Aug 16, 2012 No Comments ›› Pat Dollard
(FREE BEACON) A new lawsuit brought by a former NFL coach charges the husband of House minority leader Nancy Pelosi with breach of contract.
Dennis Green, former head coach of the Minnesota Vikings and Arizona Cardinals, is accusing Paul Pelosi and business partner Bill Hambrecht of failing to honor the $1.5 million contract he signed to coach Pelosi’s football team, the Sacramento Mountain Lions.
“Since January 2011, defendants … have failed to meet their contractual commitments to compensate Green at the amount required under his contract,” the suit states.
Green uprooted his family from their native San Diego, withdrew his children from school, and purchased a new home in Sacramento after he inked the lucrative deal with Pelosi and Hambrecht.
“[The team] acted willfully, intentionally, and maliciously in order to fraudulently induce Green to move from his home in San Diego,” the suit says. “[He] carried out the responsibilities of his contract in justifiable reliance upon Hambrecht’s promises that he would stand behind the commitments of UFL.”
A league spokesman declined to comment on the suit.
Hambrecht, a multimillionaire financier, founded the United Football League in 2007 to bring professional football to mid-sized cities in California, Oklahoma, Virginia, and Florida. He later invited Pelosi, a real estate developer and fellow San Francisco investor, to become a top owner in the league. Pelosi bought the Sacramento team for $12 million in 2009 and later purchased a $1 million stake in the league.
Pelosi pledged to treat the team like any other investment, swearing to the Washington Post that this was no vanity purchase.
“This is a business, I look at it as a business,” he said. “I’m in this because I think it is a very solid financial investment that is going to be very successful.”
Pelosi, however, did not take any of the steps required of a start-up sports league. There were no major television deals, corporate sponsorships, or signature tournament or playoff games—ingredients considered to be the staples of successful leagues.
The league also needed to bring in more investors for revenue. But its sloppy structure chased away prospective owners, including seasoned football owner Jim Speros.
“I think the football people were reputable, the problem was there was no real structure on how you could enter as an investor,” he said.
Speros, who founded the Canadian Football League’s Baltimore Stallions in the 1990s, sought to bring a UFL team to Virginia Beach in 2010. He quickly realized that it was a poor investment.
“I was looking for full ownership, but they treated the league as a single entity,” he said. “I don’t know if they did or did not pay any bills…but it doesn’t surprise me. It’s very difficult starting a league from scratch.”
Green noticed the missing elements, but received reassurances from the team that Pelosi and his partners had guaranteed its expenses, according to the suit.
“Green was mindful of the fact that the UFL [and Mountain Lions] were not generating sufficient revenues to cover their expenses, including his salary, and relied, reasonably and explicitly, on Hambrecht’s assurances that he and other investors in the UFL would pay for and guarantee the expenses,” it states.
Pelosi failed to pay Green’s bi-weekly $62,500 paycheck in full throughout 2011. He cut checks at varying amounts, dropping as low as $5,000 for weeks at a time, according to the suit. Rather than running the team like a business, Pelosi’s financial disclosure forms indicate he may have sold stocks to pay for the team.
Neither Paul Pelosi nor Rep. Pelosi (D, Calif.) returned calls for comment.
Leader Pelosi’s investment decisions have made her one of the wealthiest members of Congress and in recent years have also invited scrutiny from government watchdogs.
Her net worth grew to $43.4 million in 2011, a 62 percent jump from 2010, based in part on a number of questionable investment decisions. Author Peter Schweizer later revealed that Pelosi invested between $1 and $5 million in Visa as she presided over credit card legislation in Congress.
The UFL stands alone as Pelosi’s only financial stinker. Mr. and Mrs. Pelosi lost between $2 to $10 million on the league in 2011, according to the leader’s most recent financial disclosures. That did not stop dissuade the businessman from doubling down on the investment. He injected between $2.75 and $6.6 million into the league even as he refused to pay Green.
One person with knowledge of the league suspects Pelosi may have accepted heavy losses from the venture for political reasons.
“When people invest in a business where they’re losing money, they do it for a reason: tax deductions, or maybe it’s a pet project,” the source said. “The Pelosis, they’re sensitive to how much money they have. It’s almost like they’re looking to decrease their net worth.”
The couple’s extreme wealth has become a political liability in recent years and invited accusations of hypocrisy from critics.
The couple has refused to hire unions to work in its vineyard and other business interests, even as Pelosi has collected $365,500 in political contributions from labor groups in 2012. She has also railed against bankers despite the fact that her husband’s colleagues are her staunchest allies, contributing $500,000 in 2012, according to the Center for Responsive Politics.