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Cash and carry: Bush, family received $100,000 in benefits
Reggie Bush left USC with a national championship and the Heisman Trophy.
An eight-month probe uncovers evidence that Reggie Bush and his family appear to have accepted improper benefits from prospective agents while at USC.
An eight-month Yahoo! Sports investigation has revealed that Heisman Trophy-winning running back Reggie Bush and his family appear to have accepted financial benefits worth more than $100,000 from marketing agents while Bush was playing at the University of Southern California.
The benefits, which could lead to NCAA sanctions for USC and retroactively cost Bush his college eligibility and Heisman, were supplied by two groups attempting to woo Bush as a client. Current Bush marketing agent Mike Ornstein and one of Ornstein's employees were involved. So were Michael Michaels and Lloyd Lake, who attempted to launch an agency called New Era Sports & Entertainment, pursuing Bush as their first client.
Bush declined comment to Yahoo! Sports, and Ornstein denied any wrongdoing on his and Bush's behalf.
But documents and on-the-record interviews with sources close to the situation reveal that Bush and his family appear to have received financial benefits from Ornstein and a business associate. Those benefits include:
- $595.20 in round-trip airfare from San Diego to Oakland in November 2005 for Bush's stepfather, LaMar Griffin, his mother, Denise Griffin and younger brother to attend the USC-California game at Berkeley. The fees were charged to the credit card of Jamie Fritz, an employee of Ornstein. The document detailing the charges was provided by Lee Pfeifer, an estranged business associate of Ornstein's.
- $250.65 for limousine transportation from the Oakland airport to the Ritz-Carlton in San Francisco that November weekend for the Bush family, charged to Fritz, according to a document. Ornstein acknowledged both he and Bush's family stayed at the luxury hotel.
- Suits for Bush's stepfather and brother to wear during the Dec. 10, 2005 Heisman ceremony in New York, a makeover for his mother for the event and limousine transportation;
- Weekly payments of at least $1,500 to the Bush family.
- $623.63 for a hotel stay by Bush at the Venetian Resort & Casino in Las Vegas from March 11-13, 2005, charged to Michaels, according to a document signed by Bush.
- $1,574.86 for a stay by Bush at the Manchester Hyatt in San Diego from March 4-6, 2005, paid for by Michaels, according to a hotel document, a hotel employee and a source.
- Approximately $13,000 to Bush from New Era to purchase and modify a car, three sources said.
- As reported by Yahoo! Sports in April, $54,000 in rent-free living for a year at Michaels' $757,500 home in Spring Valley, Calif., according to Michaels and San Diego attorney Brian Watkins.
- Also from previous Yahoo! reports, $28,000 from Michaels to help Bush's family settle pre-existing debt, according to Michaels and Watkins.
- Thousands of dollars in spending money to both Bush and his family from the prospective agents, according to multiple sources.
"I don't want to talk about it," he said, three days before making his NFL debut with the New Orleans Saints last Sunday.
Meanwhile, Ornstein denied giving Bush or his family benefits, calling the accusation of cash payments a lie. Ornstein described travel arrangements made by Fritz as loans that were paid back by the Bush family.
"Reggie Bush never received an extra benefit from Mike Ornstein other than what he was allowed to get from the NCAA when he worked with us," Ornstein said, referring to the fact that Bush was an intern at Ornstein's marketing company in the summer of 2005. "I feel pretty damn good about that.''
Asked why his employee, Fritz, had paid for airfare and a limousine for the Bush family's trip to the Cal game, Ornstein said he believed the funds were paid back.
"Jamie may have paid or put it on his credit card," Ornstein said. "I don't think (Reggie's) parents have a credit card, but his parents paid for everything."
Fritz declined comment, but documents obtained by Yahoo! Sports indicate both the airfare and limousine rental for the trip to the Bay Area were paid in full on Fritz's American Express card prior to the trip being taken. Ornstein also used the card in August to book his own trip to Bush's NFL preseason debut against the Tennessee Titans.
The card establishes a direct link between Bush's family and Ornstein's office while Bush was still at USC, but Ornstein insisted it was merely a matter of helping the family.
"If the dad asked, then maybe (Jamie helped)," he said. "The (family) went on other trips. I'm sure the father – if it was anything that needed a credit card to guarantee the hotel and everything – then I'm sure Jamie will have documentation and cash receipts from the father. I guarantee it."
Asked whether he was aware that such loans could constitute an NCAA violation, Ornstein replied: "I have no idea."
NCAA by-law 12.3.1.2 states that an athlete shall be deemed ineligible if he or she accepts benefits from agents or marketing representatives. The rule further states that student-athletes, their family or friends cannot receive benefits or loans from agents. Additionally, NCAA by-law 12.1.2.1.6 states that athletes cannot receive preferential treatment, benefits or services because of the individual's athletics reputation or skill or pay-back potential as a professional athlete, unless such treatment, benefits or services are specifically permitted under NCAA legislation.
The NCAA launched an investigation into Bush's eligibility in April after Yahoo! Sports reported that Bush's family had not paid rent after living for a year in a home owned by Michaels. A Pac-10 investigation followed.
If the NCAA rules that Bush received extra benefits during his playing career at USC, he could be ruled retroactively ineligible. Since some of the benefits date back to the 2004 season, the Trojans' national championship that season could be rescinded. USC could face further NCAA sanctions and Bush's 2005 Heisman Trophy could be in jeopardy. The Heisman ballot indicates that an athlete must meet NCAA eligibility requirements to be considered for college football's most prestigious award.
Yahoo! Sports was denied a request last week to interview USC coach Pete Carroll, running backs coach Todd McNair and athletic director Mike Garrett.
The university instead released a statement though its counsel.
"USC cannot comment on any matter that is the subject of an ongoing NCAA and Pac-10 investigation," university counsel Kelly Bendell said. "USC continues to cooperate fully with the investigation."
Citing policy of not discussing ongoing investigations, NCAA officials declined to comment on the Bush matter.
Following the Trojans' loss to the University of Texas in the national championship game in January 2006, Bush turned professional. He hired Ornstein as his marketing agent, leaving a string of spurned would-be business representatives who claim Bush and his family owes them money. In April, Bush was drafted second overall by the Saints and he later signed a six-year contract guaranteeing him $26.3 million. Ornstein has since helped arrange marketing deals for Bush worth approximately $50 million.
The potential problem for USC goes beyond the trail of money to Bush. The Trojan program could be found by the NCAA to have failed to exert proper institutional control.
Sources told Yahoo! Sports that representatives of New Era were allowed into the USC locker room during the 2005 season. Ornstein and other agents frequented the USC sidelines during several games and numerous practices that season, according to published reports.
Also, McNair allegedly knew of Bush's involvement with the New Era venture before last season's national championship game against Texas, according to two sources. And at one point during the 2005 season, sources say Bush thought that Carroll knew about his parent's living arrangement and feared he was going to conduct his own investigation. Bush called Michaels, instructing that if Carroll called regarding the house to "tell him that you're a longtime family friend." Carroll never called Michaels.
In April, the Bush camp attempted to distance the running back from a direct relationship with Michaels.
"I know for a fact that everything is fine and this is all blown out of proportion and there's more to the story than is being told right now," Bush said April 27 at a predraft meeting with reporters in New York.
But when Bush stayed at the Venetian almost one year earlier, he signed for room charges that were paid for on Michaels' credit card. Another document related to that stay was filled out by Michaels, authorizing the hotel to charge Bush's stay to one of Michaels' credit cards. Yahoo! Sports obtained copies of both documents.
Earlier in March 2005, Bush stayed for two days at the Manchester Hyatt on the downtown San Diego waterfront, according to a document, a hotel front-desk employee and another source. Charges for the room were paid for on Michaels' credit card. The dates of the stay coincided with Bush attending a birthday party for former NFL and San Diego State star Marshall Faulk.
THE FAMILY ALLOWANCE
For Bush's family, the makeover, suits and limousine for the Heisman ceremony were a small part of the benefits they allegedly received.
DeMartino said that on the weekend of the Heisman ceremony in New York, three weeks before USC faced Texas in the BCS championship, Ornstein borrowed $500 from him to help make an "allowance" payment to Bush's family. DeMartino, who has known Ornstein for about 20 years, said he was at the family's hotel in New York to meet with them about a memorabilia proposal that he had submitted to Ornstein in November.
"We were standing around waiting for the family to show up," DeMartino said, recalling the Dec. 9 meeting. "Mike says to me, (Expletive), it's pay day.' He looked in his wallet, said he was a little short and asked me if he could borrow some money till the next day so he could give the family their money."
DeMartino said Ornstein explained to him that Bush's stepfather received a weekly payment of $1,000. Bush's mother received $500 and Bush's younger brother also received money.
"I'm not going to lie for the guy (Ornstein). You asked me a question, I'm going to tell you the truth," said DeMartino, who received payment after settling a financial dispute with Ornstein last week. The day after settling, DeMartino told Yahoo! Sports that he stood by his statements regarding his interaction with Ornstein in New York.
"That is a 100-percent lie," Ornstein said in a phone interview last week. "That never happened. I swear on my son, I swear on my mother, I swear on my brother. … I swear on my whole family. Let them all die tomorrow if I'm telling a lie."
Repeated attempts to reach LaMar and Denise Griffin by phone for comment were unsuccessful.
New Era's Lake, interviewed by Yahoo! Sports at the South Bay Detention Center in Chula Vista, Calif., on Aug. 27, said he was told by Bush that Ornstein was paying the running back.
Asked why DeMartino would say Ornstein was giving Bush and his family benefits, Ornstein said it was an act of vengeance after Ornstein didn't sign DeMartino as Bush's memorabilia agent. DeMartino claims he was the one who backed out of the deal, because Ornstein was asking for too much money. Asked how Bush's family was able to afford travel to USC road games last season and live in a 3,000-square-foot house belonging to a New Era Sports representative, Ornstein said he had "no idea."
"I'm not involved with that," Ornstein said. "I wasn't involved with the family at that point.
"If (Reggie's step) father did something wrong six months ago, eight months ago, that's not a story to me. … Did Michael Michaels do something like that with them? He may have, but Mr. Griffin is living in San Diego and Reggie is up in L.A., so how would he know?
"If you ask me, Mike Ornstein, I'd say 100-percent Reggie never took anything."
Ornstein said starting in November 2005, he advised the family on some issues and recommended agents but gave the family nothing of value until after signing Bush.
"And I haven't really given them anything since I signed Reggie," Ornstein said. "Reggie's been taking care of his family. On a couple of occasions, Reggie's (step)father borrowed money and he paid me back afterwards.''
Ornstein is the former director of club marketing for NFL Properties who in 1995 pled guilty to one count of mail fraud for his actions in an attempt to defraud the league. Ornstein was sentenced to five years probation, four months of home confinement and had to make $160,000 restitution to the league for the crime, according to published reports.
As a followup to their meeting in New York, DeMartino said that Ornstein solicited via email a $500,000 down payment for a prospective memorabilia deal. The email is dated Dec. 29, five days before Bush played in his last college football game and within two weeks of signing a contract to be represented by Ornstein.
Ornstein acknowledges that he negotiated in principle numerous marketing deals on behalf of Bush during the 2005 season. NCAA rule 12.3.1.2 reads in part "an individual shall be ineligible … if any person who represents any individual in the marketing of his or her athletic ability."
Ornstein contends that he operated within the NCAA rules, since no deal was finalized until after the season.
"All of that was based on only if I got [Bush] as client," Ornstein told reporters at the NFL Draft in April. "It was only going to be if and when I signed him. No deal was ever consummated until Reggie signed with me after the season."
At the same time Bush's family was allegedly receiving money from Ornstein, they continued to take gifts and benefits from Michaels as well, according to two sources. Michaels bought them expensive dinners and took them on shopping trips, the sources said. And the family continued to live in Michaels' home, without paying rent, until April.
Bush asserted in April that he and his family did nothing improper after news of his parents' living arrangements surfaced on the eve of the NFL Draft.
"When this is all said and done, everybody will see at the end of the day that we've done nothing – absolutely nothing wrong," Bush said during an interview with ESPN on April 24.
Bush's family was eventually evicted from the home in Spring Valley after failing to pay approximately $54,000 agreed to in a lease with Michaels. A source said the family also promised to buy the home from Michaels at one point. It's now up for sale. When the family moved out, Michaels said they also took approximately $12,000 worth of furniture purchased by Michaels.
GROUND TRANSPORTATION
Beyond the house and other payments, sources say New Era Sports paid for a pristine, black-on-black 1996 Chevrolet Impala SS for Bush.
Although the car was almost 10 years old, the model is popular for a number of stylistic reasons. First off, the car, which features a small block, V-8 engine, is particularly fast. Second, it boasted a frame fitted for wide, speed-rated tires, which allows it to be detailed with large rims. Sources say that after Bush took control of the car early in 2005 it was decked out with such rims and an expensive stereo system was installed.
The car was allegedly purchased for Bush. Sources say it was bought in the Los Angeles area.
Bush is also seen sitting on the hood of a car fitting that description in a full-page photo in the June/July issue of DUB Magazine, which is dedicated to high-performance and detailed cars. It regularly features pictures and articles about athletes and their automobiles.
THE GREAT DIVIDE
Bush, his family and attorney David Cornwell have been in on-again, off-again settlement discussions with Michaels and Lake since January. At one point early in the negotiations, Cornwell offered Michaels and attorney Brian Watkins, who represented Michaels at the time and still represents Lake, $100,000 to settle the matter, a source said.
The offer was turned down and Watkins countered by saying that Michaels and Watkins lost more than $300,000 in money advanced to Bush and his family and in start-up costs for the company. Watkins also sent Cornwell a letter saying he would file a lawsuit against Bush for upwards of $3.2 million in damages.
Cornwell denied that he had ever made an offer to settle. He was asked to comment about the hotel receipts linking Bush and New Era's Michaels.
"With respect to the receipt, I have one question: Did it total $3.2 million?" Cornwell said Sept. 7. "Beyond that, I will not comment on documents I have not seen."
Cornwell, who represents both Bush and Ornstein, declined to comment when reached Wednesday night about the alleged benefits provided by Ornstein.
Both Michaels and Lake had no known history as agents prior to being involved with Bush and starting New Era. They said they plan to sue and did not want to discuss specifics of the case. However, there was no denying their sense of betrayal.
"I'm still trying to figure out how (he) and his family are trying to leave me out to the wolves like they did," Michaels said Aug. 16 as he sat in his living room in El Cajon, Calif. "The truth will come out someday."
Meanwhile, USC and Bush are moving on.
The Trojans, currently ranked fourth in the Associated Press poll, opened the season with a 50-14 victory at Arkansas. In the offseason, the athletic department took extra steps to educate players and their families about NCAA rules compliance. According to a story in the Los Angeles Times, parents were required sign a statement acknowledging that they had been informed of the rules.
"We've always talked about the stuff, this time we gave them a little handy handout," Carroll said of the parents in The Times. "I know that even without doing anything, their awareness is elevated."
Bush began his NFL career last Sunday against the Cleveland Browns, accounting for 141 yards total offense. He has already ingratiated himself to the battered New Orleans community with a series of charitable donations. Season tickets sales set a record for the Saints, who are scheduled to play their first game in New Orleans since Hurricane Katrina on Sept. 25.
Source: Yahoo Sports
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