The NCAA's First Corruption Charges

North Carolina State is the first institution to face the NCAA regarding the corruption case that rocked college basketball two years ago. But will the association go after the institutions that earn it the most money?

July 16, 2019
 
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The National Collegiate Athletic Association has begun cracking down on institutions connected to the massive pay-for-play scandal that rocked men’s basketball nearly two years ago -- and North Carolina State University is its first target.

Corruption charges were first made public in September 2017, when 10 people, including Adidas executives and four assistant coaches in prominent programs, were arrested for allegedly orchestrating tens of thousands of dollars’ worth of payments to basketball recruits. The NCAA has waited until the conclusion of the federal trials in New York, which began in October, to start its own investigation.

The association notified NC State last week that it may have run afoul of the association’s rules, including committing two Level I violations, the most egregious charge the NCAA can levy, which is subject to the most severe of penalties.

College sports pundits told Inside Higher Ed they believe the association is attempting a scare tactic -- a way to deter other coaches from unethical conduct. And the NCAA’s pick of NC State is intentional, they said -- an institution large and visible enough to be considered part of big-time athletics, but not in the same tier as Big 10 programs such as Ohio State University or the University of Michigan, which bring in major revenue for the association and thus would likely escape the NCAA’s wrath.

The allegations against NC State largely relate to a star recruit, Dennis Smith Jr., who played with the Wolfpack for a single season in 2016-17 before becoming a top-10 pick in the professional draft.

Former assistant coach Orlando Early purportedly helped arrange a $40,000 payout to Smith’s father to secure Smith’s commitment to the university. The payment came from an Adidas consultant, Thomas (T. J.) Gassnola, who testified during the fraud trial of former Adidas executive Jim Gatto that he gave the money to Early. (Gatto, another representative of the shoe company and an aspiring sports agent were all found guilty of federal wire fraud last year).

Smith also received other “impermissible benefits,” the NCAA alleges -- more than 100 complimentary tickets to 13 games in the 2016-17 season that were worth $4,500. Shawn Farmer, who was Smith’s former trainer, also got 44 complimentary tickets worth more than $2,100, according to the NCAA.

The NCAA is also charging Mark Gottfried, the former head men’s basketball coach at NC State, with failing to monitor his program, the other Level I violation. The association is alleging two Level II violations related to the complimentary tickets and for the institution as a whole not monitoring the provision of the tickets. Players are supposed to receive only four complimentary tickets per home game.

Gottfried was fired in 2017. Despite no longer being at NC State (he’s now the head coach at California State University at Northridge), he could find his position in jeopardy if the NCAA finds that he did not promote an “atmosphere of compliance.” The Division I Committee on Infractions could slap Gottfried with a show-cause order that would essentially make him unemployable at an NCAA institution for a period of years.

His lawyer, Scott Tompsett, provided a written statement on the allegations: “Coach Gottfried has cooperated fully with the NCAA’s investigation and he will continue to cooperate. He is disappointed that allegations have been brought against his former program at NC State, and he takes these allegations very seriously.

“While we disagree with the enforcement staff’s position that Coach Gottfried did not adequately monitor certain aspects of his program, we are pleased that the NCAA agrees that he was not involved in any illicit payments.”

Walter Harrison, president emeritus of the University of Hartford and former chairman of the NCAA Executive Committee, the top leadership board of the association -- now known as the Board of Governors -- said, “It strains credulity to think that the head coaches had no knowledge of these activities.”

“It is very important to stress to all head coaches that they are responsible for all members of their staff complying to both NCAA regulations and the law,” Harrison said.

Some are skeptical whether the NCAA would challenge the sport's most valuable coaches, the (in some cases) revered figures who buoy certain programs and generate significant revenue for the NCAA. Dave Ridpath, president of the Drake Group, an ethics watchdog group in college athletics, said he would be interested to see the NCAA go after a coach like Sean Miller, head coach of the University of Arizona's men's team and one of the highest-paid coaches in the country. Miller was initially subpoenaed in the federal corruption case but ultimately did not testify.

"I'm still very skeptical," Ridpath, also an associate professor of sports management at Ohio University, said. "Mark Gottfried, he's not a big fish … he's not going to a big-time job. Sean Miller, that's a whole different story."

NC State has 90 days to respond to the NCAA, which will then issue a rebuttal within 60 days. After that, within three to six months, the Committee on Infractions will meet to debate the case.

The university noted in a statement that the coaches who were involved in the potential rule breaking were no longer employed there.

“NC State is committed to the highest levels of compliance, honesty and integrity,” Chancellor Randy Woodson said in a statement. “As the university carefully reviews the NCAA’s allegations and thoroughly evaluates the evidence in order to determine our response, we are prepared to be accountable where we believe it is appropriate and to vigorously defend this great university and its athletics program where we feel it is necessary.”

Marc Edelman, professor of law at Baruch College and a sports law specialist, compared the NCAA’s behavior to that of an economic cartel’s.

The NCAA is made up of member institutions that try to maximize the revenue to them and to the coaches and athletics directors, Edelman said. So when coaches cheat the system by trying to pay players illicitly, it threatens the cartel’s stability, and the NCAA is more likely to discipline the offending parties, he said.

This was evident with Southern Methodist University in 1987, when the NCAA handed down its strongest sanction: the death penalty. The football program was canceled for an entire season after the university was found to have been paying players to commit to the university.

It destroyed the SMU football team and sent a strong message to other institutions at the time, Edelman said -- and for a time, violations were minimal.

Edelman said he was unsurprised that the NCAA was coming down so hard on NC State compared to the University of North Carolina at Chapel Hill, which avoided all punishments in a major academic fraud case.

“NC State is probably not seen as nearly as powerful, useful or important as the University of North Carolina, because the NC State athletic program presumably brings in less revenue and has less brand equity than a school such as UNC,” Edelman said.

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