NBA fines Clippers $30M, strips five draft picks over Kawhi Leonard salary cap scheme

The NBA fined the Los Angeles Clippers $30 million, stripped the team of five consecutive first-round draft picks from 2029 through 2033, and suspended owner Steve Ballmer for one year after finding the team systematically circumvented salary cap rules to sign Kawhi Leonard as a free agent in 2019. The penalties, announced September 2, mark one of the largest enforcement actions in league history. Leonard was fined $700,000. President of basketball operations Lawrence Frank was suspended for six months without pay, and president of business operations Gillian Zucker was suspended for one year without pay. Leonard's then-business manager Dennis Robertson was banned from engaging with or conducting any business with NBA teams for five years, according to the Guardian and NBC News reporting. The Clippers broke NBA rules by initiating off-court income opportunities between Leonard and four companies doing business with the team: Aspiration Partners, Boingo Wireless, Daktronics, and Lockton Insurance, per the Guardian. The Clippers facilitated endorsement agreements between these companies and Leonard and induced the companies to enter into these agreements by offering them business from the team. The Clippers also paid personal expenses on behalf of Leonard and his representatives, and failed to report improper solicitations for off-court income opportunities made on Leonard's behalf, according to the Guardian and NBC News reporting. Journalist Pablo Torre reported the story, citing legal documents claiming Ballmer employed Leonard for a nonexistent role in a company Ballmer had invested in to circumvent the NBA salary cap. Ballmer partly funded a tree-planting company called Aspiration, which then allegedly entered into a $28 million agreement with KL2 Aspire, LLC, a company owned by Leonard, according to the Guardian. There was a clause in the contract between KL2 Aspire and Aspiration that effectively allowed Leonard to be paid even if he did no work. A clause in the deal said the contract would be voided if Leonard left the Clippers, per the Guardian reporting. One former employee of Aspiration told Torre he had heard the deal with Leonard had been set up to circumvent the salary cap, according to the Guardian. New York law firm Wachtell Lipton conducted the NBA's independent investigation after Torre's reporting. Wachtell Lipton conducted 73 interviews of 60 people as part of the investigation, per NBC News reporting. Ballmer was determined to have "knowingly seeking to help Mr. Leonard obtain off-court income opportunities, for approving a business deal that he knew was a precondition for Aspiration to enter into an endorsement agreement with Mr. Leonard, and for his failure to create conditions under which his organization abided by the NBA's circumvention rules," according to NBC News. Leonard violated league rules by "pressuring the Clippers, through his uncle, to assist him in obtaining off-court income opportunities, successfully obtaining those opportunities, and failing to reimburse payments by the Clippers for personal expenses," per NBC News reporting. Gillian Zucker was "primarily and directly culpable for the impermissible endorsement arrangements and for providing false and misleading statements to investigators," according to NBC News. The NBA cited "a pattern of misconduct and multiple significant rules violations," determining that team officials systematically coordinated off-the-books arrangements rather than making an isolated error, per Fox News reporting. In 2000, the NBA voided Minnesota's contracts with Joe Smith, stripped the Timberwolves of five first-round picks, and fined the team $3.5 million over a secret agreement involving the forward, according to Fox News reporting. NBA Commissioner Adam Silver stated: "The NBA's collectively bargained system for determining player compensation is a fundamental component of the basketball competition that the league oversees for the benefit of the teams and players and ultimately the fans. I am deeply disappointed by the flagrant violations of our rules and by the Clippers' institutional and leadership failures that led to this misconduct. The severity of the penalties reflects the seriousness of the violations." Leonard said in a statement: "I take full responsibility for lapses in judgment by people within my inner circle and regret the distraction this situation has caused the fans and my family. I entered into my contract with the Clippers as well as the agreements in question in good faith, fully committed to fulfilling my obligations and with no knowledge of any intent on anyone's part to circumvent the salary cap." The Clippers said they would challenge the investigation's findings "through every avenue available to us" and looked "forward to an ethical and impartial arbitration process." The Clippers "vehemently reject the NBA's findings, which are the result of a heavily biased investigation seeking to justify a predetermined narrative rather than facts and evidence" and stated "What the league told us privately differs from what it announced today publicly, and they have not held themselves close to the standard Commissioner Silver set at the start of this investigation to ensure it's fairness and accuracy," per NBC News reporting. Leonard cut ties with Dennis Robertson in June, according to Fox News reporting. The Clippers had agreed to trade Leonard to the Toronto Raptors in July.