OTL: NBA lax in Sterling oversight

ByMike Fish ESPN logo
Sunday, June 1, 2014

LOS ANGELES -- As disgraced Clippers owner Donald Sterling remained holed up in his Beverly Hills mansion in recent weeks while pledging to keep fighting for his team, the NBA's newly hired unit of high-powered investigators and lawyers worked feverishly to solidify his ouster.

The strategic decisions from the league office, its public relations statements and its investigative tactics came fast and furious since Sterling's racist rant became public. Yet the NBA's interest in Sterling's alleged misdeeds hardly existed prior to the racist recordings released by TMZ.

Over the past several weeks, ESPN's "Outside the Lines" conducted dozens of interviews and reviewed thousands of pages of documents involving Donald Sterling and his wife, Shelly. Through all of the alleged Sterling transgressions, racist statements and actions, boorish sexual behavior and discriminatory practices that cropped up over the past three decades during his tenure as the Clippers' owner, league officials appear to have never asked any questions of those involved. And though some of the cases were wrapped in confidentiality deals, a trove of details could have been found had league officials attempted to glean them, in addition to being able to land interviews with key participants, "Outside the Lines" has learned. Sterling also has been caught in conflicting testimony under oath, according to various depositions read and viewed by "Outside the Lines."

The one instance the league did show an interest in an alleged Sterling misdeed, however, came in 1996 in a case involving Sterling and a real estate employee of his who also did work for his Los Angeles Clippers: The league's insurance company became involved in a sexual harassment case against him, the alleged victim's attorney told "Outside the Lines."

Until last month, all of Sterling's behavior occurred during the just completed three-decade reign of NBA commissioner David Stern. For the past 22 years, current commissioner Adam Silver worked in the league office as an apprentice to and adviser to Stern.

When ESPN the Magazine first chronicled eye-opening racial and sexual allegations against Sterling in rich detail in a 2009 story, league officials had little to say. Asked to provide the league's position on various allegations against Sterling, an NBA spokesman told ESPN's Peter Keating: "It would be premature to have any real take on it."

Silver, in his first major press conference as commissioner, briefly and publicly revisited two of the cases last month while levying a lifetime ban and $2.5 million fine against Sterling, saying: "He's never been suspended or fined by the league because while there have been well-documented rumors and cases filed, he was sued and the plaintiff lost the lawsuit. That was [former Clippers GM] Elgin Baylor. There was a case brought by the Department of Justice in which ultimately Donald Sterling settled and there was no finding of guilt and those are the only cases that have been brought to our attention. When those two litigations were brought, they were followed closely by the league."

But those were not the only two cases tied to Sterling that were public, and Silver didn't mention the 1996 sexual harassment case against Sterling that is alleged to have involved the league's insurance firm.

The NBA constitution does not require the commissioner's office to investigate alleged wrongdoing by a team owner but does give the commissioner "the right to investigate all charges, accusations, or other matters that may adversely affect" the NBA. Shawn Klein, a professor of philosophy at Rockford University who blogs as "The Sports Ethicist," said league officials can be in a difficult spot when it comes to policing team owners about non-league-related issues.

"There is a fuzzy line there between how far they ought to be going in looking into the businesses of their owners," he said. "At some point they have to draw a line. That line may change now due to public perceptions and calls for more vigilance on the part of leagues of their owners.

"The NBA probably didn't think they had to look at things that were not connected to NBA-related business. Whether there is an obligation to do that is an important question."

Mike Bass, a league spokesman, responded to separate calls made by "Outside the Lines" to the league office, where Stern remains a consultant, as well as Stern's personal New York office, saying "Neither commissioner Silver nor former commissioner Stern will have a comment on the story."

Sterling, a personal injury/divorce lawyer by trade, and his wife also declined interview requests for this story.

In the wake of Sterling's recent rant, the NBA hired a team of New York attorneys led by David Anders, who assisted the league through the gambling scandal involving ex-referee Tim Donaghy. The task: Double back with attorneys and witnesses and build a case to terminate Sterling's ownership.

One of the cases they may have come upon was the 1996 sexual harassment case launched by an employee who performed work for the Clippers.

Christine Jaksy, then a 33-year-old former actress and model, sued Sterling for a laundry list of salacious allegations, including claims that employees were paid to engage in sex with Sterling and that he had suggested she hold an "open house" to find women for him, as well as hostesses who would work Clippers' events and parties. Court records indicate Sterling countersued Jaksy before eventually reaching a confidential settlement with her in 1998.

Jaksy's attorney said she remembers that the NBA's insurance company was involved in the 1998 resolution, but that she was never contacted back then by anyone from the league regarding the allegations, some of which directly related to the Clippers.

"They did not call us and say, 'Hey, what can we do to help?'" said Los Angeles attorney Natasha Roit. "Or look into the case and ask us more specifically so they can make their own determination. That did not occur."

Neither did the league office check into details of what transpired during a court case whose entire testimony is public and has never been bound by a confidentiality agreement.

In 2004, Sumner Davenport, a property supervisor for the Sterlings' Beverly Hills Properties, charged she was sexually harassed and retaliated against by the NBA owner after questioning the company's alleged discriminatory practices -- a lawsuit she would eventually lose.

During the deposition of a top executive, a lawyer asked the executive under oath if African-Americans employees were allowed to take off Martin Luther King Jr. Day as a holiday. The executive laughed, responding: "That's a ridiculous question." Asked why, he said: "Is [sic] Native American Indians allowed to take Custer's Last Stand off, that day? I don't know."

The testimony came more than a decade after the NBA took the strong public position of canceling league meetings in Arizona and advising the Phoenix Suns there would be no league events in the state other than regular-season and playoffs games because lawmakers had voted down observing the MLK holiday. David Stern himself served on the board of the Martin Luther King Jr. Federal Holiday Commission.

"Before the trial, during the trial and in the years after the trial -- up until this [audio tape] incident broke -- I was never contacted by the NBA and I don't believe Ms. Davenport was contacted by the NBA during that time," said John "Jack" Denove, who brought the case against Sterling a decade ago.

The Davenport lawsuit came alongside a housing discrimination case the Sterlings settled with 19 tenants and the nonprofit Housing Rights Center in Los Angeles, a case that would ultimately spawn a federal lawsuit. The Sterlings settled the initial case for nearly $5 million in attorney fees in addition to a confidential monetary settlement to the plaintiffs, though the Sterlings did not have to admit guilt.

According to depositions in the Davenport case obtained by "Outside the Lines," tenants and even employees of the Sterlings' property company testified that the couple -- not just Donald -- set out to harass and make life miserable for African-Americans and Hispanics living in two apartment buildings the couple had recently purchased. The Sterlings, the largest landlords in Beverly Hills, wanted to run off tenants who were government-housing-subsidy recipients. The buildings sat on the edge of a burgeoning Korea section of Los Angeles, and the business model was to fill the units with Korean tenants -- on the Sterlings' belief they would pay more and complain less.

Chancela Al-Mansour, executive director of the Housing Rights Center, said NBA officials never reached out in the wake of the nonprofit's settlement with the Sterlings, adding: "We would have given them as much as we could ... and access to the actual plaintiffs themselves."

The U.S. Department of Justice housing discrimination investigation spawned from that case provided little in terms of public documents, witness statements and depositions prior to being settled. But in November 2009, with their Clippers floundering en route to an eventually 29-53 finish, the Sterlings made dubious history while agreeing to pay the U.S. Department of Justice $2.75 million -- then the largest monetary payment ever obtained by the department in a housing discrimination case. Federal authorities accused the billionaire couple of discriminating against African-Americans, Hispanics and families with children at apartment buildings they controlled in Los Angeles.

Though that settlement, too, came again without an admission of guilt, then U.S. assistant attorney general Thomas E. Perez strongly noted: "The magnitude of this settlement should send a message to all landlords that we will vigorously pursue violations of the Fair Housing Act."

Los Angeles sports attorney Alan Rothenberg, president of Sterling's Clippers throughout much of the 1980s, said the commissioner's office would have had to have known about the housing discrimination details.

"There were transcripts and depositions that were circulated pretty widely," Rothenberg said. "I am sure people in the NBA had to have seen them. In terms of why they didn't proceed, I guess you would have to ask David [Stern] that."

The testimony and depositions from the housing discrimination cases reveal blistering allegations against the Sterlings.

According to several tenants, the security guards at Sterling's buildings "only made black and Hispanic people sign in." Tenants also said, after the Sterlings purchased the building, they were asked to provide their place of birth and nationality when requesting a garage door opener.

One tenant, an elderly widow, said she was called the N-word by a staffer when she called to complain her apartment was too cold.

Donald Sterling himself, according to a building supervisor, had opined unflatteringly about the smell of African-Americans.

Some of the harassment and intimidation allegedly came directly from Sterling's wife, Shelly, who according to witnesses, at least one time posed as a health inspector to illegally gain entry into tenant units. In one instance, a tenant videotaped Shelly Sterling misrepresenting herself as she barged down an apartment hallway. "And you're saying that you're Miss Shelby from the health department?" the tenant asks.

"Yes sir," Sterling responded, without breaking stride.

Under oath during a 2004 deposition, Shelly Sterling denied having represented herself that way.

Dean Segal, a building engineer for the Sterlings who witnessed the original incident, later testified that Shelly Sterling pressured him to alter his story. "I said, 'No Shelly, I remember you said you were an L.A. city health inspector,"' Segal said under oath. "She goes, 'You don't remember. Think about it."'

Asked what else Mrs. Sterling said, Segal responded: "She said, 'I don't want to go to jail.' "

As far back as 1983, it is alleged Sterling called his own players the N-word during a brief, late-night job interview at the Los Angeles airport with then-Villanova coach Rollie Massimino. Author and blogger Jeff Pearlman recently wrote of an anecdote relayed to him by then Clippers general manager Paul Phipps, describing Sterling in an alcohol-induced state, a blonde on his arm [not Mrs. Sterling] and demanding of Massimino, "I wanna know why you think you can coach these n------."

Phipps, now the chief marketing officer for Visit Florida, the state's marketing corporation, initially agreed to be interviewed by "Outside the Lines," then declined, citing his role as a state official. Massimino also declined requests.

Perhaps one of the most defining stories on the Sterlings is found in the 2003 lawsuit brought by them against then 32-year-old Alexandra Castro, alleging Castro and her mother duped them into gaining ownership of a $1.1 million Beverly Hills home.

The Sterlings accused Castro and her mother of being real estate professionals, which they weren't at the time. The younger Castro was Sterling's mistress, a relationship she alleged Shelly Sterling knew of and even encouraged. Castro claimed Donald Sterling bought the house in return for her quitting her job in order to cater "to his every need and comfort."

Yet Sterling initially denied under oath having had an intimate relationship with the brunette young enough to be his granddaughter. He denied buying her gifts. He denied traveling with her. Later, Castro's attorney confronted Sterling with a smorgasbord of receipts for gifts Sterling allegedly purchased Castro and her mother, airline tickets from trips to Hawaii, Paris, New York and a host of other romantic destinations, as well as photos of the two from their excursions.

Sterling walked out of an L.A. law office without signing his deposition that day. Months later, he returned for his next deposition with another lawyer and armed with a different story. This time, Sterling didn't deny an intimate relationship, instead he cast Castro -- whom he and Shelly met four years earlier at the late Al Davis' 70th birthday in Las Vegas -- as his personal sex toy for hire, suggesting she was a "total freak and a piece of trash."

As he testified, Sterling went to lengths stressing -- sometimes in response to unrelated questions, even -- that the checks he wrote Castro, the gifts, the globetrotting were all just compensation for oral sex or "fooling around" with the young woman.

Los Angeles attorney Douglas Bagby, who represented Castro and her mother, said Donald Sterling went around him and reached a confidential settlement with Castro and her mother.

Bagby said he was never contacted by anyone from the NBA.

As for Donald Sterling, less than a year later -- this time during a sworn deposition in the sexual harassment suit brought by Davenport -- the NBA team owner dismissed the notion that he had ever engaged in sex with Castro, let alone paid her.

"He said it was a mistake," recalled Denove, the attorney who deposed him in the latter case.

Sterling's various depositions reveal that when cornered or challenged on facts, he changes the subject, resorts to badgering and bullying. He tells attorneys to "shut up ... speak up ... be a man." He told one to get a smirk off his "ugly face."

"Everything that's been going on all these years has finally been confirmed," said Olden Polynice, a longtime NBA player union representative who served two stints as a Clipper.

Asked to what extent the league is accountable for not acting sooner, Polynice said: "They were partners. That's the only way I look at it. They [are] complicit just like [Sterling] is, because you cannot allow this man to do all this stuff for all these years, and be held blameless. You can't. You should've suspended him even back then, even if it's for a month."

The most aggressive the NBA was toward Sterling before last month's recording revelation came shortly after Sterling purchased the San Diego Clippers in 1981. A year later, he faced a forced sale of the team by the NBA amid claims that he failed to timely pay players, stiffed hotels and vendors, publicly spoke of tanking games to get the top draft pick, all the while attempting to relocate the franchise to Los Angeles.

When the league pressed him, Sterling said he would sell the team. In the end, Stern -- then the league's executive vice president who soon replaced Larry O'Brien as commissioner -- smoothed things over by recommending Sterling hire Rothenberg to oversee and operate the club.

But Sterling stayed on as owner.

"We went back to the league and made some promises about how he would operate the team and what he would do," said Rothenberg, a prominent sports attorney and onetime president of the California Bar Association. "Based on that, the league stopped any kind of proceedings for any kind of sanctions."

Rothenberg said Sterling wasn't particularly close to anyone in the league, suggesting Stern "just tolerated him."

Team owners remember him as never missing a meeting, though rarely having much to say. One meeting regular said "the league just thought he was a nut." Longtime former NBA owner George Shinn said he never heard Sterling utter a racist comment, nor does he question the league for failing to act earlier, saying: "I just know if somebody did something in their personal life that was discrimination and it didn't have anything to do with the NBA, I don't know if they would have a right to do anything. The only thing you could do is to raise a red flag and say, 'Keep your eye on this guy.' "

The bigotry revealed in the recent audio of Sterling wasn't evident in his hiring practices with the Clippers. Not only was Baylor one of the league's first African-American executives, but six of the 18 head coaches under Sterling have been African-American. And the NBA owner's own taste in female companions is known to be broadly diverse.

A handful of his coaches, though, ended up in lawsuits or arbitration after getting fired by Sterling, known to creatively, yet feebly argue that they had violated their contract by not winning enough games.

An ex-coach recalls Sterling's wife, Shelly, offering her two cents when the team was divided about whom to draft with its first pick one June, cracking "We know white guys can't play." Others recall the eccentric Sterling parading an assortment of B-list characters and cronies through the locker room after games. Polynice said the owner was too touchy-feely for most and treated players almost as property, thus word of his impending arrival after games would have players scurrying to the showers or the training room.

Still, nothing was done. The players didn't feel in position to confront the owner. Polynice said the general manager, Baylor, was told, but he, too, was powerless. At the time, Polynice noted the owners and league office were generally viewed as a "good ol' boy network."

"These guys, they roll together," Polynice said.

Investigative reporter John Barr and producer Nicole Noren of ESPN's Enterprise/Investigative Unit contributed to this report.

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