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Wednesday, November 25, 2009

Are Football and Fraud Connected in Alabama?

The University of Alabama and Auburn University meet on the football field Friday in the annual Iron Bowl game.

College football unquestionably is the most-discussed topic in our state. And the Iron Bowl easily is our most anticipated event. The day after Thanksgiving, Black Friday, typically is one of the biggest shopping days of the year. But it is likely to be quiet in Alabama, particularly between the hours of 1:30 and 5:30 p.m.--roughly when the Iron Bowl will be played at Auburn's Jordan-Hare Stadium.

Many experts consider Alabama vs. Auburn to be the most fierce rivalry in college football, and it has produced many classic moments. But if you look beneath the surface, you see that the Iron Bowl also might represent the worst part of college athletics.

For example, consider this question: Is it coincidence that the most prominent boosters at both Alabama and Auburn--Paul W. Bryant Jr. and Bobby Lowder, respectively--have been connected to financial shenanigans in recent years?

Are their shaky business practices driven by a desire to keep up in the escalating financial "arms race" that envelopes high-level college football? Programs such as Alabama and Auburn must come up with huge sums of money to attract and retain top coaches and develop essential infrastructure--stadium expansions, practice facilities, recruiting budgets, etc.

Consider the coaches. Alabama's Nick Saban, one of the highest paid coaches in college football, recently signed a contract extension that will pay him an average of about $4 million a year. Auburn's Gene Chizik is a relative pauper, making about $2 million annually.

Where does all of that money come from? In Alabama, it generally is assumed that quite a bit of it comes from Paul W. Bryant Jr. and Bobby Lowder. Both men serve on their school's board of trustees. Both men have varied business interests--Lowder in banking and real estate; Bryant in reinsurance, ready-mix concrete, catfish, casino management, dog tracks, and more. As we have reported here at Legal Schnauzer, both men have ties to troubling business practices.

Lowder's woes recently were chronicled by Senior Editor Brian O'Keefe in a story titled "The Man Behind 2009's Biggest Bank Bust" for Fortune magazine.
O'Keefe, focusing on Colonial Bancgroup, reports that Lowder is under investigation for possible wrongdoing connected to the federal government's Troubled Asset Relief Program (TARP). In ominous tones, O'Keefe writes:

As the man who signed Colonial's financial statements, Lowder could face civil or even criminal charges if evidence of fraud is found in the bank's TARP application.

Bryant's business history might be even more alarming. One of his companies, Alabama Reassurance, was implicated in a massive fraud case that resulted in a 15-year federal prison sentence for a Pennsylvania lawyer named Allen W. Stewart. The Stewart case had such a strong Southern accent that prosecutors and forensic experts from Alabama were heavily involved.

Bryant and his company came through the episode relatively unscathed. Sources tell Legal Schnauzer that's because someone in the U.S. Department of Justice at the time (late 1990s) called off an investigation. Was that to protect Bryant, the son of the late Paul "Bear" Bryant, the hall-of-fame coach who turned Alabama into a football powerhouse?

Alabama, ranked No. 2 in the country, is expected to beat Auburn on Friday--probably in fairly comfortable fashion. If the Crimson Tide beats Florida in the Southeastern Conference championship game, it will be playing for a national title.

It all has been driven by Coach Nick Saban, the $4-million man that Paul W. Bryant Jr. played a key role in hiring. As you watch Saban patrol the sidelines on Friday--and the game will be nationally televised on CBS, you might ask yourself the following questions:

* How much of Saban's salary--and other University of Alabama football expenses--are funded by Paul W. Bryant Jr.?

* Given Bryant's connections to a huge insurance-fraud case, where does that money come from?

* Is the University of Alabama's dominant football program built on a foundation of fraud?


Anonymous said...

You won't see O'Keefe writing about Junior, because he is an Alabama graduate.

legalschnauzer said...

Interesting. I sent O'Keefe information from my blog about Junior. Essentially said there is an awfully good story that could be written on the othe side of the state.

No response.

I thought his piece on Lowder was well done. But what about equal time?

J.T. said...

If Alabama consistently sells out BDS stadium every fall, I dont see how that alone does not easily finance our program. I think PBJ's involvement with the inner workings of the athletic dept is much less than most people might think..

finebammer said...

roll tide, roger.

roll tide!