NBA is investigating whether Clippers circumvented salary cap for Kawhi Leonard.
Leonard received a $28 million endorsement deal from a now-bankrupt company.
Penalties could be steep if the NBA finds wrongdoing in the Clippers case.
There’s a new wrinkle in the Kawhi Leonard “no-show” case.
New reporting from sports investigative reporter Pablo Torre, who broke the original story, uncovered that a December 2022 payment to Leonard that had been running late, was made just nine days after a company led by Clippers minority owner Dennis Wong invested in Aspiration.
The NBA is investigating whether the Clippers circumvented the salary cap by facilitating a $28 million “no-show” endorsement deal to Leonard, through a now-bankrupt sustainability company called Aspiration.
According to bank statements Torre obtained and published during a Thursday, September 11 podcast episode, a $1.75 million payment from Aspiration was made on Thursday, December 15, 2022 to KL2 Aspire LLC, a company registered to Leonard. That payment, per the report, came as Aspiration was facing financial difficulties and having issues meeting payroll obligations.
In fact, a former high-ranking executive in Aspiration’s financial department told Torre that the company laid off 20% of its workforce the very same day that the $1.75 million payment was wired.
The complication for the Clippers, however, is that the wire to Leonard’s LLC came just nine days after receiving an investment from a company led by Wong, the Clippers’ minority owner.
On Tuesday, December 6, 2022, a company called DEA 88 Investments LP wired $1.99 million to Aspiration. The registered agent of that company, Torre uncovered, is Wong, the Clippers vice chairman and sole minority owner. Torre also reported that Wong was one of Clippers owner Steve Ballmer’s roommates at Harvard.
The Clippers issued a new statement to Torre once he raised the new reporting with them, deferring to the NBA investigation into the matter.
“The details of our relationship with Aspiration are under NBA investigation, but it is clear the company was a house of cards that defrauded Steve and many others,” the statement reads. “We look forward to sharing the facts with the league and providing them with all the information they need.”
The NBA has contracted New York-based law firm Wachtell, Lipton, Rosen & Katz — which it has used in the past for other investigations – to lead the inquiry.
On Wednesday, September 10, NBA commissioner Adam Silver addressed the Leonard case upon the conclusion of a Board of Governors meeting held in Manhattan.
“In the case of the league, we and our investigators look at the totality of the evidence,” Silver said. “Whether mere appearance — just by the way the words read, as a matter of fundamental fairness — I would be reluctant to act if there was a mere appearance of impropriety. I think the goal of the investigation is to find out if there was impropriety. …
“I’ve been around the league long enough with different permutations of allegations and accusations that I’m a big believer in due process and fairness. We’ll let the investigation run its course.”
If the Clippers are found to have circumvented the salary cap, penalties could be massive and could include fines of up to $7.5 million, forfeiture of draft picks, voiding of player contracts and suspensions.