Ex-MLSE Boss: Bid-Rigging Charges in Texas Arena Project
Arena Deal Under Scrutiny: Executive Indicted in Antitrust Case
A former executive faces federal charges for allegedly rigging the bidding process for a major arena project, a case highlighting the Justice department’s (DOJ) ongoing crackdown on antitrust violations. Timothy Leiweke, former chairman and CEO of Oak View Group (OVG), has been indicted on charges of violating the Sherman Act, possibly facing up to 10 years in prison and a $1 million fine.
The indictment alleges that Leiweke orchestrated a scheme to stifle competition and secure a lucrative contract for OVG to manage entertainment services at a public university’s arena – the Moody Center at the University of Texas at austin. According to the DOJ, Leiweke actively sought to discourage a competitor from bidding on the project, offering them subcontracts in exchange for stepping aside.The alleged scheme began in September 2017,when Leiweke reportedly expressed a desire to “find a way to get [the competitor] some of the business” and “get them to back down” after learning of their intent to bid. Months later, he allegedly indicated a willingness to discuss a non-bid agreement in exchange for subcontracting opportunities, explicitly stating he had “no interest in working with them if they intend on putting in a bid.”
By February 2018, the DOJ claims Leiweke reached an agreement with the competitor to withdraw their bid, promising them subcontracts on the project. OVG subsequently submitted the sole bid and was awarded the contract. The arena opened in April 2022, and OVG continues to generate substantial revenue from the project.”As outlined in the indictment, the defendant rigged a bidding process to benefit his own company and deprived a public university and taxpayers of the benefits of competitive bidding,” stated Assistant Attorney General Abigail Slater of the DOJ Antitrust Division.
Federal authorities emphasize the importance of fair and open competition, particularly in public contracts. “Public contracts are subject to laws requiring an open and competitive bid process to ensure a level playing field,” said Christopher G.Raia, Assistant Director in Charge of the FBI New York Field Office. “The FBI is determined to ensure that those who disregard fair competition principles do not benefit from a rigged bidding process targeting our communities and public institutions.”
The DOJ’s examination has also resulted in financial penalties for OVG and Legends Hospitality, a company allegedly involved in the scheme. OVG has agreed to pay a $15 million penalty, while Legends Hospitality will pay $1.5 million.
Leiweke, however, maintains his innocence. Through his spokesperson,Amelia Fogg,he asserts that the allegations are “wrong on the law and the facts” and vows a vigorous defense. Fogg argues that the contemplated partnership between OVG and Legends was a legal “vertical, complementary business partnership” and that the case “should never have been brought.” She further contends that the Moody Center has delivered “substantial and sustained benefits to the University of Texas and the City of Austin.”
OVG, in a separate statement, confirmed its full cooperation with the DOJ’s inquiry and expressed satisfaction with resolving the matter “with no charges” against the company and “no admission of fault or wrongdoing.” The company reaffirmed its commitment to fair competition and industry-leading compliance practices.