April 28 (Bloomberg) -- The U.S. government is giving National Basketball Players Association President Derek Fisher what his fellow union officials wouldn’t: a closer examination of the organization’s finances and business practices.
The union said in a statement yesterday that it had received a subpoena from the U.S. Attorney’s Office in Manhattan. The association said it would cooperate with the investigation, which arose after Fisher asked the nine-member executive committee of the union headed by Executive Director Billy Hunter to probe the organization’s business practices amid reports of nepotism and conflicts of interest.
Hunter was notified of the investigation on April 25, according to two people with direct knowledge of the situation. The people were granted anonymity because they weren’t authorized to discuss the investigation.
The association has appointed a six-member special committee that consists of player representatives and executive committee members to oversee an internal inquiry that will include a financial audit. The statement didn’t say which players would serve on the committee.
The executive committee has retained Theodore V. Wells, Jr. and the New York law firm of Paul, Weiss, Rifkind, Wharton & Garrison to conduct the inquiry. Hunter has recused himself from the process, the statement said.
News of the investigation comes a week after the union’s executive committee asked Fisher, an Oklahoma City Thunder guard, to resign following his request for the reviews. The committee, with the support of Hunter, declined to conduct the reviews and two days later voted unanimously to ask for Fisher’s resignation. He refused.
Bloomberg News reported this week that the New York-based union has paid $4.8 million to Hunter’s family members and their professional firms since 2001, according to public records.
Hunter, 69, has a daughter and a daughter-in-law on staff at the New York-based association. Another daughter is special counsel at a law firm used by the union, and Hunter’s son is a principal at a financial planning and investment firm that advises the organization on investments and runs its financial awareness program for players.
“The mere fact that there may be nepotism is not going to in and of itself draw the interest of investigators,” William Gould, an emeritus professor at Stanford Law School and a former chairman of the National Labor Relations Board, said in a telephone interview.
Jamie Wior, a spokeswoman for Fisher, declined to comment. Carly Sullivan, a spokeswoman for Manhattan U.S. Attorney Preet Bharara said the office doesn’t confirm or deny the existence of investigations.
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 Maurice Evans; the Los Angeles Clippers’ Chris Paul; the Los Angeles Lakers’ Theo Ratliff; and Etan Thomas, who isn’t on a roster.
Leadership of the 450-member union, which agreed to a new collective bargaining agreement with NBA owners in November, has been roiled over Fisher’s demand for independent reviews.
The executive committee first agreed with Fisher’s call for an outside examination of the union. Hunter then met with the committee via conference call and discussed his family’s role in the union and the organization’s finances, Evans said. The committee then asked for Fisher’s resignation, saying he failed to uphold his duties as president. Fisher didn’t participate in the call.
Fisher in an April 20 statement said he was “extremely disappointed” with the executive committee.
Hunter is formerly the U.S. Attorney for the Northern District of California and took over the union in 1996. Owners shut down the league in labor disputes twice during his tenure, in 1998 and last year, when players and owners reached an impasse over a collective bargaining agreement.
The two sides agreed to a 10-year labor contract in November, allowing for a Christmas Day start to a 66-game season, down from the usual 82.
The playoffs begin today.
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