Not only did Chris Hansen lose out in his bid to buy the Sacramento Kings, he apparently didn’t take no for an answer, and now it’s coming back to bite him. The Sacramento Bee reported Friday that Seattle native funded to the tune of $100,000 an anti-arena campaign in Sacramento that seeks to put the project to a vote in June.
Hansen admitted to the funding and a failure to report the June 21 donation, which likely will lead to a fine and damage to his credibility.
“I’m sure everyone can appreciate how easy it is to get caught up in the heat of battle,” Hansen wrote in an email sent to Sportspress Northwest and other media outlets after the Bee broke the story Friday afternoon. “With the benefit of hindsight, this is clearly a decision I regret. I wish the city of Sacramento and Kings fans the best in their efforts and they have my commitment not to have any involvement in their arena efforts in the future.”
Hansen’s “donation” after he lost the Kings bid was revealed by a source a day after the California Fair Political Practices Commission sued the Los Angeles law firm of Loeb & Loeb seeking the identity of the donor. California, as with Washington and many states, has laws requiring timely disclosure of major funders to political campaigns.
Hansen explained that once his bid for the Kings received an unexpected rival by a group from Sacramento, he hired attorneys to investigate the opposition to public money provided by a city council vote to build the arena.
“We were faced with both the prospect of seeing our transaction fail and losing our $30 million deposit,” Hansen wrote. “I engaged Loeb & Loeb to canvas the various opposition groups to gain an understanding of their efforts and the prospects of their success.
“During this time I was approached through Loeb by the opposition about making a contribution to the opposition’s efforts as part of a broader group and agreed to make a donation.
“In this regard I would just like to highlight that I have never directly engaged with or even had any conversations or contact with STOP, Taxpayers For Safer Neighborhoods, or any the various consultants engaged in the Sacramento Arena opposition. It was also not my intent to be the primary financial sponsor of the opposition’s efforts. I merely agreed to make a donation to the opposition in what had become a competitive and heated process.
“I have not agreed to provide any further political contributions and do not intend to make any further contributions. I would also just point out that the contribution was made in my personal capacity and not on behalf of our ownership group or my partners. In fact, I have never discussed the contribution with them to date.”
How Hansen could not have known of the likely discovery of his donation is breathtaking, as was his reluctance to inform partners and advisers of his decision, not to mention interfering in another city’s political process.
An attempt to influence a decision in another market is unlikely to be overlooked by NBA owners in judging Hansen’s worthiness as a future owner of an existing or expansion team. It is not necessarily a deal-breaker, but the move can be seen as deliberately undercutting the new owners of the Kings, a group led by Silicon Valley billionaire Vivek Ranadive.
The money was directed to a signature-gathering campaign seeking 22,000 registered voters by December to put on the ballot the issue of using $258 million in future parking revenues for the arena project. The public funding plan was part of the commitment made by the city council to NBA owners, who subsequently voted 22-8 in May to keep the team in the California capital.
The law firm had been one that was used regularly by the Maloof family, the Kings owners, which in January received a $525 million offer from Hansen and primary partner Steve Ballmer of Microsoft. Hansen subsequently twice raised the offer, to $625 million, but said he was “extremely disappointed” when the NBA voted instead to take the $535 million offer from the Ranadive group, whose arena plan was much less further along than Hansen’s plan in Seattle.
At an afternoon press conference in Sacramento, state FPPC enforcement chief Gary Winuk scolded Hansen for his negligence. The reporting deadline was July 31.
“He should have known state law required him to report his $100,000 contribution. It’s not like a local school board candidate running for the first time,” Winuk said. The lapse was “at best negligent, at worst purposeful behavior.”
In a statement emailed to the Bee, Sacramento Metro Chamber President Roger Niello Friday called Hansen “a saboteur” and said the deception was “an assault on our entire community.”
Hansen could be fined up to $95,000, depending on the outcome of an investigation.
Several weeks later in a visit to Seattle, Hansen, a San Francisco hedge fund manager, told KJR radio the process of attempting to take away the Kings from a loyal fan base “kind of made me sick to my stomach.” He said he would go after another city’s team again only if he was convinced the team was going to leave.
Because no other NBA teams are as close to moving as the Kings were, Hansen’s best bet would seem to have been expansion. NBA commissioner David Stern said throughout the bidding war that developed between the markets that expansion was “not on the table.”
But after the vote, there was discussion about expansion once the NBA knew the value of its future TV contract revenues. The deals expire after the 2014-15 season, but negotiations were said likely to begin this summer. But expansion does not seem likely for at least two more seasons, if then.
In Sacramento, an anti-arena group STOP — Sacramento Taxpayers Opposed to Pork — has been circulating petitions to force a public vote. In June, $100,000 was wired from the LA law firm to a political consultant in Tulare, CA., who was helping the Sacramento petition drive. The contribution was required to be disclosed by July 31 and wasn’t, the Bee reported. That prompted the FPPC lawsuit, which generated a hearing set for Monday.
Separately, the Bee reported attorneys for the city Thursday characterized a lawsuit against the arena deal as “filled with extreme and slanderous allegations” against city officials and “a work of fiction.”
That lawsuit, filed earlier by Sacramento attorneys Patrick Soluri and Jeffrey Anderson, alleged that the city’s stated arena subsidy of $258 million is an illegal gift of public funds, and that city officials are concealing aspects of the deal.