Counsel to the Special Committee of the Board of Directors of the Fiesta Bowl
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Counsel to the Special Committee of the Board of Directors of the Fiesta Bowl Final Report Public Version March 21, 2011 Christopher W. Madel Bruce D. Manning Sara A. Poulos 2800 LaSalle Plaza 800 LaSalle Avenue Minneapolis, MN 55402 Tel: 612-349-8500 Fax: 612-339-4181 www.rkmc.com Public Version This report is addressed to the Special Committee of the Board of Directors of the Fiesta Bowl from its counsel. The report is counsel’s report—as reviewed and approved by the Special Committee. This public version has had removed from it information subject to contractual confidentiality provisions, as determined by the Fiesta Bowl. All decisions related to the publication of this report, and the scope of any waivers needed to make it publicly available, have been made by the Fiesta Bowl, and not by the Special Committee or its counsel. I. Investigative procedure ............................................................... 1 II. Scope and genesis of the investigation .................................. 9 III. Reported facts................................................................................. 14 A. Background on the Fiesta Bowl.............................................. 14 1. Bowl games and other events............................................... 17 2. Economic impact, community impact, and charitable giving ....................................................................................... 19 B. The Fiesta Bowl’s alleged reimbursement of campaign contributions ................................................................................ 25 1. The analysis and development of the campaign- contribution spreadsheet ...................................................... 25 2. If the 11 individuals’ statements are accurate, the Fiesta Bowl reimbursed individuals at least $46,539 for campaign contributions since 2000...................................... 29 3. How contributions were allegedly sought and reimbursed ...................................................................... 33 a. The alleged practice of reimbursing for campaign contributions dates back to at least 2002................... 33 b. How contributions were allegedly sought ............... 35 c. How reimbursements were allegedly made ............ 37 i Public Version i. Alleged “bonus” checks to employees............... 37 ii. Checks to one employee for the alleged reimbursement of others ..................................... 43 a. The $15,000 check to Laybourne ..................... 43 b. The $15,000 check to Aguilar........................... 46 c. Check(s) to Wisneski......................................... 49 iii. Alleged increased expense-reimbursement checks...................................................................... 50 iv. Other methods ....................................................... 51 4. No contributors said they knew the reimbursement practice could be illegal......................................................... 51 5. Laybourne’s alleged concerns about political- contribution reimbursements............................................... 52 6. Several employees made contributions reportedly against their stated political inclinations............................ 54 7. Alleged reimbursements to Junker, Fields, and Schulman ......................................................................... 55 C. The first investigation............................................................. 67 1. The Arizona Republic article .................................................... 67 2. Junker’s alleged concerns regarding the Harris article ........................................................................... 72 3. Genesis of first internal investigation.................................. 74 a. Dallas conversation....................................................... 74 b. Board discussion and retention of Grant Woods ................................................................. 75 c. December 14, 2009 Executive Committee meeting........................................................................... 77 d. Husk’s role in the investigation.................................. 80 ii Public Version e. What Husk said he said to Fiesta Bowl employees ..................................................................... 81 f. What six Fiesta Bowl employees said ......................... 83 i. Wisneski’s allegations regarding her discussions with Husk.......................................... 84 ii. Keogh’s allegations regarding her discussions with Husk.......................................... 86 iii. Eyanson’s allegations regarding her discussions with Husk.......................................... 88 iv. McGlynn’s allegations regarding her discussions with Husk.......................................... 91 v. Simental’s allegations regarding her discussions with Husk.......................................... 92 vi. Holt’s allegations regarding her discussions with Husk.......................................... 95 g. Grant Woods’ interviews ............................................ 98 i. Interviews of current employees......................... 98 ii. Interviews of former employees ....................... 105 h. Grant Woods’ oral report at the December 22, 2009 Executive Committee meeting ................................................... 108 i. The draft letter to Schoeffler...................................... 109 j. Woods’ and Husk’s review of documents and collection of data......................................................... 114 k. Husk’s presentation at the January 22, 2010 Board of Directors meeting ....................................... 119 l. Snell attorneys’ discussion with Junker .................. 121 iii Public Version D. The Arizona Secretary of State and Attorney General investigations and the formation of the Special Committee.................................................................... 126 1. The Secretary of State requested information in early 2010 .......................................................................... 126 2. An incomplete spreadsheet of contributions, bonuses, and expense reimbursements was provided to the Secretary of State on February 22, 2010 ............................ 132 3. Wisneski and Eyanson alleged that they were told to delete and alter information regarding bonuses ............. 142 4. Wisneski altered documents............................................... 146 5. The FBI interviewed an employee ..................................... 148 6. The Secretary of State referred the Fiesta Bowl investigation to the Arizona Attorney General............... 150 7. The Special Committee is formed...................................... 153 E. Expenditures by the Bowl ........................................................ 157 1. Fiesta Bowl expense procedures......................................... 158 2. The expense account analysis ............................................. 166 a. How the analysis was performed ............................. 166 b. Categorization by subject matter.............................. 167 c. Determination of whether expenses are appropriate business expenses................................. 170 d. What the expense account analysis shows.............. 174 3. Political expenditures........................................................... 175 a. Legislative trips ........................................................... 175 b. Events at the Museum and other fundraisers......... 183 c. Tickets for legislators ................................................. 186 iv Public Version d. Items of value given to politicians .......................... 191 4. Entertainment and relationship-building expenses......... 193 a. Fiesta Frolic/Spring College Football Seminars .... 193 b. Other relationship-building expenses ..................... 198 5. Employee perks..................................................................... 201 a. Golf course memberships.......................................... 201 b. Cars for senior executives ......................................... 206 c. Home internet, cable, and cell phones .................... 209 d. Junker’s 50th birthday celebration........................... 210 e. Other miscellaneous benefits ................................... 212 6. Confidential separation agreements .................................. 215 a. Blouin ........................................................................... 216 b. Schoeffler ..................................................................... 222 c. Allegations of fraud with respect to another employee...................................................................... 223 7. Employee gifts....................................................................... 224 a. The Keogh wedding.................................................... 225 b. iPad purchases............................................................. 229 c. Miscellaneous examples of employee gifts.............. 231 8. Travel with family members .............................................. 232 9. Travel and entertainment with employees and consultants ............................................................................ 236 a. Strip club visits ........................................................ 239 b. Grand Del Mar trip ................................................. 241 10. Financial-advice subscriptions ........................................ 242 11. Gold coins ........................................................................... 244 v Public Version 12.