The NBA’s investigation into Kawhi Leonard and possible salary cap circumvention through a "no-show" endorsement deal started in September and has now dragged on as long as the Warren Commission's investigation into the John F. Kennedy assassination. The sense among league executives NBC Sports spoke to in Las Vegas is that it has to be nearing an end, as it is now holding up multiple teams' free-agent business, including a potential Leonard trade to Toronto.
Now we may now know one key reason this is taking so long: The investigation has expanded to a second sponsorship deal as well, plus potentially other things of Leonard's that the Clippers paid for, reports Mike Vorkunov at The Athletic. As a reminder, the league hired the law firm of Wachtell, Lipton, Rosen & Katz to handle the investigation.
Not only has Wachtell Lipton, the league's go-to law firm hired to conduct the inquiry, inspected if the Clippers circumvented the NBA salary cap by facilitating a sponsorship deal for Leonard with Aspiration, it has also looked into whether the Clippers improperly covered expenses for Leonard but were not reimbursed for them, those sources said. And the firm has examined if Leonard had a previously unreported endorsement deal with another company, those sources said.
The Clippers continue to deny any wrongdoing, something they reiterated last week when the Raptors put the Leonard trade to Toronto on hold after the league warned they would be on the hook for any punishment Leonard could face in the investigation.
"For the past 10 months, our organization has fully cooperated with an NBA investigation, participating in dozens of interviews, providing tens of thousands of documents, and facilitating access to our staff..." The Clippers said in a statement released to NBC Sports. "At the heart of this investigation are Joe Sanberg and Aspiration. We did not funnel money to Kawhi Leonard through Aspiration. Like many sophisticated investors, financial institutions, and business partners, we were victims of a fraud initiated by Sanberg, who has been convicted and sentenced to 14 years in prison."
It is expected that this trade will eventually go through, both sides want it, but Toronto just didn't want to take on undue risk.
The sense from executives around the league is that the investigation found enough that NBA Commissioner Adam Silver is expected to come down hard on the Clippers and Ballmer, but that Leonard likely just faces a slap on the wrist.
The NBA’s original investigation
The initial investigation into this began after the Pablo Torre Finds Out podcast investigated Leonard's endorsement deal with Aspiration, a green bank company that has since gone bankrupt, and its founder, Sanberg, has been convicted and jailed.
The situation dates back to September 2021, when Clippers owner Steve Ballmer made a $50 million personal investment in Aspiration. A few weeks later, after Leonard signed a four-year, $176 million contract extension with the Clippers, it was announced that Aspiration would be a $300 million sponsor of the Clippers, and Leonard signed a $28 million endorsement deal with the company.
However, several former Aspiration employees told Torre that this was a "no-show" endorsement, and there is no evidence that Leonard made any public appearances for the company, appeared in its marketing or posted anything on social media about Aspiration. It's circumstantial evidence, but worth noting, that this kind of no-work endorsement was something that Leonard's adviser, business partner and uncle, Dennis Robertson, reportedly had requested of the Raptors during Leonard's 2019 free agency (he allegedly made other wild requests of the Lakers and other interested teams, all of which was quietly discussed in league circles after Leonard signed with the Clippers).
The NBA investigation is into whether the Clippers knowingly used Aspiration to circumvent the league's salary cap to funnel more money to Leonard (and Robertson). The investigation may have found other avenues where that took place.
It's unclear how much longer the investigation will last, but with free-agent business now held up, the league will pressure Wachtel Lipton to wrap things up quickly.
