Advertisement

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

Arizona Gov. Jan Brewer and the Fiesta Bowl's then-chief executive, John Junker, at the 2010 Tostitos Fiesta Bowl at on Jan. 4, 2010, University of Phoenix Stadium in Glendale, Ariz. / Rob Schumacher, The Arizona Republic

PHOENIX - The Fiesta Bowl's former chief executive owes more than $75,000 in back taxes on money he pocketed as reimbursement for personal expenses from 2007 to 2009, according to federal tax records released to The Arizona Republic.

The IRS Form 990s that the Fiesta Bowl's four nonprofit organizations released cite $215,739 in "excess compensation" paid to former CEO John Junker in the form of reimbursements in previous years that came to light during the April 1, 2011, to March 31, 2012, reporting period. Junker did not pay federal taxes on that compensation.

The bowl said in its filings that it unsuccessfully sought repayment from Junker for the expenses. The excess compensation was reported to the Internal Revenue Service along with other matters that bowl officials uncovered in a bid to preserve its tax-exempt status.

Junker was fired in March 2011 after a bowl investigation disclosed lavish spending and his involvement with other bowl employees in a political-contribution scheme. He pleaded guilty last year to felony charges in state and federal courts.

Through his lawyer, Junker had no comment Monday on the tax matter.

In its 2011-12 federal tax returns, the bowl did not itemize any of Junker's alleged personal expenses. In an investigative report, the bowl previously disclosed that bowl money had been used on Junker's behalf at a strip club, a charity golf date with Jack Nicklaus and for anti-aging medicine and golf-club memberships.

The bowl's investigation came after The Arizona Republic in December 2009 uncovered questionable spending and a scheme in which bowl money was used to reimburse employees who made campaign contributions to politicians, which is illegal.

Six current or former Fiesta Bowl employees pleaded guilty to misdemeanors or felonies for their roles in that reimbursement conspiracy.

Junker, who now works for the Society of St. Vincent de Paul here, is awaiting sentencing in state and federal courts. He faces up to 2½ years in prison though he could receive probation, and he is assisting the Arizona Attorney General's Office in its ongoing investigation of a contract lobbyist for the bowl.

In its tax returns, the bowl also disclosed that problems uncovered during Junker's tenure could lead to revocation of its nonprofit status and paying income taxes.

A bowl lawyer said the organization has put widespread management and policy reforms in place that should be favorable to the IRS should an inquiry occur.

"The bowl has done literally everything it could have done over the last two years to deal with all the problems of the prior management and to make all the proper fixes and changes to position itself as a fully compliant and proper tax-reporting, non-profit organization," said Nathan Hochman, a bowl lawyer and former head of the U.S. Department of Justice's Tax Division.

"Management believes it is more likely than not that the foundation will retain its tax-exempt status," the bowl said in its filings.

Bill Brunson, an IRS spokesman, said his agency is prohibited from commenting on or providing information about any taxpayer.

The Fiesta Bowl's future

The tax disclosures come as the Fiesta Bowl, a member of the Bowl Championship Series, fights to keep its place as one of college football's elite post-season games.

The current BCS contract ends in early 2014, and the Fiesta Bowl is competing for a spot in a new six-bowl rotation for a college-football playoff.

The organization is confident that "it remains in good standing with college-football leaders," said Andy Bagnato, a Fiesta Bowl spokesman.

The BCS executive director, Bill Hancock, said Monday that he was unaware of the bowl's financial disclosures until The Republic notified him.

"We all knew there would be a series of matters they would need to handle, and it sounds like this is just another in that series," Hancock said.

The Fiesta Bowl, along with other bowls, is still in the running to host a new playoff, he said. Hancock expects a final decision by April. Three BCS bowls - the Rose, Sugar and Orange - already are guaranteed spots.

Junker's expenses

In its IRS filings, the bowl said Junker initiated or approved personal reimbursements for himself of $75,623 in 2007; $10,755 in 2008; and $129,361 in 2009. During that period, his average annual compensation was $609,172, according to the bowl's prior tax-return filings.

In each of those years, the bowl's executive committee approved his compensation. Prior board chairmen defended Junker's pay, saying he earned it because he transformed the Fiesta Bowl into one of the top bowl games in college football.

In 2009, the board approved a $673,888 compensation package for Junker, making him the highest-paid BCS executive.

The bowl now contends in its most recent tax filings that Junker's compensation for those years, and the reimbursed expenses, were "in excess of compensation paid to other similarly situated chief executives in those years."

Therefore, the bowl stated, Junker received an "excess benefit" of $215,739, and it asked Junker to repay that amount plus interest. The bowl said Junker declined, and the information was included in the tax returns.

Those returns state the IRS may impose a 35% excise tax on the excess compensation of a manager who also approved or initiated the payment. So in its tax filings, the Fiesta Bowl calculated that Junker owes the IRS $75,509.

The bowl also reported that Robert Shelton, a former University of Arizona president who became the bowl's executive director Aug. 1, 2011, was paid $218,211 for working part of 2011-12.

When Shelton was hired, the bowl paid him a base annual salary of $455,000, with incentives that could push his total compensation to about $620,000.

Bowl's tax status unclear

The bowl also stated in its tax returns that prior activities such as political and lobbying expenditures and providing benefits to "disqualified persons" and "third parties," could risk the organization's nonprofit status.

The bowl said it has taken corrective actions such as trying to recover candidate contributions and that it has stopped reimbursing employees for their own political-campaign contributions, which occurred from the early 2000s to 2009.

The tax-exempt status is vital to the organization's bottom line.

The bowl's four nonprofit organizations in fiscal 2011-12 generated $25.9 million - the lowest amount since 2005-06 - and did not pay income taxes.

The nonprofits run the Fiesta Bowl, a second game now called the Buffalo Wild Wings Bowl, and numerous community events such as a parade and band competition. The minor bowl and the community events typically lose money but are intended to enhance the image of the organization.

The organization reported $32 million in expenses from April 1, 2011, to March 31, 2012, including nearly $4.6 million in legal bills as the bowl investigated prior wrongdoing.

That resulted in a roughly $6 million loss, but the entity reported $27.5 million in net assets.

Those net assets can be used as leverage for the Fiesta Bowl as it makes a financial bid to become a host site for the new playoff system.

VIDEO: Fiesta Bowl's John Junker fired March 29, 2011



Copyright 2014 USATODAY.com

Read the original story: Ex-Fiesta Bowl boss owes IRS $75,509

More In

test

Real Deals

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

GET DEALS | COUPONS

Things To Do

SAT
25
SUN
26
MON
27
TUE
28
WED
29
THU
30
FRI
31

CLASSIFIEDS

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

Weeklies & Shoppers

10TV Headlines

Dispatch Headlines

METROMIX