AUSTIN (KXAN) — A live entertainment CEO was indicted for orchestrating a conspiracy to rig the bidding process for the “development, management, and use of a multi-purpose arena that was to be located on the campus of a public university in Austin, Texas,” a press release from the U.S. Department of Justice stated.
According to the release, a federal grand jury returned an indictment against Timothy J. Leiweke, the Co-Founder and Chief Executive Officer of Oak View Group (OVG). The group develops and provides services to live entertainment venues across the country.
The release said Leiweke is accused of “orchestrating a conspiracy to rig the bidding process for an arena at a public university in Austin, Texas.”
While the Department of Justice release doesn’t specifically name the Moody Center as the venue in the press release, the OVG’s website shows the Moody Center is the only venue it manages in Austin.
CNBC also named the Moody Center as the involved venue in its reporting.
In 2021, OVG was approved by the University of Texas Board of Regents to build the new arena and Longhorns practice facility.
The indictment alleges that from around February 2018 through at least June 2024, Leiweke “conspired with the Chief Executive Officer of a competitor to rig the bidding for the development, management, and use of a multi-purpose arena that was to be located on the campus of a public university in Austin.” The press release refers to it as the “Arena Project.”
According to the press release, the indictment said that in September 2017, Leiweke told colleagues that he learned another venue-services company was “bidding against us” for the Arena Project and wanted to “find a way to get [the competitor] some of the business” and “get them to back down.”
The release said that in November 2017, “Leiweke told others that he was ‘[m]ore than happy talking to [the competitor] about not bidding and [receiving certain subcontracts]’ but had ‘no interest in working with them if they intend on putting in a bid.'”
In February 2018, Leiweke reached an agreement with the competitor’s CEO. According to the DOJ, the competitor agreed that it would stand down and neither submit nor join an independent competing bid for the project. In exchange, Leiweke said the competitor would receive the Arena Project’s subcontracts.
The DOJ said OVG ultimately submitted the “sole qualified bid” and won the Arena Project, which opened to the public in April 2022, and OVG “continues to receive significant revenues from the project to date,” the release stated.
OVG has agreed to pay $15 million in penalties related to the allegations. Legends Hospitality, another live events company, agreed to pay $1.5 million in penalties.
Leiweke was charged with a violation of Section 1 of the Sherman Act. According to the DOJ, the maximum penalty for individuals is 10 years in prison and a $1 million criminal fine. The fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine, per the DOJ.
If convicted, a federal district court judge will determine any sentence.
“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,” said Assistant Attorney General Abigail Slater of the Justice Department’s Antitrust Division. “The Antitrust Division and its law enforcement partners will continue to hold executives who cheat to avoid competition accountable.”
The U.S. Department of Labor, Office of Inspector General and the Federal Bureau of Investigation’s New York Field Office are investigating the case. The Antitrust Division’s New York Office is prosecuting the case, with the assistance of the U.S. Attorney’s Office for the Western District of Texas.
Anyone with information in connection with this investigation should contact the Antitrust Division’s Complaint Center at 888-647-3258, or visit www.justice.gov/atr/report-violations.