NBA Union Corruption

This story was interesting.  NBA Players’ Association executive director Billy Hunter sought a $7M-$9M investment for Interstate Net Bank.  Billy Hunter’s son, Todd Hunter, has connections to that bank.

Todd Hunter also works for Prim Capital.  Prim Capital has a $2.5M consulting contract with the NBAPA.

That’s the problem with State unions.  The union leader is more concerned with lining his pockets, than advocating for workers.  The union leader is more interested in protecting his turf, than advocating for workers.

Back when unions were illegal, unions were effective.  The State recognizes and regulates unions.  The union leader is just another State bureaucrat, rather than a sincere advocate for workers.

In the recent CBA negotiations, the players’ union totally caved to the owners.  The union leaders have an incentive to say that a lousy contract is a fair deal, because they want to keep their jobs.  If the entire season was lost to a lockout, the union leaders are risking their jobs.  With a new contract, the union leaders are secure in their jobs for another 6-10 years.

Here’s another aspect of NBA union corruption.  Many NBA union leaders later get jobs working for the NBA.  The union leader isn’t going to advocate too hard for players, if he’s going to get a cushy job with the NBA later.

The union leader controls a lot of money he doesn’t own.  The union leader controls union dues payments.  Sometimes, the union leader controls the pension fund.  This is the usual Principal-Agent problem.  The incentive is for the union leader to give lucrative contracts to his friends and relatives, rather than spending that money wisely.  The union leader controls money that he doesn’t own, providing an opportunity for theft and corruption.

This happens in almost every State bureaucracy.  One example is the GSA scandal. The GSA wasted nearly $1M on a Las Vegas conference.  The people who ran the conference made a nice profit at taxpayer expense.  The GSA chief controlled money that he didn’t own, providing an incentive for waste and corruption.

This happens in almost every union.  The union leader gives lucrative consulting contracts to his friends and relatives.  Many NBA players are angry at their union, after the lousy contract.  Normally, nobody would investigate.  This time, some people did, because they were angry about the new CBA.

This isn’t “one bad apple”.  Whenever a State leader controls money that he doesn’t own, the incentive is for corruption and waste.

One Response to NBA Union Corruption

  1. Anonymous Coward April 27, 2012 at 1:49 pm

    I don’t follow industrial action news closely. However whenever there is a union strike in the United Kingdom, the company management usually takes the union to court on the grounds that they didn’t follow procedure to the letter when taking a vote whether to strike or not.

    I’m sure High Court legal action is very expensive and must cost the workers a lot of money.

    The legal professional are high paid parasites. They suck money out of every aspect of life.

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