Wednesday, May 26, 2010
Probe shows extent of Kansas scam
LAWRENCE, Kan. -- There was no reason to suspect anything was wrong at the University of Kansas. The teams were winning, the stands were full, the donor money continued to roll in.
But behind the scenes, working side-by-side within the athletics department, a group of six employees had allegedly hatched a lucrative ticket-scalping scheme.
Details of the scam were outlined Wednesday in a report that found the "inappropriate" sale of at least $1 million worth of basketball and football tickets to brokers over the past five years, leaving school officials embarrassed.
"Being on the athletics side, the simplest way to try to describe this is that there was a curveball thrown and I missed it," athletic director Lew Perkins said. "I missed that curveball. It got by. We had the wrong people hired for the wrong the jobs."
The school said the findings, contained in a report done by a Wichita law firm, have been sent to federal investigators already looking into allegations of wrongdoing in the athletics department and the school's athletics fundraising arm, the Williams Educational Fund.
The investigation said five Kansas athletics staffers and a consultant -- all of them no longer employed by the school -- sold or used at least 17,609 men's basketball tickets, 2,181 football tickets and a number of parking passes and other passes for personal purposes. The report showed over $887,000 in basketball tickets and more than $122,000 worth of football tickets were involved.
And it may be higher than that.
Because investigators did not have subpoena power, the amounts could climb as high as $3 million once the federal probe is complete, according to Jack Focht, attorney for Foulston Siefkin. He said it's also possible the scam could have started much earlier since accurate records were only kept back to 2005.
Investigators were unable to determine what portion of the $1 million in tickets were sold directly to ticket brokers. Distribution of the tickets were disguised by department employees as complimentary and inventory tickets, or other categories with limited accountability.
School officials were grim-faced as they discussed the former employees, described in the report as "ice cream store" workers who seemed to "feel free to sample the wares without paying for them."
"We sincerely regret the stress this has caused our loyal fans and any lose of confidence that may have resulted," chancellor Bernadette Gray-Little said. "I want to reassure all Jayhawks that the University of Kansas will be taking decisive actions to restore trust."
The investigation said five Kansas athletics staffers and a consultant -- all of them no longer employed by the school -- sold or used at least 17,609 men's basketball tickets, 2,181 football tickets and a number of parking passes and other passes for personal purposes. There was no evidence any money was stolen or diverted from the Williams Fund, which raises about $25 million a year from more than 5,000 boosters.
The investigation found no wrongdoing in the points system used to award season tickets and said the actual effect on tickets actually awarded was minimal. The university said it will take immediate measures to prevent wrongdoing within the ticket office.
The investigation began in March amid reports that tickets to Jayhawk basketball games -- both at Allen Fieldhouse and in NCAA tournaments -- were being scalped by officials within the athletic department.
The 29-page report, backed up by 240 pages of exhibits, suggested former Williams Fund director Rodney Jones, who helped determine who got premium seats at Kansas home games, was a key player in the scandal.
Jones joined the ticket office in 1997 and became its director six years later. In 2004 he was appointed to a $70,000-a-year job running the Williams Fund. When he left in March, Jones was making $135,000 a year and $8,000 in bonuses.
Ben Kirtland, the school's associate athletic director of development, told investigators that Jones "was always on the lookout for development tickets." But the report said Kirtland was also to blame, saying he helped create "an atmosphere similar to a worker in a candy store" when it came to work with the tickets.
"It was only after the federal authorities began to ask questions that Kirtland began to reveal facts he knew about Jones and expressed his belief that Jones was selling tickets and could be making as much as $75,000 to $100,000 a year in additional income," the report said. "Kirtland finally admitted to his own culpability in the selling of tickets .. that he and Jones had not only violated the rules pertaining to the number of tickets available to donors, they had personally kept the money from selling tickets to them."
Jones' attorney, Gerald Handley, also didn't respond to AP requests for comment Wednesday. The report said getting details out of Jones -- who did not cooperate in the law firm's probe -- was best left to federal authorities.
The report also singled out Charlette Blubaugh, the former associate athletic director in charge of the ticket office and the manager most familiar with the ticketing software.
Blubaugh allegedly arranged to have ticket records destroyed and then suggested it be blamed on stadium construction, the report said. And at the 2009 NCAA tournament, after a Kansas loss, Blubaugh and others went out and sold the unneeded Elite Eight tickets "on the floor." One staffer came back with a bag of $3,400 in cash, but Blubaugh never turned hers in.
"Blubaugh used her position to improperly direct tickets to subordinates ... so that they could be sold to ticket brokers and the proceeds kept," according to the report. "We have also discovered a 'fake account' for the 'sale' of season tickets that appear were mailed to Blubaugh's former addresses."
Two of her assistants, Brandon Simmons and Jason Jeffries, "sold over $200,000 worth of tickets through brokers with Blubaugh's knowledge and consent," the report said.
Investigators recommended civil charges against all five former employees mentioned in the report as well as Blubaugh's husband, Tom, who did consulting work. The school said it would try every means to recover the money.
Mentioned briefly in the report was David Freeman, a close friend of Jones whose attorney has confirmed that his client is talking with investigators about the ticket scheme. Freeman is facing an 18-month jail sentence in an unrelated bribery case.
Freeman is also a former business partner with former Kansas basketball standout Roger Morningstar, whose son, Brady, is a current member of the team.
According to a report posted online Wednesday by Yahoo! Sports, Freeman said he has told federal investigators he believes the scalping stretches beyond Kansas and claimed he, Jones and Roger Morningstar were following the instructions of David and Dana Pump, two California-based basketball camp organizers.
According to Freeman, the ticket scam began in 2002 when the Pumps contacted Roger Morningstar and asked how to obtain extra Kansas postseason basketball tickets. Freeman told Yahoo! that Morningstar asked him to contact Jones, an assistant ticket manager at the time.
The scalping began that year, during the Big 12 tournament, Freeman told Yahoo!.
"[Rodney] gave me the tickets and then I took them to the Pumps and they gave me the money," Freeman said, saying that first year's gains yielded about $40,000 split among Freeman, Jones and Morningstar.
Morningstar declined to comment to Yahoo! and could not be located for comment Wednesday by the AP. Messages left at business offices for the Pump brothers were not immediately returned, nor were messages left for Freeman's attorney, Carl Cornwell.
Freeman said the 2002 Final Four in Atlanta was the most lucrative, with Kansas alumni eager to dump tickets after the team lost in the semifinals, telling Yahoo! Sports: "We made a half-million dollars [that weekend]." He declined to say who was buying the tickets.
The investigation said five Kansas athletics staffers and a consultant -- all of them no longer employed by the school -- sold or used at least 17,609 men's basketball tickets, 2,181 football tickets and a number of parking passes and other passes for personal purposes.