Bribery in College Basketball: What the Corruption Ring Means for the Future of Collegiate Athletics

Last Tuesday, the U.S. Attorney for the Southern District of New York, Joon H. Kim, shined light onto the “dark underbelly of college basketball” by charging a number of individuals with violating federal bribery, fraud, and corruption statutes. Among those charged were James Gatto, Director of Global Sports Marketing for Adidas, and assistant basketball coaches at the University of Arizona, Auburn University, Oklahoma State University, and the University of Southern California. Additional investigations are currently ongoing at the University of Louisville and the University of Miami.

U.S. Attorney Kim outlined two distinct schemes that were uncovered during FBI investigations. The first involved Adidas executive James Gatto, who allegedly bribed high school basketball stars to sign with certain colleges that were sponsored by Adidas. The second scheme involved financial advisers and agents bribing assistant coaches at universities in exchange for convincing their players to hire those advisers when they became professional athletes.

For those who follow college sports, particularly football and basketball, the illicit activity is not surprising. As longtime collegiate sports journalist Pat Forde explained, “Every basketball program in America is running scared right now, because this is how business gets done. A lot of people knew it, but nobody was able to lay it out with proof like the feds did on Tuesday. It’s a dirty sport, and today we know how dirty.”

It’s nevertheless a bit surprising that the Department of Justice decided now was the time to get involved, as if the corruption has not been going on for decades. The recent charges raise two questions: First, given the longstanding history of bribes in college basketball, why did the Department of Justice finally decide to get involved? Second, what does this mean for the future of collegiate athletics?

With respect to the first question, there a few possible explanations as to why the DOJ finally decided to take action against corruption in college basketball:

  • First, the evidence is incredibly strong. These cases were brought to the attention of the DOJ and the FBI by a cooperating witness, Martin Blazer, after Blazer was charged by the Securities and Exchange Commission for, among other things, a 14-year-long wire fraud scheme in which he made “made payments and loans to NCAA athletes in order to induce those student-athletes to retain [him] as a financial advisor and/or business manager.” Blazer allowed the FBI to see, record, and document the inside of the basketball world through wiretaps, surveillance video, and undercover agents. During the operation, the FBI documented coaches participating in bribes and steering their players towards certain financial advisors. In one instance, Blazer secretly recorded a meeting with Auburn assistant coach Chuck Person, who introduced one of his players to Blazer. Person told the player “This is a violation of rules, but this how the NBA players get it done, they get early relationships…they form trust, you get to know [the business manager].” When the player left, Blazer took $15,000 in cash and gave it to Person.
  • Second, the DOJ is concerned with the exploitation of young athletes, particularly by money managers. Sixty percent of former NBA players are broke within five years of retirement, in large part because of bad investments. Since the NCAA is a private actor, the NCAA does not possess subpoena powers or similar investigatory capabilities, and has struggled at times with governing its member institutions. Pay-for-play schemes similar to the one in the present case have been well documented. Yet even in some of the most high-profile cases over the last fifteen years, including those involving Auburn University’s Cam Newton in 2010 and the University of Southern California’s Reggie Bush in 2005, the NCAA has been unable to sufficiently deter future activity. In fact, both Auburn University and the University of Southern California had assistant basketball coaches that were indicted last Tuesday. Perhaps after viewing the NCAA’s inability to govern, the DOJ decided to take things into their own hands.

These dramatic developments mean that collegiate athletics will never be the same. Some of the likely consequences include:

  • In the short term, whatever illegal activity that was occurring behind the scenes has temporarily stopped. The potential punishment that the DOJ can bring down is nothing like the slap on the wrists common for the NCAA; if convicted, the defendants face maximum sentences ranging from 40 to 65 years in prison. All parties involved, whether coaches, money managers, student-athletes, or shoe-representatives, will watch closely as the investigation unfolds.
  • As for the longer term impact, this depends in part on how large the investigation becomes. All signs indicate that the indicted coaches are merely the tip of the iceberg. In the press conference, FBI assistant director Bill Sweeney warned other coaches, “We have your playbook. Our investigation is ongoing. We are conducting additional interviews as we speak.” After the investigation was announced on Tuesday, the FBI raided basketball sports agency ASM sports and a Nike division dedicated to high school basketball. A University of Alabama basketball administrator, who previously worked as an assistant director of enforcement at the NCAA, resigned on Wednesday because of direct ties to the FBI investigation.
  • More generally, this government investigation is likely to raise even more starkly questions about whether the NCAA is capable of policing corruption in collegiate athletics. It is telling that the NCAA was completely unaware of the FBI investigation that had been ongoing since 2015. Some will demand the NCAA come down hard by imposing the “death penalty”—banning the schools involved in the illegal activity from competing in college basketball for at least one year. As a first step, the NCAA may ban some of the programs mentioned from playing in this year’s NCAA tournament. For particularly egregious offenders, such as the University of Louisville, the NCAA will likely implement the death penalty for the first time since banning the Southern Methodist University from competing in college football for the 1987 season. Yet this punishment has proven to be an insufficient deterrent, and it’s not clear whether even very severe punishments, in the wake of wrongdoing that was uncovered not by the NCAA itself but by the federal government, will do much to inspire confidence that the NCAA has the will or capacity to combat pervasive corruption in college sports.
  • More likely, this massive corruption ring will make people question whether amateurism remains a good policy for collegiate athletics. If players are getting paid anyway, it might make more sense to take the payments out of the black market and compensate players for the use of their name, image and likeness.

6 thoughts on “Bribery in College Basketball: What the Corruption Ring Means for the Future of Collegiate Athletics

  1. After reading this, I’m also curious what you think the next steps are. Do you envision a crackdown from the NCAA, and stricter oversight resulting? Or do prosecutors think that bringing criminal charges is the best way to send a message to others engaging in this type of activity? Also, since this investigation has been made public, has the NCAA indicated that it’s willing to work with the government to continue to eradicate the problem of corruption in college sports? I wonder if the NCAA could come up with a position similar to a large company’s compliance officer, who is responsible for oversight of its members (or perhaps this position exists already, and it is simply ineffective).

    • Thanks for you comments and questions, Maddie. I think the NCAA will do its best to show that it can regulate/oversee its member institutions. I’m not sure, however, that the NCAA will ever be an adequate regulatory body. I like your analogy to the compliance officer position, but I think the NCAA has had comparable systems in place. Ultimately, because many of these exchanges lack significant paper trails (boosters paying players in cash, for example) it is extremely difficult for the NCAA to regulate, particularly without supbeona power.

      In terms of next steps, I expect the NCAA to come down hard on Lousiville, perhaps the most egregious offender based on the current known information, and doll out the “death penalty” for the first time in Div. 1 since SMU. In the long run, I do believe the NCAA will take a long look at some of its amateurism rules and ask whether those rules still are good policy (my belief is that such rules are bad policy). At some point, whether it is five or ten years down the line, I expect college athletes will be able to sell their image/likeness to third parties. While such a system would be imperfect, it would take a lot of pressure off of the NCAA in regulating the black market for college athletes, and minimize the incentives for prospective student-athletes to operate behind the NCAA’s back.

  2. It is nothing new in India like countries. But alike Queen of Britain, the abundant corrupt players are beyond of subpoena, as the criminals are freelance of using Queen’s power.
    In concern of USA and other west countries, such practice will develop more and spread to all sectors alike India, and it is following economic frustration already. Actually, the West wealth is the pile up from the rest world, nothing else. Corruption is the part of capital economy and its development. For example, 25% victims of capital punishment is innocent in US-judiciary.
    What is the comment?

  3. Many have written about how collegiate sports has become more vulnerable to corruption and abuse because of its increasing professionalization and commercialization. This prosecution is really a welcome development, although it remains a mystery how leagues like the NCAA can effectively overhaul the system (beyond holding offending programs accountable) in such a way that the root of the problem can be directly addressed.

    • Agreed Ryan. I’m not sure it’s possible for the NCAA to directly address the issues at play here, unless some real changes to the system are implemented (such as permitting them to use their likeness).

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