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Monday, January 18, 2010

Does the University of Alabama Benefit from Insurance Fraud?

University of Alabama defensive coordinator Kirby Smart last week turned down an offer from his alma mater, the University of Georgia, that would have roughly doubled his salary. Smart decided to stay in Tuscaloosa reportedly because Alabama quickly matched the offer. One report said the big raise for Smart is likely to cause a ripple effect in salaries for all of Alabama's assistant coaches, coming off a national-championship season.

Is Alabama able to open its checkbook in such a nimble and generous fashion partly because its most prominent booster, Paul W. Bryant Jr., has ties to insurance fraud? Bryant, a member of the university's board of trustees and the son of famed coach Paul "Bear" Bryant, is president of Greene Group Inc. One of his companies, Alabama Reassurance, was implicated in a $15-million fraud scheme that helped send a Pennsylvania man named Allen W. Stewart to federal prison.

Alabama's athletics program undoubtedly has strong cash flow these days from ticket sales, merchandise sales, television deals, etc. But does it help to have a trustee whose company clearly has been willing to break the law--and managed to get away with it?

Consider Alabama's courtship in 2007 of Head Coach Nick Saban. Various reports indicate that a private plane owned by Paul Bryant Jr. was used to help secure the highly paid, and ultra successful, coach.

In September 2008, Forbes magazine labeled Saban "the most powerful coach in sports." Reporter Monte Burke wrote:

On New Year's Day in 2007 Mal Moore, the athletic director at the University of Alabama, boarded a private plane bound for Miami. A little over a month earlier the university had fired Mike Shula, its fourth football coach in eight mediocre years. The pursuit of a new coach to that point had been bungled badly--the once proud program was reportedly turned down by Steve Spurrier, from South Carolina, and Rich Rodriguez, at the time the coach at West Virginia. Moore was on his way to Miami to try to woo Nick Saban, then the coach of the NFL's Dolphins. It was all-or-nothing, with no real backup plan. "I told the pilots when they dropped me off in Miami that if I didn't come back to this plane with Nick Saban, they should just go on and take me to Cuba," Moore says.

Hmmm, so a private plane did play a major role in landing Nick Saban. Wonder who that private plane belonged to.

It almost certainly was Bryant's plane. And here are some questions to ponder: How is Bryant's plane financed? Does his company's participation in insurance fraud help him own and maintain a private plane? Did insurance fraud, in a roundabout way, help the University of Alabama land Nick Saban?

Away from the football field, consider the University of Alabama's Birmingham campus (UAB), which Bryant helps oversee from his seat on the board of trustees. Not long after Bryant was appointed to the board, reports surfaced about massive research fraud at UAB.

We have reported that a whistleblower, a forensic accountant, estimated the fraud at $600 million. The George W. Bush Department of Justice let UAB off with a wrist slap, settling the case for $3.4 million, less than 1 percent of the actual fraud.

It's possible that Paul Bryant Jr. knew nothing about the research fraud at UAB, which was based largely on double and triple billing of Medicare. As a former 19-year employee of UAB, I often had the impression that Bryant and most of his fellow board members didn't give a rip about the Birmingham campus--particularly its football program, undergraduate programs, etc.

But the UAB research enterprise is the cash cow of the University of Alabama System. And evidence strongly suggests that, where cash is involved, Paul Bryant Jr. definitely is interested.

The bottom line? Public documents suggest the following: Whenever Paul Bryant Jr. becomes involved in an organization, signs of fraud can sometimes follow--and the U.S. government is likely to look the other way.

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