EDITOR'S NOTE: The article has been updated to include a statement released by a spokesperson for Tim Leiweke Thursday morning.
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ORIGINAL:
A federal grand jury has indicted the co-founder and CEO of Oak View Group (OVG) for allegedly rigging the bidding process to develop the Moody Center in Austin.
Timothy Leiweke is accused of conspiring with a competitor to rig the contract for the $338 million arena that opened in 2022. OVG develops and provides a variety of services to live entertainment venues, including the American Bank Center. The group has been at the center of the controversial naming rights decision for the venue.
According to the indictment from the U.S. Department of Justice, in September 2017, Leiweke told colleagues he had learned another company was "bidding against Oak View Group" for the project that would become the Moody Center, and wanted to "find a way to get the competitor some of the business" and "get them to back down."
The indictment says in November 2017, Leiweke told people he was "more 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, he ultimately reached an agreement with the CEO of the competing company, in exchange for the competitor to neither submit nor join an independent competing bid for the project.
In exchange for the competing company not submitting a bid, Leiweke allegedly allowed the competitor to get subcontracts for the project. OVG ultimately submitted the only qualified bid for the arena and won the project.
The group has agreed to pay $15 million in penalties, while another company, Legends Hospitality, will pay $1.5 million. If convicted, Leiweke faces a maximum penalty of ten years in prison and a $1 million fine.
A spokesperson for Tim Leiweke released the following statement to KRIS 6 News Thursday morning:
“Mr. Leiweke has done nothing wrong and will vigorously defend himself and his well-deserved reputation for fairness and integrity. The Antitrust Division’s allegations are wrong on the law and the facts, and the case should never have been brought. The law is clear: vertical, complementary business partnerships, like the one contemplated between OVG and Legends, are legal. These allegations blatantly ignore established legal precedent and seek to criminalize common teaming efforts that are proven to enhance competition and benefit the public. The Moody Center is a perfect example, as it has resulted in substantial and sustained benefits to the University of Texas and the City of Austin.”
