Military academies hush on sports finance
U.S. Defense Secretary James Mattis earns an annual salary of $207,800, according to public records. He oversees a department whose budget recently listed $8.2 billion for the Missile Defense Agency and $403 million for tactical Tomahawk cruise missiles.
This national security information is not confidential. It is available by law because these positions and programs are paid for and accountable to U.S. taxpayers.
By contrast, the NCAA Division I sports programs at U.S. military service academies are much more secretive about salaries and finances:
Army athletics has refused to reveal football coach Jeff Monken’s contract terms, including his pay or even the length of a deal announced Sept. 14.
Air Force athletics declined a request for its football and basketball coaches’ contracts, saying it wasn’t subject to public records laws.
Likewise, Navy athletics has rejected requests for detailed information about its revenue and expenses. Navy athletics said its policy is “to not release confidential data of this matter.”
No other athletics department has been allowed to be as secretive about its business affairs as Navy’s has the past several years, according to a USA TODAY Sports analysis of public disclosure requirements in major-college sports.
More recently, changes at Air Force and Army show they are following Navy’s path to privacy in sports business — boosted by acts of Congress that let their athletics business operations be private non-profit organizations.
But it was not the intent of lawmakers to give them the ability to hide information. It was to help them become more financially competitive and boost sports programs as recruiting tools.
“None of it was intended to shield information from the public,” said John McHugh, a former U.S. Army secretary and former congressman who co-sponsored some of the legislation.
All three service academy sports programs are part of treasured federal institutions that are funded by taxpayer dollars. Yet unlike other public universities directly funded by taxpayers, Navy, Air Force and Army say they don’t have to disclose coaches’ employment contracts and other financial records that even private schools must provide.
The bigger question is why. A USA TODAY Sports inquiry found the answer lies in loopholes and outsourcing that is largely a result of the academies getting pulled into the vortex of the big-spending world of major-college sports.
Government transparency experts say it’s wrong.
“It’s absurd in a way,” said Alex Howard, deputy director of the Sunlight Foundation, which advocates for better public access to government institutions. “It’s an absurd thing that they wouldn’t be forthcoming about how much they make, what their contract is, how long it is, at a service academy.”
Outsourcing athletics
Army, Navy and Air Force always have been different from the major-college programs they compete against in the sports business world. That’s because they are part of federal military institutions that don’t award athletic scholarships and are governed by restrictive federal government rules about contracting and fundraising.
Such rules generally are designed to protect against waste, abuse and fraud. But those rules also handicap these teams when their civilian competitors don’t have the same restrictions and can pay top dollar for coaches.
So Army and Air Force recently did what some companies do for financial reasons: They outsourced operations, following the lead of Navy, which had operated in similar fashion for decades.
Since 2009, each got federal legislation that ratified or authorized its athletics business operations to be private non-profit entities. By doing business this way, they can get around government restrictions in order to earn and spend more like normal athletics departments. The setup also reduces their need for academy financial support.
“The reason that each of the academies did it really lies in the fact that the cost of athletics is going up at a much faster rate than the government could support,” Air Force athletics director Jim Knowlton told USA TODAY Sports.
It gave them more autonomy. At the same time, these athletics programs have used this autonomy to decline requests for public records despite their continued reliance on the academies and the government. Not only are these athletics organizations still under government and academy oversight, but the students are government employees, including athletes.
Navy voluntarily has provided the base salary of football coach Ken Niumatalolo ($2 million) but for many years has denied requests for information such as coaches’ contracts and detailed budget information. “There’s not a requirement that information be disclosed,” Navy athletics director Chet Gladchuk told USA TODAY Sports.
Gladchuk said federal legislation in 2013 essentially ratified how Navy athletics long had operated under the Naval Academy Athletic Association, which was founded in 1891.
Other schools must provide more records in the interest of transparency and accountability, including private schools. These institutions are subject to open-records laws; Internal Revenue Service filing regulations that apply to private, non-profit organizations; and/ or U.S. Department of Education gender-equity reporting requirements.
The service academies do not need to submit data to the Department of Education because they do not participate in Title IV federal student aid programs.
Air Force, Army and Navy athletics previously filed IRS forms, but Air Force and Navy say they no longer have to because they are governmental affiliates. Army athletics transitioned to a private organization this year. Asked if it would seek a similar exemption, spokesman Matt Faulkner provided a statement: “We are in the first year of the (nonprofit), so we are (filing) all required forms without exception.”
Until recently, Army and Air Force divulged football coach contracts. Now they don’t.
Critics say this kind of secrecy violates the spirit of the law.
“It’s a bad idea,” said Kathleen Clark, a law professor and expert on government ethics and national security law at Washington University in St. Louis. “Congress knew to be concerned about this sort of thing, and I think it’s inconsistent with (the law).”
‘Appearance problem’
The law stipulates that the secretaries of the Army, Navy and Air Force shall ensure that the contributions they receive from these non-profit athletics entities don’t “compromise the integrity or appearance of integrity of any program” of the Department of the Navy, Air Force or Army. Clark argues their lack of disclosures contradicts this.
“It creates, at the very least, an appearance problem,” Clark said, “because we cannot verify what the finances are. God only knows. That’s not to say there’s any abuse going on, but how would anyone know?”
Much like the service academies, some athletics departments at public schools also are organized as separate non-profit organizations, including at Kansas and Central Florida. These athletics departments still turn over coaches’ contracts and financial records as a matter of law or policy. They also are required to file the IRS forms and other financial data.
Navy’s Gladchuk pointed out that the NAAA employs Navy coaches, owns its football stadium and gets only about 1% of its $42 million in revenue from government support. He gave this data voluntarily — information that couldn’t be independently verified because the records aren’t required to be public.
Navy athletics is much less publicly subsidized than Air Force or Army by virtue of being operated as a separate entity much longer. Air Force athletics got $31 million of its $50 million from state or other government support for 2015-16, according to a document that Air Force initially refused to disclose.
Air Force’s athletics corporation doesn’t run all Air Force sports and isn’t subsidized by the government. These outside entities still are entangled with their public institutions in many other ways, according to the legislation. It says all stock of Air Force’s athletics non-profit “shall be owned by the United States and held in the name of and voted by the Secretary of the Air Force.”
For Navy, it says the NAAA might use public Navy property at no cost. In Army’s case, it says the Secretary of the Army may provide housing for athletics personnel at the Army Garrison at West Point as well as other services.
The intent of the legislation was not to “afford the service academies a reason to not disclose budgetary issues, etc.” said McHugh, the former congressman. “That was not contemplated as part of the bill. … In fact, if that were an issue, Congress might want to take a look at tightening the requirements for reporting under that.”