At the beginning of September, investigative journalist Pablo Torre dropped a bombshell news on Kawhi Leonard’s third-party endorsement deal. Plus, he alleged that Steve Ballmer, the owner of the Clippers, negotiated to bypass the salary cap. In the middle is the secret $28 million endorsement deal with Aspiration that apparently helped in the Klaw’s signature. With each passing day, the screws get tighter, and even the recent update won’t bring any relief to the involved parties.

After Torre’s report, Kevin O’Connor, on his show, spoke about the cap circumvention investigation. Referring to Article 13 of the CBA, the host stated, “The system arbitrator shall have the authority upon good cause shown to direct any team, team affiliate, or player to produce any tax return returns or other relevant tax materials disclosing income figures for the player.” For now, only KL2 Aspire LLC is under investigation, since Torre found a paper trail linked to the Klaw’s deal. However, the league can order other LLCs registered in the name of the Clippers superstar.

“But in California, for example, there were 16 KL2 LLCs that were registered. That’s not abnormal for the super wealthy to have a bunch of LLCs like Kawhi Leonard is. But for the NBA, in theory, they could ask for the tax returns for all of these LLCs.” Doing some investigative work of his own, O’Connor pointed out that 16 LLCs related to Leonard can be investigated for tax returns. A simple search in the California database will help anyone get these results. There is another interesting thing that came out of this search.

“And that’s what’s interesting here because if you look at the timing of when these LLCs were created, three of them are all made very close together. There’s this one called ‘KL2 content’ that was made December 28th, 23. There was one called ‘KL2 RIC real estate’ made January 2nd, and then another one made on January 2nd as well. So there were three made within 10 days before Kawhi Leonard signed a contract extension with the Los Angeles Clippers worth three years and $153 million.” The NBA senior analyst spoke in detail on the Kevin O’Connor show.

Once again, it is worth pointing out that it is all circumstantial observation. This only suggests that if the league and the commissioner want to probe into it further, they can do that based on Article 13 of the CBA and the alleged creation of LLCs before the contract extension. In fact, KOC stated that other league executives are also thinking about what final punishment the NBA can inflict.

“And that’s what NBA executives are talking about right now. And the conversations I’ve had, they’re wondering, ‘How deep in is the NBA really going to dive here? Are they going to go through all of these, or are they just going to look at the Aspire stuff and kind of not worry about everything else that’s out there?’”

Adam Silver clears his stance after Steve Ballmer pledges innocence

Torre reported that Leonard signed a $28 million contract over four years in 2021 to market and endorse Aspiration, but never fulfilled the agreement. This “no-show job” agreement with Kawhi Leonard included an additional $20 million in stock compensation that was never delivered. The Los Angeles Clippers called out Aspiration and its owner for defrauding Ballmer. They further added that the contract with Aspiration, which was the team sponsor from the 2021 to 2023 seasons, was “nothing unusual or untoward about team sponsors doing endorsement deals with players on the same team.”

In fact, even Ballmer has maintained his innocence in the Aspiration contract. “These were guys who committed fraud. Look, they conned me. I made an investment in these guys thinking it was on the up-and-up, and they conned me”. So, the pressure is definitely on the NBA, and the investigation is already underway.

Speaking about the punishment, the commissioner said, “I’m reserving judgment because I don’t know the facts here.” Furthermore, Adam Silver said at a press conference after the league’s board of governors’ meeting in New York, “I don’t know what Kawhi was paid. I don’t know what he did or didn’t do. We’ll leave all that to the investigation.”

Silver wasted no time hiring New York-based law firm Wachtell, Lipton, Rosen, & Katz to inspect the matter. Pablo Torre responded recently and called this scandal the “biggest test of Adam Silver’s tenure as commissioner.” So far, there is no result. But as Kevin O’Connor said, the NBA can compel Kawhi Leonard to have the documents produced as part of this investigation.