Playoff PAC, a group that opposes the college football Bowl Championship Series, has filed a 27-page legal complaint with the Internal Revenue Service against bowl organizations affiliated with the BCS.

The complaint lists significant tax irregularities discovered through a review of over 2,300 pages of tax records and public documents. The complaint was submitted to the IRS on Playoff PAC’s behalf by Marcus S. Owens, former head of the IRS’s Exempt Organizations Division, and Joseph M. Birkenstock, former chief counsel of the Democratic National Committee. Both attorneys are members of Washington, D.C., law firm Caplin & Drysdale.

The complaint lists three organizations exempt from federal income tax under Section 501(c) of the Tax Code: the Arizona Sports Foundation, also known as the Fiesta Bowl; Orange Bowl Committee Inc.; and Sugar Bowl. The complaint concerns the organizations’ use of charitable funds to provide “excessive compensation to their executives, make undisclosed lobbying expenditures, and intervene in political campaigns, and provide substantial private benefit to organizational insiders.”

“BCS Bowls all claim to be ‘501(c)(3)’ public charities—the same tax designation as the American Red Cross—to make their revenues tax-exempt and obtain other taxpayer-funded benefits,” Playoff PAC co-founder Chad Pehrson said in a statement. “Playoff PAC’s review uncovered a disturbing pattern of BCS Bowl organizations using their charitable funds to enrich Bowl executives, pay registered lobbyists without disclosure, fund political campaigns, and heap frivolous benefits on Bowl insiders. The BCS Bowls’ activities raise important concerns under federal tax laws and we anticipate that the IRS will give these issues due attention.”

BCS executive director Bill Hancock declined to comment and referred questions to the individual bowl champions. Fiesta Bowl and Orange Bowl representatives did not immediately respond to a request for comment.

John Sudsbury, a spokesman for the Allstate Sugar Bowl, said, "Playoff PAC, an organization which is dedicated to ending the bowl system, is simply manipulating numbers to support their own specific agenda. We’re audited every year and we have always complied with all IRS regulations. This is just re-hashed information which has been regularly referenced by opponents of the bowl system."

The complaint alleges that Sugar Bowl’s top three execs received $1,225,136 in FYE 2009 on revenue of $12.7 million, meaning that just three people took almost $1 of every $10 the bowl earned. Fiesta Bowl CEO John Junker received $317,717 in the fiscal year ending 2009 for working just 21 hours per week from the Arizona Sports Foundation, that bowl’s lead entity. Junker’s total compensation package from all Fiesta Bowl-related entities was $592,418 for FYE 2009, nearly quadruple the CEO pay at similar-sized charities.

The Fiesta Bowl gave two bowl executives $240,000 in unsecured interest-free loans, reportedly to pay for their personal memberships in a private golf club, according to the complaint. Sugar Bowl executive director Paul Hoolahan received $645,386 in FYE 2009, a year in which the Sugar Bowl lost money despite receiving a $1.4 million government grant. Hoolahan collected $25,000 more than the Rose Bowl’s top three executives combined. BCS Bowls use charitable funds to fly bowl execs and spouses first-class, pay private club dues, and foot the bill for employees’ personal income taxes. The Orange Bowl, for example, spent $756,546 on travel in FYE 2009 for its employees, according to the complaint.

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