Advertisement

You will be redirected to the page you want to view in  seconds.

Billy Hunter's job called into question by inquiry. / Patrick McDermott Getty Images

National Basketball Players Association executive director Billy Hunter did not "engage in criminal acts involving embezzlement of theft of union funds," according to an independent inquiry into the NBPA conducted by Paul, Weiss, Rifkind, Wharton & Garrison LLP.

However, the exhaustive and detailed inquiry, led by high-profile attorney Theodore Wells, concluded, "Based on the findings of this report, the NBPA should consider whether Mr. Hunter should remain as the Union's Executive Director."

The report said, "In our judgment, 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. Further, Mr. Hunter did not properly manage conflicts of interest.

"We also find that the NBPA's Board of Player Representatives never properly approved Mr. Hunter's current employment contract with the Union as required by the Union's Constitution and By-Laws, that Mr. Hunter was aware that his current contract was never properly approved and that he knowingly failed to disclose this information to the Executive Committee and the Player Representatives."

Investigators interviewed 37 people, including Hunter, members of Hunter's family, union President Derek Fisher, other players on the executive committee and NBPA staff members. Investigators also collected nearly 944 gigabytes of e-mail data and reviewed nearly 56,000 e-mails from eight NBPA employees. The report was more than 229 pages, plus 200-plus pages of exhibits.

In a mountain of evidence that paints an unflattering picture of Hunter, 70, and some of his practices, the most disconcerting describe how Hunter procured his new contract with the help of friend and NBPA counsel Gary Hall, now deceased, how the NBPA failed to comply with union by-laws in approving it and how when it was brought up that the contract approval did not meet union bylaws, Hunter did nothing to rectify the problem, according to the report.

"The NBPA is currently reviewing the full independent special report simultaneous with the public," Hunter said in a statement Thursday evening. "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."

One part of the report that Hunter disagrees with is the characterization of his contract.

"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," Hunter said. "I believe the contract and extensions are valid. I am pleased to discuss with the Player Representative board any concerns about my contract.

"In my work for the NBPA, my priority has always been to promote the interests of the players. Through the benefit of hindsight, as with any executive, there are always things that could have been done better. But on the major issue, I am pleased that this report has confirmed what I have always known and said, I did nothing illegal."

Hunter also boasted his accomplishments.

"During my tenure, the salaries of NBA players have more than doubled, and they are the highest paid athletes in the world," he said. "When I arrived at the NBPA in 1996 the challenges were significant. The union's financial liabilities exceeded its assets. Today the Union is solvent and its financial future is secure. The union and players endured two lengthy and costly lockouts. Our greatest accomplishment is the unity and solidarity that the players maintained throughout those very difficult rounds of bargaining."

There is no sign that Hunter intends to step down.

"Prior to the report's issuance, the NBPA began implementation of some of the recommendations suggested, including a revised hiring policy and a new anti-nepotism policy," he said. "I look forward to continuing my work with the NBPA, adopting additional recommendations from the report and opening a new chapter of NBPA governance. I believe through these steps the NBPA will emerge from this review a stronger organization and continue to meet the needs of its membership. I will be reaching out to the membership to discuss the report and address ways to pursue the best path forward for the NBPA."

That 2010 contract agreement was for $3 million a year for at least four years, and as many as six, starting in 2011, according to the report. From July 1, 2011-June 30, 2012, Hunter was paid $3 million, a $600,000 (25%) raise over the previous year, according to NBPA documents filed in September with the U.S. Labor Department.

The NBPA announced on April 27 it would conduct an internal inquiry that would include a financial audit. The union retained Paul, Weiss, Rifkind, Wharton & Garrison LLP to serve as the independent investigator. That same day, the NBPA acknowledged that it received a subpoena for documents from the U.S. Attorney's Office in Manhattan.

The investigations stem from several reports detailing union practices, including charges of nepotism, and Fisher's call for a "review of the business practices and finances," in part because of NBPA business relations with members of Hunter's family, including his son, two daughters, and daughter-in-law.

Fisher was met with resistance the NBPA, and the NBPA executive committee made up of nine players voted 8-0 that it "lost confidence in Derek Fisher's ability to act as Union President and requested Derek's resignation."

In statement released Thursday, Fisher, who is not playing in the NBA now, said, "I am looking forward to reviewing today's report, findings and recommendations that have just been issued. My hope is that the law firm of Paul, Weiss, Rifkind, Wharton & Garrison, which was chosen by the Staff and Special Committee, has done a thorough review of the NBPA and addressed the concerns of the countless players, staff and myself. As there is an ongoing investigation by the Government as well, I hope that this is a chance for us to become an upstanding, strong organization with the sole purpose of serving the best interests of current and future players."

The internal investigation, which was made public Thursday, detailed the most egregious offenses, in which 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.
  • Obtained the Union's agreement to pay him $1.3 million for accrued but allegedly unused vacation time (146 days) without adequate independent review of underlying records and without securing independent advice for the Union on its obligation to make the payment.
  • 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.
  • Hunter's son, Todd, is director at Prim Capital, a financial investment firm. The NBPA paid Prim Capital $594,900 from July 1, 2011-June 30, 2012, up from $576,824 in the previous year's filing. Hunter's daughter, Robyn, is the NBPA's director of player benefits and concierge services, and his daughter-in-law, Megan Inaba is the NBPA's director of special events and sponsorships. Another daughter, Alexis Hunter, works for the law firm Steptoe & Johnson, which collected $1.367 million in legal fees from the NBPA, according to the September filing with the Department of Labor.

    "We do not contest that Mr. Hunter's relatives were qualified for their jobs, and our analysis suggests that they were not paid excessive compensation," the report said, but added, "NBPA employees concluded that Mr. Hunter was running the Union as a "family business" and, in the word of one, felt "surrounded" by Hunter family members. The appearance of favoritism has damaged the Union. Mr. Hunter's pattern of involving friends and family in Union business contributed to a deep rift among the NBPA staff."

    The report said the NBPA should "consider not continuing to use the services of Prim Capital, not only because Prim employs Mr. Hunter's son, but also because in our opinion Prim failed to cooperate fully with the investigation."

    The report also concluded that 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."

    The report detailed several examples, saying Hunter:

  • Considered what would have been a risky investment of millions of dollars in ISN Bank, a failing financial institution, without disclosure to the Executive Committee that his son Todd was then a director of the bank, and spent more than $80,000 in due diligence expenses before abandoning the transaction.
  • Approved a payment by the Union of approximately $28,000 to cover personal legal fees incurred by Charles Smith, the former executive director of the National Basketball Retired Players Association.
  • Spent union funds on luxury gifts for Executive Committee members, including nearly $22,000 for a watch he gave to Fisher in June 2010.
  • But the report focused on what it considers Hunter's improperly approved contract in 2010 the most serious offense and said player representatives and the executive committee must decide if Hunter should remain executive director. The report detailed that when Hall negotiated Hunter's current contract in 2010, "Derek Fisher and James Jones each felt that, during the negotiations for Mr. Hunter's employment agreement, Mr. Hall seemed to be representing Mr. Hunter more than the Union," according to the report.

    In Article V, Section 1 of the NBPA's Constitution and By-Laws, it states "the appointment of an Executive Director, and the terms of his employment contract, must be approved by two-thirds (2/3) of the combined total of all Board of Player Representatives and Executive Committee members."

    The report states: "The record is clear that the Board of Player Representatives did not vote to approve Mr. Hunter's contract, nor did anyone tell the Player Representatives that they were required to consider whether they wanted to approve it. Mr. Hunter should have been aware of the provisions of the By-Laws governing the proper procedure for approval of his contract. The record shows, however, that Mr. Hunter did nothing to alert the Union's Board of Player Representatives or the Executive Committee to these procedures, even after he was told that the contract had not been properly approved."

    Bothered by Hunter's actions, investigators implored the NBPA to re-evaluate Hunter's contract and potentially re-negotiate a new one.

    "Should they decide to permit Mr. Hunter to continue leading the Union, they may wish to retain independent counsel to negotiate a new employment contract with him in light of the tainted negotiation process that resulted in the agreement signed in 2010," the report said. "Of course, they could also decide if they wish to approve Mr. Hunter's current contract without any changes.

    "But the Union need not keep Mr. Hunter. 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. We believe that the circumstances of the contract's formation and the lack of proper approval cast serious doubt on Mr. Hunter's ability to enforce it."

    The report listed several recommendations including that the NBPA fill the remaining seven spots on the executive committee comprised of players, improve its record-keeping, limit excessive accrued paid vacation time and adopt an anti-nepotism policy and conduct and document annual performance reviews, among other recommendations.

    All-Star Weekend in Houston becomes more serious now. No recommendation is more important to Hunter than this: The report wants player representatives (one on each team) and the NBPA executive committee to focus on Hunter's future with the NBPA.

    "As discussed," the report read, "we believe that the NBPA's Executive Committee members and Player Representatives have two choices: (1) decline to ratify Mr. Hunter's contract retroactively, appoint an interim Acting Director and search for a new Executive Director; or (2) permit Mr. Hunter to continue running the NBPA and properly approve a contract for him."

    Hunter is a fighter and unafraid of a showdown. As a U.S. attorney and private lawyer for high-profile clients, he has been in the middle of important cases. He once received a death threat from the Hells Angels. As NBPA executive director, he has battled NBA Commissioner David Stern in collective-bargaining negotiations.

    Sometimes, he has won. Sometimes, he has lost.

    Whether he stays or goes, bank on this: George William Hunter -- Little League World Series star in the 1950s and college football star at Syracuse in the 1960s -- will make his case and do it with conviction.

    Contributing: Sam Amick



    Copyright 2014 USATODAY.com

    Read the original story: Report: Billy Hunter isn't criminal or ideal NBPA chief

    More In

    test

    Real Deals

    Flip, shop and save on specials from your favorite retailers in central Ohio.

    GET DEALS | COUPONS

    Things To Do

    MON
    22
    TUE
    23
    WED
    24
    THU
    25
    FRI
    26
    SAT
    27
    SUN
    28

    CLASSIFIEDS

    Classifieds from across Central Ohio
    Lancaster
    Chillicothe
    Newark
    Marion
    Bucyrus
    Mansfield
    Zanesville
    Coshocton

    Weeklies & Shoppers

    10TV Headlines

    Dispatch Headlines

    METROMIX