Commentary

Big big bets, and a cheerleader's protest

A lawsuit claims the owner of IMG bet on one of his clients to win the French Open

Originally Published: November 18, 2010
By Lester Munson | ESPN.com

What would you do with a billion bucks? OK, maybe you'd squirrel the first billion away somewhere for a rainy day, but what about the next few billion? What would you do with that money? That question probably isn't keeping very many folks awake at night in the neighborhood where our Courtside Seat is located -- maybe it's time to ask the boss for a raise -- but some people apparently worry about it. And guess what? Some answers are better than others. Today, we start with …

Rich people's money

Some billionaires are busy giving away their money. Microsoft founder Bill Gates and legendary investor Warren Buffett have pledged to give half their fortunes to charity and are asking other billionaires to do the same.

Construction mogul Eli Broad and his wife, Edythe, plan to give away 75 percent of their fortune during their lifetime. "We agree with Andrew Carnegie's wisdom that 'the man who dies rich dies disgraced,'" the Broads said in a statement.

But one very wealthy man has not joined Gates, Buffett and Broad. Ted Forstmann, the billionaire owner and CEO of sports industry powerhouse IMG, appears to have a different way of giving away money. He bets on sports.

[+] EnlargeTed Forstmann
Gary Gershoff/WireImageTed Forstmann's sports bets weren't illegal, but they can't be good business for IMG.

That, at least, is what a California businessman claims in a lawsuit against Forstmann and various IMG-affiliated companies. James Agate, the owner of a now-defunct printing company who has known Forstmann for 15 years, asserts in his lawsuit that Forstmann bet $40,000 on Roger Federer, an IMG client, to win the French Open final in 2007 just moments after a Forstmann-Federer telephone conversation. (For the record, Rafael Nadal beat Federer in the final.)

According to Agate, it was one of at least 600 sports bets involving millions of dollars that Forstmann made with Agate, who says he served as Forstmann's conduit to sports bookmakers in Costa Rica and elsewhere. In his lawsuit, Agate claims that the Wall Street mogul broke promises to pay taxes on Forstmann gambling money that landed in Agate's accounts and failed to deliver promised printing business to Agate. Agate also accuses Forstmann of racism, hiring escorts and using IMG funds to finance his gambling.

Forstmann, as he must, is fighting back fiercely. Allegations of betting for or against clients such as Federer or Tiger Woods or Vijay Singh are an obvious problem for Forstmann and for IMG.

Are the bets a violation of the law? No.

Are they improprieties? Maybe.

Do they qualify as the appearance of improprieties? Yes.

When first asked about the $40,000 wager on Federer, Forstmann told The Daily Beast that he might have made a call to Federer. Now, after checking his phone records for 2007 (billionaires apparently can do that), he says he never talked to Federer before he made the bet.

Forstmann also did not hesitate to call Agate, whom he trusted with his bets, a "lowlife scumbag" in The Daily Beast interview. He might have a point. In a recent court filing, Forstmann's attorneys explain that Agate has "19 judgments and liens filed against him and owes hundreds of thousands of dollars in back taxes." In an e-mail to Forstmann in April, Agate admitted that he was at "rock bottom," had been evicted from his three previous residences, had his car repossessed and had been "kicked out of both golf clubs."

But in all his attacks on Agate, Forstmann had not denied his sports gambling.

"Can you imagine that, I bet a few bucks on sports," Forstmann said.

[+] EnlargeBill Gates
AP Photo/Douglas C. PizacBill and Melinda Gates have a better way to spend their disposable income.

There's an echo in all of this. When confronted with his gambling a number of years ago, another sports icon admitted that he'd bet a few bucks, said he could afford it and suggested that the people with whom he bet were scumbags. That was, of course, Pete Rose, and his partners in crime were Paul Janszen and Tommy Gioiosa.

A guy like Forstmann, who once dated Princess Diana, ought to be able to do a little better than get himself into a fight over sports gambling with someone like Agate. There is little doubt that Forstmann can and will win the legal battle. His law firm, Kirkland & Ellis, is one of American's most successful. His crisis management consultant, Mike Sitrick, might be the best in the business. Agate is already falling behind in routine court filings in the Los Angeles Superior Court. It's only a matter of time before his case crumbles.

But the litigation is only a small part of the picture. How important is it to Forstmann to place mammoth bets on tennis and golf matches? As the leader of IMG, a highly respected sports enterprise that began with a handshake between agent Mark McCormack and Arnold Palmer in 1960, Forstmann can and must do better. A high volume of sports betting casts suspicion on everything IMG does and tries to do. Even if Forstmann is not using inside information and is technically not in violation of any rules, his high-stakes gambling casts a shadow over all of IMG. Doesn't he have a better way to spend his time and money?

Broad, the billionaire who is giving away 75 percent of his fortune, has observed, "Philanthropy is unbelievably rewarding." No one has ever said that about sports betting.

Maybe Forstmann should be working with his fellow billionaires instead of a guy like Agate.

Sometimes, the wheels of justice just fall off

When high school basketball and football star Rakheem Bolton broke a window and fled a party at a classmate's house in Silsbee, Texas, in October 2008, he left a few things behind. According to a police report, those few things included his clothes, his shoes, his cell phone, a receipt with his name on it, a used condom and a hysterical, partially clothed, 16-year-old cheerleader.

When Bolton returned to the scene a while later for his stuff, a near riot erupted on the street. There were obscenities, threats and allegations of rape. After the police arrived and took control, the cheerleader was taken to nearby Beaumont, where forensic and medical tests confirmed an attack.

As the police and a local prosecutor investigated the incident, the basketball season began. The cheerleader, known in court papers as H.S., took her position with the rest of the squad on the sideline to cheer for the Silsbee Tigers.

But when Bolton, her alleged assailant, stepped up to shoot a free throw, H.S. drew the line. Instead of participating in a cheer that featured Bolton's name, she sat down, folded her arms and stayed in what her lawyer later described as "nondisruptive, symbolic silence."

School officials, including the district superintendent, the school principal and the cheerleading sponsor, were not happy with H.S.'s silent protest. They took her into a corridor outside the gym and told her that she cheers for the entire team. When H.S. said she could not cheer for Bolton, the school officials dismissed her from the cheerleading squad.

Perhaps not surprisingly, H.S. and her parents, unhappy that Bolton was allowed to play during the rape investigation and that H.S. was not allowed to participate, filed suit in federal court in Beaumont, asserting that school officials had violated her rights, including her First Amendment right to protest.

[+] EnlargePriscilla Owen
AP Photo/Gerald HerbertPriscilla Owen is one of the three appeals court judges who ruled against the cheerleader.

Her case appeared to be strong. Numerous student protests have been protected by court decisions going back to the days when students wore black armbands in protest against the war in Vietnam.

But the federal judges who have presided over H.S.'s claim that the First Amendment allows her to express her feelings about her attacker have been no more sympathetic than the Silsbee school officials were. In a surprising series of rulings in the trial court and in the U.S. Court of Appeals for the 5th Circuit (New Orleans), four judges have ruled that H.S.'s silent, sit-down protest is not protected by the First Amendment.

The first judge to look at H.S.'s claim, U.S. District Judge Thad Heartfield of Beaumont, acknowledged "the gravity of [her] accusations and the potential rights involved," but he dismissed her case, asserting that her sit-down protest against Bolton "was not symbolic speech."

Her refusal to participate in a cheer that directly focused on Bolton "might signal a host of problems between the cheerleader and the player from petty to grave," according to Heartfield. Although the party and the rape investigation were well-known in Silsbee and throughout the high school of 858 students, H.S.'s sit-down protest against Bolton did not convey "a particularized message," Heartfield wrote, and is not protected by the First Amendment.

In the appeal of that ruling, H.S. and her attorney, Larry Watts of Missouri City, Texas, ran into three of the most conservative jurists in the entire federal system: Emilio Garza, Edith Clement and Priscilla Owen. Garza and Clement were on President George W. Bush's short lists for possible selection to the U.S. Supreme Court during the processes that led to the appointments of John Roberts and Samuel Alito. And Owen's archconservative views made her the target of a Democratic filibuster before she was finally confirmed to the appeals court.

Those three conservatives went even further than the trial court judge, ruling that H.S.'s refusal to cheer for Bolton "constituted substantial interference with the work of the school, because, as a cheerleader, she was at the game for the purpose of cheering, a position she undertook voluntarily." She was, they said, a "mouthpiece through which [the school] could disseminate speech -- namely support for its athletic teams."

A disciplined and orderly school, apparently, was more important to these judges than a constitutional right to free speech, leaving H.S. and her family clinging to the hope that a larger group of judges in the high court would agree to reconsider the ruling in what is known as an en banc hearing. That is where the case is now. If the court agrees to reconsideration, as many as 10 or 12 judges would decide whether H.S. had a right to protest.

Meanwhile, as the cheerleader suffered surprising defeats in the courts, Bolton had a surprisingly easy time moving through the justice system. After he was finally charged with rape, he quickly agreed to plead guilty to a minor assault. Despite the powerful evidence of a violent rape, he was sentenced to probation and community service.

So, to sum up: A nearly naked person who jumped through a window to flee the scene of a violent crime comes away from the legal system essentially unscathed. A young sexual assault victim stages a silent and dignified protest and finds herself losing in court and forced to pay the attorneys' fees of school officials who told her she has no right to free speech.

There is something wrong here. Let's hope the judges of the high court in New Orleans take another look.

Lester Munson, a Chicago lawyer and journalist who reports on investigative and legal issues in the sports industry, is a senior writer for ESPN.com.

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