At the cost of a $1 million fine, the Fiesta Bowl will keep its place in the Bowl Championship Series.
The BCS presidential oversight committee imposed the penalty Wednesday in the wake of a scandal at the Arizona-based game that included apparently illegal campaign contributions from staff and lavish spending by the former CEO on parties and a night at a strip club.
Under the ruling, the Fiesta Bowl can remain part of the system for deciding college football's national champion, though in addition to the fine it also must meet certain BCS demands such as strengthening the Fiesta Bowl's board and imposing greater supervision over bowl executives.
"The message is they had cleaned house and addressed their problems, but our group doesn't believe they went far enough," Bill Hancock, executive director of the BCS, said in a telephone interview. He added that the $1 million fine was meant to reflect the "serious nature of the matter."
The BCS called for the money to be donated to charities serving Arizona youth.
In a statement, Fiesta Bowl Chairman Duane Woods said: "The Fiesta Bowl Board of Directors understands and accepts the sanctions imposed by the BCS. We think that these tough but fair measures are consistent with our commitment to reform the Fiesta Bowl's governance and rebuild trust. The fine is substantial, but we are pleased that the BCS has directed that the funds benefit the youth of Arizona."
The bowl shouldn't have much trouble coming up with the cash. In a filing with the IRS this year, the Fiesta Bowl listed more than $15 million in net assets.
A recent internal report by the Fiesta Bowl detailed about $45,000 in reimbursements to employees for political donations, an apparent violation of federal and state laws. It also revealed inappropriate spending, such as $33,000 for a Pebble Beach, Calif., birthday bash for then-CEO and President John Junker, $13,000 for the wedding and honeymoon of an aide, and a $1,200 strip club tab for Junker and two others. Junker has been fired.
The oversight committee Wednesday accepted recommendations made in a report by a BCS task force, which said it was "deeply troubled" by the Fiesta Bowl's actions. Those actions, the task force said, strongly suggest "that the bowl's executive staff frequently acted with scant regard for ethics and proper conduct. Further, it is the opinion of the task force that the bowl's board of directors over the years was negligent in its oversight responsibilities."
Both the task force and the oversight committee are chaired by Penn State University President Graham Spanier.
The Fiesta Bowl, played at University of Phoenix Stadium in Glendale, Ariz., is one of four bowls that rotate hosting the BCS national title game, along with the Orange, Sugar and Rose Bowls.
Even with Wednesday's ruling, the Fiesta Bowl is not entirely in the clear yet. An NCAA panel will decide whether to continue licensing the bowl. That panel recently delayed the decision, saying it wanted to gather more information and review the BCS task force findings. The NCAA also said it will re-examine its role in licensing bowls more generally, and has put a three-year hold on any new postseason games following the Fiesta Bowl's problems.
NCAA spokesman Bob Williams called the BCS actions on the Fiesta Bowl "serious and constructive," adding that the NCAA panel will meet next week to consider licensing of the Fiesta Bowl and the Insight Bowl, a minor postseason game run by the same organization.
Matthew Sanderson, a founder of Playoff PAC, which advocates switching to a playoff system to determine a national college football champion, noted that former Fiesta Bowl CEO Junker made $674,000, in addition to running up extravagant expenses.
"They fired John Junker and paid a million-dollar fine — I'd say the Fiesta Bowl probably came out ahead," he said. "I'd say it was a profit-making move for the Fiesta Bowl."
Sanderson accused the BCS officials of a "rush to judgment. It was an effort to get a very bad headline out of the way as soon as possible, in the offseason. They should have taken a harder look at it."
In a tax complaint filed last year, Playoff PAC alleged that the Fiesta, Orange and Sugar Bowls violated their tax-exempt status by inappropriate spending and other activities. Sanderson said that the BCS undermined its credibility by not looking at the other bowls.
The Fiesta Bowl's struggles were being closely watched by the Cotton Bowl, which is widely considered next in line to move into the BCS and has moved from its antiquated former home into the $1.3 billion Cowboys Stadium outside Dallas. Cotton Bowl president Rick Baker said in a statement his bowl respects Wednesday's decision.
The internal report on the Fiesta Bowl was conducted by an outside law firm, but Hancock rejected the suggestion that the other bowls that make up the BCS should undergo the same scrutiny.
"There's no indication of any similar improprieties in the other bowls," he told reporters on a conference call. "It's unfair to paint innocent people with the same brush." The BCS does plan to come up with "responsible governance" standards that it will require its bowls to meet.
The BCS task force said that the Fiesta Bowl had taken several steps in the right direction since the internal report came out, such as changing expense reimbursement processes for senior staff and establishing criteria to serve on the board.
Among other things, the BCS said the Fiesta Bowl must:
— Remove board members who were found to have engaged in inappropriate conduct;
— Include at least two members from the "collegiate community" on the board, such as faculty members or athletic directors;
— Conduct an annual internal audit, and share the results with the BCS executive director;
— Replace its auditing firm (PriceWaterhouseCoopers), or bring in a new supervisory partner;
— Consult with the BCS on the hiring of a new executive director.
"We think that the reforms that they have instituted and the ones we have instituted together will set them on the right path," Hancock said. But he cautioned that the bowl still had a long way to go.
"They have to regain the trust of the community," he said.