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SALT LAKE CITY -- A political action committee that is trying to bring about a college football playoff is attacking the Bowl Championship Series on a new front.
Playoff PAC filed a legal complaint with the Internal Revenue Service Thursday, alleging the BCS bowls are abusing their tax-exempt status. Matt Sanderson, co-founder of the PAC, told KSL Newsradio the bowls have the same classification as the American Red Cross and the Salvation Army, but they aren't acting the same.
"They're using charitable funds to enrich executives with above-market salaries, interest-free loans," Sanderson said. "They use charitable funds for club memberships, for first-class travel."
In a 27-page complaint, Playoff PAC points to several examples of what it believes are abuses, including:
- Fiesta Bowl CEO John Junker received $317,717 in Fiscal Year 2009 for working just 21 hours per week from the Arizona Sports Foundation, the bowl's lead entity. Mr. Junker's total compensation package from all Fiesta Bowl-related entities was $592,418 for Fiscal Year 2009, nearly quadruple the CEO pay at similarly-sized charities.
- The Fiesta Bowl gave two bowl executives $240,000 in unsecured interest-free loans, reportedly to pay for their personal memberships in a private golf club.
- Sugar Bowl executive director Paul Hoolahan received $645,386 in Fiscal Year 2009, a year in which the Sugar Bowl lost money despite receiving a $1.4 million government grant. Mr. Hoolahan collected $25,000 more than the Rose Bowl's top three executives combined.
Playoff PAC also contends in the complaint that the Fiesta Bowl appears to have illegally used charitable funds to provide financial support for political candidates on multiple occasions. The PAC also claims the Fiesta Bowl has not fully disclosed its payments to lobbyists, including $1.2 million for consulting given to a registered Arizona lobbying firm.
"There are grave concerns as far as compliance with the tax code, compensation going out of whack and going into the pockets of executives rather than schools," Sanderson said. "We would like to clean up the system and, ultimately, we feel that a wholesale reform is needed."
Sanderson says attorneys combed through 2,300 pages of tax records and public documents. One of the lawyers submitting the complaint on behalf of Playoff PAC is Marcus S. Owens, the former head of the IRS Exempt Organizations Division.
"I think it's safe to say that if there were not substance to these concerns, the complaint wouldn't have been signed by him," Sanderson said.
In a statement issued to the Associated Press Wednesday, before the complaint was filed, the Fiesta Bowl called the PAC's allegations, "dated, tired and discredited."
"The Fiesta Bowl is confident that it has always fully complied with tax laws and rules in its operations and activities," the statement said.
The PAC is also pointing to an Arizona Republic story last year which reported several past and present Fiesta Bowl employees said they were encouraged to contribute to friendly politicians and then were reimbursed by the bowl. Such an arrangement, which the Fiesta Bowl denied, would violate state and federal campaign finance laws, as well as the prohibition against charities engaging in electoral politics.
"By the BCS' own admission and claims, they are the aggregation of their members -- these four different bowl games (Rose, Fiesta, Sugar and Orange) -- and so it's important to point out the warts of the status quo," Sanderson said.
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Story compiled with contributions from Andrew Adams and The Associated Press.
