An independent investigation into the National Basketball Players Association's practices and business dealings questions whether executive director Billy Hunter should stay in his job.
The findings of the investigation, conducted by the law firm Paul, Weiss, Rifkind, Wharton & Garrison, were made public Thursday afternoon. The 500-page report was emailed to the NBA's players.
"Based on the findings of this report, the NBPA should consider whether Mr. Hunter should remain as the Union’s Executive Director and whether new and more effective controls should be enacted to govern the NBPA, its Foundation and its Executive Director, whoever that may be," the report concluded.
The U.S. Attorney's office also is continuing to gather materials and interview witnesses in the government's probe of Hunter and the NBPA, sources told Yahoo! Sports.
Hunter addressed the report in an email to the league's players Thursday.
"While I strongly disagree with some of the findings contained in the report, I am pleased it recognized that I have not engaged in criminal acts nor was I involved in misappropriation of union funds," Hunter said in the statement. "Regarding my contract – my third in a long tenure of the organization – it was ratified by the NBPA Executive Committee and signed by President Derek Fisher. I believe the contract and extensions are valid."
Among the findings detailed in the Paul-Weiss report:
• As previously reported by Yahoo! Sports, Hunter "never told the union’s executive committee or player representatives that his current employment contract, which was executed in 2010, was not properly approved under the union’s By-Laws, even though by at least November 2011 outside counsel to the Union had told Mr. Hunter that the necessary approval had not occurred and remained necessary."
• As detailed in an April report by Y! Sports, Hunter "involved family and friends in union business as employees or vendors without full disclosure and the disinterested approval of the union’s officers and directors."
• "Created an atmosphere at the NBPA that discouraged challenges to his authority, including by allowing the union’s former general counsel, Gary Hall, to stop former secretary-treasurer Pat Garrity from speaking freely about conflicts of interest to the executive committee."
The report also revealed "instances in which Mr. Hunter made decisions that reflect poor judgment, display insensitivity to conflicts of interest, call into question his stewardship of Union resources or raise serious doubts about his interest in the policies and procedures that protect the Union in the orderly conduct of its affairs." Among them were confirmation of Y! Sports' April report that Hunter attempted to invest several million dollars of union funds into a failing New Jersey bank with business ties to his son.
The law firm's inquiry concluded that Hunter failed to disclose to the union's executive committee that his son Todd was a director of the bank, "and [Hunter] spent more than $80,000 in due diligence expenses before abandoning the transaction." The report also recommended the union sever ties with Prim Capital, Todd Hunter's firm.
"The facts do show that, at times, Mr. Hunter's actions were inconsistent with his fiduciary obligations to put the interests of the union above his personal interests," the report stated. "Further, Mr. Hunter did not properly manage conflicts of interest."
Several prominent player agents reacted to the revelations on Hunter's unapproved contract and the findings of the Paul-Weiss report with a renewed effort to oust Hunter as executive director.
Paul-Weiss was retained in April by a union special committee to conduct an independent internal investigation "focusing on allegations of nepotism, conflicts of interest and the potential misuse of NBPA funds." Investigators reviewed "tens of thousands of documents, including financial records, governance documents and NBPA emails" and interviewed more than three dozen witnesses, "including NBPA employees, vendors and executive committee members."
The probe determined "that the facts do not show that Mr. Hunter engaged in criminal acts involving embezzlement or theft of union funds." Yet, because Hunter's contract was determined to have not been properly approved, the Paul-Weiss report suggests the union's players should decide whether to keep Hunter as executive director.
The report states that if the player representatives and the executive committee could decide it's possible for Hunter "to rectify the problems he has created and serve as an effective executive Director in the future despite the issues of the past." The union could then decide to seek counsel to negotiate a new contract for Hunter.
"But the union need not keep Mr. Hunter," the report stated. "If the NBPA’s player representatives and executive committee members decide for any reason that the union deserves a fresh start, they are free to do so. They may choose not to ratify or renegotiate Mr. Hunter’s employment agreement, appoint an acting executive director and authorize a search for a new executive director. Although we cannot guarantee that a court would agree, in our judgment the union has no obligation to accept Mr. Hunter’s current contract as valid or enforceable."
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