And The BCS Came Tumbling Down
Wednesday - September 29, 2010
Carthage was untouchable. After taking Sicily from the Greeks in 275 B.C.E. and having turned back the Romans for 118 years, the Carthaginians were secure in their power to control the entire Mediterranean Sea. Then something happened.
After years of trying, Rome succeeded in sacking the famed city. More than 200,000 were killed, and the 50,000 survivors were sold into slavery. The fortress was leveled, a curse put on the site and one of the great cities of antiquity erased. Two thousand years later and 108 years after the first Rose Bowl, another dominant power is being hounded by its enemies.
It is not likely the BCS bowls will suffer such a dramatic end. But make no mistake about it, just like the North African city-state that once dominated everything within its reach, the BCS is under siege, and its nearly unfettered control of college athletics’ financial empire is in danger of falling.
Last week, a group called Playoff PAC announced its intent to file a complaint with the IRS claiming the Orange, Fiesta and Sugar bowls have violated tax laws involving nonprofit organizations. Playoff PAC is a political action committee that wants the NCAA to dump the BCS and institute a playoff system.
The claims by the PAC are interesting and, if proven true, could finally undo the entire system.
The bowls are tax-exempt 501(c)3 charities and by law they cannot be used for the benefit of private interests.
Playoff PAC believes the Fiesta Bowl violated U.S. tax law by extending noninterest loans to executives, by paying $1.2 million to a lobbying firm while indicating on its tax returns it did not engage in such activities and, perhaps most damaging, reimbursing employees who donate to friendly politicians, which is a violation of state and federal campaign finance laws.
Bowl officials have publicly dismissed the complaint, but privately the concern is certainly much greater. Not only is the complaint damaging, but the group is connected and it should find a willing partner in Utah Sen. Orrin Hatch.
According to the Associated Press, the signers of the complaint include Matthew Sanderson, who was a campaign finance lawyer for John McCain’s 2008 presidential campaign, and Joe Birkenstock, a one-time chief counsel for the Democratic National Party. The third signer, Marcus Owens, is a former director of the IRS exempt organizations division. Then, of course, there is Hatch, who has been beating the anti-BCS drum for years.
Hatch’s interest in the BCS goes back to, at least, 2003 when he chaired a hearing in the Senate Judiciary Committee on possible antitrust violations. A year ago he testified in front of the Senate Antitrust Subcommittee, saying in his opening statement, “Put simply, Section 1 of the Sherman Antitrust Act prohibits contracts, combinations or conspiracies to limit competition.
I’ve said before that I don’t believe a plainer description of the BCS exists.”
The Salt Lake City Republican said an antitrust violation occurs when “... one is in possession of monopoly power and uses that power in a way not associated with growth or development as a consequence of having a superior product or business acumen.”
That’s a hard opinion to dismiss.
The complaint from the PAC, by itself, won’t be enough to bring down the BCS. Even if the bowls are found to have violated tax laws, it would be surprising if the IRS pulled their tax-exempt status. A fine may be a more likely reaction.
But with each volley from the cannonade, the walls surrounding the BCS citadel become weaker, and it may be just a matter of time before its defenses are breached. Hatch and his supporters will likely use any decision by the IRS as a way to press for full Senate inquiry.
This may not be The Punic Wars, but a football fortress may someday stand in ruin, its history plowed into the soil and its furrows salted to prevent regrowth.
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