SIHR’s Behind the Boards

Schooley Scandal Plagues Pittsburgh Pucksters

SIHR’s Behind the Boards


Schooley Scandal Plagues Pittsburgh Pucksters

John Lokka
Posted May 09, 2020

Viewed 2769 times

Roy Schooley pictured with the 1920 USA Men's Hockey Team
Roy Schooley pictured with the 1920 USA Men's Hockey Team

In the mid-2000s, the NHL greatly improved its due diligence procedures surrounding franchises in the wake of multiple scandals.[1]

One of the most egregious examples involved John Rigas, former owner of Adelphia communications and the Buffalo Sabres. The Rigas family leveraged Adelphia to fund their ownership of the hockey club as well as other properties and investments, which were not disclosed in SEC filings and financial reports.

Rigas received a 15 year prison sentence for the fraud, which amounted to $1.5 billion.[2] While John Rigas was a private person leveraging a private enterprise for personal gain, a public figure used public monies to do the same thing some 70 years prior.

In October 1929, the Great Depression hit the United States. As banks collapse and funds dried up, many cities enacted new laws over tax receipts and treasury bonds. Pittsburgh was one of those cities. In January 1930, Charles Kline was sworn-in as reelected mayor. As opposed to his 1926 election, he appointed loyalists over whom he had near complete control. The referee's/news reporter, Roy D Schooley, counted himself amongst Kline's inner circle.[3] And, Mayor Kline rewarded him with an appointment to city treasurer. [4]

Schooley did not get the appointment by happenstance. His long exposure to Pittsburgh politics started when he first moved into the city in 1903. At the time, he came as both a referee and a news reporter after completing a law degree in Ontario. As a news reporter, Schooley worked the political beat exposing him to many of Pittsburgh's prominent politicians.

After getting his citizenship in 1910, Schooley moved steadily through Pittsburgh's political ranks. [5] By 1926 he held positions of the secretary of the city of Pittsburgh, chief clerk Department of works, road commissioner of Allegheny County, and on the board of assessment and revision of taxes. [6] While experiencing rising status as public life, his control and ownership of Pittsburgh's hockey league also grew during these years.

Schooley turned the Pittsburgh Athletic Association team into the rising star of the intra-city league. In 1917/18, they became the PAA All-Stars. During the USAHA era, they were known as the Yellow Jackets. Despite being affiliated with amateur organizations, they regularly faced charges or criticism of professionalism. After the end of the 1924/25 season, Schooley sold the team but retained trademark over the team name due to debit.

With the selling of the team, he was able to focus on his rising political status. He attached himself to Charles Kline. Kline's 1926 gubernatorial candidacy relied upon Carnegie Mellon's backing. During Kline's first mayorship, he built his own political machine using Mellon's techniques. Those techniques usually insured money flowed to friends and allies.[7] Then came the Great Depression.

In 1930, the last thing taxpayers wanted to see was largess in their elected officials especially at the city level. In Pittsburgh, new laws requiring open bids and competition for purchases and deposits must be secured with bonds. The changing attitudes and the election of FDR created fiction between Kline's Republican administration and the public.

Schooley retained three positions during his tenure in the city's treasurer office, city treasurer, collector of delinquent taxes, and school tax administrator. Shortly after getting installed in 1930, Schooley posted delinquent tax notices in the newspapers. Although, it's not clear if this was meant to hide the previous administration's graft or set up a potential legal defense since Schooley saw the massive discrepancy in the books. Regardless, Schooley would be no hero.

By March 1931, allegations of graft in Kline's administration boiled over into public discourse. Kline turned a simmering anger into a full roil with the purchase of two Persian rugs for $1950 without competitive bidding. Unusual spending and graft played out in March 4 newspapers. By then, Kline had dismissed the previous director of supplies, leaving investigators and auditors to intensely focus on the city treasurer's office.[8]

First fell Charles Solomon, a clerk, for stealing taxes and issuing false receipts. Next came Franklin savings and trust company which held $125,000 of the city’s deposits, supposedly secured by collateral. Arthur Burgoyne, Schooley's close aide, made bonds magically appear and then disappear again. [10] Franklin Savings and Trust closed in September 1931, as well as two other banks Schooley used for city deposits. However, Franklin also managed Schooley's personal accounts and those of the Yellow Jackets. On October 19, 1931, Schooley resigned, but the audit pushed on.

By December 1931, two more aides were indicted and another committed suicide. Yet, the Yellow Jackets prepared to play and with a newly remodeled arena. In the summer of 1931, Schooley and his partner John Callahan parted ways. Schooley now held controlling ownership of both the Yellow Jackets and Duquesne Gardens Arena. In September, Schooley announced a $10,000 renovation. Additionally, Charlie Read returned to be the Yellow Jackets head coach. The team seemed solid.

In January 1932, Schooley's indictment came down, in which the grand jury presented 58 charges. From February 18, 1930 until September 3, 1931, Schooley allegedly appropriated $16,500 of tax money for his own use. At least $1860 went to two Schooley hockey clubs, the Pittsburgh hockey club and the Fort Pitt hockey club. Additional money went to favored individuals in return for postdated checks or IOUs.[11,12] The audit revealed that the defunct bank Franklin honored a $9800 check back in April even though the balance only showed $8.03. [13]

In July 1932, the IHL forced Schooley to forfeit the Pittsburgh hockey club. The league re-awarded the team to a local group of businessmen led by Cliff Whitehill. The owners of the arena, Pittsburgh Railways company, canceled the team’s lease prior to forfeiture. [14] By the 1932/33 winter, John Harris led the arena coalition. [15]

No teams played that season due to the fallout of Roy Schooley. Schooley retained territorial rights and trademark but no franchise or players. Banking interests controlled the team but were not granted territorial rights to operate by the NHL. [16] Thus, Pittsburgh hockey languished from league play until 1935/36.

Schooley's indictment, along with Schooley himself, died in November of 1933. That's where Roy Schooley and John Rigas differ. Rigas is still alive at 92. Additionally, Rigas did not embezzle from the government or the public taxpayer. Still, I don't think a public official or political appointee should be allowed to retain majority control over such an enterprise, though the Give Fans a Chance Act of 1997 (H.R. 590, Section 7.b.4) might allow otherwise. [17]

 References

[1] Kelley, Jim (2007) Sports Illustrated, No End to NHL Ownership Scandals https://www.si.com/more-sports/2008/06/27/ownership-scandals

[2] SEC vs Adelphia/Rigas, https://www.sec.gov/litigation/complaints/complr17627.htm

[3] Mayor Kline's swearing in ceremony Jan 1930

https://historicpittsburgh.org/islandora/object/pitt%3AMSP301_B003_F005_I19/viewer

[4] Councilmanic hand book of Pittsburgh 1932/33

https://digital.library.pitt.edu/islandora/object/pitt%3A31735037682410/viewer#page/158/mode/2up

[5] Naturalization Records. National Archives at Philadelphia, Philadelphia, Pennsylvania. (Ancestry.com at https://ancstry.me/2YvHlSK)

[6] Senatorial Campaign Expenditures Hearings: June 9 - July 7, 1926

https://bit.ly/3bYTRxU (page 746/digital 762)

[7] Charles Kline's Senate Biography https://www.legis.state.pa.us/cfdocs/legis/BiosHistory/MemBio.cfm?ID=4873&body=S

[8] "Women Find Kline's Rugs 'Beautiful' But 'Outrageous'" Pittsburgh Press, page 1, March 4, 1931 https://www.newspapers.com/clip/50053647/the-pittsburgh-press/

[9] "Clerk is Held for Stealing Taxes", Lancaster New Era, March 4, 1931, pg 12 https://www.newspapers.com/clip/50090633/lancaster-new-era/

[10] "This must be Cleared Up", Pittsburgh Press, Oct 14 1931 https://www.newspapers.com/clip/50094146/the-pittsburgh-press/

[11] "Probers Urge Indictments". Page 1, Pittsburgh Post-Gazette Jan 6, 1932. https://www.newspapers.com/clip/50135709/pittsburgh-post-gazette/

[12] Continued from Page 1, Pittsburgh Post-Gazette Jan 6, 1932. https://www.newspapers.com/clip/50136333/pittsburgh-post-gazette/

[13] "State Official Asks for Securities Treasurer Claims Bank Gave." Pittsburgh Post-Gazette, Oct 14, 1931. https://www.newspapers.com/clip/50094251/pittsburgh-post-gazette/

[14] "Ice Hockey Future Here is Certain", Pittsburgh Press. Jul 31, 1932. https://www.newspapers.com/clip/50134938/the-pittsburgh-press/

[15] "Garden Plans Hockey Team". Pittsburgh Sun-Telegraph. Dec 15, 1932. https://www.newspapers.com/clip/50167121/pittsburgh-sun-telegraph/

[16] "City Hockey Continues Unsettled" Pittsburgh Press, Aug 24, 1932 https://www.newspapers.com/clip/50135648/the-pittsburgh-press/

[17] Give Fans a Chance Act of 1997 (Public Law 87-331; 15 U.S.C. 1291, Section 7.b.4) https://www.congress.gov/bill/105th-congress/house-bill/590/text

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