Longhorn senior Jonathon Levy displays his season tickets after picking them up inside Bellmont Hall. (Deborah Cannon/American-Statesman)


UT audit finds Longhorns staff used prime seats to play favorites, help ticket brokers

Posted December 12th, 2015

Story highlights
  • Audit says some allegations were referred to police and to the Travis County district attorney, but no charges were pursued.
  • Auditors discovered that employees had “regular email communications” with those who had known ties to the secondary ticket market.
  • UT athletics officials say they have made sweeping internal changes as a result of the ticket investigation.

University of Texas athletics employees systematically abused their access to Longhorns football tickets for years, resulting in preferential treatment for favored donors, secret arrangements with ticket brokers and untold financial losses for the university, an audit obtained by the American-Statesman reveals.

Some allegations resulting from a 16-month university investigation point to possible illegal conduct, including employees who accepted gifts and exploited loopholes to pocket immeasurable profits by selling complimentary tickets. The audit says those allegations were referred to police and to the Travis County district attorney, but no charges were pursued.

Many practices uncovered by the investigation violate university policy or represent fireable offenses, UT officials said. However, no employees are named and no one is held responsible in the audit, formally completed Nov. 30 and obtained by the Statesman under the Texas Public Information Act.

According to the report, auditors began their investigation of the Longhorn Foundation, the UT athletic department’s fundraising arm, after two employees came forward in February 2012 with what a UT spokesman called “very specific allegations.”

Most of the investigation was completed by June 2013, the report says, but the final report was not sent to top university officials until two years later — after UT President Bill Powers and athletic director DeLoss Dodds, in office at the time of the ticket abuses, had moved on.

The 22-page report by the university’s Office of Internal Audit sheds unprecedented light on how Longhorn Foundation employees took care of football donors and season-ticket holders, sometimes by filling orders for those who did not make the required donation or missed deadlines. That included giving some more prized Texas-Oklahoma football game tickets “than the number that should have been allowed under existing policy,” according to the report.

Local car dealers were given tickets without the university getting a corresponding courtesy car for staff members in return. And 22 of 23 recently deceased donors’ seats were transferred to others who were not family members at amounts lower than market value, according to the report.

Longhorn Foundation employees accepted unreported gifts for seats or upgrades that were not deserved, something auditors initially described as “possible kickbacks” in a draft of the report, also obtained by the Statesman. That language in the final version of the report was changed to say “possible conflict of interest.”

The report says auditors shared one questionable email with the Travis County district attorney’s office for possible felony criminal prosecution.

“An email was located in which a Longhorn Foundation employee questioned a known ticket reseller about the status of a transfer into the employee’s bank account,” the report said.

Using search warrants by university police and Travis County prosecutors, auditors obtained bank account data to see whether the university employee was being paid directly for giving ticket buyers favorable treatment, the report said. Through interviews and internal records, auditors couldn’t make a final determination, and county officials chose not to prosecute.

The audit examined 39 accounts that were “identified by Athletics,” according to the report. UT officials called it a “targeted investigation” and said a “limited number of accounts had abnormalities and the investigators focused on them.” There are approximately 15,000 accounts within the system. UT officials would not make auditors available to the Statesman for an interview.

Texas athletic director Mike Perrin declined to comment when asked about what personnel changes were made in the athletics office after the findings of the audit were presented. (RODOLFO GONZALEZ / AMERICAN-STATESMAN)
Texas athletics director Mike Perrin declined to comment when asked about what personnel changes were made in the athletics office after the findings of the audit were presented. (RODOLFO GONZALEZ / AMERICAN-STATESMAN)

School officials will not say whether any Longhorn Foundation employee was disciplined or terminated as a result of the investigation. The report is completely nameless. There is nothing in the report indicating school officials tried to recover any money from employees or others associated with the investigation.

“Personnel policy,” UT men’s athletic director Mike Perrin told the Statesman. “I can’t comment on personnel issues.”

Asked directly if anyone has been fired because of the auditors’ report, women’s athletic director Chris Plonsky said, “There have been personnel changes. Whether it was couched in the term you just used, I can’t comment on.”

University spokesman Gary Susswein said, “As a standard policy, the auditor’s office does not include names in its reports — whether employees, donors or others — or raise specific allegations against individuals. The office focuses on improving protocols and processes.”

Ticket brokers had help

Each of the past five years, UT athletics announced that the football program generated more than $30 million in ticket revenue. But school officials cannot estimate how much money might have been lost over the years, nor can they gauge how much money athletics employees might have made with under-the-table arrangements with ticket brokers when the football team averaged more than 100,000 fans per game from 2009 to 2012.

Auditors discovered that employees had “regular email communications” with those who had known ties to the secondary ticket market. One athletic staff member emailed the entire season-ticket list to a person who was not a UT employee, according to the report.

The report does not say whether ticket brokers were directly manipulating the system from within. However, it’s clear they had help. Among the 39 accounts reviewed, auditors determined that some donors received ticket allocations before tickets even went on sale. Then, those same tickets were being sold on the secondary market.

Auditors found that unrelated accounts were paid with the same credit card. Donations from account holders with “various locations across Texas” were made with consecutively numbered cashier’s checks.

A river of cash payments flowed through the Longhorn Foundation itself, not the school’s ticket or business office. One employee processed approximately 87 cash payments for tickets per game after the fact — an average of 23 days after football games. That activity suggests the employee was involved with reselling tickets on the secondary market before paying UT for the tickets. Many of those payments “occurred on generic donor accounts that were not linked to a specific individual,” the report states.

Neither auditors nor UT officials can state with certainty whether the school received full market value for these tickets. The auditors’ report states that some users could process “partial payments” within the system on generic accounts.

The report states that this Longhorn Foundation staff member processed “more than half” of the total dollar amount of cash payments in the ticketing system for the 2006-11 football seasons. According to UT’s athletics annual report, the announced football ticket revenue crested at $35.5 million for the 2010 season.

Only one unidentified employee was singled out by auditors. However, the ticketing system contained 1,427 user accounts, and the system was not “managed consistently and may not be monitored,” the report states. It says 14 of 16 Longhorn Foundation employees had full computer access for “all functions in the ticketing system.”

Four ticket printers were found in foundation offices, and employees with system access could print off untold numbers of tickets, mark the seats as complimentary and remove them from the seating inventory. Overall, auditors found nine ticket printers and one system to log transactions.

It’s unclear how many Texas athletics employees accessed the system during the time specified in the audit. The report examined whether athletic staff members sold their complimentary tickets for profit against school policy. Every athletics employee receives at least two free tickets. The allegation was not substantiated by evidence; however, auditors weren’t sure if tickets were sold through other platforms besides the online ticket site StubHub.

“The majority of complimentary tickets sold on StubHub had been issued to letter winners,” the report states. That could be viewed as an extra benefit and thus an NCAA violation. Tickets to sporting events, special discounts or benefits based on athletic performance are all examples of impermissible benefits, according to the NCAA.

Asked if letter winners could lose their ticket privileges if found to be systematically reselling their complimentary seats, Perrin said, “Probably.”

Athletics staff members did manipulate the system to pad their personal accounts with bogus donations, making them eligible for additional tickets or seating upgrades. The report states the university used three computer applications, and information did not reconcile.

With a mishmash of data from multiple systems, auditors noted that transactions could be processed in a way that prevented oversight. The degree to which UT athletics reconciles its financial data “may be insufficient,” the report states.

In summation, the Office of Internal Audits said it planned to perform future reviews of the deficiencies and the “corrective actions” taken by the athletic department.

“That audit will look at a broader group of accounts that will be selected through sampling, as is standard practice,” Susswein said.

Examining the report

The report itself, from its language to when it was marked final, appears to have been handled with extreme caution. Internally, it was known as “Project #793.12.”

The draft copy, dated July 29, 2015, is similar to the final report, dated Nov. 30, with minor adjustments such as the change of “possible kickbacks” to “possible conflict of interest.”

The final release of the report “was pushed back by a combination of factors,” Susswein said. Athletics did address issues raised by auditors’ initial findings, he said. The final report was delayed as UT waited on a decision from the Travis County district attorney. Staff and leadership changes slowed the process, and auditors were working on other projects, Susswein said.

According to an internal timeline of events obtained by the Statesman, auditors gave their first report to UT athletics officials, including Dodds, Plonsky and others, at 11 a.m. June 1, 2012, about 3½ months after two UT employees stepped forward with their concerns.

Another meeting was held at 4 p.m. Sept. 12, 2012. Those present were not listed, but UT compliance, athletics management, internal audit and legal affairs were represented.

Then in March 2013, auditors started giving presentations to UT athletics employees Amy Folan and Lori Hammond. Those two, along with former Longhorn Foundation employee David Onion, received oral reports in April, May and June that year. By giving oral reports, attendees were not required to save documentation that later could be released to the public via the state’s open records laws.

At the time, Dodds, Plonsky and deputy men’s athletic director Butch Worley oversaw UT athletics. It’s unclear why none of those three sat in on the oral presentations. Plonsky is the only one of the three staffers still at the school. Dodds retired in November 2013 after 32 years with the Longhorns. Worley, who was at Texas for almost 27 years, announced he was leaving in August 2014.

UT Women's Athletic Director Chris Plonsky says.... (Laura Skelding/American-Statesman)
UT Women’s Athletic Director Chris Plonsky says she and other athletics officials didn’t know what they were going to discover when they turned over ticket impropriety allegations to the internal audit office. (Laura Skelding/American-Statesman)

Asked if Dodds knew about the problems in the Longhorn Foundation and looked the other way, Plonsky said, “Absolutely not. Our habit is we call campus. We call campus on things where they say, ‘Thanks for calling, but this doesn’t rise to the level.’ But the habit was always to err on the side of communicating.”

Through a university spokesman, Dodds said, “As soon as we were made aware of the concerns, we informed Internal Audits and they began their investigation. As they provided feedback, we addressed the issues from a process and personnel standpoint to eliminate the issues.”

Plonsky said: “I worked alongside DeLoss for 20 years straight. This is the stuff he just never couched. I believe we did the right thing. But it’s just, what were we going to discover when it went to audit? That was going to take some time. Once we turned it over to audit, I thought we were going to learn a lot.”

Dodds’ replacement, Steve Patterson, received the auditors’ report in late July, according to UT sources. The draft states that Patterson and Plonsky were asked to “provide responses and corrective action plans” by Aug. 13 — 15 days later.

Patterson was fired about one month after the auditors’ deadline. His settlement with UT includes a nondisparagement clause prohibiting the two sides from speaking ill of each other.

During the 16-month investigation, then-UT President Powers was battling with UT System regents to keep his job. Powers ultimately resigned in July 2014. Powers, who has not given any interviews since leaving office, declined an interview request by the Statesman.

Current UT President Gregory L. Fenves took over on June 3, 2015. Two days later, Fenves learned of allegations regarding possible academic improprieties with former basketball players. Fenves had some knowledge of the audit when he was provost and a member of a campus audit committee. He became aware of the full investigation results shortly after becoming president, Susswein said.

“President Fenves understands there were serious problems identified several years ago and that the athletics department worked immediately to address them,” Susswein said.

Changes internally

In their formal five-page response to the audit, Perrin and Plonsky describe how the Longhorn Foundation has since been shifted from “ticket-related transactional functions to philanthropic fundraising for capital projects, endowments and student-athlete support services.”

UT athletics officials say they have made sweeping internal changes as a result of the ticket investigation. Ticket printers are now locked up, and the Longhorn Foundation does not accept cash, said Steve Hank, chief revenue officer for UT athletics.

One of Patterson’s biggest changes was to consolidate UT athletics’ sprawling ticket operations and implement a priority points system, which ranks donors according to their financial giving.

“One of the things that we’re going to make sure of is that every single person gets every single benefit they’re entitled to and that they earn it,” Hank said. “The priority points system does that equitably and fairly.”

In spring 2014, UT began merging its systems to provide real-time monitoring of donor data. UT officials believe this allows for better checks and balances and ensures the integrity of the process. “The systems part of this can’t be understated in terms of its importance,” Plonsky said.

Perrin, who said he had no knowledge of the problems or investigation before September, said he would keep the priority points system in place.

“It’s a way to reward folks who are coming on board today and not push out the longtime supporters of the program. It’s a balancing act,” Perrin said.

“The issues addressed in this audit report are corrected, have been corrected, and if we find others, they will be corrected,” he said.

The findings of the audit are below: