BCS Games Accused of Abusing Tax-Exempt Status
The anti-BCS group Playoff PAC has filed a complaint with the Internal Revenue Service accusing certain BCS bowls of abusing their 501(c)(3) tax-exempt status. The 27-page legal complaint and executive summary list significant tax irregularities discovered through a thorough review of over 2,300 pages of tax records and public documents.
The 3 organizations being targeted are:
- The Arizona Sports Foundation–also known as the Fiesta Bowl–and its affiliated charities;
- Orange Bowl Committee, Inc., and its affiliated public charities; and
- Sugar Bowl
Some of the irregularities uncovered by Playoff PAC include:
- The Sugar Bowl’s top three execs received $1,225,136 in FYE 2009 on revenue of $12.7 million, meaning that just three people skimmed almost $1 of every $10 the Bowl earned.
- Fiesta Bowl CEO John Junker received $317,717 in FYE 2009 for working just 21 hours per week from the Arizona Sports Foundation, the Bowl’s lead entity. Mr. Junker’s total compensation package from all Fiesta Bowl-related entities was $592,418 for FYE 2009, nearly quadruple the CEO pay at similarly sized charities.
- The Fiesta Bowl gave two Bowl executives $240,000 in unsecured interest-free loans, reportedly to pay for their personal memberships in a private golf club.
- Sugar Bowl Exec. Dir. Paul Hoolahan received $645,386 in FYE 2009, a year in which the Sugar Bowl lost money despite receiving a $1.4 million government grant. Mr. Hoolahan collected $25,000 more than the Rose Bowl’s top three executives combined.
- BCS Bowls use charitable funds to fly Bowl execs and spouses first-class, pay private club dues, and foot the bill for employees’ personal income taxes. The Orange Bowl, for example, spent $756,546 on travel in FYE 2009 for its employees.
The PAC also reported that the Fiesta Bowl paid over $1 million in fees over the last 5 years to the lobbying firm Husk Partners, Inc. (complaint, page 6), yet on each of the past five tax returns, the bowl checked “no” on whether it engaged in lobbying activities or attempted to influence legislation. This situation has prompted the Arizona Secretary of State to send a letter to Attorney General Terry Goddard asking him to open a criminal investigation.
Of course, the BCS representatives to a person say that this is all nonsense and that they comply with all necessary laws. And to take down an organization as powerful as the BCS it might take more than a few tax violations. However it has been done before: see Al Capone.