A federal probe hanging over Intuit Dome
The New York Times broke the story overnight. The office of the federal prosecutor for the Eastern District of New York in Brooklyn has opened a criminal investigation into the Los Angeles Clippers. The focus: the franchise’s financial arrangements around Kawhi Leonard.
The probe is still at an early stage. At least one subpoena has already been issued, according to sources familiar with the case. There is no sign yet that it will lead to charges or to evidence being put before a grand jury. The prosecutor’s office declined to comment, while the Clippers and the NBA did not respond.
One detail stands out: investigators were already at work before the NBA made its findings public.
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$30 million fine and five first-round picks gone
On 2 September, after a year-long independent investigation by Wachtell, Lipton, Rosen & Katz, the league hit the Clippers with a $30 million fine and stripped them of their first-round draft picks from 2029 to 2033. Kawhi Leonard was ordered to pay $700,000. Owner Steve Ballmer was handed a one-year suspension from all league and team-related activity. Two executives were also suspended.
The NBA said the case involved a series of violations and noted that the club had already been a repeat offender when it came to skirting the salary cap. At the heart of it: linking Leonard with team sponsors for off-court income, promises of commercial deals to the companies involved in return, and the covering of personal expenses for the player and his representatives.
Four companies are named: Boingo Wireless, Daktronics, Lockton Insurance and Aspiration Partners. The last of those, a fintech company that went bust last year, allegedly signed a $28 million endorsement deal with Leonard and a 23-year, $300 million partnership with the Clippers. Daktronics confirmed on 2 September that it had been contacted by the SEC.
Ballmer lines up a fightback
The Clippers are challenging the findings and even the legitimacy of the league’s investigation. According to the New York Times, Ballmer and the franchise are considering legal action against the NBA and are seeking an injunction.
Leonard, 35, says through his new agent Harrison Gaines that he knew nothing about any attempt to skirt the salary cap. He has admitted poor judgement around him. Dennis Robertson, his uncle and former adviser, has been banned for five years from any dealings with league franchises.
One issue is still unresolved. The deal agreed in principle on 30 June with Toronto, the team with which Leonard won the title and Finals MVP in 2019, has still not been completed.
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