury I’d never vote to convict anyone involved in any of this, because I don’t see any crime and I don’t think the federal govt. should send people to prison for violating NCAA rules.
The crime is adidas, pitino and player getting together, using a phone, a computer or the mail, and saying: “you go to Louisville and you get this money. Everyone wins.”
Why? Because public employees are not allowed to participate in hidden secret schemes for value of any type, even if the school wins. If you need someone to be harmed, UK basketball fans would complain right?
If Nike paid guys to go to Tech and CPJ was fully aware and participated would you really say: no harm no foul? Really?
I’m sure we’d all want there to be a foul, but that doesn’t mean there is one.
get your point but I can’t see how Duke University (and other private schools) isn’t also subject to these laws if this is what’s being prosecuted. That can’t be true, right?
It is somehow true that the CEO of Apple can do some things a Governor can’t. Imagine that.
Funny how Governor and Apple CEO are two totally different jobs, not at all in direct competition with each other, and therefore an “apples to oranges” pun you didn’t even intend. Yet, Duke and UNC recruiting the same player, and one being able to pay 100K and the other not, is certainly an apples-to-apples issue.
Being able as far as the ncaa is concerned? No they cant.
Being able to as far as the FBI is concerned? There’s a difference.
Take my analogy above about acme and the Governor. If you replace Governor with Apple CEO there’s probably not any issue criminally. The stockholders may or may not have a civil claim.
Again, that is not the feds’ argument. They charge that Louisville was harmed by this because their actions have exposed the school to NCAA sanctions.
It’s absurd, to coin a term.
If they get out of the honest services lane, I agree they may have trouble. It isn’t unlike the government’s to throw a bunch of shit at the wall and see what sticks. Judges are remarkably open to their “creativity.”
No, I’d say CPJ violated NCAA rules and the NCAA should step in and punish the program. I wouldn’t say the FBI should be involved. Under your example most of the coaches, ADs and donors at Auburn would be in federal prison now. Again, why wouldn’t every NCAA violation involving the paying of players over the years have been grounds to federally prosecute the coaches involved? This seems like a textbook case of prosecutorial overreach to me.
If you wanted to be obtuse about it, you could claim a crime occurred any time a coach was found to have contacted a recruit by phone outside a contact period. That would be a public employee using a phone to participate in a secret scheme. I don’t want to live in a country where every rules violation in any organization is a violation of criminal law. On the other hand, if the FBI has solved every other major crime and has enough time on it’s hands to start doing the NCAA’s investigative work, I guess that is a good thing.
There are lots of crimes the feds don’t prosecute. It’s called prosecutorial discretion. It’s underused in my opinion. Everytime a pot dispensary sells in Portland or Denver they are violating federal law.
I’m not arguing should. I’m merely saying they CAN.
I can’t personally fathom why AG Seesions gives a damn whether you smoke weed. But he does and he can do something about it. Or he can choose not to.
As far whether Kirby can call up Dan’s Chevrolet and ask him to deliver a free Red and Black Camaro to Zamir white and not violate federal law. No he can’t. Will the feds do anything? Probably not.
Who knows why they’ve involved themselves here?
Well, fraud is a crime, but there has to be someone who was defrauded, and therein lies the problem, as you say. The universities were defrauded? What a crock that will be.
The law says the victim is the public because they are entitled to public employee‘s “honest services.”
I guess Charley Pell, Danny Ford, Barry Switzer, Pat Dye, Terry Bowden, Gene Chizik and Pete Carroll, to name a few. aren’t sleeping too well these days. The specter of the FBI knocking on their doors has to be disconcerting. Since the NCAA already did the initial investigative work on them and uncovered evidence of them not providing “honest service”, the criminal case should be a slam dunk.
You do have a 5 year statute of limitations. The feds haven’t interested themselves in these things for whatever reason. Probably because the public doesn’t expect or want it. The typical response here shows how little popularity it would have. They are involved in electoral politics whether we want to admit it or not. Prosecuting the head coach of the University of Florida is likely not going to be high on a president’s list of priorities given the number of electoral college votes in play.
Why isn’t the FBI all over Baylor and Art Briles? I’d say his and the administration’s actions, or inaction, would be much more likely to rise to the level of criminal conduct than a shoe company paying a player to go to school “A”. I know the feds can torture almost any law into an indictment but this whole affair seems to strain credulity.
Texas has a few electoral votes too.
Name the code section and post the jury instructions for what Baylor and art did that the fbi should be investigating.
I haven’t noticed Texas being as competitive and determinative as Florida in presidential elections. Seems pretty bold red don’t it?
My point on Florida is that if the fbi were considering policing schools giving things of value to football recruits, they would have to anticipate what a shitstorm that would be for the party in charge. Nearly every us attorney is a political animal looking for his/her next gig. Pissing off an entire fan base ain’t gonna be helpful to thier ambitions.
In addition to your argument it could also be argued that, to the extent that the coaches have done this on paid time, it is a misappropriation of public funds. I’m not in love with the argument though since it would seem to be selective prosecution; public employees have been known to conduct personal business on paid time more than occasionally.
However, misappropriation of state funds is normally not a federal crime (In fact in many states it is only a misdemeanor or civil penalty). You would think that the FBI would have better things to do.
So, essentially, the FBI has done the NCAA’s investigation for them. Since the FBI has authority that the NCAA does not they can get information the NCAA cannot. The trick is defining NCAA violations as a crime. Apparently, the FBI was unaware that the NCAA didn’t actually want an investigation.
I assure you the FBI and the U.S. Attorney’s office do not care, at all, about what the NCAA thinks, wants or otherwise cares about.
Wouldn’t it be hilarious if the Big East got it’s way concerning two full years and all the recruits signed up for Jr Colleges all over the country, fielding the damnedest muscle-flexing BB teams that we have ever seen while the bigs can only field HS level teams? Now, that would be amateur to satisfy any NCAA rules.
I’m no lawyer and I sleep at home but wouldn’t any and all schools that recruited “Stud A” be harmed if “Stud A” made his decision to attend “School X” because a sneaker company with a contract with “School X” paid him or his family to attend “School X” ?
Since when are NCAA “rules” laws? Why is the FBI looking into this at all?