← Pablo Torre Finds Out
Pablo Torre Finds Out
The Mystery Investor, the No-Show Payday and the "Smoking Gun": Kawhi-Gate, Part III
00:56:34
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- [00:00]
A
Torre finds out. I am Pablo Torre and today we're going to find out what this sound is. How surprising is it that a new investor would put money in in December 2022 who had not already clearly been deeply invested into the company?
- [00:21]
B
So it is beyond shocking right after this ad.
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D
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A
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B
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- [01:08]
A
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- [01:30]
D
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- [02:28]
D
Covered them this time.
- [02:29]
C
Yeah, that's what I was. The first thing I was gonna say is they learned from last time.
- [02:32]
A
We childproofed them. Meanwhile, I'm surprised because Amin walks in wearing what I thought was a Darius Miles jersey.
- [02:39]
C
It's Malik Sealy. The late, great Malik Sealy. It was laundry day, so I just happened to wear this.
- [02:45]
A
Yeah, definitely.
- [02:46]
D
I do laundry every day.
- [02:47]
A
As we defend our journalistic credibility. I'm dealing with Amin wearing Malik Sealy as a tribute, a justified tribute. And David is doing. Doing peanuts. Stop looking at the thing. Take off your little glasses, please.
- [03:05]
D
Well, now that I know how this.
- [03:06]
A
Works, I know you're trying to sneak a peek. You're trying to sneak a peek by moving aside the peanuts in a story about whether people are doing anything here for peanuts.
- [03:17]
D
28 million worth of peanuts.
- [03:18]
A
28 million peanuts. This will require a tiny bit of patience before we open the folders. Okay, you don't know what I'm about to show you, which is my favorite part about all of this, but I do need to catch everybody very quickly up to speed.
- [03:35]
D
On Wednesday, podcaster Pablo Torre published a.
- [03:38]
A
Report that the Clippers circumvented the NBA.
- [03:40]
D
Salary cap because Kawhi Leonard had a no show contract with a company that.
- [03:45]
A
Clippers owner Steve Ballmer was an investor in. Steve, thanks for joining us to discuss all of this. I really appreciate your giving me a chance. I look forward to it. I just up front, I want to say one thing very clearly. We, the Clippers, have abided by the salary cap circumvention rules because that's the right thing to do. And we have done. This was last Thursday. This was Los Angeles Clippers owner Steve Ballmer, the richest owner in all of sports, doing something that I find more amusing and more rewarding in a sense than anything else I've achieved in my life, which is, wow, you have a child. We have, well, violet earmuffs. We made one of the 10 richest people in the world fly to Bristol, Connecticut. That says a lot, I would say, about what the level of urgency is from inside the facility whose name you're wearing on your chest.
- [04:39]
C
It's funny, because you kind of Babe Ruth called your shot. You tweeted, I wonder how long before he has his, like, sit down interview. And it happened within hours, I think, of your tweet.
- [04:52]
A
Yeah, something else that happened. It just seemed like Steve wasn't a big fan of our work here. We did things by the book, and I don't know what those deals should look like, nor do I know what this one looked like specifically. So why do you think they gave him that much money? A. Let me just repeat, I don't know how much money they gave him. Well, in the court documents and in.
- [05:13]
D
Pablo's podcast, they report it was 28 million.
- [05:15]
A
Pablo's podcast. I don't know anything about the court documents. Documents on this. I don't. I haven't seen him and I don't know, I'm not trying to be who I don't know. I really don't know.
- [05:24]
D
But I love the body language. So notice the way he was sitting. If you're the seventh richest person in the world, I think you can sit back and cross your legs. He was in the attack position.
- [05:35]
A
He was in a. As if he was in a gamer chair playing.
- [05:39]
C
Third quarter. Now I gotta get serious.
- [05:42]
A
Very skilled 13 year old but he's also responding in a real way, I mean to what's been happening. What's been talked about back channeled around the league. And you're a former front office executive, you're a guy who talks to people. How would you characterize what the response has been?
- [05:59]
C
Everyone's been some version of yeah, this is pretty bad. Even the ones who say well a lot this happens everywhere. Everyone acknowledges it never happens to this magnitude. When you're talking about the amount of money and the lack of any perceivable deliverable of any sort from Kawhi Leonard, that just doesn't happen. That part doesn't happen. Are there deals with team sponsors that are very lucrative and may include the language say hey, if he gets traded or if he doesn't play here anymore, that ends the deal.
- [06:34]
A
Sure.
- [06:35]
C
But they all have some sort of deliverable that is tangible that people can see that we're getting value out of this. They're not just giving money away out of the kindness of the world.
- [06:44]
D
And are any of them 7 million per year?
- [06:46]
A
This deal was 7 million a year to David's point, multiples bigger than just standard normal rates. That this was bigger actually than his New Balance deal, his actual sneaker contract, which is kind of, I think sufficiently eye opening. I should also mention though that after this episode dropped, I confirmed something that the Boston Sports Journal reported which makes the number more eye opening by a kind of mind blowing amount. So what was reported, what I have now confirmed is that Aspiration granted Kawhi Leonard $20 million in stock in addition this time it was from Aspiration Co founder Joe Sandberg and Aspiration Growth Opportunities Partners, which is Sandberg's related venture capital fund, it's called AGO Partners. And I say all that to say, David, that it brings us to this week. It brings us to the fact that very conveniently for our purposes, the NBA's board of governors, the owners just finished their regularly scheduled meeting on Wednesday here in New York City at the St. Regis Hotel. And for people who don't know what the hell the Board of Governors meetings are. What are they?
- [07:56]
D
It's when you get the 30 control people in a room and you get updates on the season is starting soon. And here's what we're doing. Here's the plan. You may show a little hype up video congratulating the last champions getting ready for the next season. And there's also updates on any outstanding legal issues. They will update legal cases that are going on so the owners get an idea and they're set way in advance. This didn't come up as a result of your show. This is set in advance.
- [08:28]
A
So I just got a sidebar here to acknowledge that David Sampson is right. We did not cause the Board of Governors to assemble this week. But what multiple sources did tell me is that the reporting on Pablo Torre finds out was the palpable subtext for the awkwardness and tension around an extremely conspicuous decision that Commissioner Adam Silver decided to make, which was to not discuss the investigation into Steve Ballmer out loud in front of the room of owners at any point. Which is even more amusing when you also realize that Steve Ballmer also serves on the NBA's audit committee, by the way, in which his responsibility is to focus on financial transparency and communication. The silence in that big room pushed multiple irritated owners, I am told, into a series of private side chats over drinks between sessions at the luncheon at the St. Regis afterwards about Kawhi's $28 million no show contract and his $20 million in stocks. All that adding up to $48 million in total value and the $50 million that Steve Ballmer had personally invested into Aspiration, a company that Adam Silver said he had never heard of before, which set the stage for the commissioner's public press conference on Wednesday afternoon. I mean, the amount of attention that this has commanded, certainly no one out there is saying, oh, this is just business as usual in the NBA. What's the big deal? This is what teams do when they want to sign players, people. In fact, the suggestion is this is highly aberrant behavior. And which is why in response to a podcast and some additional media reports, we brought in the big guns on the investigation and no one and so I guess I should just say here that yes, I personally am most biased in terms of I think this whole thing seems pretty cut and dry. And it's not just because I've talked to multiple NBA owners who effectively have told me the same thing, that the facts seem clear, but it's also because what it takes to prove cap circumvention Salary cap circumvention in the collective bargaining agreement, which has been characterized by Commissioner Adam Silver as a cardinal sin in the league. That also, according to the language, seems cut and dry in terms of what is useful for the league to consider. And so I just want to quote Article 13, Section 2 of the collective bargaining agreement with the NBA and its players under the heading, quote, no unauthorized agreements. It says a violation may be proven by direct or circumstantial evidence, including, but not limited to evidence that a player contract or any term or provision thereof cannot rationally be explained, end quote. I had forgotten the last part, the cannot rationally be explained clause.
- [11:26]
D
But, I mean, well, that's what the investigation's for.
- [11:30]
C
David, what does that mean? Legally cannot rationally. And I think we understand what that means, but in the legal sense, how.
- [11:37]
D
Do you prove nothing? It's completely wishy washy. There is no legal threshold. Remember, we are not in a court of law.
- [11:43]
A
The burden is on the league. If we're going to discipline a team, an owner, a player, or, you know, any of the constituent members of the league, I think, as with any process that requires, you know, a fundamental sense of fairness, the burden should be on the party that is, in essence, bringing those charges. I was only quasi joking with someone earlier that, you know, when people talk about a smoking gun, that's obviously circumstantial. It means the gun is still smoking. It must have recently fired. I'd say in the case of the league, we and our investigators look at the totality of the evidence.
- [12:22]
D
So this is not criminal, this is not civil. This is a violation of a collective bargaining agreement. And what it actually means is that we, Wachtel Lipton, will interview people with.
- [12:32]
A
The Clippers, the law firm that the.
- [12:34]
D
NBA hired to do this investigation. It won't take a day, it won't take a week, it won't take a month, It'll take much longer. As you know, when you are the accused, the burden is on the accuser, not the accused.
- [12:43]
A
We're in podcast court now.
- [12:47]
C
This is a defendant, Steve Ball, in.
- [12:50]
A
The podcast justice system.
- [12:51]
D
It is quite something to be in podcast court, because there's a word for it that we used to use. It's the court of public opinion. Yes, and the irony is the court of public opinion has no rules of evidence, Right? It has. No.
- [13:02]
A
No, judge. The irony that the court of public opinion is currently strewn with your peanuts. So I should say that Steve Ballmer here for the historical review, was punished by the NBA in 2015 for attempting to circumvent the cap with DeAndre Jordan, who was a fraction of the player that Kawhi Leonard is in terms of the attention he received. Steve Ballmer's team and Uncle Dennis then got investigated for complaints about capture convention for Kawaii in 2019. The league reportedly found no evidence there that requests from Uncle Dennis for these secret sweeteners, ranging from partial ownership to guaranteed sponsorship money, were actually granted by the Clippers.
- [13:37]
C
Right.
- [13:38]
A
So Uncle Dennis, for the uninitiated, is Dennis Robertson. Uncle Dennis Robertson still has not responded to any of our requests for comment, just like Kawhi's agent, Mitch Frankel has not. Although we should all acknowledge that we just read Bruce Arthur's article in Toronto Star that reported that Uncle Dennis had specifically, it turns out, requested two things. First, quote, ownership stakes in outside companies. You may now recall that whole little thing I did about AGO Partners and the $20 million in equity. And second, one of Bruce sources recalled that Leonard's camp outlined its approach to the deal as quote, we don't want to do anything, end quote. Meaning it was a non starter for Kawhi to be asked to do anything in exchange for the money that they believed they deserve. And so here we are again. The Clippers are being investigated the third time in 10 years.
- [14:34]
D
But we're in the podcast court. Yeah, we are not in the true legal system. So Wat Lipton is not all that interested in what happened with DeAndre Jordan. They're not going to spend a dollar, though they'd love to spend a dollar and bill $2 looking into what happened with DeAndre Jordan. But they're not. This is a separate incident that will be looked at in its entirety separately.
- [14:55]
C
Well, that. That's for their investigation. But ultimately the judge is Judge Silver.
- [15:00]
A
That's what I'm curious.
- [15:01]
C
And so he has knowledge of the recidivism of the repeat offenses, and he will almost certainly take that into account in the same way that Draymond Green gets suspended a little bit longer with every additional outburst because of the. The pattern of behavior.
- [15:19]
A
Which is all to say that what Steve Ballmer wants everybody to know is much like playing against Draymond Green in a game, this whole thing has been a real kick in the nuts. Now, should I have sniffed it out? Maybe I feel embarrassed and kind of silly that I didn't sniff it out, but I didn't. I made the investment. A lot of other smart investors didn't sniff it out either. It's also true I've made a bunch of bad business deals and investments in my life, and I've made some good ones. This was fraud and a bad investment, and I. I'm embarrassed by that. The thing I keep thinking here, as David is chewing on more peanuts, is that two things can actually be done at once. You can podcast and eat peanuts. Steve Ballmer could have been misled by aspirations master of deception while also trusting aspiration to help his Los Angeles Clippers help Uncle Dennis deceive the NBA. That, if anything, is the view I bring to what we're about to do here today.
- [16:21]
D
Okay, so I don't want to say a word because it will only delay what we're supposed to be doing here.
- [16:27]
A
Everybody's caught up. We're in the present tense. And at this point, David, get your hand off the folder for one last time because we need to go back in time. Okay, here we go. We're going back in time to a critical moment in Steve Ballmer's relationship with Kawhi Leonard and aspiration that I have not yet discussed with you guys. And I did not appreciate it myself until it hit me. Kind of like an apple falling from a tree, as it were. And you're going to get hit with it too, after the break.
- [16:56]
C
Oh, come on.
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D
It's like a game show.
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- [19:27]
A
The month is December. The year is 2022. So you may recall that Kawhi Leonard is back from his torn acl. He's now tearing up the Boston Celtics in December of 22. I just need to establish that. You may recall that in the last episode we did, I convinced an anonymous source and aspirations finance department to go on tape and there was a condition, A condition that we use what? Voice modulation, which I granted because of the ongoing parallel investigations by the DOJ and the FBI and the SEC and the Commodity Futures Trading Commission, otherwise known as the cftc. And I want to respect just the sensitivity of the fact that this is a giant national scandal involving one of the richest people on the planet. All of which is to say that for this episode, what we're about to do here involves the product of the vetting and fact checking and persuading that I spent time doing with another source who I convinced to separately talk to me about December 2022 and they agreed to the same conditions.
- [20:28]
B
I was a very senior executive in finance. I was also painfully aware of the fact that the contract between Kawaii and Aspiration was to circumvent the salary cap. I too brought that up with some of the more senior executives at the firm who were also aware of this fact. And much like many of the very senior executives Aspiration, I had to spend a lot of time having conversations with some federal agencies about some of what was happening inside of Aspiration.
- [21:03]
A
And I also just got to say thank you to you original source number one, because when you came on the show the first time, no one had any idea what we were doing. Now you've had the experience of listening to other people listen to your voice modulated self and could you clarify whether you have also been interviewed by federal agencies in the course of their investigation into Aspiration.
- [21:30]
B
Yes, I have.
- [21:32]
A
So what was December 2022 like inside of Aspiration as you personally experienced it?
- [21:39]
B
So December 2022, the company had virtually no income, no pipeline of clients, was really looking like it wasn't going to be able to make payroll. The ship was sinking. It was just a matter of how long we could hold on. And we ended up doing two rounds of layoffs. The first round was in the first week of December where a bunch of very high level executives got laid off. The president, the general counsel, some C suite. And then the second round of layoffs, which was in the second week of December, was almost 20% of the entire staff. So about 100 people were laid off. I mean, to say it was bleak is a, it's almost an understatement. And I asked a lawyer, given the scenario of the company and what I'm seeing on a daily basis and the literal lack of cash in the company, what do I need to do to protect myself? I didn't want to have exposure if these numbers, as I had and as a lot of other executives I were speaking to had suspected, were not 100% accurate. I literally did retain a law firm. And I was sending emails to other people in the C suite letting them know that unless I saw certain things on paper, I was unable to proceed with bringing in these investors.
- [23:12]
D
The last sentence is what's interesting to me. They're out trying to find money. So when you're a company and your revenues are being out gunned by your expenses, you've got two choices. One, you can lower your expenses or two, you can increase your revenues. In the absence of either of those, you got to go three, and that's going to the capital markets. You can take money off a credit card. That's the crudest way to do it. You can borrow money at those usurious interest rates or you can go to a bank and try to get a line of credit. You can get a bridge loan from a bank which is you borrow money to make payroll until your next revenue payment comes and then you pay that bridge loan back. You can get long term financing from a bank, sometimes a bank of ill repute, and it just depends what interest rate you pay. So you have to go through all of those options, which I assume aspiration did.
- [24:02]
A
So they badly needed money. The people that we talked to, the one news source, source number two is saying that they didn't feel comfortable asking others for money. Given what they were learning about the company behind the scenes. These are the people, by the way, who cooperated with the federal agencies. Just give people a sense of like, who's talking to me? This company. To summarize what our two sources now have told us on tape, December 2022 was. So for instance, here's another thing that happened in October of 2022, right? So this is by Q4 of 2022, the week before the NBA season started, there was a Bloomberg headline out in public that everybody could see about how Andre Czerny Aspirations Co Founder, CEO, the guy who had signed and executed Kawhi's secret no show endorsement deal right next to Kawhi's signature, had resigned from the company. But now, briefly, imagine you're the Clippers. Imagine you're the team that Amin is wearing on his chest in December 22nd. In September of 21, you will recall vividly, Steve Ballmer had announced Aspiration as the thing on their chest. Their jersey patch sponsor, right. The first founding partner of the Intuit Dome Aspiration agreed to pay, do you Remember? More than $300 million to the Clippers in sponsorship money over 23 years. Given what you now heard about December 22, spoiler alert, that didn't exist. What was clear though is that inside of Aspiration, according to my seven sources, as well as aspirations internal cash forecast for sponsorship payments, which is a spreadsheet I obtained that you, David, now get to review in your mystery folder there. You can get it now.
- [25:46]
D
You have the cash flow of Aspiration.
- [25:48]
A
It's the cash forecast for sponsorship payments. Don't read it out loud yet. So the smoking gun question we're all contemplating, it's the thing that I think I have uncovered that we're about to learn about. I think it's what the NBA just hired a very high powered law firm to search for. Because by the end of 2022, one of the company's absolute top priorities, despite the total financial show enveloping this company, was simple. Hey, KL2Aspire LLC. David, what is it marked there on the cash forecast that Aspiration was internally using to make its sponsorship payments?
- [26:28]
D
It is marked critical.
- [26:30]
A
Yeah. Because in Kawhi Leonard's four year secret endorsement deal with this fraudulent company, which is now on the express train to bankruptcy, Kawhi's 7 million annual salary doing absolutely nothing needed to be paid quarterly.
- [26:44]
C
Right?
- [26:44]
A
Okay. For $1.75 million installments. The first installment, 1.75 million due in June of 22. The second, 1.75 million installment due in September. The third 1.75 million installment due in December. But I mean, Aspiration had a problem. What do you think the problem was about making those payments?
- [27:09]
C
I don't have any cash.
- [27:11]
A
According to this Green Bank's Silicon Valley bank statements, which I have acquired and confirmed and having the folder in front of you, Amin, when does Aspiration send that first wire to Kawai Leonard and how much is it? It is due in June 22. What do you have in front of you there?
- [27:30]
C
July 6, 2022. Wire out to KL2 Aspire LLC. $1.75 million.
- [27:40]
A
So the first payment, David, is late of this critical priority deal doesn't arrive until July 2022. Not encouraging in terms of the launching of this business relationship. Likewise, your folders will include aspirations September and October bank statements for your review. You may now look at that. This is when the next $1.75 million is due to be wired.
- [28:08]
D
And spoiler alert, there is no transaction involving KL2 Aspire LLC.
- [28:14]
A
I mean, I'm gonna do you a favor and tell you that I didn't see that either on that statement you have in your hand. Look, the lateness of these payments, right? So September was supposed to be the second payment. There was nothing there. October comes and goes, and Kawhi Leonard is now playing NBA basketball for the Los Angeles Clippers and not getting paid by aspiration. And so now we're in November. So I just ask you guys to imagine now, what do you think Uncle Dennis or anybody in his shoes would be feeling during this time as this contract was not getting paid and was now running late perpetually.
- [28:54]
C
Well, I mean, I'm sure he was very calm and rational and didn't pick up the phone and call them a million times, banging down the door trying to find out where the money is.
- [29:03]
A
Which is all to say that Uncle Dennis was pissed.
- [29:07]
B
So in all fairness to Uncle Dennis, he's not the only one who's calling trying to get paid. There's a huge freeze because there's no money to be spent. So from the finance team's perspective, we feel like we're on the other end of collections calls. People are constantly coming in asking for their money. But between those months when all of this is missing, so September, October, November, and leading up to December, the actual certainty of the company even existing is up for grabs. At that point, are we going to get paid as employees? Why does Uncle Dennis keep calling us? We have such bigger concerns that we're thinking about, which is our own salaries? What are we doing? Are we going to have to go through layoffs? Where is the money going to come from? But lo and behold, Uncle Dennis gets paid.
- [30:00]
A
David Sampson, former president of the Marlins, please tell us when exactly Aspiration finally does wire their months late second payment to Kawhi Leonard.
- [30:11]
D
December 15th of 2022. 1.75 million.
- [30:17]
A
So this payment was made December 15th, 2022. When was the 20% of the staff laid off the same day?
- [30:26]
C
Oh, that deflated.
- [30:29]
A
Oh, there was a lot of deflation in December 22, in fact. But the thing I want to answer with you guys here is the deeply underrated question of how Aspiration finally paid KAWHI LEONARD his second ever payment on December 15, 2022. And so, Amin, I want to point you back to the December bank statement which you have in front of you from Aspirations checking account. You may notice something that I noticed as you scan that because something happened just nine days before the wire out to Kawhi's KL2 Aspire LLC for $1.75 million on December 15th.
- [31:11]
C
On December 6th of 2022, a wire in from DEA88 Investments in the amount of $1,000,999. $999.59.
- [31:27]
A
So 1.99 million comes in nine days before Kawhi Leonard is scheduled to get paid amid the total collapse of the economic premise of this entire company. But here's what's even stranger. According to our review of Aspirations cap table and bank statements, there is no evidence that prior to December 6, 2022, DEA 88 Investments LP had ever invested in Aspiration before, which I also confirmed with my sources. Which means that DEA88 Investments LP chose to invest that precise amount while this company was basically sinking into the ocean. And so, given all of this, I said to myself, should probably look up the registered agent on file for DEA 88 Investments LP. And it turned out to be a man named Dennis.
- [32:24]
C
Dennis Robertson.
- [32:28]
A
Not Uncle Dennis, A different Dennis.
- [32:34]
C
Another Dennis.
- [32:35]
A
Dennis Wong. Oh, Dennis Wong. Our different Dennis is a fascinating character. Different Dennis, the guy who paid $1.99 million to Aspiration nine days before Aspiration, paid $1.75 million to Kawhi Leonard on the same day aspiration laid off 20% of its staff. Is this Dennis? Not Uncle Dennis, but the Dennis seen breaking ground on intuit dome in 2021 in a Covid mask off to the side of Steve Ballmer in this video, which we played in episode one, no less than five feet from Kawhi Leonard. He, in fact, is the Dennis in this other video we have who is literally in the shadow of Kawhi Leonard and Steve Ballmer in hard hats at the Intuit Dome construction site. There it is. He's got a jersey. He's got a jersey and a hard hat with his name on it.
- [33:28]
C
Oh, my God.
- [33:28]
A
God. He, in fact, I mean, is the Dennis you can find sitting courtside right next to Steve Ballmer, as in this photograph.
- [33:38]
C
Oh, man.
- [33:40]
A
Dennis J. Wong, our different Dennis, is the vice chairman of Los Angeles Clippers.
- [33:48]
C
Come on, man.
- [33:50]
A
He is the one and only limited partner, in fact, of the team. This has not been reported previously, but Steve Ballmer, the richest owner in all the sports by far, has a very strange arrangement with his ownership group, because the ownership group is Steve Ballmer owning 99%, right? And Dennis J. Wong owning 1%. And that's it.
- [34:10]
C
And that's current.
- [34:12]
A
That is today. Dennis J. Wong is the alternate governor of the Los Angeles Clippers. He is the guy that Steve Ballmer empowers to attend the Board of Governors meeting when Steve Ballmer can't make it.
- [34:28]
D
Can I just repeat it in a way that uses my brain, the way it's Rolodexing at the moment? Are you saying that the 1% limited partner of the Los Angeles Clippers, who is the vice chairman of the Clippers, made an independent decision to invest in Aspiration for this first time in his own name or his own entity's name nine days before Kawhi Leonard got paid when no one else was getting paid?
- [34:57]
A
I am saying that is exactly what happened. And I am also saying that you should probably know that Dennis J. Wong was also Steve Ballmer's college roommate at Harvard in 1975.
- [35:07]
C
These are the things that I'm kicking around my head. I got my Clipper jersey on. I'm trying to think about this in the most innocent way and say, well, maybe the Clippers, and by extension, Dennis Wong, didn't know that Aspiration was headed to the. And so he's like, hey, Steve, what's the name of that company you invested in? $50 million. Like, oh, aspiration. I love them.
- [35:32]
D
Cool.
- [35:33]
C
I think I'm gonna finally get off my. My keister and go ahead and put in a little quiche on it. Two million sounds about right.
- [35:41]
D
There is no way that Dennis Wong was not aware of the existing relationship that Steve had with Aspiration.
- [35:47]
C
It's not that. It's. Was he aware of the existing financial dire straits that the company was in?
- [35:53]
D
I don't Think it mattered to him if he had been asked if he needed to put in the 2 million to get it to Kawhi? He didn't do it with the expectations, David.
- [36:01]
C
I'm trying to give them the benefit of the doubt here.
- [36:03]
A
We reached out to Dennis Wong via email by a phone number linked to him in records database. Also to the Clippers with interview requests, detailed list of questions as we do here at Pablo. Tori finds out, we outline our reporting and Wong did not respond before our deadline. But the Clippers wrote us a new statement, quote, the details of our relationship with Aspiration are under NBA investigation, but it is clear the company was a house of cards that defrauded Steve and many others. We look forward to sharing the facts with the league and providing them with all the information they need, end quote. Now, when we responded to that statement with follow up questions about Wong's investment, the Clippers didn't respond. I mean, I want to, I want to validate your attempt here.
- [36:59]
C
Right.
- [36:59]
A
And I want to acknowledge something which is that if you do think that maybe Dennis Wong was blind to the utter mess unfolding inside of Aspiration at the time.
- [37:07]
C
Right.
- [37:09]
A
A useful detail to know is that his daughter just happened to be an employee at Aspiration.
- [37:16]
C
Jesus Christ.
- [37:16]
A
Dennis Wandsdaughter, according to our LinkedIn bio which reads Project Manager, Operations and Strategy. Which means that through his college roommate and partner, Steve Ballmer, who had invested $50 million of his own money into Aspiration and through aspirations deal that was collapsing with the team Dennis co owns, the only limited partner of the team, the Clippers, and also through his own daughter who's witnessing the sinking of this ship firsthand, who my sources all knew. As a colleague, he had several very informed ways to know quite a bit about what company he was sinking $2 million into. Right. As Kawhi Leonard needed to be paid. 1.75.
- [37:55]
C
It's almost like the opposite of insider trading, right? You had the scoop to not put money in.
- [38:04]
A
Yes.
- [38:04]
C
Unless you weren't investing in this to make money. You were investing in this for a different reason.
- [38:11]
A
And I should also clarify that. Let's call him Grandpa Dennis. Grandpa Dennis specializes in real estate. He's a brilliant and wealthy investor and he's a noted philanthropist, including to one conservative think tank. The guy knows his way around a dollar and around the NBA. What Dennis J. Wong is most known for actually is helping build the building that his old roommate cares about more than any other. Damn, I'm fired up. I have to say. I'm a Little anxious tonight.
- [38:47]
C
I love what we built, but I.
- [38:50]
A
Want all of you to love what we built. But my partner, Dennis Wong, sitting here in the front row, that's in the real estate business, and he said, come on, we've known each other since 1975. Come on, we can do this. Bomber, let's go. And I said, okay, okay. We need our own house. I just want to acknowledge what we've established here in a simpler way, which is that the only other owner of the team that is denying that this was Cap Circ Convention invested almost exactly the amount of money needed to finally pay off Kawhi Leonard, having never invested in this company, which was in December 22nd, as you've exhaustively conveyed going into this year. His college roommate is Steve Ballmer, who put in 50. His daughter is an employee, as well as the basic fact that, I don't know, maybe he just had a sense that $2 million into a company that had previously raised over 300 was a weird thing. As my first source did want to underscore.
- [39:59]
B
There'S multiple things that are conspicuous. One, we're broke. We're broke. So to invest in a broke company is beyond me. Really don't understand it, but I might not be a very sophisticated investor. So that's one thing. And then the other thing is the amount that's being invested that's a such a nominal amount. If we're talking pure investment, especially in a late stage startup that's in the process of a spac or on the outside date of a SPAC or going to SPAC at some point and has already raised in a year earlier, $300 million. What does $2 million buy you?
- [40:44]
A
But I did want to know what my second source knew at the time about the different Dennis in question.
- [40:52]
B
I knew the name Dennis Wong because I got two texts from this very senior, this very senior executive at the firm regarding Dennis Wong.
- [41:06]
A
So inside of aspiration, Dennis Wong's investment was identified as an investment with the clippers clearly attached as part of the identification.
- [41:16]
B
Yeah, and I do have another text as well. This is from November 13, 2022, and it says Wong is Ballmer partner.
- [41:27]
A
How surprising is it that a new investor would put money in in December 2022 who had not already clearly been deeply invested into the company?
- [41:40]
B
So it is beyond shocking. And I will tell you, I knew that the board, which is Ibrahim Hussein, who's been indicted, and Joe Sandberg, who's been indicted, I knew that they had put money in in December to make payroll and make rent and all that material. It is not a rational investment that someone would make. So it is. It is very shocking to me that 2 million was made as an investment by Dennis Wong, who in my text is identified as the Clippers, Steve Ballmer's partner a week before 1.75 million was paid to Quiet.
- [42:25]
A
Okay, so this is where I just gotta jump in here to point to yet another document that Pablo Torre finds out has a obtained. Because this document is the stock purchase agreement dated December 9, 2022, made by DEA 88 Investments LP and signed by its president, Dennis Wong, ultimately giving the Clippers vice chairman and alternate governor and only minority owner of the team, not to mention Steve Ballmer's college roommate, 0.072% of an eventually bankrupt company. But the big reason I wanted to mention this here is because this contract also very clearly discloses some very important and for any potential investor or attorney, very alarming facts about Aspiration at this moment in time. For instance, the company is in default. Furthermore, KPMG resigned as the company's independent auditor. End quote. Also, Aspiration, the company in question is facing significant litigation for millions of dollars as described here, not to mention inquiries from government agencies including FINRA and the sec. Now, notably, and in corroboration of our second tape source who had told me this previously above, the only other two investors listed in this document who decided to invest alongside Dennis Wong and his $1.99 million in December 2022, as all of this is happening after being presented with these same same alarming disclosures in writing are Aspiration co founder Joe Sandberg and Aspiration board member Ibrahim Al Husseini, the two individuals who have pled guilty to wire fraud this year in federal court.
- [44:36]
D
What's interesting to me is that when you put money into a startup or into any company, you are told here is the sources of funds, here's the uses of funds and you put in $2 million into a company. Hey, what are you using it for? Are you paying down debt? Are you using it for payroll? Are you using it for research and development? Are you going to try to cure cancer? What do we got here? It would seem to me that Dennis Wong would not be shocked to hear that his money was being used to pay Kawhi. But it would be interesting to find out in my head is did he think that he was putting in money to save the earth, that this was 2 million that was required to keep it going?
- [45:11]
C
That's the part that I'm trying to get at from a I'M giving you guys the maximum benefit of the doubt. Dennis Wong, who has a daughter that works for the company, I have to assume even if the daughter was not in the finance department, she wasn't. She was a project manager. She would still be aware of the general tension in the company. I've worked at places where there was that tension.
- [45:35]
A
President got fired, CEO turnover, general counsel got fired.
- [45:38]
D
Shouldn't be doing her job. She may not be in the office. She may just look every two weeks to make sure there's a meager, meager payment coming.
- [45:46]
C
But you know, you don't know what's up. But you know something is up.
- [45:50]
D
You know, it's easy to argue.
- [45:52]
A
Is it rational? Is the question right for Dennis J. Wong?
- [45:57]
C
Podcast court. Here we go.
- [45:58]
A
To put in, coincidentally, just enough to get the most important employee of the Los Angeles Clippers paid at the scheduled date with just nine days to go.
- [46:11]
D
Now what Wachtel has to do is now the Clippers have to explain this one too. They have to explain this investment because the 50, you know, you tied it to 48. 28 plus 20.
- [46:23]
A
That was months between.
- [46:25]
D
I could argue how you did that, but it's, it has to be explained. This one for certain has to be explained. And, and I don't know how he will rationalize it, but he will have to when he meets with Wachtel.
- [46:38]
C
I don't want to get ahead of ourselves, but if you're the Clippers and this information has now come to light, is the play now that Dennis Wong was a rogue agent operating outside of the purview of Steve Ballmer and the rest of Clippers leadership?
- [46:58]
A
That's right. The only man Steve Ballmer trusted to own a percentage point of his team, the only person is the guy who betrayed him, even though they've known each other since 1975.
- [47:08]
D
Now will he go full IPE?
- [47:10]
A
Well, now let's start. Let's talk about that. That's look, so as we're contemplating endgame strategies because I believe that this is the single most indicting piece of documentary evidence we have provided this series of facts and this context, I should say here to be very clear, just full disclosure that Pablo Torre finds out is independently produced by Meadowlark Media and distributed by the Athletic. The views, research and reporting expressed in this episod solely those of Pablo Torre finds out and do not reflect the work or editorial input of the Athletic or its journalists. But this is what I'm contemplating. According to the reporting we have now shown how Steve Ballmer invested $50 million into Aspiration, made the company the founding partner of his basketball team's dream arena. Ballmer introduced his superstar Kawhi Leonard to the company Aspiration. The introduction got made and then they were off to the races on, on their own. We weren't involved. A year later, as the company is again going under, laying off 25 of its staff, losing the co founder, CEO, the president, general counsel, dozens more people. As that's happening, Kawhi Leonard is awaiting his quarterly payments of $1.75 million. And so of course, the Uncle Dennis's of the world come to collect. So with this payment being late, and because the company was already running out of money, which is, imagine you're Steve Ballmer. In fairness to him, how would I be able. Look, they conned me. You're one of the richest men in America. You put in 50, right? And you're saying by payment two, you got to get the different Dennis. Allegedly Dennis Wong, Grandpa Dennis, putting in 1.99, wiring the money nine days before Kawhi got paid for his top secret no show job that by the way, nobody knew about for more than three years until we reported it. I mean, I just want to now throw it to our very senior executive source in the finance department at Aspiration for a second.
- [49:13]
B
It really looks like the Clippers, through Dennis Wong, put in 2 million in order for Aspiration to be able to make the $1.75 million payment to Qu. That. That's what it looks like to me.
- [49:28]
A
So the game is, is this a smoking gun? I don't know how much more you need in podcast court or frankly, others. Look, at this point, I want to have you guys read the Clipper's two statements because I want to again just give them the opportunity to have foreseen that all of this could be out there. I mean, they said what?
- [49:59]
C
This is a quote from the chief communications officer of the Los Angeles clippers. Quote, neither Mr. Ballmer nor the Clippers circumvented the salary cap or engaged in any misconduct related to aspiration. Any contrary assertion is provably false.
- [50:15]
A
And then to Sham Sharania after the.
- [50:16]
D
Episode came out, neither the Clippers nor Steve Ballmer circumvented the salary cap. The notion that Steve invested an aspiration in order to funnel money to Kawhi Leonard is absurd.
- [50:31]
B
Absurd.
- [50:33]
A
So, David, I turn to you because when you ran the Marlins for a living, for a very long time, you also specialized in crisis communications press releases. What does this all strike you as? Like how do you, what do you, what do you do?
- [50:47]
D
And investigations and being deposed.
- [50:51]
A
That's right. As a guy who's been in real court and podcast court, what do you do with this? I want you to play that role for us.
- [50:59]
D
Steve Ballmer will not be going on ESPN for a follow up interview. Number one, the Clippers shall not be doing anything other than saying it is an open investigation and we are not commenting. Number two, the NBA will have no further comment because it's pending investigation. Number three, Number four is they take the information that they will get from you that they just got and that gets added to the list of okay, we need to check on this. This needs to somehow be rationally explained because it's yet another bit of evidence that shows the salary circumvention. So what you've done is just given Wattel more work, more billable hours. I would expect them to have a statement that says thank you because they will get a better vacation house. The firm will be have better distributions to its partners. The NBA should be sending a statement that says you because they will be spending more money on this investigation which they will then be billing back to Ballmer. Little known fact, the investigation will end up being paid for by Steve Ballmer.
- [52:00]
A
A real kick in the peanuts.
- [52:03]
C
Way to bring it back.
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A
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This time for real.
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- [53:57]
A
So the question of punishment given that we exist in podcast court, talking about an NBA court, curious what's going on over there. The language that we outlined before about rationality in the CBA and about circumstantial versus direct evidence. I just got to remind people that the only real and kind of vague analog to this story was about a quarter century ago. I mean, you remember it.
- [54:23]
C
Joe Smith and the Minnesota Timberwolves.
- [54:26]
A
So what happened, David, in that story with the owner Glenn Taylor of the T Wolves and Joe Smith, number one draft pick at one time there was.
- [54:37]
D
Actual evidence, not circumstantial, not any sort of thought or hypotheses that Glenn Taylor had a signed agreement which they ended up finding with Joe Smith to pay him money outside of his contract.
- [54:50]
C
It was a promise to pay him a larger deal when his current way less paying deal was expired.
- [54:59]
D
It's what we're told in baseball never to do with someone like Shohei Ohtani when he's coming from Japan. You can't promise him more than you're giving him because we'll find out.
- [55:07]
C
Right?
- [55:08]
D
And MLB does investigate those things and doesn't like to find that stuff out. But all teams suspect that there are nefarious things that go on.
- [55:17]
C
Again. The the legend as legend has it, it's you get these verbal promises all the time. This happens a lot. But the Timberwolves and Joe Smith had it in writing because there was a fear that Glenn Taylor was not going to survive long enough to make good on that promise.
- [55:37]
D
Smart.
- [55:37]
C
And so they wanted it in writing so that if he did pass and the new owner comes in, he can't say I'm not going to pay you any of that. It's in writing. You guys promised. That's why they got caught.
- [55:50]
A
Well, the punishment, right? The five future first round picks, they regained two after subsequent appeals. The $3.5 million then record fine, the contract being voided, it erased his Bird rights, also made him a free agent. Joe Smith, Glenn Taylor, the owner suspended for a season effectively. Kevin McHale, the VP of basketball ops suspended effectively unpaid leave for that season. But the thing Amin just said about how this all came to be. Yes There was this concern about Glenn Taylor not living right long enough to pay out the contract. But the similarity to me as Glenn Taylor is very alive and well at press time is that the similarity is legal. So the way this came out was that there was litigation during an agent dispute and a lawsuit and it sprung open this documentary evidence that came from something else. In that way I am reminded of how I came upon this story which is that this all would have been fine if not for this other crazy thing that happened to unlock the door behind which you were hiding. Now in the Joe Smith case, a fairly straight ahead story, in this case, a multi part podcast court series. But I for now just want to defer to the words of an existing NBA minority owner on what could or should happen. Look, if, if your reporting is right.
- [57:26]
C
And Steve knew, then it's over, right?
- [57:30]
A
So what do you think? What do you think the punishment is that's fair if in fact he's toast?
- [57:35]
C
I mean he's got, you know, it's far worse than Joe Smith.
- [57:39]
A
So third investigation in 10 years. A lot's on the table given that framework. And David is laughing.
- [57:46]
D
I'm laughing because here's what's going to happen is that Mark Cuban is going to tweet at you again because you clipped that bit. And then he is going to ask to speak to you again and you are going to honor that request. And he is then going to say what he is going to say, hey, that's cool what you found out. But Wong, Wong, that's your rabbit in a hat. We don't give a about Wong in the industry. It's coming.
- [58:17]
C
I just can't get over all of it. David, I gotta reiterate this again for everyone to say, oh, he would never do this is an incredibly elaborate way to salary gap circumvent. If in fact the allegations are true.
- [58:34]
A
If the reporting is correct, if the.
- [58:35]
C
Reporting is correct, if everything that we are led to kind of connect these dots ends up to be accurate. I want to stop anyone from saying they would never be that sloppy. This is incredibly elaborate. This is not Joe Smith to your point where it's just.
- [58:53]
A
No, it's not a paper in a drawer. Yeah, it's they, it's. We found the papers but there are clues littered throughout the papers that did not have to ever be publicly disclosed. Like I just want people to understand this.
- [59:07]
C
It's like Ozark.
- [59:08]
A
For years they got away with what we are describing if it is in fact what we are describing. And we haven't even got into all of it. But in this story that standard of rationality I am led as I consider what Article 12 for penalties lists enumerates right A fine of up to 7.5 million direct forfeiture of draft picks, voiding of a player contract fine of up to $350,000 for the player suspension for up to a year for any team personnel found to have willfully engage in such violation the voiding of any transaction or agreement found to have violated league rules, all that stuff. The thing I think of as I think back to how we started this whole thing is how we ended it when we first gathered here because remember, in honor of aspirations roster of celebrity endorsers, the climate change Avengers of apparently Kawhi Leonard, but also on The Record Leonardo DiCaprio and Drake and Robert Downey Jr. We got our own Iron man to plant a tree to zero out ish our journalism's carbon footprint. It wasn't just any tree, as Amin of course recalls. It was an apple tree that I.
- [60:20]
D
Said would never have an apple.
- [60:22]
A
Well, we planted it right outside the building that Steve Ballmer and Dennis Wong built and we paid it a visit. And here is Iron Man.
- [60:34]
C
Oh, he's coming back.
- [60:35]
A
There he is, right in front of the intuitome making another site visit to our planting. We thought it was important to have him check it out to see if it was still there to see how our tree is doing.
- [60:48]
C
It's there.
- [60:48]
A
And there it is. Look at that Napolis. David, in your face. Still standing.
- [60:55]
D
Four brown leaves.
- [60:57]
C
Those leaves are emaciated.
- [61:01]
D
I should also point out the math, if you don't mind on 7.5 million, which is supposed to be a serious fine for Steve Ballmer. That's the equivalent of a $10 fine to someone who has a net worth of 200 grand.
- [61:12]
A
It may explain why he has allegedly tried to do this three times. It also helps explain why our investigation quite like our tree continues to grow.
- [61:29]
D
Apolis.
- [61:31]
C
I gotta take this jersey off. I cannot so continue to support.
- [61:46]
A
This has been Pablo Torre finds out a Meadowlark Media production and I'll talk to you next time.
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B
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