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When CSAC’s word isn’t their ($50k) bond: Department of Consumer Affairs leaves fighters vulnerable to predatory promoters

By Zach Arnold | October 2, 2012

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When Pat Healy saw his opportunity of fighting Gilbert Melendez slip away due to Melendez getting injured, he like many other fighters on the 9/29 Arco Arena card in Sacramento were in the red as far as training expenses were concerned. Given that the fight was canceled about a week before it was scheduled to take place, Healy claimed that he had training expenses in the $4,000-to-$5,000 range.

When a promoter runs a show in California, the California State Athletic Commission requires a $50,000 bond. Amongst the reasons the commission requires a licensed promoter to have a bond is to use the bond to cover fighters who are not paid when a show gets canceled or postponed. The process is relatively simple. A fighter contacts the commission, asks for the bondholder information (bond number, address, etc), and then contacts the company that issued the promoter the bond. In this case, Zuffa is the licensed promoter. All Pat Healy had to do was get the bond info from CSAC, contact the bond company, and ‘hit the bond’ in order to freeze it. The bond then pays out, on a first-come first-serve basis, requests to cover the purse for fighters who didn’t get paid because the show was canceled. The one downside to this request is that once you hit a bond, it means the price of getting a $50k bond for other California fight promoters can increase. These types of bonds generally are a year in length. The bigger fight promoters can get these bonds at a lower cost than small or mid-sized event promoters.

Of course, the key component here if Pat Healy wanted to hit the bond is having the cooperation of the California State Athletic Commission. It’s their job and responsibility to provide the bond information. However, what if the commission decides that they don’t want to help out fighters who lost money due to a show getting canceled? What if the commission decides not to give out the bond information to any fighter that asks for it?

Incredibly, this is the situation that fighters are now facing in the state of California.

The Oxnard debacle – the quick and dirty

On September 24th, we published a detailed report about a canceled show in Oxnard, California involving two individuals who have shady track records as event promoters in 2012. The two individuals, Raul Orozco and Armando Renteria, are involved in operations for the El Dorado Mexican restaurant in downtown Oxnard, California. As we painstakingly detailed in our Oxnard event report, these two individuals had promoted two previous shows in Port Hueneme, California before scheduling a third show for Pacifica High School in Oxnard.

In the two shows the men previously promoted, they allegedly bounced checks to fighters and members of CSAC. Instead of Raul Orozco, the licensed promoter, having his license suspended or revoked by CSAC, Che Guevara decided to allow Orozco (and Renteria) run a third show — on the condition that they pay CSAC officials with cashier’s checks. There were allegedly no protections in place for the fighter purses on the third card. The cashier’s checks were supposedly in the range of $100.

The fact that neither Orozco nor Renteria were banned from running further shows by the commission is surprising. What makes the arrangement between the two men even more question is that Renteria is reportedly the manager of Jose Aguiniga, the boxer who headlined the first two shows Orozco & Renteria promoted in Port Hueneme. Aguiniga was also scheduled for the main event of the Oxnard show that was canceled.

Under the Ali Act, a manager of a fighter cannot use said fighter on a show they are promoting. It’s a clear conflict of interest and a violation of Federal law. Under the contractual set-up with Orozco and Renteria, Orozco was the one with the California promoter’s license even though Renteria went around in media circles (including the Ventura County Star newspaper) being labeled as the promoter. Since Orozco was the licensed promoter, Renteria could go ahead and claim that he wasn’t violating the Ali Act by being Aguiniga’s manager.

However, this fine line was reportedly pierced when Orozco did not show up for weigh-ins the day before the scheduled show in Oxnard. Instead of Orozco, the licensed promoter, showing up to sign the bout contracts, Armando Renteria showed up and reportedly signed the bout contracts with CSAC inspector Anthony Olivas present. Olivas allowed the contracts to be signed by Renteria. There’s a big problem here. If Renteria is a licensed promoter in California and is a licensed manager on behalf of Aguiniga, then Renteria signing the bout contracts is a direct violation of the Ali Act and he should absolutely be prosecuted. If Renteria isn’t a licensed promoter in California and signed the bout contracts illegally (instead of Orozco signing the contracts), then that would make the athletic commission (hence the state of California) legally liable as a third party for the contracts.

Making the situation even dicier is the fact that we found a newspaper arrest log for Armando Renteria after his second show of 2012. The arrest log displayed that he was arrested in Lancaster last June for grand theft at a location near Home Depot.

Despite all of the evidence available at the disposal of the California State Athletic Commission, Che Guevara decided that it would OK for Raul Orozco and Armando Renteria to continue promoting events in the state of California. Why? What on Earth prompted Guevara to back these deadbeat promoters? It’s not as if their shows are big money makers that fill the coffers of the state of California. What’s in it for Che to blatantly ignore the rules & regulations of the California State Athletic Commission in order for criminal behavior to go unpunished?

Fighters left hanging out to dry by Sacramento

When the Oxnard scandal first broke, we were contacted by boxer Crystal Morales. She presented us a copy of her bout contract which was signed by Raul Orozco (who was listed as the licensed promoter). Crystal, like the rest of the fighters on the card, got stiffed on their show purses.

She, along with the rest of the fighters, were left to fend for themselves. Instead of the California State Athletic Commission producing information to the fighters about the $50,000 bond required by Raul Orozco to have an active promoter’s license, the fighters had to try to figure out their own ways of getting the purse money that was owed to them by Orozco & Renteria.

The whole point of requiring licensed promoters to carry a $50,000 bond is to ensure that the fighters & officials get paid in case a show is canceled or postponed. If you are a fighter and you have a bout scheduled in California, how can you trust the athletic commission to have your back when they won’t give out bond information to fighters who are victims of predatory promoters? If a fighter breaks a serious CSAC rule or regulation, they are suspended and can’t fight in other states. California wants fighters to honor the laws on the books but apparently Che Guevara and the CSAC front office doesn’t care if deadbeat promoters stiff fighters and customers who can’t get a refund on tickets they purchased to a show that the promoters admit wasn’t going to happen because of bad ticket sales.

As a result of CSAC’s intentional & flagrant inaction, Crystal ended up hiring a lawyer.

The lawyer she hired is Farzad Tabatabai, the same lawyer who is representing inspector Dwayne Woodard in his age discrimination & retaliation lawsuit against the California State Athletic Commission and the Department of Consumer Affairs.

We contacted Mr. Tabatabai to find out if his client was able to recover the money that was owed to her and whether or not the athletic commission bothered to cooperate.

“Crystal Morales was on the card for the show in Oxnard on September 22nd. She met her obligations, made weight, and was prepared to fight but was not paid her purse. The promoter had agreed to pay Crystal’s (purse) [Monday] at noon but he did not pay and has not responded to my call or email.

“If the promoter doesn’t pay, then we will look at other options — like the bond. I have asked CSAC several times by e-mail and even by phone to give me the bond information and let me know where they stand on this and so far they haven’t provided the information.”

The idea that Che Guevara was supposedly more concerned about cashier’s checks for the commission officials instead of supposedly securing the same financial arrangement for the fighters booked is, in a depressing way, not unusual or shocking given his past track record.

“I do not have all of the facts yet, but if it’s true that the promoter has a history of bounced checks before and because of that CSAC required cashier’s checks for its crew but not for the fighters, then it looks like CSAC cut to the front of the line to get paid and probably violated the law.

“The law is very clear that fighter purses must be paid before CSAC officials and judges get paid. The order of payment is listed right in the statutes and is printed right on CSAC’s own bond form. This is pretty clear-cut stuff.

“I also heard the commission is talking about paying fighters 20% or 50% of their purses, or trying to negotiate so they take less. No one has approached me on behalf of Crystal to take less, but in this case I see no legal or other reason why the fighters should not be paid 100% of their purses. Under CSAC regulations, poor ticket sales is not a reason for canceling a show. Indoor shows cannot be canceled for any reason without approval of the commission.

“The fighters performed their end of the bargain and the law requires a bond so fighters get paid. The law says fighters must be paid before CSAC gets paid. Here, it looks like CSAC got their money, so why shouldn’t the fighters get their money?”

As I stated earlier in the article, CSAC handing over the bondholder information to a fighter or a fighter’s representative should take no more than a couple of minutes. It’s supposed to be a (relatively) painless transaction.

When Tabatabai says that the bond form lists an order for priority, he’s exactly right. From the promoter’s bond application form that must be filled out and processed at CSAC:

This bond guarantees, in order of priority, the payment of all taxes and fines due and payable to the State, the payment of contributions for medical insurance and to the pension and disability fund, the payment of assessments for neurological examinations, as specified in Business and Professions Code Section 18711(c), the payment of the purses to the competitors, the repayment to consumers of purchased tickets, the payment of fees to the referees, judges, timekeepers and physicians, and in the event of the cancellation of a contest or match approved by the Commission without good cause, an amount determined by the Commission which does not exceed the Commission’s actual cost in connection with the approval of the contest or match.

The bond covers fighters and fans first and then commission officials. In the Oxnard scenario, Che Guevara allegedly made sure the commission officials got cashier’s checks while the fighters didn’t have secured payments. Plus, the tickets that Raul Orozco and Armando Renteria sold to fans for the show violated CSAC rules & regulations by claiming “no refunds or exchanges” in writing right on the tickets.

Therefore, both the fighters and the fans who bought tickets to the show but couldn’t get a refund are entitled to hitting the $50,000 promoter bond to recover their lost money.

Why won’t CSAC cough up the bond information?

After spending some time trying to figure out why the athletic commission won’t cough up the bond information, I’m left with one of three options as to why Che Guevara and his staff in the Sacramento front office won’t produce the bond information. It’s not as if the bondholder information is to be treated as a state secret.

Trying to rationalize the irrational is difficult, but…

Scenario 1: CSAC won’t cough up the information because they don’t think it’s in the best interest of the parties involved to know.

This makes the least amount of sense to me. OK, so the price of bonds for promoters to purchase goes up. You know whose fault that is? The commission’s fault. Why? They allowed the deadbeat promoters to continue running shows after they reportedly bounced checks on the first two events. Instead of suspending or revoking the license of Raul Orozco, CSAC let him continue as a promoter. Promoters should have every right to be pissed off at CSAC if their negligence results in the cost of acquiring a bond to increase. That is CSAC’s fault because they created this mess, a mess that was totally unnecessary and self-inflicted.

Scenario 2: The Sacramento office has lost the bondholder paperwork for the deadbeat promoters.

This is entirely plausible given how they lose medical records all the time and attempt to backdate/alter fighter paperwork.

Scenario 3: There is no bond.

This would be a catastrophic development, given that having a $50,000 bond is a requirement to be licensed. It would open up the floodgates of liability for the state of California should they get sued. The Oxnard debacle is the perfect example of why the state athletic commission asks for a $50,000 bond in the first place. If the athletic commission allowed Raul Orozco and sidekick Armando Renteria to run a show in Oxnard without a bond, this would be the kind of offense that could and should get people fired. The whole point of an athletic commission, besides generating cash for the state, is to protect the fighters. If you can’t ensure that a deadbeat promoter has a bond on record, what does that say about your ability to regulate any show in the state? If this scenario is true, then everyone in the Sacramento office should be immediately issued notice of adverse actions and terminated with cause.

Just who is CSAC defending here?

It truly is amazing to see Sacramento bureaucrats take the side of cash-strapped deadbeat promoters over fighters who are California taxpayers. Of all the scenarios to choose, why would these people risk their job security over a couple of low-rent individuals who aren’t contributing much money to state coffers?

In our September 24th article about Oxnard, we gave you a taste as to who Armando Renteria really is. He’s a flashy, big-mouthed socialite who likes attention. Except he apparently didn’t like the attention we gave him when we exposed his arrest log from last June.

So, who exactly are Raul Orozco and Armando Renteria? And why is the state backing them over fighters who got stiffed on cash?

We started investigating the backgrounds of both Orozco & Renteria. We have a treasure trove of information. However, we’re streamlining our dossier here in order to give you a basic summary of how these two are joined at the hip.

Raul Orozco & Armando Ramirez are high school buddies. They graduated from high school in Hueneme, Class of 1987.

Orozco would go on to create his own construction company called Trust Builders Construction. It’s a sole proprietorship. As this snapshot from the Contractors State License Board shows, Raul has a history of acquiring bonds for his construction operation. So, the idea of him getting a bond for any sort of business operation is not new for him. In this case, he got a three-month bond for his construction operation start last July and expiring next week. Manta estimates he made/makes $80,000 yearly.

As this bulletin notice from the City of Oxnard (December 14th, 2009) shows, Orozco was seeking a permit.

Planning & Zoning Permit No. 09-500-05 (Special Use Permit) & 09-300-05 (Tentative Subdivision Map): Cabrillo Neighborhood

A request for approval of a Tentative Subdivision Map to subdivide one acre into four residential parcels and construct a cul-de-sac, and a Special Use Permit to construct four detached single-family residences with one house on each lot. The sizes of dwelling units will vary between 2,502 square-feet and 3,083 square-feet. The project site is a vacant one-acre property located at the east terminus of Oneida Place, west of Ventura Road, east of Oxford Drive, and north of Devonshire Drive. The proposal is exempt from environmental review pursuant to Section 15315 of the California Environmental Quality Act (CEQA) Guidelines. Filed by Raúl B. Orozco, 312 Camarillo Drive, Camarillo CA 93010.

Applicant: Raúl Orozco Phone: (805) 207-4669

City Contact: Brian Foote, Associate Planner Phone: (805) 385-8312

Shortly after this zoning permit request, Orozco ended up in another business venture. In a November 2010 profile article for the Ventura County Star newspaper, El Dorado Mexican restaurant was featured.

For 18 years, it was known as El Dorado. Then, sometime around 2004, it got a new owner and a new name: El Coyote.

And now? After a makeover that introduced pendant lamps in the booths and a new chef in the kitchen, the space at Oxnard Boulevard and Sixth Street in downtown Oxnard is once again El Dorado.

“I kept having people asking me to change it back, because the original restaurant was such a part of Oxnard,” said Raul Orozco, who bought it in May.

Here’s Raul Orozco’s liquor license record from the California department of Alcohol Beverage Control. With Raul owning both a construction company and now El Dorado Mexican restaurant, enter Armando Renteria into the picture. Armando is your classic hanger-on around the fight business (he tried promoting MMA in 2009) — and his friend is boxer Jose Aguiniga. Put it all together and you end up with El Dorado Entertainment, the banner under which Orozco (as the licensed promoter) and Renteria started promoting boxing shows in Port Hueneme/Oxnard in 2012 with Aguiniga as the headliner.

Which led to two shows where both fighters and athletic commission officials reportedly got bounced checks. And then Armando Renteria got arrested for grand theft near a Home Depot. And then Che Guevara decided to let these two individuals promote a third show instead of suspending their license for violating CSAC rules & regulations, not to mention violating the Ali Act (a Federal law).

All of this led to what we saw go down in Oxnard. And instead of helping the victims get their money back, the California State Athletic Commission has apparently sided with the deadbeat promoters. There’s a commission meeting in Los Angeles on October 8th and CSAC has not said any word as to whether or not they will suspend Raul Orozco’s license at all. If the commission won’t cough up the bond information on Orozco, the fighters from the Oxnard show who got stiffed on their purses should show up to the Los Angeles CSAC hearing and publicly embarass Che Guevara. They should make Che Guevara answer this question:

Why is Che Guevara protecting Raul Orozco & Armando Renteria?

A littany of lawbreaking

There are so many maddening elements to this story. However, the most confusing part about this story is why there is so much inaction on part of the California State Athletic Commission to suspend the license of Raul Orozco given the amount of laws that have been broken by he and Armando Renteria.

Earlier in this article, we noted that Armando Renteria acting as Jose Aguiniga’s manager and claiming to be a promoter of shows that Aguiniga is headlining is a violation of the Ali Act, which is Federal law. Look at the text of the Ali Act bill and go to Section 5, which is about Conflict of Interest.

Section 17 of the Professional Boxing Safety Act of 1996 (15 U.S.C. 6308) (as redesignated by section 4 of this Act) is amended–

(1) in the first sentence by striking ‘No member’ and inserting ‘(a) REGULATORY PERSONNEL- No member’; and
(2) by adding at the end the following:
‘(b) FIREWALL BETWEEN PROMOTERS AND MANAGERS-

‘(1) IN GENERAL- It is unlawful for–
(A) a promoter to have a direct or indirect financial interest in the management of a boxer; or
‘(B) a manager–
(i) to have a direct or indirect financial interest in the promotion of a boxer; or
‘(ii) to be employed by or receive compensation or other benefits from a promoter, except for amounts received as consideration under the manager’s contract with the boxer.

Because Armando Renteria is labeled as a manager for Jose Aguiniga, he can’t act as both a manager and a promoter for Aguiniga on the El Dorado Entertainment shows. However, Aguiniga was the headliner for the first two El Dorado shows (last February & May) and was going to be the headliner for the third show in Oxnard. Section 119 of the Business & Professions Code spells out clearly the following:

119. Any person who does any of the following is guilty of a misdemeanor:

(b) Lends his or her license to any other person or knowingly permits the use thereof by another.

(e) Knowingly permits any unlawful use of a license issued to him or her.

In the case of the weigh-ins the day before the scheduled show in Oxnard, the licensed promoter (Raul Orozco) reportedly didn’t show up at the weigh-ins. Instead, Armando Renteria showed up at the weigh-ins and signed the bout contracts that CSAC inspector Anthony Olivas approved of.

Sections 18665 through 18674 of the Business & Professions Code also hammers anyone who doesn’t full disclose the business relationship of someone who has the promoter’s license. In this case, did Raul Orozco disclose to the commission his full business relationship with Armando Renteria?

18665. (a) All applications for a promoter’s license shall contain a true statement of all persons connected with or having a proprietary interest in the promoter.

(b) Any person connected with, or having a proprietary interest in, an applicant for a promoter’s license shall provide the commission with such financial information, or access to such financial information, as the commission deems necessary in order to determine whether the applicant is financially responsible.

(c) Any application for a promoter’s license shall be signed under penalty of perjury by the sole proprietor, a general partner, or an officer of the corporation or association, as the case may be.

18666. All promoters shall submit in writing for prior approval by the commission, any change at any time in the persons connected with or having a proprietary interest in the promoter, including any change in the shareholders of a corporate entity.

18667. The commission shall not issue any promoter’s license to an applicant unless the commission is satisfied that the applicant is the real party in interest, and intends to conduct, hold, or give such contests itself. In no case shall the commission issue a license to a promoter unless, the promoter will receive at least 25 percent of the net receipts of any promotion.

18668. Licensed promoters may engage in promotions with other licensed promoters, so long as each promoter holds a valid, unexpired license, and receives the written approval of the commission prior to the promotion. The co-promoters shall file a bond or bonds sufficient to meet the requirements of Section 18680.

18673. (a) All applications for a manager’s license shall contain a true statement of all persons connected with, or having a proprietary interest in, the management of the boxer or martial arts fighter.

(b) Any application for a manager’s license shall be signed under penalty of perjury by the sole proprietor, a general partner, or an officer of the corporation or association, as the case may be.

18674. All managers shall submit in writing, for prior approval by the commission, any change at any time in the persons connected with or having a proprietary interest in the management of the boxer or martial arts fighter, including any change in the shareholders of a corporate entity.

In this case, Renteria signing the bout contracts at the weigh-ins instead of Orozco should have been a huge red flag for both Anthony Olivas and for the Sacramento CSAC office. If Sacramento gave Olivas the go-ahead to let Renteria sign the bout contracts, that means CSAC is now legally liable as a third party to the deals given that Renteria can’t be both a manager to a fighter on a show that he’s also a promoter for. Common sense would tell you that Orozco should have been forced to sign the bout contracts at the weigh-ins or the show should have been canceled right at that moment. Instead, Renteria was reportedly allowed to sign the bout contracts and the show was canceled hours before it was scheduled to start. Renteria compounded his comedy of errors by telling the Ventura County Star newspaper that the show was canceled due to poor ticket sales, which is a violation of CSAC’s rules & regulations.

Furthermore, take a look at CSAC’s rules & regulations page regarding bout contracts:

§ 230. Contract Provisions.

(a) No verbal agreement or written agreement other than a contract on the commission’s official form shall be accepted by the commission.

(b) No contract between a promoter and manager or boxer shall be enforced by the commission until all contracts between the promoter and the contestants for a particular match are filed with the commission and meet the requirements of these rules and the provisions of the code applicable to professional boxing. All contracts for an event shall be filed with the commission no later than the time periods specified in Rule 240.

(c) Contracts are prohibited wherein a certain sum other than federal, state or local government taxes is taken by the club from the gate receipts or, where applicable, receipts from the sale, lease, transfer, or other exploitation of broadcasting and television rights, before a boxer is paid a percentage of the balance of said receipts for his or her services. Deductions may be allowed only if the amount to be deducted is clearly specified and itemized in the contract signed by the club with the boxer. If the commission determines that the deductions are not sufficiently itemized and specific, it may disallow such deductions.

(d) “Blanket contracts” or options on a boxer’s services shall not be recognized unless written approval is obtained from the commission.

(e) Contracts wherein a boxer agrees to accept a certain percentage for his services with the understanding that at the same time he is to pay his opponent a stipulated amount of this percentage are not acceptable to the commission unless such a contract is submitted to the commission for examination and approval.

NOTE: Authority cited: Section 18611, Business and Professions Code. Reference: Sections 18640, 18641, 18642, 18660, 18661 and 18854, Business and Professions Code.

§ 232. Payment Of Contestants.

All contestants shall be paid in full according to their contracts, and no part or percentage of their remuneration may be withheld except by order of an official of the commission, nor shall any part thereof be returned through arrangement with the boxer or his manager to any matchmaker, assistant matchmaker, or club official. The boxer or manager may not assign his respective share of the purse, or any portion thereof, without the approval of the commission, upon written request filed with the commission at least 72 hours before the contest.

NOTE: Authority cited: Section 18611, Business and Professions Code. Reference: Sections 18640, 18641 and 18854, Business and Professions Code

We cite these code sections because some of the fighters on the Oxnard card were ‘paid’ with tickets. As Crystal Morales claimed in our September 24th Oxnard report, Raul Orozco & Armando Renteria allegedly stated they weren’t going to pay her the fight purse unless she had sold all of the tickets they gave her. Her fight purse on the contract was listed at $1,000.

In an on-the-record conversation Monday night, Crystal claims that Armando Renteria asked her for the money she sold from tickets. She was allegedly given 100 tickets with a total face value of $3,000. She didn’t sell all the tickets. After she gave the money from her ticket sales to Armando Renteria at the weigh-in, she claims that Renteria turned around and gave the money to a representative of CSAC.

After the fight was canceled on Saturday, she had not been paid. On Monday, Crystal claimed that she received a text from Raul Orozco. To paraphrase what she claims the text message stated, allegedly the message stated that if she had talked to Armando Renteria she would have found out that she was not getting paid her purse because she didn’t sell the 100 tickets she was given.

If you combine the violations of law we cite here in this article along with the violations we cited in the September 24th article, you have an incredible laundry list of illegal actions by Orozco & Renteria.

What it all means

Supposedly, the deadbeat promoters claimed they would pay the fighters they stiffed. Yesterday, they reportedly were nowhere to be found and could not be reached by several parties who were looking for their money.

So, given this development, it is absolutely incumbent upon the California State Athletic Commission to provide the bond information to the fighters so they can hit the $50,000 bond, freeze it, and make sure that those who need to get paid get their money.

And if the athletic commission, led by Che Guevara, doesn’t cough up the bond information? They are setting up the Department of Consumer Affairs for a lawsuit that could cost the Sacramento CSAC front office workers their jobs.

This whole situation could have been resolved right after the debacle happened. The solution takes less than a couple of minutes. The athletic commission simply needed to cough up the bond information and let the chips fall where they may. Instead, they have incredibly dug their heels in and have not coughed up the bond info. And not only that, they apparently have not suspended the promoter’s license of Raul Orozco or the manager’s license of Armando Renteria (if he actually has one and isn’t full of $&%! as his track record indicates he is wont to do).

If you are in management at the Department of Consumer Affairs, you are political animals. Why would someone like Denise Brown, Awet Kidane, or head of DCA legal Doreathea Johnson allow their careers to be damaged by someone like Che Guevara? It makes no sense as to why anyone in Sacramento is backing this guy. He’s completely incompetent at his job and simply does not care about the fighters. He can’t train inspectors to properly manage a box office, meaning the state is losing up to 7 figures from events. Medical paperwork in the front office is constantly missing and inspectors are being asked to alter the dates on fighter paperwork. You have inspectors who Che Guevara is supposed to be supervising who are missing illegal hand-wraps, skinned gloves, and fighters who have different size gloves on in the ring. Further adding to the stress level at shows, you have a ridiculous three inspector policy that is creating havoc at events in terms of producing an atmosphere for quality supervision. Remember what Sacramento’s solution to the three inspector policy was, the ‘ol Volunteer Service Agreements? Yes, those coercive contracts of adhesion.

It would be one thing if some mistakes were made by the front office and eventually corrected. However, everything is spiraling out of control. The promoters are losing patience because the quality of regulation is down. The fans are losing because promoters are holding less events in the state and are considering other states in order to avoid having to deal with CSAC. The fighters are facing a free-for-all situation in terms of their opponents flaunting the system by openly cheating because they can get away with it and know that nothing is going to happen to them.

And, yet, there is something about the situation in Oxnard that apparently the Sacramento CSAC front office thinks is worth covering up. Of all the problems with the California State Athletic Commission, why would you set up a situation where you are on the side of two deadbeat promoters (Raul Orozco and Armando Renteria) who don’t produce significant revenue for the state of California? Why would you, as an athletic commission, set yourselves up to get destroyed in the press and (potentially) in court because you don’t want to lift a finger to to help fighters who were completely taken advantage of thanks to your negligence in not suspending the promoter’s license of Raul Orozco in the first place?

What CSAC is really focused on

You remember the phrase about Nero fiddling while Rome burned? When you read the following internal office memo, keep that phrase in mind as you read it. Understand that this memo was sent a few days after the Oxnard show was abruptly canceled and the fighters were stiffed on their purses.

Hello Inspectors/Commission Staff:

I don’t believe that all of you have noticed that on the bottom of my e-mails there is a “confidentiality notice.” This notice tells you that my e-mails are for the sole use of the intended recipient(s). This means that my e-mails are not to be shared with others outside the recipient list. If you wish to share one of my e-mails with, let’s just say for the fun of it, a media source, you must get my permission first or you will be violating my and the commission’s confidentiality which could result in an employee action. Now, many e-mails are disclosable via a Public Records Act request; however, all those requests must be directed to the Commission headquarters.

Let me know if you have any questions.

Kathi Burns
Interim Executive Officer
California State Athletic Commission
2005 Evergreen Street, Ste. 2010
Sacramento, CA 95815
(916) 263-2195

*** Confidentiality Notice: This e-mail message, including any attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. ***

This is a perfect reflection of who the individuals at the California State Athletic Commission (and DCA) really are. While the state’s combat sports climate is burning to a crisp, they’re fiddling around on their keyboards doing nothing productive. These people are hazardous to the health & safety of the fighters who compete in California. File the notices of adverse actions with the State Personnel Board, fire their asses, and send these clowns to the unemployment line.

Topics: Boxing, CSAC, Media, MMA, StrikeForce, Zach Arnold | 24 Comments » | Permalink | Trackback |

24 Responses to “When CSAC’s word isn’t their ($50k) bond: Department of Consumer Affairs leaves fighters vulnerable to predatory promoters”

  1. Zach Arnold says:

    http://www.sherdog.com/blog/Zach-Arnold-Joins-Press-Row-45951

    If you haven’t had a chance to listen to this yet, go out of your way to hear the 40-minute radio show I did with Jordan Breen on the topic of the California State Athletic Commission. It’s the best general summary of what is happening and why it’s an important story.

  2. Jonathan says:

    This is what you were talking about on Twitter with me about, right?

    Ed. — Yes. This situation never should have happened.

  3. Chuck says:

    My anti-spam word is carny. Very fitting!

    But yeah, that is some carny-huckster bullshit there. Forcing a fighter to sell tickets to an event? Fucking Christ, are these two boneheads indy wrestling promoters or something?

  4. Steve4192 says:

    Great article Zach, with one caveat.

    Leading off with the Strikeforce cancellation and Healy’s dilemma threw me for a loop. It led me to believe this article was about Healy seeking access to the $50K bond and being denied. I was shocked that Zuffa didn’t pay him given their established track record of paying fighters whose fights get cancelled.

    When you spun off onto the Oxnard situation, I thought you were just giving a recap of a similar situation and that you would return to the Healy story. It wasn’t until I was halfway through that I realized this article had nothing to do with Healy and Strikeforce. Although I really appreciate the breakdown of what is going on with the Oxnard debacle, I feel like you pulled a bait and switch by leading off with the Healy video and Strikeforce discussion.

    • Zach Arnold says:

      It’s not a bait-and-switch. The reason I brought up Pat Healy is because his situation is something that can be resolved by hitting the bond if Zuffa can’t/won’t pay his purse for the canceled show. It’s illustrating an example and then applying what we know about Oxnard and then the latest update.

      If a guy like Pat Healy working for a reputable promoter like Zuffa is at risk from the commission, then one can only imagine what kind of risk fighters are dealing with by fighting for someone who isn’t a major name. It’s a clear violation of the duty of the commission to protect the fighters — and it’s not as if CSAC has to cough up cash to ensure a resolution happens, either.

  5. 45 Huddle says:

    If an event is cancelled within a week or two of the event, the fighters should have close to zero liability in the matter. They have put in their time and money into training properly.

    The risk should be at the promoters or insurance (bonds) company. The fact that it really isn’t is pathetic.

  6. F4W_4life says:

    I see similarities between PRIDE and the downfall of the CSAC.

  7. Jay B. says:

    Bet that “Bond Money” is already in Che’s (Or spread out through CSAC) grubby little pockets.

    Biggest question is why didnt Che stopped these guys and what kind of special payout or treatment will he receive from these guys. Definitely isnt free Carne Asada plates at Armando or Orozco’s restaurants.

    Also, be surprised if any of these fighters know the rules to litigate. Crystal may have been the one person smart enough to look around. The out of state guys like you said, probably didnt even bother or wont pursue any kind of action.

    Some of those guys were probably just happy to be expecting a paycheck. They have no clue what is going on with CSAC and the mess in California. Surprised more of the huckster/janky promoters have not shown up in the last 6-8 months.

    • Zach Arnold says:

      If the Sacramento office had access to ‘bond money,’ then I might actually be able to explain a motive for their actions. But that’s not how it works.

      A promoter contacts a company that sells bonds and gets either a year-long bond worth $50,000 or gets a ‘continuous’ bond (show-to-show). They have to produce the bond information to the commission to have their promoter’s license active. The commission itself makes no money on the bond.

      What happens is when a show gets canceled on short notice and fighters are left hanging on the purse, the commission is supposed to give the bond information (it’s public record) to the fighters if they need to ‘hit’ the bond. Once the bond is hit, it is frozen and whatever is paid out by request is paid out on a first-come, first-serve basis.

      A bond is simply that – a bond. It’s not something that deadbeats can say, “Oh, well, the bond will cover my expenses and I’ll walk away scot free.” If the bond is hit, then the bond company will go after the promoters to recover their money. So, if the deadbeat promoters in Oxnard think that a bond will cover them stiffing the purses without any sort of consequence, they’re in for a severely rude awakening.

      • Fishbowl says:

        Hi Zach, small correction to your above reply. The continuous bond is the year-long bond. I’m not too sure what the show-to-show one is called. I think it’s single transaction bond, but I could be wrong about that.

        Very informative piece, btw.

      • Jay B. says:

        Good information on it, I was wondering how it worked out if Promoters could some how work a loophole to recover the Bond. I saw the public information stuff you wrote about earlier. But I was wondering if it was possible for Armando and Orozco’s fighter (The one who worked the show) to ask for a huge amount of the money and return it to them and they share a piece of it with the fighter.

    • 45 Huddle says:

      This is why most AC’s or government entities in general don’t ask for collateral. If they had collateral on hand, anybody could claim the money and just try and take it.

      With the bond, somebody has to make a claim against the bond and it goes through the company who wrote it.

      By the way, most bonds are set up so that a 3rd party can make a claim against it. You don’t have to be on the bond in order to benefit from it.

      • Jay B. says:

        Thats why I was wondering as I said above. In the situation where someone violates the Ali act. Can the fighter ask for most of the money in the bond since its first come, first serve…he receives that money and gives it back to his Manager/promoter. As if they made a shady deal.

        Ed. — When a promoter takes out a bond, whatever is hit against the bond is what the insurance company then pursues (in court) against the promoter. So, if $10,000 is hit against the bond, the insurance company wants the promoter to pay up the $10,000.

  8. retzev says:

    Are MMArtists protected by the Ali act?

    Ed. — Ali Act only protects boxers, not MMA fighters.

    • Alan Conceicao says:

      Since the act says boxing specifically, the answer is no. I believe Randy Couture tried to challenge his contract on that basis and it went nowhere.

      • Chuck says:

        It went nowhere only because Couture decided to pull the plug on the lawsuit. I believe his exact words were something to the extent of “the court process was taking too long, so I will just go back to the UFC”. If I am wrong, someone please correct me.

        Imagine if Couture went through with the lawsuit. Maybe the Ali Act would have covered MMA fighters. Who knows? it’s all academic at this point.

  9. Alan Conceicao says:

    So, why has every MMA media outlet ignored that SPEED TV is getting revamped?

    http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-baseball-fox-tbs-20121002,0,3675669.story

    This is not a new story. I’ve heard this line literally for the better part of a year and I’ve heard that the plan is for Fox Soccer and Fuel to get converted to Fox Sports networks as well down the road. Not that this is meaningful news or anything to see the UFC changing cable networks/platforms and getting MLB or NASCAR as lead ins rather than 4 year old action movies and Thrillbillies. Who cares, amirite?

    • Zach Arnold says:

      When it can be demonstrated that UFC benefits from legitimate lead-in programming, then I’ll pay attention. Otherwise, the evidence so far indicates that the Fox platform (outside of getting $100M a year) has not benefited them the way their backers thought it would.

      UFC’s core audience is not a traditional sport audience. A lot of the audience is from pro-wrestling or views MMA as their primary sport of choice.

    • edub says:

      I think it’s huge, especially if Fox goes all out and spends money on HD programming for all the new channels.

      There is no “second” to ESPN programming right now as they are by far the undisputed leader. However, Fox has the clout to challenge that, and if they were successful it would IMO be incredible for the UFC brand.

  10. retzev says:

    Doesn’t the UFC’S core audience tune in no matter which channel it’s on? And isn’t it the mainstream sports fans and casual MMA fans that need to be better reached? If the UFC and Fox continue to pretend that the UFC is a mainstream sport for long enough, may not the mainstream eventually believe that it is?

  11. […] Officer named Kathi Burns who had no clue what she was doing. It was on Guevara’s match that the debacle in Oxnard took place in September of 2012. Until Andy Foster was hired by DCA, Guevara’s incompetence in training athletic inspectors […]

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