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Fiesta Bowl Spending and Donations Questioned
John Junker, right, the president of the Fiesta Bowl, with Boise State Coach Chris Petersen in 2009. Junker allegedly used the organization's money for personal expenses, including his 50th birthday celebration.
Top executives at the Fiesta Bowl, the host of one of the nation’s pre-eminent college football games, funneled campaign contributions to local politicians, flew other Arizona elected officials around the country at the bowl’s expense, racked up a $1,200 bill at a strip club, and even spent $30,000 on a birthday party for the chief executive, according to an investigative report commissioned by the bowl’s board of directors.
The most serious revelations involve nearly a dozen employees who told investigators that the chief executive and others working for the bowl encouraged them to make political contributions, then reimbursed them with phony bonus payments. Some said they then were pressured to lie about the practice.
The investigators do not make conclusions about whether bowl executives or others broke the law, but at least one expert in nonprofit organizations said the findings could lead to criminal charges. At minimum, the investigation may threaten the tax-exempt status of the bowl, which, like most other prominent organizations in college sports, is formally registered as a charity.
Some aspects of the campaign contribution scheme were reported by The Arizona Republic in 2009, prompting an initial inquiry by the board of directors as well as an investigation by Arizona’s state attorney general. Tom Horne, the attorney general, said in a statement that the report, which has been presented to his office, will assist his office in its continuing investigation.
John Junker, chief executive of the Fiesta Bowl, refused to speak with the most recent set of investigators about the campaign reimbursements, and was placed on administrative leave in February. The Fiesta Bowl announced his firing Tuesday in a press release, and said it would implement a series of reforms aimed at improving oversight and transparency. A bowl spokesman confirmed Tuesday that Natalie Wisneski, the chief operating officer, and Jay Fields, the vice president for marketing, had offered their resignations.
The report was made public Tuesday after a New York Times article about the investigation’s findings. Many of the people cited in it either would not comment or did not return messages seeking comment.
The findings are all but certain to further arm critics of college football’s bowl system, which many argue has become overly commercialized, and thus more vulnerable to corruption.
The Fiesta Bowl, the newest of the four Bowl Championship Series bowls, was founded in 1971 and has played host to seven national championship games. The four nonprofits that run the bowl took in nearly $28 million in revenues in 2009, most of it earned through ticket sales and corporate sponsorships, according to federal tax records.
The Fiesta Bowl executives did not limit their political activity to campaign contributions, according to the report. The Fiesta Bowl sometimes paid to cater political fund-raisers, including one in 2007 for Representative Jim Weiers, who was then the speaker of the Arizona House of Representatives, and one at the Fiesta Bowl Museum in 2009 for W. L. Lane, the mayor of Scottsdale, who is known as Jim. Junker apparently knew that hosting such events was forbidden because he warned his assistant against sending out invitations using a Fiesta Bowl e-mail address, the report said.
In a telephone interview, Lane said Fiesta Bowl officials offered to hold the event for him but he does not know who paid for it. If the bowl paid, he said, “it’s not something we generally would be involved in.”
The report highlighted several trips to Chicago, Boston and elsewhere that the Fiesta Bowl hosted for several Arizona politicians and their families. Anthony Aguilar, the Fiesta Bowl’s director of community and corporate relations, told investigators that the trips were meant to be educational and to show legislators the importance of college football and the Fiesta Bowl to the Arizona economy.
One of the beneficiaries of the trips was Russell Pearce, the State Senate president, a Republican who has gained a national profile over the past year for writing Arizona’s controversial immigration law. Pearce and his wife, LuAnne, traveled to Chicago in 2005 to attend a Northwestern-Michigan game and stayed at the Ritz-Carlton. He and his wife also traveled to Boston on a similar trip with his son in 2008, according to the report.
Pearce did not return calls for comment.
Angela Holt, one of the bowl’s financial officers, told investigators she found no documentation to show the politicians reimbursed the bowl for the cost of the trips.
The report does not say what exactly the bowl might have been seeking with its favors to the elected officials, beyond good will among people of local prominence.
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.”
Schoeffler was reimbursed for six other visits to the same strip club, even though the Fiesta Bowl employee manual prohibits reimbursements for strip club entertainment.
Some of the expenses appeared to be personal in nature. Last year, Junker’s daughter, Lucy, was seeking admission to the honors program at the University of Texas. The Fiesta Bowl paid $75 to send flowers to the head of the honors admissions program. Lucy Junker was accepted into the program, according to the report.
It 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. As for the flowers, he said the bowl’s reimbursement must have been a mix-up.
The board of directors initiated the investigation last fall and charged it with investigating allegations of wrongdoing nearly a year after the initial Arizona Republic articles.
The bowl followed up the newspaper’s articles with a brief investigation that concluded there was no credible evidence that the allegations were true. But the board of directors then ordered a new investigation, and hired Christopher W. Madel, a lawyer with Robins, Kaplan, Miller and Ciresi in Minneapolis, to oversee it.
The report to be issued this week uncovered many new details about the campaign contribution practice. Most of the contributions were to Arizona state lawmakers and local city councilmen, although Junker and his wife, Susan, were reimbursed for two contributions totaling $4,200 to Senator John McCain of Arizona in 2007, investigators found.
The report outlined several ways in which executives at the bowl attempted to disguise the reimbursements. Wisneski, the chief operating officer, told investigators that Junker would instruct her to also give bonuses to employees who had not donated. For those who had made contributions, Junker asked her to give them a false explanation for why they were receiving a bonus, “but I couldn’t face it,” she said in an interview excerpted in the report. “I had a hard time doing it.”
Several of the employees who admitted to being repaid said they did not know the practice could be illegal until they read the Arizona Republic article. Peggy Eyanson, the director of business operations, told investigators that when she learned that employees could face prison time, she felt “scared, upset and sick to my stomach.”
Investigators also raised questions about an initial inquiry that was conducted by the Fiesta Bowl in December 2009. The board hired Grant Woods, a former Arizona attorney general, to conduct the investigation, but asked that it be completed quickly, before the Fiesta Bowl took place in January. Woods hired as his assistant Gary Husk, a lobbyist who had been working for the bowl and who, investigators now say, had played a key role in collecting political contributions from employees.
Six Fiesta Bowl employees later told investigators that Husk approached them before they were to be interviewed by investigators and discussed the issue of campaign contributions with them. Wisneski, for example, told investigators that Husk invited her to his house and coached her on how to answer the questions that Woods would ask.
Husk denied any knowledge of the reimbursements and said he never discussed the issue with the employees, nor did he steer employees away from Woods, according to the report. In a statement Tuesday, Husk said he fully cooperated with the most recent investigation and did nothing wrong. “My integrity is extremely important to me, and I would never do anything to jeopardize it.”
Woods has since said he believes he was misled during his initial investigation.
In a statement, he said: “The Fiesta Bowl Committee’s investigation this time was comprehensive and I fully expect that they will fire anyone who has lied to or misled them or me. I will continue to work with them under our attorney-client relationship and am confident that they will quickly restore order and move on to even more success in the future.”
Source: New York Times