A report strongly critical of NBA union executive director Billy Hunter, released Thursday by an independent law firm hired by the players, could lead to Hunter’s ouster.
The investigation, authorized in April 2012 by the National Basketball Players Association, focused on Hunter’s business practices, possible misuse of union funds and allegations of nepotism and conflicts of interest. It was conducted by Paul, Weiss, Rifkind, Wharton & Garrison.
The findings? Hunter did nothing that would rise to the level of “criminal acts.” But he did violate “fiduciary obligations” to put the union’s interests ahead of his own and “did not properly manage conflicts of interest.”
The 469-page document, along with a 39-page executive summary, concluded: “Based on the findings of this report, the BPA should consider whether Mr. Hunter should remain as the Union’s Executive Director and whether new and more effective controls should be enacted to govern the NBPA, its Foundation and its Executive Director, whoever that may be.”
The independent review and financial audit sprang from union in-fighting that came in the wake of last season’s lockout and eventual settlement. The U.S. Attorney’s office in Manhattan also has been investigating NBPA business practices.
In a statement released late Thursday afternoon, Hunter said: “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. … In my work for the NBPA, my priority has always been to promote the interests of the players.”
Union president Derek Fisher – whose attempted ouster by the Executive Committee led to the Paul, Weiss investigation – issued a statement saying he looked forward to reviewing the report’s findings and recommendations. “As there is an ongoing investigation by the Government as well,” Fisher’s statement read, “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.”
Amid tension stemming from the lockout – driven by accusations that the union conceded too much and splintering among the NBPA execs, rank-and-file players, some high-profile NBA stars and a group of elite agents – the Executive Committee voted 8-0 seeking Fisher’s resignation. Fisher refused and instead asked for an audit of the NBPA’s business practices. (Hunter’s stance was that an audit had recently been done, was not necessary and would have cost the union as much as $400,000.)
The NBA declined to comment on the union matter.
Among the findings that could threaten Hunter’s term with the NBPA:
- The union “never properly approved Mr. Hunter’s current employment contract with the union” as required by its constitution and by-laws. Also, Hunter knew that his contract had not been approved, yet failed to disclose that to the Executive Committee and the player reps. [Hunter, in his statement Thursday, noted: "Regarding my contract … it was ratified by the NBPA Executive Committee and signed by President Derek Fisher. I believe the contract and extensions are valid."]
- Hunter received $1.3 million for “accrued but allegedly unused vacation time (146 days)” without providing an independent review of records or advice to the union on its obligation to make the payment.
- He involved family and friends in union business as vendors or employees, including daughter Robyn Hunter; daugher-in-law Megan Inaba; Prim Capital, a financial services company where Hunter’s son is a partner, and the law firm Steptoe & Johnson, where daughter Alexis works.
- Hunter “created an atmosphere at the NBPA that discouraged challenges to his authority.” It cited an instance in which former player and NBPA secretary-treasurer Pat Garrity was stopped by former general counself Gary Hall from talking about potential conflicts of interest.
Hall, who died in May 2011, curiously was the only union attorney involved in negotiating Hunter’s contract. That contract paid him $3 million for the year that began July 1, 2011 and reportedly has three years remaining.
The report also was critical of some business decisions by Hunter and others within the NBPA that showed “poor judgment” or “display insensitivity to conflicts of interest.” Among them:
- Hunter approved a pay of approximately $28,000 to cover personal legal fees incurred by Charles Smith, a former Executive Director fo the National Basketball Retired Players Association.
- He “spent union funds on luxury gifts for Executive Committee members, including nearly $22,000 for a watch he gave to Derek Fisher in June 2010.”
- He made “questionable choices” when charging travel expenses to the union, pursued “atypical” business ventures as potential NBPA investments and ran the NBPA Foundation “without regard for its by-laws or governance standards applicable to non-profit entities.”
Fisher, members of the Executive Committee and even player reps are cited in the report for not properly monitoring Hunter’s activities or following union procedures. For example, Fisher did not put Hunter’s contract to a vote, as required by the by-laws.
That contract pays Hunter approximately $500,000 more than NFLPA head DeMaurice Smith receives and double or triple what their MLB and NHL counterparts are paid. Hunter’s salary jumped by $600,000 on the day the 2011-12 lockout began.
Now 70, Hunter assumed the role of Executive Director in 1996 and steered the NBPA through two lockouts that resulted in shortened regular seasons. He negotiated every NBA collective bargaining agreement in that time with the league’s owners and familiar adversary, commissioner David Stern.
Prior to this involvement with the NBPA, Hunter played professional football for the NFL’s Washington and Miami franchises and worked as a U.S. Attorney for the Northern District of California at San Francisco.
The question now, as labor unrest in the NBA takes on a post-lockout meaning and tilts one way, is: Does he stay or does he go?
Or as the report itself asked, Should Mr. Hunter remain as Executive Director? Here is how it summarized, leaving the hard choices up to the NBPA’s and Hunter’s willingness to fight:
“The Player Representatives and the Executive Committee could decide that it is possible for Mr. Hunter to rectify the problems he has created and serve as an effective Executive Director in the future despite the issues of the past. 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…”
“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.”
TNT analyst David Aldridge contributed to this report.