The BCS presidential oversight committee, which made the decision Wednesday, also attached several conditions as it let the Fiesta Bowl remain part of the system for deciding college football's national champion. The demands include strengthening the Fiesta Bowl's board and imposing greater supervision of bowl executives so the problems are not repeated, according to materials obtained by The Associated Press.
"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 with the AP. He added that the $1 million fine was meant to reflect the "serious nature of the matter."
The BCS called for the $1 million 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 lavish and 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 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.
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 in the wake of the Fiesta Bowl's problems.
The actions taken by the BCS were "serious and constructive," NCAA spokesman Bob Williams, adding that the subcommittee on bowl licensing 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 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 accused the Fiesta, Orange and Sugar Bowls of spending that violated their tax-exempt status. Sanderson said that the BCS undermined its credibility by not looking at the other bowls.
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.
"Indeed, were it not persuaded of the sincerity of the Fiesta Bowl's commitment to these reforms, the task force would almost certainly not be recommending that the BCS Group continue its relationship with the Fiesta Bowl through the duration of the current agreement," the BCS said.
Among other things, the BCS said the Fiesta Bowl must also:
— 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.
As to whether the moves will satisfy critics, executive director Hancock said, "These are strong actions in keeping with the nature of what was revealed in their report. These actions were not taken to satisfy or not satisfy any critics. They were taken because they were the appropriate actions, in light of the findings."