N.C. State University is refusing to turn over records — which should be public — that could shine a light on a corruption scandal involving Adidas and former basketball star Dennis Smith Jr., multiple media outlets claim in a new lawsuit.
The News & Observer, The New York Times, WRAL and ABC11 have sued N.C. State, claiming the school has been “knowingly and intentionally violating” the law by refusing to turn over public records.
At issue is a high-profile scandal involving college basketball players and coaches in which several people went to prison after being convicted of federal crimes, including fraud. The FBI’s investigation into college basketball and the subsequent trial focused on Adidas, the apparel company that has contracts with N.C. State, Miami, Louisville, Georgia Tech, East Carolina and other college sports programs.
Duke, UNC and Wake Forest have contracts with Nike and were not implicated in this investigation.
For the past two years, N&O sports reporter Steve Wiseman and investigative reporter Dan Kane have been asking N.C. State officials for documents the university provided under federal subpoena in the investigation, which includes electronic communications and phone records.
They also have sought documents related to the NCAA’s investigation, which is separate from the criminal investigation. That includes cell phone records from former head coach Mark Gottfried that Gottfried is fighting to keep confidential, in a separate court case, the N&O has reported.
After months of incomplete responses, the N&O and its media partners filed the lawsuit.
The university said Wednesday night it has not seen or been served with the lawsuit and would wait to comment until officials have reviewed it. But a university spokesperson said officials “disagree with the way this issue is being characterized.”
“N.C. State has released thousands of pages of documents and has acted in good faith and transparency throughout the federal and NCAA investigations,” the spokesperson said. “In addition, the university was prepared to release extensive phone records, but that release has been blocked by a temporary court order.”
Court order requested
If the lawsuit is successful, it’s possible that it would create more transparency — not just at N.C. State, but at all UNC System schools.
N.C. State isn’t the only school to have hidden records related to an NCAA investigation. UNC-Chapel Hill also refused to release records related to its bogus class scandal, including interviews of campus officials conducted jointly by campus leaders and the NCAA, the N&O has previously reported.
The media organizations are asking for a court order “declaring the requested records and information are public records pursuant to the Public Records Law and requiring the defendant, and all similarly situated constituent institutions of the University of North Carolina System, to provide plaintiffs with copies of the same, access to same or otherwise provide the information made public by statute.”
The records from the NCAA investigation are of particular interest to the media organizations. Officials at N.C. State have refused to turn them over, claiming they don’t have ownership of the documents because they exist only on an online “portal” controlled by the NCAA, and the NCAA requires university officials to sign a confidentiality agreement before accessing the portal.
However, according to a copy of that agreement obtained by the N&O, it specifically says that N.C. State is allowed to break confidentiality if “such disclosure is required by state law.”
The lawsuit argues that the NCAA records should indeed be considered public records since state law defines public records as all documents “made or received ... in connection with the transaction of public business by any agency of North Carolina government or its subdivisions.”
Officials at N.C. State, however, have claimed they did not technically “receive” any of the NCAA’s documents because they only have looked at the documents on that portal, and therefore don’t have to let the public see any of it.
“The NCAA did not provide the university with the individual documents identified in the exhibits,” a university spokesman told an N&O reporter by email in July, in denying a records request. “Those documents are only accessible for viewing on a NCAA protected site. The university does not have the ability to print, download, or copy these documents and is thus unable to provide that content at this time.”
According to a comprehensive report in The Washington Post, high school recruits are potentially worth millions to companies like Adidas and Nike if they become stars. So shoe companies fund youth and “grassroots” basketball leagues and also sometimes pay the teens to make sure they attend one of their schools instead of a rival company’s school.
Smith, a Fayetteville native, was the nation’s top-rated point guard in his high school class and became one of the best players in the country during his only year at N.C. State. He won the 2016-17 ACC freshman of the year award while leading the Wolfpack in points, assists and steals before being picked by the Dallas Mavericks 9th overall in the 2017 NBA draft.
Gottfried, the coach, was fired in February of that season, when the team went 4-14 in ACC play. He continued to coach the team through the end of the season.
According to court testimony, Smith’s family was paid at least $40,000 for him to attend N.C. State. Smith and his family members have declined numerous interview requests from the N&O.
But some of the records that N.C. State provided show Smith denied in an April 30 on-campus interview that anyone from the university paid him money. The interview was with N.C. State compliance director Carrie Doyle; former senior associate athletic director Chris Boyer; and assistant compliance director Steve Shults.
However, former Adidas consultant T.J. Gassnola testified in federal court last year that former N.C. State assistant coach Orlando Early asked for some cash to secure Smith’s recruitment, so Gassnola got $40,000 from former Adidas’ global marketing director James Gatto, who was among those convicted in the trial. Gassnola testified he gave the money to Early to give to Smith’s former trainer, Shawn Farmer, to give to Smith’s father.
Gatto denied being involved, blaming it on a sports agent. In March, ESPN reported there are confidential court records that claim Early said Gottfried gave him envelopes full of what he assumed was cash to get to the Smith family. Gottfried’s attorney denied the claim. An N.C. State spokesman later told the N&O that even if that happened, no one else from the school knew.
“If such information exists, it has not been shared with the university,” N.C. State spokesman Fred Demarest said at the time.
Doyle, N.C. State’s head of NCAA compliance, testified in Gatto’s trial last October that she didn’t know about the alleged $40,000 payment but said she had raised concerns about a helicopter ride Gottfried and Early took to Fayetteville to recruit Smith.
N.C. State officials have turned over some other records, too, including an August release of ticket logs that show Early brought Gassnola, Gatto and Farmer to multiple Wolfpack games as his guests during Smith’s recruitment and time on campus.
In the records that show Smith denying he took any money from N.C. State officials, he also said he drove his grandmother’s car while at school — and would not have done so if he was sitting on tens of thousands of dollars.
In the interview with N.C. State officials, the records show Smith admitted to reselling Adidas-issued gear on the side.
More than a dozen football players from UNC were suspended last year for a similar scheme, after they were caught selling Nike-issued team gear before the start of the 2018 season.