An internal investigation of the National Basketball Players Association's business practices under executive director G. William Hunter conducted by Paul, Weiss, Rifkind, Wharton & Garrison has cleared the former federal prosecutor of illegal activity, but recommends potential changes to the union's leadership and policies.
The Paul Weiss probe began nine months ago amid a power struggle for control of the NBPA, following a five-month lockout of players by league management during collective bargaining negotiations. A six-member committee of players retained Paul Weiss litigation cochair Theodore "Ted" Wells Jr., partner David Brown, and associate Amy Gold after the U.S. attorney's office in Manhattan began an investigation of its own into how the union conducted its affairs under Hunter's stewardship.
The report released late Thursday afternoon by Paul Weissthe firm has set up a website to download the 229-page report and a 38-page executive summaryis the result of reviewing thousands of documents, emails, and financial records, as well as interviews with three dozen individuals. The firm's findings, which cites previous stories from The Am Law Daily about the union's ties to outside counsel at Dewey & LeBoeuf, Howrey, and Steptoe & Johnson, concludes that at times Hunter put his own interests ahead of the unions' rank-and-file.
Hunter, pictured here with the union's longtime outside counsel Jeffrey Kessler (who took a team of lawyers from now-defunct Dewey to Winston & Strawn last year), said in a statement late Thursday that while he disagreed with some of the report's conclusions, he was pleased that "it recognized that I have not engaged in criminal acts nor was I involved in the misappropriation of union funds."
Hunter has been criticized for hiring relatives and sending NBPA business to a financial advisory firm called Prim Capital that employed his son Todd Hunter as a principal. As previously noted by The Am Law Daily, Hunter's daughter-in-law and attorney Megan Natsuko Inaba was also hired by the union to serve as its director of special events and partnerships. One of Hunter's daughters, Robyn Hunter, serves as director of player benefits and services at the NBPA. Records filed last year with the U.S. Department of Labor show they received annual compensation of $174,500 and $97,298, respectively, while the now 70-year-old Hunter took home more than $3.1 million.
Another daughter, Steptoe & Johnson special litigation counsel Alexis Hunter, was part of a team of lawyers from the firm representing the union in lockout-related litigation with the league in 2011. Labor Department records show that Steptoe was paid nearly $1.4 million in legal fees by the union during the period between July 1, 2011, and June 30, 2012. Alexis Hunter previously worked at now defunct Howrey, which had received more than $300,000 for its services to the NBPA between 2007 and 2010, according to our previous reports.
While the Paul Weiss report released Thursday includes those fees, it also delves into the circumstances that led to Alexis Hunter being hired by Howrey, whose abrupt collapse led her to join Steptoe in April 2011. The firm's investigation also looks at Gary Hall, the union's longtime general counsel who passed away in May 2011. Hall, a former partner at Syracuse's Blitman & King, "shared a close personal relationship" with Hunter for "more than 30 years," according to the Paul Weiss report.
The firm's internal inquiry found that Hunter's decision to hire his best friend in Hall to be the union's top in-house lawyer effectively "perpetuated an atmosphere at the NBPA that made it difficult for Player Representatives, Executive Committee members, and employees to challenge his decisions."
According to the Paul Weiss report, the evidence suggests that Hall was "not viewed as an independent figure who would be responsive to concerns about Hunter's management of the Union." The firm's probe states that Hall actively helped Hunter in "squelching dissent," and that his actions as general counsel bear "at least some responsibility for the NBPA's failures to comply with its by-laws and adhere to principles of proper corporate governance."
Hall is cited in the report as supporting the hire of Robyn Hunter, as well as furthering the union's relationship with Howrey and then Steptoe, both of which were paid "a combined total of more than $1.75 million to date," according to an analysis by Paul Weiss. The firm notes that "Hunter's decision to give legal work to these firms created conflicts of interest that he failed to properly disclose or manage, and which have hurt the Union, including by fueling the public perception that he runs the NBPA for the benefit of his family."