CBA: The Eagleson scandal

Sunday, November 16, 2003

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NHL players have never had it better. Since 1990-91 they've seen the average player salary go from $276,000 to $1.79 million. They are treated a lot better than some of their predecessors were during their playing days in the National Hockey League. And they owe a big debt of gratitude to a fellow named Carl Brewer and another one named Russ Conway.

Brewer, former player, and Conway, a newspaper writer, were instrumental in exposing the fraud and corruption during Alan Eagleson's reign as head of the NHLPA and his time as the most powerful man in hockey. It helped bring justice to hundreds of retired NHL players, and set the stage for big changes in the league's relations with the players.

"If I had my way, Carl would be in the Hall of Fame -- as a builder. I think he did more for players than any of the owners in the National Hockey League," Hockey Hall of Famer Frank Mahovlich once said.

Brewer, who died in 2001, had a hand in helping create and then helping destroy the career of Alan Eagleson, once the most powerful man in hockey. The man who helped a teenaged sensation named Bobby Orr negotiate a record contract with the Boston Bruins. The man who helped establish the National Hockey League Players' Association. The man who organized the 1972 Summit Series between Canada and The Soviet Union, and the 1976 Canada Cup. The man who would be elected into the Hockey Hall of Fame.

The man who ended up going to prison for defrauding NHL players and lining his pockets and those of his family, friends and associates with money that belonged to the players. The man who brought scandal to professional hockey.

And it was Brewer who played a major role in exposing Eagleson and helping bring change to the relationship between the players and the owners. It's ironic that it was Brewer, because he is the one who opened the door for Eagleson's entry into the NHL.

Brewer, a defenseman with the Toronto Maple Leafs who helped them win three straight Stanley Cups, hired Eagleson as his agent back in the mid-60's. After Brewer left the Leafs a few years later, it was Eagleson who helped him gain amateur status so he could play for the Canadian National Team.

Meanwhile, Eagleson was moving up the hockey food chain. He was a top agent, head of the players' union and an international hockey czar. But after Brewer retired from hockey, he started to have doubts about Eagleson's handling of the players' money. It had a lot to do with pension funds.

Concern over pension money was nothing new in the NHL. In 1957 Detroit' Ted Lindsay and Montreal's Doug Harvey, upset with the league's refusal to release financial information, formed the first NHLPA.

It didn't last long. The owners broke the union by using scare tactics. They benched organizers, sent them to the minors or traded them. Lindsay was no exception. After putting up career numbers he was traded to Chicago, considered the NHL's equivalent of Siberia in those days. The players finally broke and the union died.

But Brewer was indefatigable in his pursuit of the truth. He eventually was joined by Gordie Howe, Bobby Hull and others in bringing a lawsuit against the NHL for misallocating surplus pension money. Howe, who had played in the league 26 years, was pulling in an annual pension of $14,000.

Eagleson's problems were starting to mount. Some players players had been complaining for years that Eagleson was wearing too many hats. He was head of the players' union and an agent that represented both players and management. He was involved in a lot of business dealings in hockey as well. Those players hired Ed Garvey, former head of the National Football League Players' Association, to look at Eagleson's dealing as head of the union.

Garvey issued a scathing report in 1989, saying that "The conflicts of interest are shocking, but even more shocking is a pattern of sweetheart agreements with the NHL over all these years...."

At issue were Eagleson's relationship with NHL President John Ziegler and Bill Wirtz, owner of the Chicago Blackhawks and Chairman of the NHL Board of Governors. Those relationships led Garvey to call the NHL's collective bargaining process a "charade."

In essence, Eagleson worked with the league and owners to keep player salaries down. It was pretty easy to do since in those days the union was reluctant to reveal what players were making. Eagleson was basically selling out the very players he was paid to represent.

"It does not take a great stretch of the imagination to believe that when Eagleson, Ziegler and Wirtz led their respective troops into collective bargaining negotiations, the results might have been pre-ordained. Owners, players and players' wives then celebrated at a posh dinner party hosted by the owners. Everyone would attest to how difficult the negotiations had been, and how fruitful the hard-fought gains for both sides. To us, it appeared the players never suspected the scenario might have been scripted in advance." Gil Stein, the former NHL executive and briefly president, is quoted as saying in the recently released book by Bruce Dowbiggin called 'Money Players: How Hockey's Greatest Stars Beat the NHL At It's Own Game.'

The year after Garvey issued his report, player agent Rich Winter filed a complaint with the Royal Canadian Mounted Police. He alleged that that Eagleson breached his trust as players' union leader and took secret commissions from the sales of advertising at the Canada Cup tournament. Canadian authorities would eventually decide to take no action.

Meanwhile, while still waiting for a ruling on his pension money lawsuit, Brewer met with a chain-smoking, newspaper editor from Massachusetts by the name of Russ Conway, who would expose the depth of Eagleson's corruption.

Conway had become interested in Eagleson's dealings after talking with some Boston Bruin players. Brewer had some doubts about how Conway, the editor of a small, suburban Boston newspaper, was going to go where no big publications dared to go.

"Are you really going to pursue this?" Brewer asked Conway. "We've heard other people come along in the media of this country with the same song, who said they would work on a story, only to have them walk away. Eagleson just seems to have them wrapped up in his pocket."

Conway was ready to pursue it. He tackled the Eagleson issue head on. He wrote a series of reports for the Lawrence (Mass.) Eagle-Tribune in September 1991 that federal investigators used to help investigate, eventually indict and put Eagleson behind bars for fraud and theft.

Conway later put his work into a book called "Game Misconduct, Alan Eagleson and the Corruption of Hockey." Sports Illustrated rated it one of the top 100 books on sports in the 20th century.

Conway got loads of information from players and agents, who had lost faith in Eagleson. Among them was Winger, who had filed the criminal complaint in Canada. Conway even got some help and advice from Eagleson's deputy and soon to be heir, Bob Goodenow.

Players like former Bruins Brad Park, Dave Forbes and Andy Moog helped provide information. Park provided a key piece of evidence -- a 1989 letter from Eagleson to all current and retired NHL players saying that neither he, nor any family member, nor any company connected to him had ever received money from the Canada Cup tournaments. Records showed that was not true. That meant it fell under the definition of mail fraud.

Moog, a union vice-president, also provided a lot of information. Moog, like a lot of players at the time, believed Eagleson's assertion that retired players, like Brewer, were just trying take away some of their pension money.

There's the story of Brett Hull, who heard Eagleson talk about the pension issue at a meeting, asking his Hall of Fame Dad, Bobby: "What are you trying to do, Dad? Take $250,000 out of my pocket?"

Conway, writing in 1998, described a conversation he had with Moog at a pub near the Boston Garden on the pension issue. Conway wanted to ask Moog why the players refused to talk with retired players at the 1991 All-Star game about the pension issue.

When Moog brought up Eagleson's assertion about the retired players were trying to take money from current players, Conway said his response was: "That's wrong when Gordie Howe gets a pension of $13,000 to $14,000, or Bobby Orr gets a pension of $8,400, Canadian."

Moog's response: "Gordie Howe gets only 14? Get out of town, no way!"

Way.

After Conway showed Moog the documentation, Moog was a believer and he paved the way for Conway to get more documents. Conway published his first series of articles in September of 1991, and shortly thereafter federal authorities in the U.S. launched an investigation.

Conway's reports continued, other reporters started to investigate and the the incriminating evidence began to amount against Eagleson, who stepped down as NHLPA chief in 1990 and was replaced by Goodenow.

Here are some of the revelations about Eagleson's shady dealings.

The Money Issues

Eagleson billed hundreds of thousands of dollars in sometimes questionable expenses to the players' union, plus union funds were put into high-risk real estate investments involving Mr. Eagleson, his friends and associates.
Eagleson had claimed repeatedly that money from international tournaments went into the pension fund for players. But it appears the money was helped to merely reduce what the NHL and teams were supposed to pay into the fund.
Although Eagleson claimed that he, his family and associates didn't benefit from international tournaments, evidence suggested otherwise. Eagleson, his family and associates made millions in contracts associated with those tournaments. He was also apparently involved in selling advertising spots on rink boards, and made hundreds of thousands of dollars off that.

Disability Claims

Eagleson allegedly swindled nearly $15,000 in disability insurance money from former player Glen Sharpley, whose NHL career was ended in 1981 by an eye injury.
There was also the case of former Bruin Mike Gillis, who was looking for help securing his disability insurance. Eagleson told Gillis that it would be a tough case, but if the injured Bruin would give him a 15 percent cut, Eagleson said he would see what he could do. One problem though. Eagleson already knew that Gillis' claim had been approved and the NHLPA chief pocketed $41,250 on that deal.
Eagleson also allegedly worked to keep disability pay outs low and, in return, demanded kickbacks from the insurance companies.

The Bobby Orr case

Eagleson's most famous client was left in near financial ruin when his career was over. Eagleson's investments for Orr left the Bruins legend in tax trouble in both the U.S. and Canada. The legal and accounting bills and the taxes owed exceeded Orr's assets, leaving him basically bankrupt.
In 1976 Eagleson helped Orr, his career nearing an end because of knee problems, sign with Wirtz's team in Chicago. Eagleson helped pull off the deal by failing to tell Orr about a key part of the offer from the Bruins. If he stayed with the Bruins, Orr would have received and 18.5 percent ownership stake in the team. Orr never knew about the ownership stake until much later. He signed with Chicago, thinking Boston wasn't interested in keeping him.

As the investigation continued into Eagleson, the former NHL players won big in the dispute over pension money. in 1992, a Canadian judge ruled that more than 1,300 former NHL players were owed more than $20 million in pension money. Due to mounting interest during the appeals process the judgment swells to $41 million after the Canadian Supreme Court upheld the ruling in 1995.

In 1994 a federal grand jury in Boston indicted Eagleson on numerous counts that included fraud, racketeering and embezzlement relating to his position with the players' association.

In 1996 the Royal Canadian Mounted Police charged Eagleson with four counts of fraud and theft from Hockey Canada, the NHL and the players' association between 1982 and 1986.

In 1998 Eagleson would plead guilty in both the U.S. and Canada, and was sentenced to an 18-month prison term in Canada. He was paroled after six months.

In a press release announcing the guilty plea, the FBI outlined its case:

"... the first fraudulent scheme involved Eagleson’s fraudulent conversion of airline travel passes and other profits from advertising in connection with Canada Cup tournaments and other international hockey tournaments between 1976 and 1991. Eagleson urged NHLPA players to participate in these tournaments by assuring them that certain of the proceeds from the tournaments would be used to enhance their pensions and that neither he nor his family members received any monetary benefit from the tournaments. Eagleson diverted the air travel passes and certain other advertising proceeds from the NHLPA and the NHL, using them for the benefit of himself, family members, friends and associates."
"Eagleson also converted other NHLPA funds for personal expenses of himself, his family, friends and associates, for good and services unrelated and unnecessary to the business of the NHLPA."
"The third fraudulent scheme charged in the Information involved Eagleson’s fraud against former NHL player Glen Sharpley through which Eagleson converted $15,000 of Sharpley’s insurance proceeds, keeping the funds for himself."
"Eagleson’s fraudulent conduct violated the federal mail fraud stature because he used a series of mailings to the players, in which he made false representations to the NHLPA membership to conceal and perpetuate his fraudulent conduct."

There was another issue players had with Eagleson. It had to do with him being in the Hockey Hall of Fame. Eagleson was elected into the HHOF 1989 as a builder.

Several Hall of Fame players like Park, Orr and Howe and others threatened to give up their membership if Eagleson remained. Eagleson finally resigned his membership.

Conway was in the Boston courtroom when Eagleson offered his guilty plea. The small town newspaper editor received a round of applause from NHL players for his work to bring down Eagleson.

"Russ Conway exposed Alan Eagleson," said Terry O'Reilly, the former Boston Bruins forward. "He dug and dug and he showed the world. And I would like to thank him."

And a lot of players remember Carl Brewer as well. Recently the CBC ran a program on Brewer and his legal fight with Eagleson and the league over pension money.

"Present-day players should look back and put a plaque up for Carl because he is the one who probably put a lot of money in their pockets," said Howe, who benefited greatly because of Brewer's hard work.

And while Brewer and Conway played major roles in bringing down Eagleson and shedding light on his and the league's shady dealings, they also helped open the door for the brave new world of labor relations in the National Hockey League. Relations that pit Bob Goodenow's NHLPA against Gary Bettman's NHL.

In our next report, a closer look at Goodenow and how he changed the NHLPA and its relationship with the league.

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