Wednesday, October 14, 2009

NCAA Shines Light on University of Alabama's "Abysmal" Ethics

The NCAA calls the University of Alabama's compliance record in athletics "abysmal," according to news reports out today.

A big question is this: Why would anybody be surprised?

The institution, and its fabled football program, are run by the University of Alabama Board of Trustees. The best known member of the board--and probably its most powerful force--is Paul Bryant Jr., the son of the late football coaching icon, Paul "Bear" Bryant.

Bryant Jr. is the president of Greene Group Inc., and at least one of his companies has engaged in highly shady financial transactions, which helped lead to a 15-year prison sentence for a Pennsylvania man several years ago. Bryant and his colleagues managed to escape punishment--and even scrutiny in the mainstream press.

But they have not escaped scrutiny here at Legal Schnauzer. And in a series of upcoming posts, we will show you why no one should be surprised that an organization involving Paul Bryant Jr. would be found to have "abysmal" ethics.

Irony abounds in today's reports about the University of Alabama. They come as cross-state rival Auburn University is receiving some unwelcome attention, due to the financial difficulties of high-profile board member Bobby Lowder and his failed Colonial Bank.

Lowder's latest woes are examined in a story titled "The Man Behind 2009's Biggest Bank Bust" in the current Fortune magazine. Senior Editor Brian O'Keefe exhibits splendid reporting and writing skills on the piece, and we will be taking a closer look at it in the coming days.

But first, let's look at how the Lowder story dovetails with today's reports about the University of Alabama--in which the NCAA says the institution has an "appalling and unprecedented recent infractions history."

Lowder's cross-state counterpart is Paul Bryant Jr. Both have long been considered the key heavyweights on the state's two major university boards. Both have backgrounds in banking--Lowder at Colonial and Bryant at (what else?) Bryant Bank. Both reportedly are fanatical about their respective college football programs.

Here's a major difference between the two men: Whatever Lowder's faults--and O'Keefe reports that he could wind up facing criminal charges--the Auburn trustee's business activities have been quite well known. He has been involved in businesses--banking, real-estate development--that at least appeared to be solid on the surface.

But Bryant? He tends to operate in the shadows--in enterprises like casino management, dog tracks, catfish, ready-mix concrete, and reinsurance.

It's that last field that has attracted our attention at Legal Schnauzer. One of Bryant's companies is called Alabama Reassurance. And it was implicated in at least eight counts of a massive fraud case in the late '90s involving a Philadelphia lawyer named Allen W. Stewart.

Stewart is serving a 15-year federal prison sentence, and in 2003, he coughed up $17 million in criminal forfeiture proceedings.

Our sources say that, after the Stewart conviction, the U.S. Department of Justice was prepared to launch a heightened investigation of Alabama Reassurance. But someone in the DOJ's power structure called off the dogs.

In the coming weeks, we will be looking closely at the Allen W. Stewart case, the role of Alabama Reassurance in it, and the government's decision to call off its investigation of Paul Bryant Jr.'s company.

Can you avoid scrutiny of your "funny finances" when your name is Paul Bryant Jr. in Alabama? Sure looks that way.


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