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Wednesday, August 15, 2007

Donaghy Pleads Guilty to Two Felonies, Faces Up to 25 Years in Prison

The New York Daily News reports that former NBA referee Tim Donaghy pleaded guilty to "conspiracy to engage in wire fraud as well as transmitting bets and wagers in a scam that has devastated the league." He is now free on a $250,000 bond but faces up to 25 years in prison. Details of the exact charges are now publicly available.

More information is sure to come out in the coming days and weeks but a few things immediately caught my eye:

1) As of yet, there is no direct indication that Donaghy actively did anything to affect the outcome of games in terms of how he officiated. The government simply alleges that "Donaghy also compromised his objectivity as a referee because of his personal financial interest in the outcome of NBA games."

This would of course explain why the NBA was not able to detect what he was doing--he may not if fact have been intentionally making bad calls. It is possible that the extent of Donaghy's illegal involvement consisted of providing what could be called "insider information"--which referees would work specific games, which players are injured, etc.--to various parties. That is certainly serious but not nearly as serious as a referee actively fixing a point spread and/or the outcome of a game.

Of course, it is also possible that Donaghy was in fact fixing games, something that might be difficult to prove--in a legal sense--without some kind of "smoking gun"; there is obviously a strong trail of evidence regarding betting on the involved games but there may not be enough evidence to convict Donaghy of actively fixing games.

Either way, this is an excellent example of why I have consistently said that before "heads roll" in the NBA offices we must know the details of exactly what happened. If Donaghy was simply improperly conveying information to other parties then there is no way that the NBA could have discovered this activity by watching tapes of his games. Perhaps the league needs to more closely monitor how its referees communicate with the outside world but I'm not sure how it could do that without violating their rights to privacy.

2) The government alleges that Donaghy had been betting on games for four years prior to the time he started giving out information to other parties.

The government's case essentially is that Donaghy had a gambling problem and that he has been betting on NBA games for quite some time. The government alleges a person--who is unidentified in the court documents--informed Donaghy that he was aware that Donaghy was betting on NBA games. This person offered to pay Donaghy each time that Donaghy provided information that led to the placing of winning bets; Donaghy was only paid if the bets won. Donaghy began doing this in December 2006. This suggests that Donaghy was coerced into this activity either by being blackmailed or by virtue of being in debt. Of course, this is why the NBA forbids its referees from doing any kind of gambling (except for betting on horse racing during the NBA offseason; that is just one example of the bizarre compromises that can happen when every single detail between a league and its employees is collectively bargained), because a referee who has a gambling problem--legal or illegal--is susceptible to just the kind of pressure to which Donaghy apparently submitted.

3) It does not appear that any other NBA employee was involved with what Donaghy was doing.

Obviously, that would be the best news that the NBA has received since news of the Donaghy case became public.

At this point, it seems that Commissioner David Stern was correct when he said that Donaghy was just one isolated "rogue." If it turns out that Donaghy's primary or sole offense was providing "inside information," then this case will not be nearly as damaging to the NBA as it would have been if Donaghy had actively fixed games. It seems like the NBA will either need to tighten its grip on certain information regarding officiating assignments, player injuries and so forth or perhaps make more of that information publicly available so that such knowledge does not give anyone a gambling edge.

posted by David Friedman @ 5:54 PM



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