College Football Playoff Backer Files Tax Complaint Against Bowls
Playoff PAC, a political action committee opposing college football’s Bowl Championship Series, filed a complaint with the Internal Revenue Service, alleging the Fiesta, Orange and Sugar Bowls are violating their tax- exempt status.
The PAC claims the bowls provide excessive compensation to executives, spend an undisclosed amount on lobbying, intervene in political campaigns and provide substantial private benefits to organizational insiders.
The Fiesta, Orange and Sugar Bowls represent three of the five bowls that make up the BCS. The others are the Rose Bowl and the BCS championship game. The bowls operate as 501(c)3 charities, whose operations are tax-exempt and contributions to the organizations are tax deductible.
Playoff PAC, which wants the sport to change its system of using polls and computer rankings to determine a national champion in college football to a playoff system, claims the bowls are violating their tax-exempt status and need to make their finances more transparent.
“We hope to raise awareness,” said Matt Sanderson, an attorney with Caplin & Drysdale in Washington, D.C., and a co- founder of Playoff PAC. “A lot of the public will be surprised to learn that these bowls are public charities that get the same benefits as the American Red Cross and Salvation Army.
“Once you raise awareness, the need for change will become apparent. And we think the IRS will take the complaint seriously,” he said.
According to the complaint:
The Sugar Bowl paid Executive Director Paul Hoolahan $645,386 in 2009, more than 5 percent of total revenue that year.
“Playoff PAC is an organization which is dedicated to ending the bowl system, playing loosely with figures in order to sensationalize to suit their own agenda,” said John Sudsbury, a spokesman for the Sugar Bowl. “We’re audited every year and we have always complied with all IRS regulations.”
Sudsbury said a 24-member board sets compensation with the help of an outside compensation analyst.
The Fiesta Bowl says on its tax returns that it doesn’t engage in lobbying activities, yet it gave $1.2 million for consulting to one registered Arizona lobbying firm and retained two other registered lobbying firms for undisclosed sums. The complaint didn’t identify the firms.
“These are dated, tired and discredited allegations by an entity whose sole purpose is to destroy the college football bowl system,” said Fiesta Bowl spokesman Andy Bagnato. “The Fiesta Bowl is confident that it has always fully complied with tax laws and rules in its operations and activities.”
The Orange Bowl spent $331,938 on “parties” and “summer splash” in fiscal 2004, according to the complaint.
“The information provided by the Playoff PAC is misleading and inaccurate,” said Larry Wahl, spokesman for the Orange Bowl. “We will continue to be accountable to our community as we continue to support youth sports, scholarship funding and year-round activities that make South Florida the great place that it is.”
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