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NCAA: Making a Federal Case Out of Private Rules Violations

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In a Manhattan federal courtroom this past week, justice was done. The judge said so. The prosecutors said so. The media said so. Thus, it must be so.

As always, heroic federal prosecutors stepped in to rescue someone, this time being Oklahoma State University, which former assistant basketball coach Lamont Evans allegedly defrauded through his actions in recruiting basketball players by supposedly violating National Collegiate Athletics Association rules. Evans, who pleaded guilty to federal charges, will serve three months in federal prison and then may face deportation, since he is a foreign national living and working, or formerly working, in the USA. As I shall point out, Evans pleaded guilty to conspiring to engage in actions that are not prohibited by federal statutes and no one in the courtroom blinked, not the judge, not the prosecutors, not Evans’s legal representation, not the media, no one.

Matt Norlander, the CBS Sports reporter who wrote the story about the Evans sentencing, notes the following:

This is now fact: You can be found guilty of federal crimes while engaging in acts that violate NCAA rules. No one knows if we'll ever see something like this again, but the possibility of it happening will always be there.

Actually, he is wrong. In 2005, federal prosecutors in Memphis successfully prosecuted the late Logan Young, a booster for the University of Alabama, for federal “crimes” related to his attempt to help recruit a prominent athlete to Alabama. In that case, federal prosecutors convicted Young of illegally withdrawing money and crossing state lines in order to commit bribery — even though there was no federal bribery statute to break, and no one had charged Young with breaking Tennessee state bribery laws. Although the latest set of prosecutions aimed at assistant basketball coaches is the first set of federal prosecutions for alleged NCAA violations, this round is much more ominous, as it gives federal prosecutors the green light to continue down this road, and we can expect prosecutors to expand their reach.

Norlander is wrong about something else, or at least he is misleading. These prosecutions are not the result of Congress passing statutes regarding the policing of NCAA violations; in fact, Congress never has officially addressed this legal category in either civil or criminal law. Furthermore, while Evans officially was charged with “conspiracy to commit bribery,” there is NO federal bribery statute. Instead, federal prosecutors took it upon themselves to use existing federal criminal law and apply it in new categories, including one that has no authentic legal basis, something that should set off alarms in the legal community. Unfortunately, few people have protested this new incursion publicly.

By these actions, federal prosecutors create de facto bills of attainder which the US Constitution forbids in Article I, Section 9. By refusing to enforce the Constitution, and by permitting federal prosecutors to break the law and endorsing their actions, US District Judge Edgardo Ramos has engaged in the kind of legal fraud that should immediately warrant his impeachment.

I wrote about another case last year that is part of this same sweeping federal “investigation” into college basketball and my theme is a continuation of what I said then: by being permitted to criminalize what clearly are violations of private rules in private organizations, there are no limits anymore to what federal prosecutors can do in charging individuals with crimes. Americans now truly are in Three Felonies a Day territory and no one — no one — in a position of authority or political leadership is going to step in and try to put a stop to what has become absolute rule by prosecutors that are protected by the legal doctrine of absolute immunity and are free to go to the furthest lengths of their legal imaginations.

To give some background, the NCAA has strict rules on what colleges and universities can offer student-athletes who participate in sports. Athletes can receive what is called a grant-in-aid, which covers tuition, meals, room, and books should the athlete be receiving a “full ride.” (I was a scholarship athlete at the University of Tennessee in track and field from 1971 to 1975 and was under the same — or at least similar — set of rules that govern collegiate athletes.)

However, sports like football and men’s basketball are wildly popular and bring millions of dollars to the successful collegiate programs, such as the University of Alabama, which has enjoyed near-unprecedented football success under coach Nick Saban. Christopher Walsh of the Atlanta Journal-Constitution wrote this of Alabama’s fortunes:

Before Saban arrived, the school had already begun an enrollment push, topping 20,000 in 2003 (20,333), and reaching a then-record 23,878 for the 2006–07 academic school year. For that fall, it received 15,761 applications.

For the fall of 2016, it received 42,802 applications. Enrollment was 37,665.

He continues:

Normally when a school significantly expands the quality of its student applications dips. That wasn’t the case at Alabama. The average ACT score went from 24.2 in 2006 to 27.07 a decade later. The average GPA for the incoming freshmen rose from 3.4 to 3.69.

The geographical makeup of the student body also has changed dramatically. In 2004, 72 percent of freshmen came from within the state. Just four years after Saban arrived the university had more students from out-of-state for the first time.

That’s a huge boon in the bottom line. In 2006, tuition was $4,864 in-state, $13,516 for those from somewhere else. Following a steady stream of tuition hikes, the latest announced just last month, it’ll be $11,580 in-state, and $28,900 out-of-state for the 2017–2018 academic year. Room and board is another $13,224.

Coaching is the obvious key to such success, and Saban is rewarded by an eight-figure salary and perks, but even the best teacher of the game cannot succeed without athletic talent. The key factors of production are not just coaches, but also players and that is where things become interesting.

As I noted before, college athletic programs cannot compensate athletes beyond academic expenses, yet it also is clear that these athletes are a main cog in bringing millions (and even billions) to some college and universities. The best athletes (called “five stars” by the ratings services) are rare and usually matriculate to the top programs like Alabama or Clemson in football, or Duke or Kentucky in basketball. As for the NCAA itself, its Division I men’s basketball tournament, nicknamed “March Madness,” brings billions of dollars to the organization and helps pay for other collegiate athletic programs that tend not to bring in much revenue (such as women’s field hockey or men’s wrestling).

The collegiate experience for athletes is not only valuable to the NCAA and its member schools, but also provides publicity for athletes that could not receive it in other venues, like the NBA’s G-League. This past year, Zion Williamson, a 285-pound athletic wonder, dazzled college basketball as a freshman, leading Duke to an Atlantic Coast Conference championship and nearly bringing his team to the NCAA championship’s Final Four (Duke lost in overtime to Michigan State in the regional final). Zion surely will be the first pick in the upcoming National Basketball Association draft after having received nearly every honor a collegiate basketball player could earn, including being named college basketball’s top player.

Had Williamson gone to the G-League instead of spending a year at Duke, he would not have received the requisite publicity that will make him an instant multi-millionaire when he is drafted. For that matter, he was not the top-rated high school player his senior year, so by forgoing the $125,000 salary the G-League would have provided and sticking with his Duke scholarship (which allegedly put no money directly into his pocket), he added millions of dollars to his bank account. Such is the lure of college basketball.

Because college athletes are what economists call a “key resource” in producing athletic teams, the NCAA rules suppress the true value many of these players are to their respective universities. (Unlike Williamson and many other athletes, I am sure I was a net cost to Tennessee, given that track and field is not considered to be a “revenue” sport, and if people paid admission to watch us run, they paid to see our world-class sprinter or national championship distance runner, not me.) Given their value and given that NCAA rules undercut the true value of the athletes, it is not surprising that both the players and their families seek out other compensation, and coaches, recruiters, and boosters are all-too-happy to accommodate them.

Athletes have received off-the-books compensation as long as the NCAA has existed. I saw it nearly 50 years ago when I was a collegiate athlete and the practice continues today — and no one is (or should be) surprised that programs regularly break the NCAA rules. An athlete’s value to the university can well be measured in excess of the scholarship limits, and everyone from the athlete and his family to university officials, so the incentives exist to find ways to compensate players or their families outside the boundaries of what the NCAA permits.

When NCAA officials have found evidence of rule breaking, they usually levy sanctions on the offending programs from loss of scholarships to prohibiting the teams from participating in post-season play (like playing in the NCAA basketball tournament). Until the Logan Young case, federal authorities had not engaged in their own actions against those accused of NCAA rule breaking.

The federal accusations (that supposedly justified federal incursion into college sports) claim that the athletic programs and universities that employed these coaches were defrauded by the coaches’ actions. Even Judge Ramos when he sentenced Evans declared that he committed fraud against his employer, Oklahoma State University. Such a viewpoint and such actions run contrary to how the NCAA engaged in enforcement when it almost always punished the offending programs and higher education institutions themselves.

For example, the case of which I wrote last year involved the payment of recruits to the University of Louisville, and federal prosecutors convinced a Manhattan jury to convict three men that “defrauded” Louisville. However, the NCAA punished Louisville’s basketball program by levying sanctions (the university actually sanctioned itself — or engaged in “self-punishment” — but with the approval of the NCAA) against that program. Either Louisville is considered a victim, or one should consider it to be a perpetrator, but it cannot be both simultaneously.

Furthermore, it truly defies the imagination to say that coaches, athletes, and athletic administrators were ignorant of payments to athletes and their families, be those payments originating from boosters, agents, or shoe and apparel companies. Supposedly the “fraud” occurred because these athletes that either received money or their families received money would have been ineligible had the university found out, but that is ludicrous, since university officials and coaches probably knew beforehand but decided to recruit and play these athletes, anyway. Defining fraud the way the feds have done it turns the very meaning of the word upon its head.

If there is fraud anywhere in this sorry affair, it is committed by federal prosecutors, defense attorneys, federal judges, and journalists. Federal prosecutors charge individuals with violations of private rules governing private organizations that are bundled into federal conspiracy laws alleging the breaking of non-existent statutes, creating illegal bills of attainder in the process; defense attorneys pressure their clients into pleading to such legal abominations; judges look the other way and sign off on these Rube Goldberg charges, and then journalists report these actions as though they had legal and moral legitimacy.

Unfortunately, people in the American media and the legal community are celebrating these actions as though they were major moral advancements of law. They are not. If putting people into prison and ruining their lives because they “broke” laws that didn’t exist (or “conspired” to break them) is a form of legal and moral progress, then the world truly is upside down and everything we knew to be true is a lie.

William L. Anderson is a professor of economics at Frostburg State University in Frostburg, Maryland.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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