Halloween Horror: Corporate Sports Tickets Gone Wrong
Picture this, a big financial firm that does a ton of entertaining (you know, sports, concerts, shows, all that stuff). You got your top VP who drives a lot of revenue and probably uses these tickets to do so. Now imagine, this same VP, taking those same tickets, and giving them to some government official under the table to push the deal over the edge. Sound like a bribe? You’re not alone and even worst, you don’t have to imagine it. These things happen all the time and most companies don’t know it’s happening until it’s too late.
L.J. Hart & Company, a huge bond firm in the St. Louis area recently got busted for giving 2,000 sports tickets to local school district officials to win their business. This was a clear violation of the “pay-to-play” rules created to clean up the municipal bond business.
“Superintendent Link Luttrell of the Festus R-VI School District said he and board members received tickets at the meeting as a ‘reward for visiting their booth,’” says the local St. Louis Post-Dispatch. “Daphne Dorsey, spokeswoman for the Normandy School District, said Hart would ‘make tickets available’ to school administrators, who in turn provided the tickets to district employees.” As unbelievable as it sounds, sports tickets are a corporate commodity and they do get misused.
These types of occurrences happen frequently and now regulators seem to be cracking down on them more often. It’s clear that these tickets drive business but, how do tackle fraud proactively. “The company should have in place procedures requiring the accurate reporting of all disbursements and reimbursements associate with business courtesies,” says Foley & Lardner, an expert law firm around sports. They also mention that “The company should maintain procedures to ensure the accurate tracking and identification of all business-related gifts, meals, entertainment, and travel payments and expenses.”
In the end, entertainment tickets are important. They help drive business but, they also come with unwarranted risk. Therefore, companies need to have the right procedures in place in order to be compliant.