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Politics, Problems, and Power at the New York State Athletic Commission: Part Three

29
Jan

On March 27, 2019, the New York Times published an investigative report that detailed a fundraiser for New York governor Andrew Cuomo. The report, which was featured on page 1 of the first section, began, “The rooftop fund-raiser was meant to be a secretive affair, but word spread quickly among those with pending issues before the state. Lobbyists told their clients that the event would be a good thing to go to. After all, the dinner was being held a little more than two weeks before the New York State budget was due, and what better way to make valuable connections than to pay tribute to the guest of honor, Gov. Andrew M. Cuomo. Among those present were the vice president of a school bus company seeking tax breaks for the purchase of buses; a recycling company founder looking for a broadening of the 5-cent deposit law; and an affordable housing developer lobbying for real estate tax credits. The fundraiser was held on March 14 on the 20th floor of the St. Regis Hotel, just off Fifth Avenue and a block from Trump Tower. The minimum donation per couple was $25,000. The event, which was billed as a spring dinner with the governor, was strictly under the radar. It was not listed on Mr. Cuomo’s calendar. The invitation was vaguely worded with the locale only provided in the RSVP. A reporter who showed up at the fund-raiser was barred entry. The guests included senior Cuomo administration officials, including the state budget director. The fundraiser provided a vivid example of how things work in Albany’s pay-to-play culture, where political contributions are often viewed by business leaders as a prerequisite for getting their perspective heard in the capital.”

New York Gov. Andrew Cuomo (AP Photo/Mike Groll)

Four months later, on July 29, 2019, the Times ran a similar investigative report: “Months after landing its first job in nearly a decade on the New York City subway, a Long Island construction firm hosted an intimate fundraiser in its luxury suite at Citi Field for a special guest: Gov. Andrew M. Cuomo. The firm, Haugland Group, had wanted to expand into the lucrative world of contracting for the Metropolitan Transportation Authority, the agency that oversees the subway and is controlled by Mr. Cuomo. After securing a $23 million contract to clear clogged subway drains in October 2017, William Haugland and his son Billy, the company’s leaders, sought to raise as much as a quarter of a million dollars for Mr. Cuomo’s re-election campaign at the Citi Field event, according to a person with direct knowledge of the event. Neither the family nor their companies had ever donated to Mr. Cuomo before. Haugland Group was suddenly one of Mr. Cuomo’s largest contributors as he ran for a third term. Another firm that cleared subway drains, Welkin Mechanical, also donated to Mr. Cuomo. The campaign received the contribution less than three weeks before the company won a nearly $15 million contract in November 2017.”

This is the environment in which the New York State Athletic Commission exists. Money and political power dictate policy and policy implementation at every level.

As noted in Part One of this series, the NYSAC doesn’t have a budget like its counterparts in most states. Its economic mysteries are folded into the budget for the New York State Department of State. Thus, much of its cost to taxpayers is hidden from public scrutiny and also from review by the NYSAC commissioners and executive director.

On several occasions, the NYSAC and Department of State refused a request by this writer for information stating the total annual cost of operating the commission and a breakdown of these costs (e.g. salaries, travel expenses, office space, etc). Finally, on February 8, 2019, I filed a demand pursuant to New York’s Freedom of Information Law to require the production of the information.

But there was a problem. The New York State Department of State (through the New York State Committee on Open Government) is the entity that oversees administration of the Freedom of Information Law. And the DOS refused to fulfill its legal obligation with regard to my request for information about the NYSAC budget.

On March 19, 2019, I received an email from an assistant records access officer named Cherise A. Watson that read, “Dear Mr. Hauser: This is in response to your FOIL request of ‘annual cost of operating the New York State Athletic Commission.’ It is taking significantly longer than anticipated to review our records and respond to your request. Please be advised that the Department of State needs additional time. The anticipated date of response is April 30, 2019.”

On April 30, I received the same email with a different anticipated date of response. That process repeated itself on May 29 and June 26.

Here I might add that Ms. Watson’s June 26 email came one day after Robert Freeman (director of the New York State Committee on Open Government) was dismissed from his job after multiple complaints alleging sexual harassment were filed against him and investigators found photos of naked women on his state computer in addition to sexually suggestive emails written by him on his state account.

On June 27, I filed an appeal in response to the failure of the Department of State to provide me with documents as required by law.

Finally, on July 26 (five-and-a-half months after my Freedom of Information Law request), I received an email from the Department of State which contained a one-page document that was only partially responsive to my request. For example, there is no reference in the document to the cost of office space allocated to the New York State Athletic Commission. Other entries seem to have been mischaracterized or are vague.

By way of example; Dr. Angela Gagliardi is assistant chief medical officer for the NYSAC. One source says that Gagliardi works from home, comes into the office one day a week, and coordinates medical matters for the NYSAC. She also attends weigh-ins and fights. In addition, Gagliardi has spent time in recent months contacting commission employees (including non-medical and per diem personnel) about the administrative requirement that all NYSAC business be transacted on Department of State servers rather than private email accounts.

According to SeeThroughNY, Gagliardi is an hourly employee who, in 2018, was paid at the rate of $77 an hour for a total of $174,855. If this information is correct – and if she never took a week off – Gagliardi worked approximately 2,271 hours in 2018 (an average of 43 hours 20 minutes per week). Since $174,855 is more than the entire total listed for “per diem” employees by the Department of State in its production to me, I assume that either Gagliardi was classified in the document produced as a “fulltime employee” or the numbers provided by the DOS pursuant to the Freedom of Information Law are incorrect.

There are people assigned to the NYSAC who receive substantial salaries and who high-ranking commission officials have never met or even heard of. One such person is listed by SeeThroughNY as having been employed in 2015 as a “special assistant” in the “executive” category. Her “total pay” for that year was $105,550. David Berlin, who was NYSAC executive director at the time, says he has no idea who that person was.

More significantly, the New York State Athletic Commission and New York State Department of State appear to be countenancing false financial filings with the state that might lead to tax fraud.

Section 13 of the federal Muhammad Ali Boxing Reform Act is entitled “Required Disclosures for Promoters.” In part, it states, “A promoter shall not be entitled to receive any compensation directly or indirectly in connection with a boxing match until it provides to the boxing commission responsible for regulating the match in a State (1) a copy of any agreement in writing to which the promoter is a party with any boxer participating in the match; (2) a statement made under penalty of perjury that there are no other agreements, written or oral, between the promoter and the boxer with respect to that match.”

This requirement is now being finessed in New York. For big fights, an official NYSAC bout contract with an artificially low purse is often filed with the commission by the promoter of record and the fighter is paid more on the side from money that filters through some other mechanism, often through a party other than the promoter of record.

Meanwhile, section 206.12 of the NYSAC Regulations provides, “All contracts calling for the services of a professional in an authorized professional combative sport and entered into by licensed promoters, professionals or managers as one or more of the parties in such contracts shall be subject to Commission approval and must be filed with the Commission to be valid.”

It appears as though this provision is being routinely circumvented with the silent assent of the NYSAC. The result is that there’s a shell game going on with regard to fighters’ purses. It’s common practice for fighters in big fights in New York to be given two or more checks – one for the purse that’s reported to the NYSAC and the other or others for the difference between that amount and the real purse.

The bout contracts and supporting paperwork are filed with the NYSAC by the promoter of record, who’s not necessarily the driving promotional force behind the fight. In that regard, one of these promoters acknowledges, “Everyone is filing false paperwork on big fights. I file what I’m given.”

For example:

*         Gennady Golovkin’s purse for fighting Steve Rolls in New York on June 8 was reported to the NYSAC as being $2 million. Dan Rafael of ESPN.com called that number “laughable” and reported that Golovkin was “getting closer to $15 million.” Four months later, the official purses reported to the NYSAC for Golovkin vs. Sergiy Derevyanchenko were $4 million for Derevyanchenko and $2.5 million for Golovkin.

Photo by Mark Robinson/Matchroom Boxing UK

*         When Anthony Joshua fought Andy Ruiz at Madison Square Garden on June 1, Joshua’s official paycheck based on his purse after certain deductions was $3.2 million and Ruiz’s was $1.3 million. In reality, Joshua received well into eight figures for the fight and Ruiz’s purse is believed to have been in the neighborhood of $6 million.

*         Deontay Wilder’s purse for fighting Dominic Breazeale on May 18 as reported to the NYSAC was $4 million. It’s unclear how much Wilder actually contracted for to receive but it’s believed to have been at least $12 million.

Why are these discrepancies important? For starters, they set the stage for the possibility of underreporting with regard to New York State income tax. People can play games with the numbers and say things like, “Well, the bout contract was accurate. The other ten million dollars that so-and-so got was for personal appearances at corporate events or some kind of sponsorship (not taxable in New York).” But that’s nonsense.

There are NYSAC employees who acknowledge (but not for attribution) that they know the purse filings are inaccurate.

One justification advanced in support of allowing the situation to continue is the claim that the purpose of the Ali Act and the New York State regulations is to “protect the fighter.” Thus, if income is knowingly being underreported for tax purposes, it isn’t relevant to these reporting requirements. But that’s ridiculous. Filing false documents with the state is a crime. Knowingly underreporting income for tax purposes is a crime. And just as important: If false documents are being filed with the commission, how does the NYSAC know that the fighters are getting honest numbers?

Quite possibly, all appropriate New York State income taxes are being paid on fighters’ purses. But this situation opens the door for abuse. It calls into question the integrity of the New York State Athletic Commission and also the integrity of the New York State Department of State. And as a related issue, the inaccurate purse filings for big fights are particularly irritating to referees and judges who, as per New York State Athletic Commission Bulletin 2017-02, are supposed to paid a legally-mandated percentage of the fighters’ purses when they referee or judge a championship fight.

The bottom line is that the Cuomo Administration, like many government entities on both sides of the political aisle, caters to and shields powerful economic interests.

For years, the application for a promoter’s license in New York required applicants to list the name of each shareholder. This was designed to identify potential conflicts of interest and root out unsavory backers. In August 2018, the NYSAC removed the requirement that this information be listed. Why?

The nature of government is that, too often, regulatory agencies are run by entities that they’re supposed to regulate. For example, in the Trump administration, the coal industry dictates policy to the Environmental Protection Agency. Similarly, crucial decisions at the New York State Athletic Commission are now being made by entities that the NYSAC is supposed to regulate. I’m not talking about small venues and small promoters. They don’t make NYSAC policy.  But large venues and large promoters with highly-skilled lobbyists on retainer do.

Too often, the NYSAC is compliant with the wishes of the powerful to the detriment of good government.

Georges St-Pierre vs. Michael Bisping (right) in their UFC middleweight championship bout at Madison Square Garden on November 4, 2017. (Photo by Jeff Bottari/Zuffa LLC/Zuffa LLC via Getty Images)

Here it’s worth revisiting the case of Michael Bisping. On November 4, 2017, Bisping tapped out while being choked by Georges St. Pierre at UFC 217 at Madison Square Garden. A left hook and series of forearms smashes had immobilized him. Then St. Pierre applied a naked chokehold that ended the bout.

Bisping appeared to temporarily lose consciousness. That night, he was placed on a 30-day medical suspension by the NYSAC medical staff. Then, in mid-November, UFC contacted NYSAC executive director Kim Sumbler, told her that Bisping had been judged fit to fight by a neurologist in California, submitted supporting medical documentation, and asked that the suspension be lifted. The NYSAC complied with the request. On November 25, three weeks after enduring a beating in New York, Bisping was knocked out by Kelvin Gastelum on a UFC fight card in Shanghai. He did not fight again and, in May 2018, announced his retirement from MMA competition.

It now appears that Bisping, who at this point has a prosthetic right eye, was almost sightless in that eye when he fought St. Pierre in New York. During an October 15, 2019, podcast, he acknowledged, “My vision [in my right eye] was pretty much non-existent since 2013. People always say, ‘How did you fight with only one eye?’ And I always say, ‘With great fucking difficulty!’”

Michael Bisping

Reflecting on the situation with Michael Bisping, a high-ranking NYSAC official admits, “We don’t hold big promoters to the same standards as small ones.”

Asked for another example, the official says, “UFC is allowed to use a bottle of adrenaline that has already been opened for multiple fighters. Cutmen who work for other promoters’ fighters have to use a new bottle for each fighter.”

“The rules are different for UFC,” another NYSAC official acknowledges. “They can do pretty much anything they want. The regular rule is that a fighter isn’t allowed to eat anything after we take his pre-fight urine sample. If he does – and it’s the same for women fighters – we take another urine sample. But UFC is allowed to come in and give snack bags to its fighters for them to eat without being retested.”

Similarly, the Medical Standards for Combat Sports posted on the NYSAC website states, “The MAB and the Commission limit fluids at ringside only to authorized bottled water. Water must be in a sealed bottle and remain unopened until ringside.”

Pursuant to this dictate, fighters are not allowed to ingest drinks with electrolytes after giving a pre-fight urine sample. But the NYSAC allows UFC combatants to use Bodyarmor Alkaline SportWater with “potassium-packed electrolytes.” Perhaps that’s because Bodyarmor is the “official sports drink of UFC.”

And it doesn’t stop there.

On November 1, 2019, Kelvin Gastelum weighed in for a UFC 244 match to be contested at Madison Square Garden against Darren Till. The contract weight was 186 pounds. It was widely known in the MMA community that Gastelum had been having trouble making weight. Before stepping on the scale, he stripped down completely naked and a towel was lifted in front of him to shield his genitals from public view. Then, to everyone’s surprise, his weight was announced as 184 pounds (two pounds under the contract weight).

But – and this is an elephant-sized “but” – video of the weigh-in shows Gastelum resting his elbow on his coach, Rafael Cordeiro, as he stood on the scale. And the NYSAC officials conducting the weigh-in missed it.

Daniel Cormier makes weight for his bout vs. Anthony Johnson.

The incident brought back memories of another UFC weigh-in. Daniel Cormier fought Anthony Johnson in a cruiserweight title bout that was the main event on an April 8, 2017, UFC 210 card at Keybank Arena in Buffalo. The UFC cruiserweight limit is 205 pounds. Cormier stripped naked at the weigh-in and, with two defenders of public decency holding a towel in front of him, weighed in at 206.2 pounds. Then, literally 143 seconds later, he returned to the scale and weighed in at 205 pounds.

How did Cormier lose 1.2 pounds in 143 seconds? Video evidence shows that, on the second weigh-in attempt, Cormier was holding onto the towel and pressing downward, an age-old con used by amateur wrestlers in poorly-regulated competitions to make weight. The following night, he won by submission over Johnson in the second round.

How did NYSAC make the same mistake twice?

In answering that question, one might note that weigh-ins for major fights in New York City are usually overseen by deputy commissioners Robert Orlando and George Ward. Orlando and Ward are retired New York City corrections officers. Each man has been with the commission for decades and knows all the tricks. But while on site and readying for the November 1 Gastelum-Till weigh-in, Orlando and Ward were advised by NYSAC executive director Kim Sumbler that they were being replaced at the scales by two less experienced commission employees who had been brought to New York City from upstate.

Six days after the fight, the NYSAC fined Gastelum and Cordeiro $1,000 and $200 respectively for “making contact” during the weigh-in. That’s not even a slap on the wrists.

According to FollowTheMoney.org, Zuffa LLC (the parent company of UFC) has given more than $160,000 in direct campaign contributions to Andrew Cuomo. Various New York state legislators of both parties have also benefited from its generosity. And the company has spent millions more on lobbying.

The manner in which the New York State Athletic Commission does business today shows inadequate respect for combat sports and the fighters who risk their lives in the ring.

This is Part Three of a three-part series. Click here for Parts One and Two.

 

 

Thomas Hauser’s email address is [email protected] His most recent book – A Dangerous Journey: Another Year Inside Boxing  – was published by the University of Arkansas Press. In 2004, the Boxing Writers Association of America honored Hauser with the Nat Fleischer Award for career excellence in boxing journalism. On June 14, 2020, he will be inducted into the International Boxing Hall of Fame.