The U.S. Department of Justice has reportedly launched an investigation into whether the Los Angeles Clippers committed crimes in allegedly arranging for team sponsors to pay Kawhi Leonard for no-show endorsement deals.
The New York Times reported Thursday on the probe, led by the U.S. Attorney’s Office in Brooklyn. The U.S. Attorney’s Office for the Eastern District of New York is the same office that has prosecuted several NBA figures, including Terry Rozier, Damon Jones and Chauncey Billups, in criminal cases involving alleged illegal gambling schemes, wire fraud, money laundering and related offenses. About a decade ago, this office also prosecuted FIFA officials and sports-marketing executives for racketeering, wire fraud and money laundering over bribes and kickbacks.
The DOJ’s interest in the Clippers scandal might seem surprising given that the NBA has punished the team, owner Steve Ballmer, several executives and Leonard for what amounts to basketball cheating—circumventing the league’s salary cap, undermining fair play and obtaining an unfair advantage over competitors.
Those aren’t crimes. They’re contractual violations governed by business agreements.
To that point, NBA teams and owners are bound by the league’s constitution, a contract governing the relationship between the commissioner, the league, teams and owners. That constitution expressly states that all decisions of the commissioner are “final and binding” and should be understood as arbitration awards. Another key contract is the collective bargaining agreement, which prohibits salary-cap circumvention.
