Tim Donaghy, a referee for the NBA, entered a guilty plea to two federal felony charges in connection with his bets and tips on NBA games. The charges are conspiracy to engage in wire fraud and transmitting betting information via interstate commerce. Mr. Donaghy picked teams to win in games he was scheduled to referee. Experts have said that Donaghy committed the equivalent of insider trading on Wall Street by providing outsiders with information about games, players, and referees. He got \(\$ 5,000\) from his tippees for correct picks.

According to the indictments, Donaghy began betting on games in 2003, but in December 2006 began passing along inside information to others who have also been charged in the conspiracy. The communication was in code via cell phone. Through his lawyer, Donaghy has indicated that he has a gambling addiction problem and is currently on medication and under the treatment of a psychiatrist.

The NBA Commissioner, David Stern, has referred to Donaghy as a "rogue referee", but says that the gambling charges were a wake-up call for the NBA and that it must not be "complacent." 756 Because Mr. Donaghy's bets were through illegal gambling channels, any monitors the NBA had at Las Vegas sports books would not have been triggered. In fact, Mr. Donaghy's missteps were discovered as the federal government was conducting an investigation into the Gambino crime family, based in Brooklyn. The two men who are alleged to have worked with Donaghy on the gambling scheme and inside information are James Battista and Thomas Martin. The three men were friends during high school.
Commissioner Stern says that the NBA will be looking at the checks and balances that the NFL has built into its system, including prohibitions on referees of traveling to Las Vegas and other gambling resorts without prior approval. The NFL also has significant background checks and ongoing monitoring of its referees.
Mr. Donaghy ran a basketball clinic for developmentally disabled boys in Springfield, Pennsylvania (Mr. Donaghy's hometown) for almost a decade. He was a graduate of Villanova and had worked his way up to being one of the NBA's top referees, coming through the ranks of refereeing in both high school and the Continental Basketball Association. His salary with the NBA during 2006 was \(\$ 260,000\).
Mr. Donaghy entered a guilty plea to the federal charges in 2007 , was divorced in 2007 , served 15 months in federal prison from 2007-2008, and, upon his release, wrote a book about his experience. The original name for the book under one publisher was Blowing the Whistle: The Culture of Fraud in the NBA, but the publisher canceled the book after it says the NBA threatened to take legal action, that is, file a defamation suit. Mr. Donaghy found another publisher, with a book that took a slightly different angle, called Personal Foul: A First-Person Account of the Scandal That Rocked the NBA. In an interview following his release from prison, Mr. Donaghy commented on the activities of Wall Street traders before the 2008 collapse, noting that what he did was "No different than [sic] Wall Street insider trading. Except I didn't affect the economy.................

Discussion Questions 1. Why do you think Mr. Donaghy was engaged in the gambling?
2. Doesn't his civic activity paint a different picture of his character?
3. Evaluate Mr. Donaghy's quotes comparing his behavior to what Wall Street traders did.