What if a Booster Ran an SEC School’s Budget?

On January 12, 2006, Mike Fish of ESPN.com published a lengthy piece on the “most powerful boosters” in college sports. At the top of the list was Oregon’s Phil Knight, Oklahoma State’s T. Boone Pickens and Auburn’s Bobby Lowder.

Bobby Lowder

(At Auburn, failed banker, megabooster Bobby Lowder oversees school budget)

Lowder is the former CEO and chairman of Colonial Bancgroup, a banking empire he founded in 1981. In 2009, Alabama-based Colonial was the largest bank failure in the United States and sixth-biggest bank failure in U.S. history. Lowder’s company was seized by Federal regulators in a collapse that reportedly cost the FDIC $2.8 billion.

In the aftermath of the Colonial failure, last month the OPELIKA-AUBURN NEWS reported:

The feds (FBI) are moving forward quickly toward prosecution of some 50 bank executives and directors of failed banks to recover as much as $1 billion paid out by the Federal Deposit Insurance Corporation.

Lowder is being personally sued by Colonial employees for $50 million for alleged mismanagement of their retirement funds and the FBI has alleged that Colonial executives committed financial fraud totaling $1.9 billion. FORTUNE Senior Editor Brian O’Keefe also noted another Federal investigation of Lowder’s Colonial:

Perhaps most worrying for Lowder is an investigation by the FBI and the Office of the Special Inspector General for the Troubled Asset Relief Program into Colonial’s so-called warehouse-lending business.

Colonial applied for $550 million in TARP funds last fall but was never cleared to receive a bailout. On Aug. 3, just 11 days before regulators shut down Colonial, agents raided the bank’s offices in downtown Orlando, where the warehouse lending was managed, and spent hours carting away boxes of documents.

After the Colonial meltdown, Lowder “retired” from his post at the bank. Despite the public ignominy that befell his finance career, Lowder continues to retain his seat on Auburn Board of Trustees. As the longest tenured member of the board, Lowder currently chairs the finance committee that oversees Auburn University entire budget - which includes the Auburn athletic department.

Of Lowder’s role at Auburn, Fortune’s O’Keefe wrote in 2009:

“His name might not be familiar outside Alabama, but he is easily one of the most feared, loathed, and some say misunderstood men to wield power in this state since George Wallace — the governor who first appointed him to the board in 1983.

“… Lowder has been accused of making backroom deals with governors and treating the Auburn football program like a private fiefdom. (Because of his influence over Auburn’s athletic program, three years ago ESPN named him the most powerful booster in college sports.)”

The BIRMINGHAM NEWS reported that some of the “big losers” in Lowder’s Colonial bank “dive” were former Auburn football coach Pat Dye and prominent Auburn booster and gambling business magnate Milton McGregor. McGregor reportedly owned $19 million in Colonial stock at one point. Lowder reportedly had many of his high-powered Auburn acquaintances, including McGregor, appointed to the Colonial Board of Directors.

As owner of the state’s largest electronic bingo casino, VictoryLand, Milton McGregor is one of the highest-profile Auburn boosters in the state. In 2008, he donated $1 million toward construction of the new Auburn basketball arena.

The morning of October, 4, 2010, the BIRMINGHAM NEWS reported:

FBI agents swept across Alabama this morning arresting state lawmakers and lobbyists as part of a federal probe into efforts to pass gambling legislation last spring.

The biggest name arrested so far has been VictoryLand owner Milton McGregor, who was arrested at his Montgomery home this morning.

Before McGregor was arrested by FBI agents, the Birmingham News reported of the ongoing investigation on May 7, 2010:

Sources familiar with the investigation have said the probe has included the use of wiretaps, and several lawmakers agreed to wear wires to capture the conversations between themselves, other lawmakers and lobbyists.

One of those lobbyists, prominent Auburn alumnus Robert Geddie, was arrested by FBI agents on the same day as Auburn booster McGregor as part of the same Federal investigation. From the BIRMINGHAM NEWS:

Geddie, who along with partner Joe Fine, have operated maybe the capitol city’s most powerful contract lobbyist firm for years.

Budd McLaughlin of the HUNTSVILLE (AL) TIMES reported in 2008 of Auburn’s financial relationship with Geddie’s firm:

Alabama and Auburn pay a total of $20,000-a-month retainer fees to the Montgomery lobbying firm of Fine Geddie & Associates LLC, which has 50 clients, including some of the nation’s largest corporations.

At Auburn, the lobbying firm is paid from Tigers Unlimited, AU’s Athletic Department’s fund-raising arm.

Last month, shortly after Geddie’s arrest following FBI wiretaps, the OPELIKA-AUBURN NEWS reported of the current state of Geddie’s firm’s business relationship with Auburn’s “athletic department fund-raising arm“, Tigers Unlimited:

A whopping amount of the money flowing to the firm, almost a million dollars thus far, has been paid by the Auburn Athletics/Tigers Unlimited Foundation (TUF).

The O-A News added that in the wake of Geddie’s arrest, “Deedie Dowdell, who heads the Marketing and Communications Department at Auburn, said there are no plans to end the contracts (with Geddie’s firm.)

Auburn’s Dowdell also noted that as the AU athletics fund-raising Tigers Unlimited was expressly created as a private organization, it can keep all of its financial dealings secret.

Mike Fish of ESPN.com reported of Tigers Unlimited in 2006:

According to the 2004 federal tax documents filed by the Robert and Charlotte Lowder Foundation, a grant of $600,000 — more than a third of all moneys issued during the year — went to Tigers Unlimited, the fund-raising arm of Auburn’s athletic department. A $30,000 grant was written to Chette Williams Ministries Inc., a nonprofit charity operated by the Tigers’ team chaplain.

On September 14, 2003, the John Zenor of the ASSOCIATED PRESS reported:

Former Auburn coach Terry Bowden said on tape two years ago that boosters were funneling thousands of dollars to players when he became coach in 1993, a time when the Tigers were on NCAA probation.

“They were paying players cash, $12,000, $15,000 to sign,” Bowden said on a recording reviewed by the Associated Press. “All I was told to do was shake hands and say, “Thank you. I appreciate how much you love Auburn.’ “

On the tape, Bowden said 25-30 boosters would meet in Birmingham and 15-20 would meet in Rome, Ga., and that they would give $5,000 each. He said that when he arrived at Auburn, an assistant collected the money.

Bowden later claimed through a spokesman that the comments were off the record, but the Associated Press reported that the writer who recorded the comments received an e-mail from Bowden “encouraging their publication.

Bowden has not disputed the writer’s claim about that encouragement nor the veracity of the publication of his remarks.

Not reported in the AP account of Bowden’s remarks was who else was in attendance when the coach accused Auburn boosters, Auburn Trustees and even his own coaching staff of participating in a scheme to pay players under the table.

On Sept. 18, 2010, Mitch Sneed of the Opelika-Auburn News reported:

A group of longtime Auburn University professors said Wednesday that they were present at an April 2001 conversation with Terry Bowden where the former Tiger football coach told about a system for playing players.

Dr. Barry Burkhart, Dr. Larry Gerber and Dr. Gary Mullen all said they accompanied Dr. Wayne Flynt to a farm in Loachapoka, where Bowden told all he knew about how thesystem worked.

Their revelations were backed up by comments by former athletics director Mike Lude, who said Bowden told him a similar story in 1999 and again in 2001.

“A group of us accompanied Wayne (Flynt) to a farm in Loachapoka,” Burkhart said. “I don’t recall (Bowden) ever saying, ‘you can’t repeat this’ or that it was ‘off the record.’ He wanted someone to hear it.”

Bowden reportedly held five separate meetings during a two-day period in April of 2001 as part of his detailing alleged Auburn impropriety. His remarks included citing Auburn Trustee Lowder as having allegedly masterminded the football program’s pay-for-play operation.

In 2001, Auburn University’s accreditation was placed in significant jeopardy. Mike Fish of ESPN.com reported of the challenge to the school’s basic credibility:

The Southern Association of Colleges and Schools (SACS), the regional accrediting agency, placed the university on probation. The agency cited the micromanagement by Lowder and the board of trustees, saying Auburn failed to prove that the university president has “ultimate control over the athletics program” as well as failing to prove that the board isn’t controlled by “a minority of board members.”

Since his Colonial bank empire imploded, Lowder’s power on the Auburn Board of Trustees has reportedly diminished, but as overseer of the school’s athletic and overall budget, he obviously still wields considerable influence.

Influence that undoubtedly includes same manner of oversight of Tigers Unlimited, which as a private entity, can keep its financial records secret.

The same Tigers Unlimited that has reportedly paid the lobbying firm of Auburn alumnus Robert Geddie “almost a million dollars thus far.”

The same Tigers Unlimited-funded Geddie who was arrested by the FBI last month following an investigation - that included wiretaps - of his recent dealings with Auburn mega-booster Milton McGregor.

What was current Auburn Athletic Jay Jacobs doing before he took his present job?

Tigers Unlimited Foundation

From the Auburn athletics official site:

Jacobs gained strong business expertise as the Senior Associate Athletics Director for Tigers Unlimited prior to his appointment as Director of Athletics.

From ESPN.com in 2006:

Jay Jacobs, the new AD who previously headed Tigers Unlimited, said of his dealings with Lowder: “I don’t have any whatsoever.”

Lowder, who has been on the Auburn Board of Trustees since 1983, will have his most recent term expire in April.

UPDATE: TMZ.com is now reporting:

According to sources connected to the probe … FBI agents looking into the Newton recruiting controversy are also asking about Milton McGregor — a dog track owner arrested last month for allegedly bribing Alabama politicians to vote pro gambling.

We’re told agents asked someone connected to the Newton case if he was familiar with McGregor or the bribery scandal.

Milton McGregor

(Auburn Booster Milton McGregor, wiretapped, arrested by FBI)

UPDATE 2: TMZ.com has updated its story on McGregor being linked to the FBI investigation of Cam Newton recruitment:

Milton McGregor’s attorney tells TMZ his client has “never had any contact – direct or indirect – with Cam Newton, Cecil Newton, Cam’s father; Kenny Rogers or anyone purporting to represent Cam Newton.”  He also says McGregor has never compensated student athletes at Auburn or any other school.

Follow Brooks on Twitter for real-time updates.