March 29, 2011
Anyone paying attention could hear the firing squad warming up when the Fiesta Bowl placed CEO John Junker on administrative leave back in February, so it's no surprise that the bowl officially fired Junker on Tuesday amid multiple investigations for alleged abuse of the bowl's legal nonprofit status over the last decade. One of those investigations was an internal audit led by a three-man committee, whose official findings — released Tuesday afternoon — charge Junker with a handful of offenses, including:
• An "apparent scheme" to reimburse at least $46,539 in illegal campaign contributions by Fiesta Bowl employees to various politicians, including Arizona senator and former presidential candidate John McCain.
• A "flawed" initial investigation into the campaign contributions, and an "apparent conspiracy" to conceal the reimbursement scheme from both the Fiesta Bowl Board of Directors and state officials.
• "Unauthorized and excessive compensation, non-business and inappropriate expenditures and inappropriate gifts."
That's the formal version. The New York Times is a little more straightforward on the specifics (the clubhouse leader for Corporate Quote of the Year is in bold):
Junker and other top executives often used bowl money to spend lavishly, investigators found. In 2008, the Fiesta Bowl paid the $1,200 bill at a Phoenix strip club attended by Junker; Shawn Schoeffler, the former vice president for media relations; and Aaron Brown, a Maricopa County sheriff's lieutenant who owns a company that provides security to the Fiesta Bowl.
According to the report, Junker explained to investigators: "We are in the business where big strong athletes are known to attend these types of establishments. It was important for us to visit, and we certainly conducted business."[…]
[The Fiesta Bowl] also appears to have paid $13,000 in connection with the wedding of Junker's assistant, Kelly Keogh, covering her airfare and hotel on her honeymoon to British Columbia. It also paid to fly Junker, his wife, son and at least six Fiesta Bowl employees to her wedding in Kansas City, Mo.
One of the most extreme examples was a 50th birthday celebration given by the Fiesta Bowl for Junker in Pebble Beach, Calif., in 2005. Investigators found the bowl spent more than $33,000 on the party, including airfare for Junker and other top executives, car rentals, meals and lodging. A lawyer for Junker said investigators never asked his client about the party or the flowers. Junker said others gave him the party and he believed the board of directors had approved the expense.
Read the full report here. It runs 276 pages, and you get your money's worth: Besides the obviously salacious stuff, bowl employees used the coffers — nonprofit coffers — to ring up an $8,400 diamond pendant, a $1,000 bottle of wine, multiple golf club memberships, thousands in gold coins, iPads, a retreat for a "Hispanic businesswomen's group" in Paris, France (you know, because bowl employees "should get out in the Hispanic community"), all other varieties of travel and pretty much anything else you can think of. Keep in mind, that's a limited accounting, before we get to the zero-interest loans paid back almost entirely by bonuses and the suspiciously lucrative contract with a security company the bowl seems to have initially backed with substantial loans to get the company off the ground. (And whose owner, the above-mentioned Maricopa sheriff's lieutenant — one of Junker's strip club companions — once served as personal driver and bodyguard for Junker's daughter at her high school prom. Yeah, it's a long report.)
The board claims that it is shocked — shocked! — by these findings, and emphasized in its reponse that "the actions taken by John Junker and others were effectively hidden" from board oversight. This is a key point for two reasons.
First, and most importantly, the board acknowledges that it faces an ongoing investigation by the Arizona Attorney General's office into the illegal campaign contributions, which threatens to put its nonprofit status at risk of being revoked. On that front, the board is anxious to put the buck squarely on Junker as a rogue executive acting not only without the knowledge of the board but actually working to deceive the board. According to Tuesday's press releases, "the Fiesta Bowl as an organization has not violated any laws and does not anticipate any charges to be filed against it."
Second, and almost as importantly, for the future of the Fiesta Bowl as a major bowl game, which, yes, is very much in question. Officially, the board says it's "confident that the Fiesta Bowl will continue to be a part of the BCS rotation … because we are doing the right thing and making changes to prevent this type of thing from happening in the future." That will not stop the game the Fiesta impertinently nudged aside when the "Big Four" first came together in the mid-'90s, the Cotton Bowl, which has been positioning itself for a run at BCS status for years and now has ammunition against its main rival. Plus, if there's anything they definitely know in Dallas, it's how to capitalize on a corruption scandal.
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Matt Hinton is on Twitter: Follow him @DrSaturday.