Nepotism Concern Roils NBA Union as Players Question Hire

April 24 (Bloomberg) -- Bloomberg News reports that the business practices of the National Basketball Players Association are being called into question by its president, Derek Fisher, who was asked to resign last week after requesting a review of the organization's finances. Bloomberg's Josh Lipton reports. (Source: Bloomberg)

The National Basketball Players Association, whose business practices are being questioned by President Derek Fisher, paid almost $4.8 million to Executive Director Billy Hunter’s family members and their professional firms since 2001, according to public records.

Fisher was asked to resign last week by the union’s leadership after he sought an outside review of finances. The request for him to step down came after the association’s executive committee spoke with Hunter on a conference call.

Hunter, a former U.S. attorney who led the players through two work stoppages, has a daughter and daughter-in-law on staff at the union. Another daughter is special counsel at a law firm used by the association, and Hunter’s son is a principal at a financial planning and investment firm that last fiscal year was paid $45,526 a month to run the union’s financial awareness program and advise on investments, according to filings with the U.S. Labor Department.

“It’s not a criminal act, but it’s not something I would do,” said Marvin Miller, who led baseball players through three strikes and two lockouts as their salaries rose 12-fold between 1966 and 1982.

Union spokesman Dan Wasserman said the executive committee knows about the Hunter family’s positions with the organization. He said Hunter was unavailable to comment.

Photographer: Patrick McDermott/Getty Images

Billy Hunter, left, executive director of the National Basketball Players Association and Derek Fisher, president of the NBA Players Association, speak at a press conference in New York on Nov. 10, 2011. Close

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Photographer: Patrick McDermott/Getty Images

Billy Hunter, left, executive director of the National Basketball Players Association and Derek Fisher, president of the NBA Players Association, speak at a press conference in New York on Nov. 10, 2011.

“There’s been full disclosure,” Wasserman said in a telephone interview.

Hunter said in an interview two days ago with the New York Times (NYT) that his family members are highly credentialed and “in many instances, they’re being paid at or below the market.”

“My kids have been vetted; the players have seen them,” Hunter told the newspaper. “They’re probably more competent than most of the people on my staff.”

‘Ethical Concern’

While Hunter isn’t breaking any law or violating association rules, having so many relatives making money from the union is enough for an independent examination, said Robert Barbato, a business ethics professor at the Rochester Institute of Technology.

“The involvement of so many family members who are receiving significant economic benefits raises enough of an ethical concern that an independent review seems required,” Barbato said in an e-mail. “Unless there is a reasonable explanation for calling for his resignation, I’m especially concerned that the executive committee has tried to silence Derek Fisher.”

Union Conference Call

Hunter, 69, discussed his family’s role in the union and the organization’s finances during the conference call last week with its executive committee, said the Washington Wizards’ Maurice Evans, a member of the nine-player group. After it concluded, the committee asked for Fisher’s resignation, saying he failed to uphold his duties as president. Fisher didn’t participate in the call.

Billy Hunter, Executive Director of the National Basketball Players Association, right, and Derek Fisher, President of the National Basketball Players Association, speak at a press conference after NBA labor negotiations at the New York Helmsley Hotel on Nov. 10, 2011 in New York City. Photographer Patrick McDermott/Getty Images Close

Billy Hunter, Executive Director of the National Basketball Players Association, right,... Read More

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Billy Hunter, Executive Director of the National Basketball Players Association, right, and Derek Fisher, President of the National Basketball Players Association, speak at a press conference after NBA labor negotiations at the New York Helmsley Hotel on Nov. 10, 2011 in New York City. Photographer Patrick McDermott/Getty Images

Fisher, who signed with the Oklahoma City Thunder last month, in an April 20 statement said he was “extremely disappointed” with the executive committee.

“I have tried to convey the legal and moral obligations we have as union officers,” said Fisher, 37. “Sadly, the executive committee has now waged a personal character attack on me to divert attention from the real issue.”

According to the union’s constitution, the executive director of the 450-member organization has the authority to hire and establish salaries for administrative and legal staffs, outside counsel and other advisers.

Hunter took over as executive director in 1996. A former National Football League player, he was the U.S. Attorney for the Northern District of California from 1977-84.

Partner at Prim

His son, Todd, is one of three partners at Prim Capital Corp., a Cleveland-based firm that runs the union’s financial awareness program and advises the organization on its investments. The union had about $210 million in assets as of July 2011, according to its annual filing with the U.S. Department of Labor.

The association has paid Prim almost $3 million since 2005, according to filings.

Prim has been working for the union since at least 1999, and Todd Hunter joined in 2002, Prim spokeswoman Carolyn Kaufman said in a telephone interview. Todd Hunter didn’t work on union matters until 2008, she said. Prim’s contract with the union bars the company from taking players as money management clients, she said.

Todd Hunter didn’t respond to voicemail and e-mail requests for comment.

Wasserman said the work was put out for bid and Prim was selected over at least three other companies.

Hunter’s Daughter

Billy Hunter’s daughter Alexis has worked for two law firms that were hired by the union since he took over. According to her LinkedIn profile, she left the U.S. Attorney’s office in San Francisco in 2007 and joined Washington-based Howrey LLP in September 2007. The union made its first payment to Howrey, of $60,035, on Sept. 21, 2007, and $380,917 in total before she left the firm for Steptoe & Johnson LLP in April 2011, according to the filings.

The next month, the union hired her new firm to file an unfair labor practice charge against the NBA with the National Labor Relations Board. In October, she was listed as an attorney of record for the union in a reply to a lawsuit brought against the players by the NBA. Records of how much Washington-based Steptoe & Johnson billed the union during the lockout, when team owners shut down the league, will be on the 2012 filing, which hasn’t been submitted.

Wasserman said the union hired Howrey because its former general counsel Gary Hall, who died a year ago, had a relationship with an attorney there. The union switched to Steptoe & Johnson when he moved there. Howrey filed for chapter 11 bankruptcy protection and dissolved last year.

Billy Hunter’s daughter Robyn, the union’s benefits director, was on the organization’s payroll with an annual salary of $82,954, according to the 2011 Labor Department filing. She has been paid $201,234 since joining the union near the start of 2009.

Daughter-In-Law

Todd Hunter’s wife, Megan Inaba, currently the union’s director of special events, has been on the payroll since 2001 - - before she and Todd Hunter were married -- and has made almost $1.2 million. She was paid $70,948 as the union’s director of career programs in 2002. According to the 2011 filing, she was paid $173,219, fifth most at the union, and more than the $163,458 paid to Pamela Wheeler, director of operations for the women’s players union.

In total, Hunter’s relatives and their firms, excluding the executive director, have been paid $4,768,685 since 2001, the filings show.

“That about says it all,” Philadelphia 76ers center Spencer Hawes, the team’s alternate representative to the union, said in an interview. “I don’t see what it hurts to try and see how the money is spent.”

Hunter’s Salary

Hunter himself made $2.39 million in salary, according to the 2011 filing, the most of the three major-sports unions based in the U.S. NFL union chief DeMaurice Smith made $1.38 million, according to the 2011 filing. Baseball’s Michael Weiner made $1 million.

Former NBA player and executive board member Jerome Williams said the structure of the basketball union merits examination.

“It’s a fine line because of how many players are represented and the amount of money that’s influenced by one person,” Williams, 38, said via telephone. “As a former vice president, I would have to advise the group that it would be wise to diversify.”

Last week, the executive committee first agreed with Fisher’s call for an outside examination of the union. The players changed their minds after hearing from Hunter in the conference call.

In calling for his resignation in an April 20 statement, the committee accused Fisher of conduct detrimental to the union and not acting in the players’ best interest.

Annual Audits

The union in that statement said it performs annual audits and shares the results with the executive committee and player representatives. The association completed an audit in February and will share the results at its summer meeting. In addition, the statement said the union would conduct a business review “in a timely manner.” It wasn’t specific.

The executive committee is composed of Fisher, the Boston Celtics’ Keyon Dooling; the Miami Heat’s James Jones; the San Antonio Spurs’ Matt Bonner; the Washington Wizards’ Roger Mason and Evans; the Los Angeles ClippersChris Paul; the Los Angeles Lakers’ Theo Ratliff; and Etan Thomas, who isn’t on a roster.

Basketball Hall of Fame member Bob Cousy, one of the founders of the players association in 1954, said Fisher might have trouble gaining support from his peers.

“I doubt whether they’re seriously interested in the whole thing unless it affects them directly,” the 83-year-old Cousy said in a telephone interview. “At that age, all these man- children are busy doing their own thing.”

Declined Invitation

Evans told reporters on April 20 that Fisher declined an invitation from the executive committee to defend himself on a conference call with Hunter. Nepotism at the union was among the topics discussed on the call, Evans said.

“Billy answered those questions to our satisfaction, was very open and candid with us, and we were satisfied, and again, the players were disappointed because Derek has yet to address us,” he said.

Miller, 95, said in a telephone interview that hiring family makes him squeamish.

“I would never do it,” he said.

To contact the reporter on this story: Mason Levinson in New York at mlevinson@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net

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