Good morning. We’re here today to discuss the ongoing investigation into certain allegations about NBA referee, Tim Donaghy.
What I propose to do is to tell you what our procedures are with respect to referees and gambling; what we can or cannot tell you and why there are certain things we can’t tell you that might have made it easier not to have this press conference at this time, but we thought it was our obligation to have it; what previous actions we have known about with respect to Mr. Donaghy, what we did about those, and what we are permitted to say about Mr. Donaghy and the investigation and when we learned about those facts. And then I’ll open it up to questions and spend quite a bit of time here to satisfy you on all of the things that I’m able to.
The first thing that I would like to say is that our rules are crystal clear; that referees may not either gamble on our games; or, provide information to anyone about those games. We, you know, have a rule that says you’re subject to discipline, which would most likely be expulsion from the league and the job. We educate our referees intensely. We have training camp presentations, we have brochures we distribute work rules , they are visited by security, and we give them copies of compliance plans and the like that make it clear that not only aren’t they permitted to either gamble or provide information to people; they may not even provide other than to their immediate family the details of their travel schedules or the games they are going to work.
We take these rules seriously. We have a security department that is large. It’s headed by Bernie Tolbert, the senior vice president of security, former FBI, head of the Buffalo office second in command at Philadelphia who has a background in undercover work. We have in house representatives that are from Secret Service, U.S. Army, New York Police Department, and New York State Police Investigation.
We, in addition, have a security network that includes a security representative with respect to every NBA team. Those security representatives are routinely judged and either changed as appropriate, and instructed on the ground to be listening to what goes on, what they hear, what they see, what they can observe. And those security representatives are for the most part either FBI retired, local police, in some cases DEA. And we are permitted by work rules, some of them are actually functioning in their regular capacity for local PD and working for us at the team level.
In addition to the constant communication with our security represents of what goes on in the cities, we are in continuous conversation with DEA, the FBI section on organized crime which deals with sports betting, and with the Homeland Security Department. Our security department operates rather extensively, and has actually been beefed up more recently with respect to its activities in connection with Homeland Security, which occupies since 9/11 a more substantial time, a more substantial amount of its time.
We do subject our referees to extensive security checks, to the limit provided by the law. That is to say, with their authorization each year for the past two years, we have conducted personal background checks that cover credit, bank account, litigation, civil and criminal, assets including real property, debt, you name it; if it’s legal to have it, we do it. The agency that we use for that is the Arkin Group, and under the guidance of the former head of worldwide operations for the CIA.
If appropriate, we do follow up work with respect to anything that the investigation shows. And when we are curious, I guess, because we’ve been alerted to something, we hire appropriate investigators to look at the details.
With respect to our referees’ performance, well, I guess before I get to that, let me just say, we in addition to that, as part of our concern with gambling, we have for many years retained a consultant in Las Vegas whose job it is to inform us whether there are any movements or unusual movements in betting on the NBA about which we should be concerned, and we’re also in contact with the Nevada Gaming Board who monitors that for their own purposes to determine whether there has been anything that we should be concerned about or particularly aware of.
On the court, we have since the beginning of 2003 2004, been implementing a system that is designed to capture every call that a referee makes, and every non call that is deemed by observers to be incorrect. And our observer system works roughly as follows: We have retained 30 observers, one at each of our team’s games. They are in effect charting the game with respect to the calls and other observations that they make. They then review the game on tape. They then are audited, not every game, but selectively audited by the group supervisors that we have employed by the NBA.
And then most recently this year, we actually to sort of do an audit on the auditors and satisfy ourselves that our observer system had the accuracy that we were hoping to build to, we began using two of our 30 observers to actually observe other games to see how they would have been called, and we retained four additional basketball experts not currently employed in the NBA or by us to, in effect, audited auditors so that the system was as good as it could be.
I guess with respect to that, I can say that what we did with our officials when we began this, because this was new, in all of professional sports, was to assure them that the primary purpose of this system was designed for their development to make them better officials; to increase their call accuracy and generally to improve the quality of their work.
And that is not to say that if something unusual popped up, we wouldn’t pursue it, but we it was not predominately developed as a screen for criminal activity.
Now, with respect to Mr. Donaghy, in 19 in January of 2005, it came to the NBA’s attention that he was involved in disputes with his neighbor which resulted in the filing of litigation in or about West Chester, Pennsylvania, where he resided.
We hired an investigator to look into that through our security office, and looked at the allegations in the complaint. It had to do strictly with a dispute, and we had occasion to call Mr. Donaghy in where he informed us in January of 2005 that we he informed us that the allegations against him were untrue, and that he was the person that was being harassed by his neighbor, not as alleged by the neighbor, that he was harassing the neighbor.
At that time, and as part of that investigation, there was an allegation made by two of our investigators on the ground, which by that time we had retained the Arkin Group to continue the investigation. Somebody suggested that he had gambled at the Borgata Hotel in Atlantic City, at either the gaming tables or card games, I can’t remember which one. There’s no sports betting in Atlantic City.
He had denied that he did that. We checked not only the Borgata, but every casino in Atlantic City and in Las Vegas to determine whether he had any presence in any of those places, and all of our investigation came up negative.
The only thing that persisted was this ongoing dispute with his neighbors, and we informed him that that made us unhappy; that was not the kind of conduct that we expected from our referees despite his denials that he was the victim, rather than just a willing participant in all of this. And in 2005, whereas he had worked the second round of the playoffs in 2004 2005, in the playoffs of 2005, we told him that he was not going to work the second round. This, in effect, as a consequence of making us unhappy with his behavior. Not relating to the gambling allegations with we followed to the end of the trail and could not substantiate any of it; but with respect to his behavior and the kind of conduct that we didn’t like. And we told him that if it continued, he would no longer work for the NBA.
Mr. Donaghy subsequently moved to Florida, and there were no other allegations against him of any kind in the 2005 2006, 2006 2007 seasons, no reports of any kind. And the background checks that we do each year, as I did, give us everything that’s legally obtainable yielded nothing that raised any suspicions by us. Indeed, as a matter of his on court performance, he’s in the top tier of accuracy, to the extent that we engaged that as a second round official, which is a good ranking amongst NBA officials.
Now, on June 20, we got a call from the Federal Bureau of Investigation telling us that they would like to come in and meet with us because one of our investigations June 20 of this year, by the way, I’m sorry. After our foreshortened Finals, we received a call from the FBI to say that they wanted to come and talk to us about a referee alleged to be gambling on games.
I want to do two things here. I want to say and we did meet with them the next day, on June 21. I want to say two things here. One, we’re extraordinarily thankful and appreciative of the efforts of the FBI and of the U.S. Attorney’s Office, the Justice Department. In their cooperation with us, it’s really allowing us to cooperate with us, and informing us of the danger that is here and asking us to provide them with certain information without the need for a subpoena, which we did. And they explained to us as best they could why they might or might not need this, and we are continuing to cooperate and produce data.
But we are unable and I am therefore unable to comment on the continuing investigation and the information which we have provided to them and that they have provided to us. But I’m going to within those constraints give you what my understanding is of what Mr. Donaghy stands accused of.
We understand that he is accused of betting on games in the NBA. We are not positive it’s games that he worked, although I understand that some of those are games specifically that he worked; I understand that it may be that he bet on other games in which he didn’t work. I understand that he is accused of, or likely to be accused of, providing information to others for the purpose of allowing them to profit on betting on NBA games.
I am not I don’t know the number of games. I don’t know which games. And until this moment, I have not deployed substantial amounts of people to do the work that would be necessary to satisfy us, because I felt constrained by the FBI’s request that we not communicate this to anybody; so the smallest possible number of people knew about this in the NBA office and knew about the fact of this ongoing investigation.
On July 9, Mr. Donaghy resigned. Suffice it to say that we would like to have terminated him earlier upon learning certain things, but it was our understanding that the investigation would best be aided if we did not terminate Mr. Donaghy. So, we did not, and he resigned.
We understand that the relevant time period being investigated is the past two seasons; that is, 2005 2006, and 2006 2007. I can tell you that during that period of time, Mr. Donaghy refereed 139 regular season games, eight playoff games, and four preseason games.
I also understand that Mr. Donaghy is the only referee who is alleged to have bet on NBA games and disclosed confidential information to others with respect to NBA games that would enable them to place wagers with an advantage. I’ll say it again, I understand that this is an isolated case involving an NBA referee who engaged not only in a violation of our rules, but in criminal conduct.
But let me make it clear, that’s my current understanding, and I await the outcome of the investigation by the FBI and the determination by the Justice Department and what they are going to do with it. All of my knowledge is secondhand. That’s my current understanding. But given the extraordinary interest that has been generated and fair questions that have been asked, I felt I had an obligation to come here as soon as possible, and I informed both the FBI and the Justice Department that I would be doing that.
If there are different facts that have been uncovered or will be uncovered, we will make them available as we know them.
Just a couple of other things. No. 1, there’s been some speculation that we knew that Donaghy was betting the season and nevertheless let him work. That’s not true.
A lot of speculation about our previous investigation of Donaghy; I’ve told what you we’ve done. And we will continue to both not only keep you advised, but I think it’s my obligation as commissioner to retain the best outside experts in these matters and consultants to advise the NBA on what we can do better to assure our fans that our games are being decided on their merits. I think that’s the obligation that every sports league has.
I have been involved with refereeing, and obviously been involved with the NBA for 40 years in some shape or form. I can tell you that this is the most serious situation and worst situation that I have ever experienced either as a fan of the NBA, a lawyer for the NBA or a commissioner of the NBA. And we take our obligation to our fans in this matter very, very seriously, and I can stand here today and pledge that we will do every look back possible to analyze our processes and seek the best advice possible to see if there are changes that should be made and procedures that should be implemented to continue to assure fans that we are doing the best we possibly can.
It’s small consolation to me, but, you know, doing the best you can doesn’t always mean that criminal activity by a determined person can be prevented. All you can do in many cases is deal with it as harshly as you can when you determine it and hope that that, in addition to all of your other processes and procedures, acts as a deterrent.
But if there’s anything that is possible, virtually regardless of the cost, we plan to pursue that and to, in effect, reaffirm our covenant with our fans; that the NBA is a product that will remain proud of its officiating staff, which we believe is the best in the world, and that our games are decided on their merits.
I’m happy to take any questions.
I just want to be clear, within the past two seasons, neither you nor anyone in your employ was given any heads up by anyone that Mr. Donaghy might have had a gambling problem?
Stern: That is correct.
Considering all of the security things you laid out for us, are you surprised or shocked that something like this could slip through the cracks and you all wouldn’t find it?
Stern: You know, that’s a question that I’ve asked myself in the pendency of this investigation. And I guess, yes, I’m surprised; but I think no more surprised than the head of the FBI, the head of the CIA, that rogue employees turn on their country in criminal activity despite the best investigative procedures you can possibly imagine; or when judges turn out to be corrupt despite their oath and the processes that are used to monitor them. But that’s small consolation to us.
What I always do is turn it inward and say, what else could we have done and what else can we do. And if I can unburden myself in that area, I want to call in the best minds that I can have around me with respect to criminal activity, gambling detection, and determine what is legally possible.
You know, we were advised at least as sort of an investigatory matter, the two things that would be usable would be wiretapping, which is available to the FBI and illegal by a private employer check and a 24 hour surveillance on a 24/7 basis of every employee which, you know, not something that we do.
Can you take us through the range of emotions that you felt when you first got this phone call from the FBI that someone had possibly corrupted what has been your life’s work?
Stern: This is a subject that we discuss at the NBA, the statistical the institution of the statistical development database was at my direction and the institution of the two of the more recent annual reviews of all that’s legal were at my direction.
And so, I’m aware and have been aware of the threat that’s placed to all sports. We followed with particular interest the recent referee scandal in the German soccer league, the Bundesliga League, which is a big deal I should say the German football league. And we think about that all the time in terms of how they were found out, what we can do to be better and it’s ongoing.
And my reaction was, I can’t believe it’s happening to us.
And then can you also take us through the last two days since the story broke on Friday; what have you been doing, what kind of meetings have you been having and what has it been like around the NBA offices?
Stern: Well, actually after this press conference I’ll going to the NBA family picnic to assure a bunch of employees, their families and kids that the sun is definitely going to rise tomorrow.
But really, our what we wanted to do, most importantly and have been chomping at the bit to do, is figure out a way between what we could say and what we couldn’t say, to get me here as fast as possible, and that’s what we’ve been spending our time doing and ruminating about how we will spend significant parts of the summer and fall seeking expert guidance with respect to what else we can do.
We’ve been comparing our procedures to see whether there are other leagues that we want to, you know, despite our competitive spirit, that actually do it better than we do; whether there’s things we can adapt, etc., because we take our covenant very seriously. And that’s it.
It really had to do with getting everything out. We had hoped when this broke on Friday, we spent Sunday preparing for a press conference yesterday. But in light of various conversations that we were having, we thought it better to schedule the press conference for today or tomorrow. But then those conversations allowed us to go forward with today, and so we scheduled it for the earliest possible time with some concern for our friends on the West Coast, so they wouldn’t have to get up before 8 a.m.
You’ve always been very protective of the referees and the fact that there was a system in place of players and coach, criticize referees, they are fined sometimes quite heavily. What are you going to do to look at your system and perhaps make it more transparent? And you talked about your covenant with your fans; what can you do to work with the players to reassure them that the system is honest and above board?
Stern: Well, I think I’m going to come back to the fact that I’m going to wait for this investigation to run it’s course, because we think we have here a rogue, isolated criminal. And I think we want people to understand our system, and I think I still have to be protective of my officials, including those who likely have been and will continue to be unfailingly besmirched in the allegations that have been made against Mr. Donaghy.
By and large, they get it right most of the time. They get it wrong sometimes. Sometimes they perhaps carry themselves in a way that is not as modest as we would prefer, but they do their darnedest to get the result right. And frankly, I’m more concerned, rather than chastising them, with reassuring them that I am committed to protecting them while at the same time making sure that we keep our covenant with our fans.
With respect to transparency, you know, I’m going to wait for the summer to yield the results as a fan and the like. I think it’s important that our referees who have a very difficult job, you know, 70 away games every year going into a place where there seems to be unanimity of agreement about their competency, not their integrity, but their competence. We’ve got people complaining about from both teams about the referees called a bad game against them.
But we’ll continue to work with our referees to get their accuracy level up. We’ll continue to work I mean, to be transparent in the sense that our fans know how the system works. We will do that. We’re not transparent enough. We will continue to recruit and improve our recruitment which is another ongoing issue. We will continue to bear the expense for both the Development League and the WNBA to work three person rotations so that our referees training can have the greatest array of competition and the like and anything else we can learn. I think transparency is a good thing.
Because of how protective you have been, do you feel betrayed by what happened?
Stern: I feel betrayed by what happened on behalf of the sport regardless of how protective I’ve been. This is not something that is anything other than an act of betrayal of what we know in sports as a sacred trust.
If you can just describe your thoughts, you find out obviously one of your referees is acting illegally, but then to see further reports that there could be Mafia ties, and now there are reports in the paper today of death threats. How has continued to escalate, a referee continuing to act on his behalf of point spreads –
Stern: I don’t look at this as continuing to escalate, that’s just the media, it’s an interesting story and it’s going to get lots of coverage. That’s the business that we’re in. We expose ourselves, we invite you in and we ask you to cover us. And with that comes the obligation to be covered whether it’s good or bad. And it comes as no surprise to us that things that we would rather not happen are covered as widely as things that do happen. I just understand that from all of the years that I’ve been, you know, working with or for the NBA.
And to me, it’s fascinating that actually subjects that are that are interesting and compelling somehow become even more compelling in the context of sports and allows people to jump in, have an opinion, a way in, follow it, and that’s one of the things that comes with the territory.
I know it’s hard to prove a negative, but how certain can you be that this is an isolated incident and it isn’t more pervasive?
I think I was just asked when I stopped beating my wife; so I don’t think that how certain can I be? On the basis of my current understanding, it’s an isolated incident. And I can this proves that I can never be certain of anything, but we have been we understand that this is an isolated instance.
So that we kind of welcome the most extensive investigation by the Federal Bureau of Investigation and the Justice Department because they can do things that I can’t do legally. And so whether we like it or not, we are in the process of being vetted in a very thorough way, and I can tell you that that’s something that we have welcomed and with respect to which we are continuing to cooperate and provide information.
So they are looking into the other referees, as well?
Stern: Not exactly. But we don’t know exactly we know a little bit and we know that at this point, that we understand that it’s an isolated instance, but I don’t want to comment about their investigation or what they are doing because I’ve been asked not to; indeed, directed not to.
If I’m reading you right, is it yet to be determined whether Donaghy made calls that affected outcomes of the games?
Stern: I don’t think you have to read me. You can ask me. I mean, what I said was my understanding is, that he is currently that the current state is that he’s I have to choose my words carefully. His current state is what we are dealing with is betting and providing information. I don’t know about any charges or any discussions or anything else with regard to fixing of games.
Do you know how he bet to avoid security?
Stern: I have a strong idea but it’s part of the continuing investigation and I’m not authorized to say that. But I believe that it will come out and I also believe — my understanding is it wasn’t through Las Vegas.
It’s been said that there’s been some tension between the referees and the league office over the ratings system, the way they feel that they are so closely monitored. If one of your referees was having problems at home with an outside situation, would he come to the league office and tell you that. How would he do that if he wanted to?
Stern: We have a pretty extensive employee assistance program confidentially available. They are employees the same as anybody else; and the issues of stress, family management, money concerns, you name it, we are accessible and they know how to do that.
Did he ever?
Stern: No — well, he actually in the course of the investigation, he asked us whether we could be helpful in having his neighbor stop menacing him, but that was it.
Just to go back a second, Tim Donaghy resigned, but you must have resigned him. Can you tell us how that –
Stern: No, no.
He came in –
Stern: No, he didn’t come in. We received a letter. He resigned. Because we came to the belief that termination by us might hamper the ongoing investigation, and as a result, even though we knew he was going to be terminated, we did not because we did not want to be responsible for in any way, shape or form influencing the investigation.
Have you talked to him since? Have you personally talked to him since?
The call on June 20?
Stern: No. We have had conversations with his lawyer.
There have been various reports in Philadelphia and other places, several anger management situations involving Tim Donaghy including a problem with a postal worker, including a physical confrontation with a fellow referee at a union meeting and some things that happened at golf courses. Was none of that enough to warrant additional action by the NBA?
Stern: Well, it was enough to warrant investigation by the NBA. It was enough to bring him in to ask him about the veracity of those. It was enough to cause us to interview some of the people with whom he was in dispute; although, they might have their own perspective or view that was different. And not unlike players, an altercation in the locker room or in training camp is not would not be that would not be the only one in my time as commissioner if there was such.
But sheer volume of those wasn’t enough to make you do more?
Stern: The sheer volume, as I said, was to call him in and say if it happened again, anything like it, he was going to be terminated and to show that we meant it; he was being pulled off a round of playoffs, which are something that every referee aspires to. And then we concluded investigations in each of the subsequent years and found nothing to suggest any continuation of that behavior.
Earlier today, you said that you had been aware of the threat placed to all sports, and we think about it all the time at the league offices. I believe at the All Star Game in Las Vegas, you were asked by a reporter, ‘Does the subject of game fixing in any way concern you’; and you said, ‘No, it does not concern me and I’m surprised you ask the question.’ Just curious if you could explain the context of why you said that and how we should reconcile that with what you said today.
Stern: Do you have the transcript with you.
No, I don’t?
Stern: I don’t remember saying it that way. I think it was somehow connecting it to Las Vegas which I think is actually counter. I understand what I said was I understood, or what I say now, I understand why Las Vegas says that it is actually the check on illegal gambling, even though — the check on points spreads, even though it only represents to something under five percent of actual betting; the rest being 95 percent illegal, but it’s the connection between. As I recall the question, it was like, aren’t I worried that being in Las Vegas affects fixing of games, and that’s not.
Is there a distinction between Las Vegas sport betting and off shore sports betting in your mind?
Stern: Well, there is. One is legal in the United States of America and one is illegal.
They are both against your rules –
Stern: Oh, yes, you are not permitted to bet if you’re a referee. You’re not permitted to bet legally and you’re not permitted to bet illegally. The legal betting will cost you your job. The illegal betting, depending upon the context, may cost you your freedom.
I wanted to give you a chance to clarify, you were very clear, that this is the only referee currently under investigation –
Stern: I’m very clear that is my current understanding that this is one isolated referee, and that if that understanding changes tomorrow, I will so inform everybody.
Are you just as clear in your understanding currently that no other no player, team or other league official is currently under suspicion or investigation?
Stern: I know of no such suspicion.
Over the years, have you ever had to — not you, has the league ever had to bring in any officials to discuss the possibility of maybe red flag of gambling?
Stern: No. This is part of the code, our you know, our referees know what’s expected of them.
Now, you were probably a young man when the besting scandals at CCNY in New York City destroyed college basketball –
Stern: I was eight years old, I rush to say; I was a mere slip of a lad.
But you know the damage that did to college basketball, not only in the City, but throughout the East Coast of the United States. How concerned are you that this incident could have a similar effect on the popularity and on the fact that people may not believe what they see when they watch NBA games anymore.
Stern: That’s a fair question. When I was a lot older, I did legal work with respect to the 1961, I guess it was, investigations that related to names like Jack Molinas, Aaron Wagman and the fixtures that were there. I had occasion to work with then District Attorney Frank Hogan’s office and assistant DA and so on, and Detective Laurendi who administered the polygraph test for the New York Police Department.
I’m very aware of this subject. And I guess what I could say is that college basketball is soaring. I don’t participate in betting on college basketball, but lots of other people involve themselves in the bracket. It’s done better than ever. I’m aware that the World Cup is probably the greatest spectacle in the world of sport, and that’s despite the referees that have been found to have fixed games specifically. And it is my hope that the NBA will be similarly accorded the benefit of the doubt based upon what we have done, what we stand for and what we pledge to continue to do.
Just for clarification, did you say Tim Donaghy is being accused of betting on games that he did officiate?
Stern: It is my understanding that amongst the allegations are that he bet on games in which he officiated and possibly in which he did not officiate, and that he gave information to others for the purpose of allowing them to place bets on games that he was officiating and games that he was not officiating.
Are you reviewing tapes of games that Donaghy was involved in, and also, what do you tell spectators who are looking very hard at the Suns’ first playoff series?
Stern: I would like to await the outcome of the criminal investigation so that we will both know before I answer that question, whether that was one of the games that was bet.
With respect to the review of games, we are, as I said earlier, we didn’t deploy all of the people that would be necessary to do that. He worked 150 games over the last two years, of course we did not want to sort of march people together and say, we are now going to investigate Tim Donaghy, I want you to look for this. But I can assure that you in the fullness of the summer and the autumn, we will have the opportunity to review Mr. Donaghy statistically and by video, and it will be done.
On your referee monitoring system in the arena, do you use existing TV cameras or do you have a separate number of cameras set up for this?
Stern: No, we use existing TV cameras. We have lots of different feeds.
And also, have your monitors ever looked at especially suspicious patterns or have you never heard of anybody doing that?
Stern: Especially suspicious patterns have not revealed themselves to us, but the primary purpose was not a screen for criminal activity.
I cannot tell you that it will remain that way, because as we seek expert guidance to continue to give the assurances to our fans, I’m not here to predict what we will do and what we don’t do.
But I can tell you that I know that the Referees Union has been very supportive of our endeavors, the Players Association has been very supportive of our endeavors, and the Coaches Association has been very supportive of our endeavors. We have heard from each of them and I think that we are working together with both those organizations and the outside experts that we will come up with something that is appropriate and continue our efforts to make those assurances to our fans.
Did the Nevada Gaming Commission or the consultant that you spoke about earlier that you keep in Las Vegas, did they alert you to any suspicious activity related to either games Tim Donaghy worked, or if not, how common is it for them to alert to you suspicious –
Stern: It is not common.
Has it ever happened before?
Stern: Once a long, long time ago.
Could you elaborate on that? Is it a closed case?
Stern: It doesn’t involve any currently working there was some question where an NBA game that was taken off the line; it must have been 20 years ago, and that was it.
And the question there was about the timing.
Was that the Gaming Commission that alerted you at the time?
Stern: I think it was.
To the best of your understanding, do you really feel that it’s possible to determine if a referee is actually cheating, making calls that aren’t real?
Stern: That’s a really good question. It’s very hard, but we’re going to give it our best shot. There are things that you have been speculating about in the media in the last few days about the number of calls, the disparity of calls and the like. But it’s hard, but we’re going to do it and we’ll be able to make the judgment at that time.
It would not surprise me if it proves to be difficult, but I just want to say one thing here. If you bet on a game, you lose the benefit of the doubt. So I’m not going to stand here and say to you, it didn’t happen, because that would impair the credibility that I think the NBA deserves for its efforts, and that’s why we don’t allow betting on games because as our brochure that we give to the referees says, that if you bet, then people will assume that the game is being subjected to the possibility that it would be decided by other than on its merits, and I think that’s a fair point. And I will make no defense, neat criminal distinction between betting on games here and something worse. You lose the benefit of the doubt when you do it.
Two quick things. One, is it illegal to bet on it’s not illegal for your employees, they are not allowed to bet on NBA games or they are not allowed to gamble the slot machines, cards, betting on NFL games?
Stern: The prohibition is on all forms of gambling.
Slot machines included?
Stern: Slot machines included. If you want to go to the racetrack in the summertime, you get a pass, that’s it.
And you found out on the 24th and Donaghy resigned on the 9th. To the best of your knowledge when were you told he was under investigation?
Stern: I found out on the 20th of June. Donaghy resigned on the 9th of July. So by the time that we had our first meeting, I think it’s my understanding that Mr. Donaghy and his attorney were well aware of the pendency of the investigation.
How does this impact the possibility of an NBA franchise sometime being in Las Vegas?
Stern: I don’t know. I think the I honestly think that the juxtaposition of a meeting of our committee on that subject which was scheduled for Monday and this was untimely and I cancelled the meeting; not out of any rational response, but my feeling about it was it was not something I wanted to juxtapose, and I think that in the course of the summer, we’ll think about that as well.
Given that it’s likely that Donaghy laid his bets down illegally with illegal bookies, what do you think about the debate about whether sports betting should be legalized in this country so folks like the Las Vegas regulatory authorities could track it and possibly regulate it?
Stern: Historically, I think that by making it legal, you’re going to encourage more people to bet, and that’s been the policy underlying the illegalization of off shore gaming and the like. I’m going to leave that for smarter policy makers than I, but it has been our historic position that it and really encoded by the U.S. Senate in the ’90s in legislation introduced by then Senator Bradley that made sports betting specifically illegal in any jurisdiction that didn’t have it at the time of the legislation.
I’m wondering if there is any indication that any of Mr. Donaghy’s fellow referees had any inkling of his connection with organized crime?
Stern: The only inclination was after the investigation began and the buzzing after June 20 where there was some chatter about the fact that he was being investigated for something, and the referees knew that. And I believe they knew that either directly or indirectly from Mr. Donaghy himself.
You mentioned earlier the background checks and the credit, bank accounts, that kind of thing had only been the last two years. I’m curious why it was such a late arriving thing?
Stern: Before that we did the normal, standard criminal and credit checks upon hiring and we did a standard ongoing check every two years. But we decided two years ago that we should actually do it every year and indeed do it deeper and a more expensive dive because of the subject matter.
And that was unrelated to Mr. Donaghy. That had been put in motion by me before the Donaghy probably at the beginning of the 2004 2005 season, but we couldn’t do it by then so we resolved to do it starting at the 2005 2006 season.
In the course of your conversations with authorities, have you gotten any indication about motive, what made him do this?
Stern: I’m not able to answer that question openly at this time, I’m sorry.
You mentioned that referees are allowed to bet at the racetrack in the off season. Isn’t that the same kind of place where you can get into the same kind of gambling problem or debt as other forms? Why is that an exception?
Stern: Because it was bargained for by the union against a since we had the most far reaching prohibition, I think of any sport, which prohibited them being in casinos, that we said, okay, if you’re a summer day at the racetrack is okay, out of season.
Is that something that you’ll visit given this case?
Stern: Boy, we’re going to revisit everything. Everything.
Do you fell you will know what games may have been compromised before the FBI lays out their case; will they share it with you or will you have to wait?
Stern: I have to wait. That has been made clear to me. And I appreciate that and I support that. If I haven’t been effusive enough in my praise of the FBI and the Justice Department, I want to add to that here; we appreciate what they are doing and we don’t in any way want to compromise their investigation and we appreciate their understanding that as a matter of our business, and our sensitivity to what you folks think and our fans think, that we have to come out here and sort of having to walk this difficult line.
If you do find out that playoff games may have been compromised, does that make regaining the confidence of the fans and the public even more difficult if your tournament was possibly tainted?
Stern: I think that I think that we are going to maintain the confidence of our fans and regain the confidence of those who may be shaken by this as we are. But to me, one game that is allegedly determined on its merits is bad enough. I’m not going to distinguish I’m not going to take the easy out and say I’m relieved that there are no playoff games, which might be the case, I don’t know. That doesn’t make it any better for me.
If regular season games are determined on other than their merits, then the wrong has been done; the trust has been violated. I’m not going to distinguish between postseason and regular season.
Could you confirm reports that Donaghy was at or near the top of the list among fouls called, technicals; and if so, was that something that trips the league’s wires?
Stern: No, I can tell you, I believe that he was not near the top of technicals. And I believe that he probably was near or at top of calls made, but someone always has to be at the top, at the bottom, to get you to an average and if someone was calling a couple of fouls more than the average, we see that in different categories.
We use that for training, actually, sometimes. We go back, we look at tapes and we see that a referee is adamantly not calling defensive three, then we go back and look at a tape and we don’t say he’s got to call more. We look at examples that’s a trigger for us to look at examples that that’s happening and that something may be missing and we’ll call it to his attention. A foul call itself is not a trip wire for us.
Will you examine raising their salaries to reduce the risk of debt or anything else that might factor into them thinking bad thoughts?
Stern: Mr. Donaghy earned this past season, $260,000. I think that and with each year of additional experience that, gets raised and has a component of regular season and for playoffs, and he only has 13 years of experience. We have referees with 29 or 30 years of experience who are appropriately higher earners.
So we do think that that is fair, and there are lots of people that keep the peace that earn a lot less.
I’m wondering, do you have any idea how he got away with this? Can you comment on how he managed to hide this?
Stern: I mean, I’ll only invoke the earlier reference to the CIA, the FBI and people who get away with doing dastardly things. If you’re intent upon engaging in criminal activity, and if you are acting alone in many cases without the knowledge of even your family, it’s possible. Our history is replete with examples of that. So it doesn’t come as a surprise that you could go undetected.
In his bank account, there was no suspicious amounts of money?
Mr. Donaghy has not been convicted or charged with anything so, what evidence do you have that he’s guilty of having bet on games?
Stern: His lawyer informed us that he’s contemplating a plea on that subject.
Does that answer your question?
Yes. Just wondering, you mentioned the Players Association, but broader than that, what conversations have you had with any players since this broke, and because of this situation, what concerns might come up for them during the season?
Stern: Well, I’ve had the ability to have a dialogue with Michael Goldberg, the head of the Coaches Association who is here. We’ve been in touch with Gary Paul, the second in command at the Union; Billy Hunter has been in Africa. We met with Derek Fisher yesterday, the head of the Players Union. And NBA personnel are on the ground at the training camp for the national team in Las Vegas this past week.
And generally what we have said to the players is what we’re saying to you and to our fans; we’re going to do the right thing here by a combination of disclosure, self analysis, and determination to do what’s right and best on an ongoing basis.
And what is from them or from the public your greatest fear about what this could do to the credibility of the game?
Stern: I think the public learning, what we do, what we have done and what we are determined to do is going to be by and large with us.
And it’s not about my fear. The only fear I have is not making good on the covenant to do whatever is necessary. And I’m saying here as a personal matter, that I am going to be deeply involved in the analysis and changes that go on so that if I stand here again to say what we’re going or what we’ve done, it’s going to be because I had firsthand knowledge and got my hands as dirty as they possibly can get in connection with any changes that we might make.
Are there any concerns or investigations about possible game fixing or any thoughts about inappropriate relationships or deals with players or coaches?
Stern: No. But we are going to, as I said, use the summer to analyze everything that we have, get the right opinions, and, you know, continue to improve our systems.
Before I leave with a thank you, I just want to sum up to say to you that this is something that is the worst that could happen to a professional sports league. And I want to say on the other hand that we are going to make good on the covenant that we believe we have with our fans, and I pledge that my involvement will be as intense and complete as it can possibly be and what we do will be completely transparent.
Thank you very much.