Steve Ballmer's Sword, the DOJ's Probe and a "Road to Jail Time": Kawhi-Gate, Part XVI

Welcome to Pablo Torre finds out, I am Pablo Torre and today we're going to find out what this sound is. Second row on the end of the left, Pablo. Yeah, Pablo from Pablo Torre finds out right after this. The press conference I want to get to because watching people at the press conference for me sitting in the second row was really fun. But I don't think we can get there David Sampson and Amina Hassan quite yet because like every episode in like a limited series drama we need to do that previously on ptfo thing. And there's a lot we have to recap the turns out since we last hung out together. This is me putting undue stress on the producers and editors of the show I feel like someone can cut the montage. If the near time isn't confirming at the AP isn't confirming at the Washington Post Wall Street Journal, like if big mainstream media outlets aren't touching your scoop, to me that's that's not defending Steve Balmer the NBA of the Clippers that's like, is there anything here and are you just presenting this story for your audience for clout and clicks a few moments later we begin today with the NBA's punishment of the Clippers for circumventing the salary cap to get more money to Kauai Leonard. The NBA has found that the team played an active role in the violations first detailed by Pablo Torrey and so for those of me who last saw us or heard us on September 2nd when you and I and David were going live after the biggest punishment in NBA history got announced, how would you describe the LA Clippers owner Steve Balmer in his reaction publicly that evening. The reaction as portrayed by his attorney was I would say in a word defiant it was threatening actually to litigate David that was the thing he was threatening actually to arbitrate right off the bat and then turns out couldn't do that goes Kauai Leonard on the union had settled with the league and then he threatened to sue the league that's where we were that evening when we all hug out. I just know that when Adam silver went to sleep on September 2nd he went to sleep knowing that his legal department was not sleeping his outside council was not sleeping they were preparing to be served literally high you've gotten served I was imagining Steve Balmer serving Adam silver while meeting the media after a board of governors meeting which is why I figured in all of our conversations both on and off air that something was going to have to happen. Between September 2nd and his defiant on conceding nature and the moment that the board of governors meeting was going to start at the St. Regis Hotel in New York. Here is the letter that Steve Balmer's attorney wrote to Adam silver quote it seems increasingly likely that Mr. Balmer will spend years defending himself and the team. Against a podcasters baseless claims this type of witch hunt flies in the face of fundamental fairness and of the integrity of the league and of the sport that we all love we are exploring every legal remedy to address this gross injustice. And then there was radio silence from team bomber 11 days pass and then the richest under American sports who was currently the 8th or 9th richest person in the world worth about 170 plus billion dollars last check tweeted out this David during the 4th quarter of son and I football this week. This has been a very difficult time for everybody associated with the clippers and for that I have sincere regrets. I want to apologize to our fans employees and my fellow NBA team owners for the distraction and distress this matter has caused for which I accept responsibility as principal owner. We are committing to put this chapter behind us we have communicated to the NBA that we are complying with the penalties assessed by the league have paid the fine and are moving forward well there are still disagreements concerning the findings in the report this is not where I want to focus. Team owners should support not distract now as one former NBA team executive put it to me about all of this legal saber rattling quote. He had no choice the bylaws make it impossible to see the league as you would just be suing yourself the clippers are 130th of the league and quote. And what it's worth Adam silver of course gesture towards this David indicated as much at his press conference on Tuesday afternoon most importantly indicated a willingness to accept. The leagues decision in this case and the accompanying sanctions so that initially was I was most focused on which the real focus there though guys is what Adam said after that fact at the press conference and what Steve's attorneys. I promise you told him as they combed through that statement there was released in the fourth quarter of Monday night football and that is Steve bombers being investigated by the federal government. I'm sorry probably you don't want to go there yet well we're going to get to that in a minute we're doing we're doing the montage we're doing the montage sorry damage this is still the recap fine back to the recap. But speaking of distractions what Steve bomber talked about was the distraction this has been a distraction this has been distressing owners should not distract. At no point as a mean just alluded to did Steve bomber admit to cap circumvention or the actual wrongdoing in the eyes of the league that had been exhaustively chronicled in our recap. A previous episode in walk tells 36 page report but I want to move along the NBA timeline here specific to the league because all of this at the scene for what the city of Toronto had been waiting for since the end of June because what happens sources tell me that at long last the clippers and raptors have both agreed to move forward and complete the quiet Leonard to Toronto trade and well the long awaited quiet Leonard deal to the Toronto. Raptors finally gets consummated it went down pretty much as agreed to his quiet Leonard going in return for a grady dick Brennan Ingram first round picks in 2031 and 2033 second round picks in 2030 and 2033 and a first round pick swap in 2027 which under the on against the backdrop of the sanctions that are just levied by the NBA is a nice bit of relief for the clippers. But I want to point you guys to now though is this billboard which I want to recall because this is this is the seven year era this is how it started quiet Leonard Paul George we over me LA our way they had a movie poster and this is how the movie ended and so when it comes to the me on the right quiet Leonard. And how this trade was eventually clear to proceed with the NBA assigning just a seven hundred thousand dollar fine for quiet Leonard effectively a slap on the wrist no suspension no avoiding of the contract of course a five year ban of Uncle Dennis Robertson is the harshest thing that team co I got Adam silver at this presser on Tuesday was very conspicuously not willing to discuss how this came to be he didn't want to discuss the seven hundred thousand dollar fine. In fact what he said in response to a question from Zac Lowe at the ringer was that he did not think any of this was appropriate to discuss I don't think it would be appropriate to take you through the back and forth with the players association. I did meet directly with Kauai recently and I think we all agreed time to move forward here. But what one high level official directly familiar with the quiet Leonard settlement negotiations in this investigation told us your public or he finds out is quote the nuclear option of co wise contract being avoided could have been on the table anything was on the table and quote what the union did was what Steve Balmer ultimately apparently refused to do at least in earnest. He refused to negotiate and co I landed in the union did exactly that and an NBA spokesperson declined to comment but that seven hundred thousand dollar fine we are told was a negotiated number we understand that that total came from adding up expenses apparently that co I was okay paying back. And what this official added of co I getting off relatively easy was quote to the extent that his punishment is not so heavy the NBA can live with that. They're upholding the system protections they want and they get those by imposing punishments on the team and they are big ones and quote which I mean another high level official familiar with the clipper's punishment underscored as well. I don't think this is the league stance, but I fundamentally believe players can't cap circumvent teams caps are convinced. So when a league wants to curtail capture convention you don't lay the hammer on players you live the hammer on teams because a player cannot independently cap circumvent only happens. in concert with the team, avoiding quietly his contract. That's not gonna stop team. The team was like, yeah, go, yeah. Far, oh, those players, those bad players, ooh. The way you stop teams is by hitting the team. The team said, whoa, oh, oh, oh, oh, oh, oh, oh, oh. I could get in that kind of trouble. Never mind, I'm not doing that. And so the focus became Steve Balmer and his executive team. And that is a function, according to the reporting we've done here, of yes, the apparently endless rabbit hole inside of the scope that walked out Lipton, Rosalie cats had pursued over the last year, which is still ongoing, according to walked out Lipton. They still have not closed the book on that for the record. But what is especially interesting right now, as a concern is the governance of, yes, an American sports league with 30 franchises, totaling evaluation of some $165 billion give or take. We still have no idea, as we tape right now, who is running the Los Angeles Clippers? In fact, while I was wandering the halls, David, of the St. Rita's Hotel here in Manhattan, the Clippers, it turns out, we're not Steve Balmer, band for a year, alternate governor, slash president of business, Gillian Zucker, who we'll get back to later this episode, band for a year, the other alternate governor, as we always point out, Clippers co-owner and rationally inexplicable aspiration investor, Dennis Wong. (laughing) Where is he? He was not punished. Was he the name they submitted? We are waiting to discover that. And according to one MBA owner who was present at the board of governor's meetings, talking about who the clipper sent, quote, nobody. It was the strangest thing ever. 29 teams wrapping, end quote. - So Adam Silver was asked about that as well. Who is the Clippers representative? He said they were not represented. And then he said, whoever they pick, we have to vet them. - They're in the process of pointing that person in that person. I mean, you know, Pablo's question, that person has to be vetted as well. So there's a bit of a process there before that person becomes official. - I did not know that was the case, David. I thought, hey, it's an employee or one of the owners. We're already in the circle, we're already in the house. - There's a strong vetting process that exists when you become a limited partner of a team, when you become a controlling owner of a team, the vetting process is even deeper and more significant. And so what I believe is going on, if Dennis Wong, we're gonna be the alternate governor, he would have been approved quickly and would have been at that owner's meeting. I am inferring by the fact that Adam said that there were no representatives there, that Dennis Wong will not be the interim governor because his vetting process would be faster because he was already approved as a limited partner of the clippers. So I assume it is someone other than Dennis, as I would imagine it would have to be given the fact of Dennis's involvement in all this, though not in Wachtel's report, conspicuously absent, by the way, name not mentioned in Wachtel's report. And so I'm not surprised there were no clippers representatives because who do you send? George Costanza, the assistant to the traveling secretary, you can't just stand up and vote on behalf of your team, if you are not authorized by the league to vote on that particular issue, and the clippers simply had no one authorized, so that was that. - Yeah, it's the question of who is in charge of this multi-billion dollar franchise as opposed to, hey, who wants to represent us at like the draft lottery where you can send someone's kid or whatever. But all of this stuff is, it turns out, the least of Steve Balmer's concerns at the moment because as one former clippers executive told me, quote, feds getting involved with the clips, so glad I'm not around anymore. exclamation point, end quote. - Well, here's the problem when you're being investigated by not Pablo and not Wachtel. You're being investigated by someone where the ramifications are not PR based. The ramifications are not financial based or draft pick based. The ramifications can be freedom based. And anytime there's a freedom based issue, it draws your attention greatly. And when it was announced by the Eastern District that they were looking into possible criminal actions by the clippers, Kauai, whatever surrounded these endorsement contracts, if you're working with the clippers, you are in immediate investigative mode. And I want to quickly explain what that means. When you're in litigation mode, you meet with your employees. Don't get rid of your emails. Do not shred any documents. Do not talk to the following 10 people. We will have meetings with our employees 'cause we were often in investigative and in legal mode, but when it's federal government and the criminal side, that's a whole different level of, uh oh, your day is different, whether you are in ticket sales or the CFO. - We are moving from podcast court, not the civil court, which we've been already, we're moving to the real thing. (upbeat music) So I just got to remind everybody that this is far from the first time that the feds have shown up in this podcast series. You may recall the Department of Justice, send in Sig Jo Sandberg, the co-founder of that green bank aspiration, but a clippers partner. To 14 years in federal prison, following a multi-year investigation that was triggered, of course, by two whistleblowers. We submitted a federal whistleblower complaint at aspiration under penalty of perjury, explicitly mentioning Steve Balmer's clippers and Kawai Leonard and salary capture convention in the spring of 2023. You may also recall how we have been talking about this parallel investigation into aspiration by the Securities and Exchange Commission, which continues to this day, according to our reporting. And you may also recall that just hours before the NBA issued its punishment of Steve Balmer's clippers for facilitating four secret cap circumvention schemes with a total of 14 partners, the CFO of one of those four companies, Dactronics, admitted on an earnings call, that the SEC had opened an investigation to the publicly traded scoreboard manufacturer, following our previous reporting with Hunter Brook Media. - Additionally, the Securities and Exchange Commission seeking information from us, concerning the company and Mr. Leonard. We take these requests seriously and are cooperating. - And then, last Thursday, this is days before Balmer laid down his sword against the NBA, this happened. - It's breaking news. Federal prosecutors have opened a criminal investigation into the LA clippers, that's according to The New York Times. - The New York Times is today reporting that the scandal has caught the attention of the Department of Justice. Quote, the investigation is in its earliest stages and is being conducted by the US Attorney's Office in Brooklyn, which has a long history of investigating the NBA and professional sports. - Look, the Justice Department often wants to look into high profile matters in which there may be some potential wrongdoing. One other immediate note, David, from the Times reporting, beyond the fact that at least one subpoena has been issued already, is that this probe started before the NBA ruling came down as well, which means that, as always, I appreciate whoever is out there liking and subscribing. (laughing) - Yeah, I just know that the probe that has started was not made any more or less important by five draft picks, $30 million and a five year suspension for Uncle Dennis and one year suspension for Balmer. The critical part of a probe like this is you have to find something criminal and you have to find something that a grand jury will carry forward as an indictment. And while we can talk all we want about the penalties given by Adam Silver and the NBA to the Clippers, none of those are in any way part of what would be presented to a grand jury. It's not proof of anything. It's not evidentiary of anything. So what they're doing is looking for things that are actually criminal in criminal court, not NBA sports or podcast court. - Which is extra strange, all of this podcast court and real life court intersection. Because one of us happen to have on their Twitter header a photo. I mean, do you recall the photo of a certain cast member of the Dan Lebedtard show after doing an episode of "Powletory Finds Out," investigating the NBA's gambling scandal in which that cast member was dressed up as FBI director Cash Patel. - As a matter of fact, I do. And you can bet on that. - The fact David that the FBI in the DOJ or listening to a podcast and a mean is doing cash Patel impressions is a bit much even for me. But what this current DOJ probe and to Steve Balmer and the Clippers does back in this story is help to explain crucially how and why the ninth richest man in the world has been waving the white flag. And he has not admitted to anything that we and the investigators of "Walk to a Lipton" have now exhaustively chronicled still. And this is something the commissioner himself acknowledged after a question by the Athletics David Aldridge at the St. Regis Hotel. - There are other inquiries that have nothing to do with the NBA [BLANK_AUDIO] Uh, Clippers and Steve Bomber are now dealing with, and so my assumption is, in some cases, he, you know, has to choose his words, you know, carefully in terms of what he's saying. But that is the biggest understatement of the press conference. One, Steve Bomber didn't choose his words in that letter that talked about how he's a distraction. That was loyered up in a very significant way because when you're under investigation, there's one thing you learn. You do not say anything that can in any way be used by prosecutors as evidence to help build a case against you and nothing about being a distraction to other MBA owners by saying that we've paid the fine. None of that in any way furthers the probe or, frankly, dampens it or lessens it, but it just becomes wholly irrelevant to the federal prosecutors. So David, I mean, this is a report about an inquiry into perhaps launching a criminal probe. It's a lot of if, ends, and buts, but what exactly is the risk that Steve Bomber is inheriting here? What could they actually charge him with in criminal court? So, so David, I want to, I want to jump in here because what I've been doing, and I know you've been doing something similar, is I've been asking people who might know the answer to this question, and so the first thing I did, actually, I mean, was I asked a former federal prosecutor who requested anonymity to speak freely about their intimate knowledge of the workings of the U.S. Attorney's Office out of the Eastern District of New York, which is reportedly roving the co-I fallout. I asked him that question. How much worse is all of this for Steve Bomber personally, just at a high level, now that the DOJ specifically is investigating these alleged schemes in addition to the SEC? And what the source said was, quote, "Oh, much worse. Not truly staring into the abyss, but this is a whole different sport, even in 2026. A creative theory could map out a road to jail time." And quote, "And what another attorney who worked for the SEC explained to me is that the SEC, David, you can help me out here, the SEC is forward-looking. In generally seeking to deter future violations of securities loss, they're looking for violations so that they can take them to the public. We are regulating the market." Whereas the DOJ essentially is backward-looking. What it's doing is it is seeking somewhat competitively, perhaps, to prosecute criminal behavior that's already allegedly been done. Well, we don't live in minority report. You can't investigate and prosecute criminal activity that has not taken place because you think it's going to take place. I mean, that would be quite a system where you may have to change out your eyeballs. That's the minority report reference below that may have just been right by me. I'm familiar with pre-crime. Okay. Thank you. I'm familiar with that. That's a fool. But I do want to introduce here to help us out a different character that the audience might recognize who has been a guest on multiple episodes of this unlimited run series that we've been doing. And this guy happens to be the recovering DOJ fraud attorney who launched the initial investigation into aspiration in 2023. I can only assume that what you would do, Pablo, as a Pulitzer-winning podcaster is speak to Lou Manzo, who actually is the person who was right there at ground zero of this investigation wondering where do we go to see if something can stick here and did not necessarily believe that salary caps are convention at that time was the route to take. I started in DOJ under Obama, I was under Trump, I was under Biden, and typically nothing changed. For most of DOJ, it's much less political than anyone thinks on the outside. And so that's going to be interesting to see, is there a political dimension of this just Trump want to come after a major Democratic donor, or is there this kind of billionaires club where the people at the top don't really, they just look out for each other. And I could see that happening too. That's the very cynical side. The non-synical side is maybe some, you know, enterprising prosecutor in the Eastern District of New York has some goods. And so the first thing I want to start with is the last thing Lou mentioned, which is, what could be the goods here? What might be the potential creative legal theory in front of us and in front of Steve Bombers, very expensive attorneys, David? That could ostensibly put the ninth richest man on the planet behind bars. And so I just want to remind people that on its face, the circumvention of a sports league salary cap itself has never before been successfully prosecuted as a federal crime to my knowledge. David, you know, in this case, the owners, the other billionaires, they might be the victims under this first theory. So you have to look for a crime and fraud is a good place to start. And the question is who is defrauded and what was the harm? What was the injury? And I could make a cogent argument that the 29 owners got harmed by the salary cap circumvention because they were not in a position to sign Kawaii Leonard unless they broke the NBA rules, which they didn't want to break. And then I could try to assign a monetary value to that harm, though the Lakers selling for $12.5 billion in theory as an enterprise valuation, it's going to be hard to prove that there's any harm that the Lakers got by not signing Kawaii. I could try to go more granular and say that the owner of the local bar establishment outside in Arena, which is a Kawaii Leonard love affair bar got harmed because Kawaii didn't play for that particular team when he could have but for salary cap circumvention. But what I'm really thinking about and why the DOJ focus not on the salary cap circumvention, what they were focusing on were the endorsement contracts, the manner in which the salary cap circumvention happened. Because if you are a company and you are not properly disclosing what you are doing with your money, both money coming in and money going out, then you may be participating in a fraud upon the investors of that company. That's why Joe Sanbers in prison, not because he didn't plan to tree outside the Great Western Forum, because he defrauded investors who thought they were getting X and they ended up getting nothing instead. Well, this is what you just said, David, is according to our latest ongoing reporting, the far more plausible chapter of the saga that we are staring in the face of, which may well be securities fraud. And you will recall a mean that we started this series with Steve Balmer's personal investments into aspiration, the $50 million in 2021, the next 10 million in 2023, that's after the whistleblowers reported the scheme to the federal government and it is while the company was obviously falling apart. And you will also perhaps recall, David, the secret undisclosed side deal we previously reported, where Steve Balmer had worked out an arrangement with Joe Sandberg on that initial $50 million investment in which Sandberg agreed to guarantee that investment in case of the company's collapse. This was a side deal, a protection, a downside bit of security that nobody I talked to, no one knew about this until Steve Balmer happened to very subtly disclose it in his victim impact letter ahead of Sandberg's sentencing. And so in that story, by the way, in Balmer's investments, which walked out again, left out of the report by and large. What you have is our familiar from episode one. Two things can be true theory, I mean. One, Steve Balmer was defrauded by Joe Sandberg, two, Steve Balmer used Joe Sandberg to circumvent the salary cap. Yes. But you need a three here. I mean, if you're going to talk about soap on a rope, you need a three soap, soap on a rope. That's my, are we still? Sorry. That's the reason I won't commit any crimes. I'll tell you that. It's the rope. It's not the morality of it. It's the rope. He's not worrying about the gallows, folks. So from our reporting in the Dectronics, and Wachtel's investigation into Boyngo Wireless, and locked in insurance in addition, is that this whole led scheme was of course bigger than aspiration. And it has now raised questions of whether Dectronics and Boyngo, which were both public, public companies at the time, whether they truthfully disclosed those secret dealings with the clippers in their securities filings. They were also receiving enormous multi-million dollar contracts from the clippers at the Intuitome that were contingent on their participation in these secret cap circumvention allegedly undisclosed side deals. And all of this David would be an SEC concern. Of course, Dectronics has said it's cooperating with the SEC, Boyngo has not been talking publicly since the MBA ruling came down. But the first federal prosecutor that I talked to added this question that I want to pose to David, quote, "Is there any evidence that someone from the clippers knew and acknowledged that any one of these companies would have to avoid disclosing this in their securities filings, perhaps in order to protect their own flank. If so, you could have the beginnings of a conspiracy to violate securities laws." And you could have interstate. There's all sorts of other accounts. But do you remember something that people summarily dismissed that I pointed out on one of your shows and almost made fun of much to my actually not chagrin? Remember we talked about the halo board, $100 million halo board and how you can fudge numbers when you're building a ballpark and putting things out to contracts. And the halo board may only be $80 million. But you make it $100 million with the promise that Dectronics will give you $20 million or give Kauai Leonard $20 million. You're not supposed to do that with a public company. Why? Because if I can prove that Steve Balmer made Dectronics falsify invoices or artificially inflate the value of product, the impact of that on other deals that they're doing, the investors are saying, wait a minute, is the board worth $100 million or is it worth $80 million? How do we project revenue and earnings going forward? How do we figure out about investing in your company, the value of your shares? So I would just point out that while we do things in stadium courts, while we do things with companies in order to make sure that we're on budget and on time, when you're doing things that actually can impact share worth or what you are doing to investors in a public company, you're opening yourself up to an inquiry, which is exactly what the Eastern District is starting right now. Allegedly. Flip side of that, David, is I'm curious about the legality of paying the company, the third party, Dectronics in this instance, for consultancy, and then Dectronics separately paying Kauai Leonard as a spokesperson. In other words, it's all one big pot where the money's in and the money's out, but can you say, no, no, no, this money was earmarked over here for something completely different, and this money that we paid him with was completely different money in a criminal court. How do you prove that that money here was just, you know, basically going through a way station? That's when you have to go to the SEC filings. That's when you go to the disclosure statements. That's what when they say they're opening a probe, what they're doing is looking at all these documents. It's like being a tax audit. No one's looking at your tax return until you're audited. Then everybody's looking at how much you paid for a block of cheese. So once there is an inquiry, then all of a sudden they're going to follow the trail of the money. What went in, what went out, and what was told, and the way you tell people in a public company about what you're doing is with these filings. That's the SEC, that's the law, that's the regulatory way, which is just give us the bread crumbs of the roadmap so we can evaluate whether or not we are fairly reasonably confident about investing in your company. So for the record, Dectronics on that same earnings call, where they disclose the SEC's probe, they said that they would not be commenting any further in public about all of this. And when asked about such a direction potentially for its inquiry, a spokesman for the US Attorney's Office in Brooklyn declined the comment. And so what I did was I went back to our pal Lou Manzo, the former prosecutor who probed aspirations fraud with a question. Let's say that there's a criminal dimension with the clippers knowingly doing something with disclosures. How would you explain what that means in real terms? Fraud is lies for money. That's the simplest way to explain it. And so if the clippers aided lies where somebody benefited with money, then that's the basics of wire fraud. And then all you have to do is then prove an interstate jurisdiction and there you go off the racist. Off to the racist. There's a phrase from an expression that keeps coming back ever since that interview, I DSPN, that Steve Walmer gave a remonial. The introduction got made and then they were off to the races on on their own. So this is where I should point out also that the SEC, the lack of SEC disclosure for these companies, you know, the penalty there, civil, we're talking about a fine of some magnitude. But what my first federal prosecutor's source told me is that if, quote, the clippers actively helped plan this scheme across four companies, then the criminal penalties for even a books and records violation would be much more serious than the SEC's fines. End quote. And so this is where I should say that we took this analysis of how former prosecutors think the DOJ might go after Steve Walmer and his clippers. We took it to Steve Walmer's lawyer and the clippers spokesperson and they did not immediately respond to our requests for comment. But what we know, I mean, from Wachtell's report about how these clippers, team partners interacted with the NBA's investigation is very interesting and perhaps worth you reading for us here. Quote, some such as Boingo reported initially to cooperate but then supplied information that was inconsistent or not credible to investigators and ultimately refused to cooperate further. And we also know from Wachtell's report the following about clippers' president of business, Gillian Zucker specifically. This is the longtime sports executive who has been repeatedly described to me by the way across months of reporting as Steve Walmer's right hand woman. Quote, Ms. Zucker made several statements that proved inconsistent with contemporaneous documents, other witness statements, and the broader chronology of events. Professor Lack of recollection on important issues placed responsibility on subordinates and offered inconsistent rendition of facts, which is my favorite way of saying lied. Well, I'll give you another way, David, as a concerns the off-to-the-racist claim that Palmer made in the ESPN interview that we played before. Because here is what Wachtell concluded about the clippers claim that their sole involvement in Mr. Leonard's relationship with aspiration was the introductory email. Based on the foregoing evidence, investigators find these statements to be inaccurate at best with respect to Mr. Balmer and clearly false with respect to Ms. Zucker. All of which made former DOJ prosecutor Liu Manzo consider the head start, maybe. At the federal government now has on this story and how there are two federal agencies now competing with each other effectively to get to the bottom of it. So is there a company that the clippers helped lie for money? So if the clippers helped Jack Tronix lie by giving this no-show job to Mr. Leonard, and was that lie material in helping Jack Tronix gain a foothold over another company that wouldn't do that? I think the more eyes that are on something and the higher up the attention gets, oh, up to the deputy attorney general's office at DOJ, that means that there's going to be more pushing. So more resources devoted to your prosecution so you could get some more agents, you could get some more prosecutors, and then just more eyes on it. So most prosecutors work at a very as fast as they can, but certainly when you have high ups at DOJ or your US attorney looking at case, you're going to focus on that. Which now brings us David back to the question of political pressure and you may recall in major league baseball, for instance, how the steroids scandal became quite useful in Washington DC going even to Capitol Hill for a hearing. We measure throughout the industry when you're sitting in owners meetings or you're just having conversations with the commissioner, you're measuring the weight of what's worthwhile in terms of putting our focus, our resources. The government does the same thing. When they've got a docket and Lou didn't have just aspiration on this plate, you've got 70 possible cases on your plate. You can't do everything all at once everywhere. So what you do is you decide what's going to get the most attention. What has the highest likelihood of indictment, then conviction, and what's going to make us look good not just to the country, but more importantly to our boss and what's going to screw the other departments who were asleep at the switch, who did not raise these issues. And therefore, we're getting credit all over the board. You're going through each issue and then deciding what Lou was trying to say. And he said it perfectly, actually, is that if the Department of Justice in the Eastern District, if they find that something's going on where off to the races was not exactly how it happened and that there is a haunt individual or party and there was line and there was money involved and there was wire interstate, etc. They're going to go. Why? Because Balmer is rich and famous because sports is the thread that is common. between people who don't care about what happens on the court and people who do, and it's sexy. And when you put all those things together, you are worried if you are on the receiving end of that investigation. And so here is where I should quote one high level NBA league source who told us about the DOJ's investigation quote, the **** US attorney's office, the fact that they spend God knows how much of our taxpayer money, even on just stuff like the Terry Rogier thing. It's just ridiculous. End quote. I disagree, Pablo. Well, but look, and the Eastern District disagrees, right? They consider sports important. They have prosecuted FIFA corruption under Obama, Trump, Biden, and then Trump again. And now, of course, there is the matter, the extra ingredient of the time and place in which we exist that has to do with the matter of a means old Twitter header. And the fact that the guy who was pictured in it showed up at the Eastern District's presser for the NBA gambling charges, which had started under Joe Biden. But then led to this. This is the insider trading saga for the NBA. That's what this is. That's why we are going to take heat. But as the evidence comes and you can bet on that. There has never been a better time to take a $700,000 fine for whatever it is that Kuwaitiner did or did not do and get traded to another country. Our friends up north. But another interesting part of this story, as we get close to the end, finally, of this episode, is that the stuff we just mentioned with aspiration and dectronics and Bungo and locked in insurance might not be the most interesting area for the Department of Justice to investigate. At least not according to former DOJ prosecutor, Lou Manzo. So the Ryle and football club story is interesting to me because there is public money involved. And it's not just statements on an SEC disclosure. If there's public funds involved, then that really queues up a federal interest. So I'm almost a little surprised the reporting didn't come that the District of Rhode Island is pursuing a case or something like that, rather than Eastern District, New York. And maybe they are. We just don't know behind the scenes because it makes no sense. Why would he own a minor league soccer team in Rhode Island? It makes no sense. And how did he come to own it? And how is that team aligned with the stadium development plan that has affordable housing and this whole nexus that that to me is just like a very unfinished story? Now you're talking Pablo something close to my heart because that was the probe with me over public financing of a stadium. And that's exactly what RIFC was. So I can speak anytime you want about how to defend that and what the truth is certainly in my case. Turning pro bono council. Yes. Okay. I am. And I'll tell you why because I understand why I lose say map because public financing for stadiums is like an eight on the sexy chart for the prosecution because it is such a cause of debate, not just on sports shows, but on shows where people don't care about sports because they ridiculously think that money can be used to help pay police more or teachers more when in fact 99% of the time the money can't be used for that. I'm not digressing here. I'm saying that if there's a there there, it's going to be looked at. I promise you that. We got to take David from an eight till like a five when we talk about public five just pisses me off. Okay. You get public financing. People go crazy. The the second tier pro soccer team in question, I got a note here has said in a previous statement to us quote, there is absolutely no connection. What's so ever between Rhode Island FC and the NBA investigation end quote, but all of this I mean, it brings us back at long last. The well appointed rooms of the St. Regis hotel were 29 of the 30 teams arrived here in Manhattan to discuss the sport that the three of us all grew up loving. And where it's headed next and this conversation involved not just the absentee clippers, but also a question at NBA commissioner Adam Silver's post game presser so to speak about another governor that we hear at Pablo Torrey finds out have recently been investigating in Los Angeles named Mark Walter who just agreed to sell the Los Angeles Lakers to Joshua Kushner and Bob Iger for a record 12 and a half billion dollars. Second row on the end of the left Pablo. Pablo from public Torrey finds out. Given the ongoing federal investigations into the clippers and dectronics and aspiration as well as the investigation to Mark Walter, there has been a growing concern that wealthy individuals and entities are using the approval of the NBA to purchase credibility in the eyes of the public, meaning the fans. And I'm just curious if that growing concern is something that you share when it comes to the due diligence that follows the application of an owner or a sponsor and if you plan on changing anything about NBA due diligence processes because of that. I mean interesting the way you put it I've never heard it quite that way. I understand that with team ownership comes a platform both for individual owners and helps them become widely known. But I also think it imposes responsibilities on them in their communities. It's my opening. It's one of the things we talked about today in terms of what comes with team ownership. What do you think he means by that? He's like, oh, I didn't. I didn't think about it. He thought it was very interesting the way you framed that. And I said, he said he hadn't heard that before. He said, you hadn't heard that people were thinking that maybe Mark Walter got over by basically his association within the NBA. And baseball and sports, yeah. Adam says things sometimes where he tries to play this polyano like really I had no idea like I look man, you know, you're not the admit the stuff, but you also can't feign this ignorance about something that I think is pretty straightforward. Sports washing. I mean, that's the core of the question as we invite private equity and sovereign wealth funds and shady sponsors into the sport that again, we all genuinely care about. I would only say, you know, and this has even come up in your reporting just as there are limits to what a reporter is able to do. Some ways reporters can do things that traditional investigators can't because you can in some cases keep all your sources confidential. I think there's different transparency obligations on leagues and also maybe a different set of actors willingness to talk directly to leagues. But we take these vetting, the vetting process very seriously. A lot of what we do is intensive database searching. I mean, you would think in this day and age with AI and everything else that everything is centralized. It's not many cases you're going state by state. In certain cases, people are part of industries that are regulated state by state, so we have to look there as well. You know, we also talked to as many people as we can find and you know, who have knowledge about these people and we do interviews. But beyond that, you know, I will say, we're always reassessing to see if we can do more. But in fairness to the parties involved, even Mark Walter, as we sit here today, I know no more about him than I did when we vetted him. I read newspaper articles, but in fairness to him, I don't know where those investigations are going to come out. I don't know where any government inquiries are going to come out. So, again, I guess we're always seeing if we can do things better, but I don't see a trend or some widespread issues certainly among, you know, our principal owners that gives me cause for concern. We will vet people hard, but when the number starts with a T and ends with an N and you're going to buy a franchise at a valuation of $10 billion, we may remove the second T out of the vetting process because we'd love to have a number like that on the books. Will your question change the way they investigate potential owners? I'm sorry, PTFO, it will not, but is it something that the MBA will think about going forward maybe? It's the question that I've been asking since Mark Walter, since Mark's dad with the Minnesota group. Are we okay with our franchises being in essence, a condo on South Beach? I bought it as a good price. It was cool. What? You'll pay me how much for it? So, I have no whole memories. There's no pictures of my kids when they were in grade school. None of that. This is just a condo on South Beach that when I go to South Beach, I got a place to stay. Is that the future of, I'm going to speak for the MBA? Is that the future of our league? And if it's not, if this offends anyone in control, what are they going to do about it? And David, I can already tell by your body language, they're going to do shit because they just want the money. As big as that number gets, That's all that matters. But good and got it right. Show me the money. We say that inside honors meetings almost every time. How many Tom Cruise movies can we fit into a single episode? Here is the thing though that Adam Silver is right about and that I have no objection to truly journalists, podcasters even, we do a very different job from the league and it's law firm and a very different job from the federal government. And those differences form something like an ecosystem, an ecosystem that hopefully keeps the public interest and the health of the thing that the public cares about in anything resembling balance, which then took me back to Lou Manzo for one more very important question. You know, I was thinking about the NBA gambling investigation by the DOJ in terms of timeline. And no cases, of course, these are all different. But that was started like in the Biden administration and then it got actually a rest remade under Trump, which is to say that this was years. If you're not familiar with how long a DOJ probe takes, how would you summarize what is a reasonable expectation for like a timeline? - I think the fastest charging decision can happen is nine months, where a probe is started, subpoenas go out and a rest are made. That's a pretty accelerated timeline. So I'd say two to three years all in from time you cut the first subpoena to the sentence scene is standard. - All of which is to say that the series has a long way to go. - Years, guys. - We got more of these, two or three more years, David. - Two or three more years of podcasting with you two. - The ecosystems get out of balance. The result is certain species become extinct. - That is foreboding. - Who's the dinosaur in this case? - Who's the asteroid? - Wait to see. - This has been Pablo Torre finds out, a metal-lark media production, and I'll talk to you next time. (upbeat music)