Bush allegedly wanted to create sports agency

Former USC football star Reggie Bush was involved earlier and more deeply than previously reported in efforts to create a sports marketing agency that has been the focus of lingering controversy, according to lawyers for disgruntled partners in the failed venture.

The lawyers said it was Bush, along with his stepfather, LaMar Griffin, who proposed the agency as a way for the Heisman Trophy winner to avoid paying a percentage of his earnings to an established agent when he turned professional.

The NCAA and Pacific 10 Conference are investigating whether Bush violated rules of amateurism. If that is proved, USC could forfeit victories spanning two highly successful seasons and Bush could be forced to surrender his Heisman.

Attorney Brian Watkins said his client, Lloyd Lake, one of the agency’s partners, planned to cooperate with collegiate investigators.

Watkins told The Times that Bush was present at several early meetings of the agency’s founders and was active in pushing the idea of creating New Era Sports & Entertainment. Bush later introduced USC teammates to New Era backers Lake and Michael Michaels, the attorney said.

“But for him [Bush], this business venture wouldn’t get off the ground,” Watkins said. “What do you think? LaMar could never start a sports agency. He’s a high school security guard. No one’s going to get behind that business venture.”

Jordan Cohen, who represents Michaels, called Bush “a founding member” of the sports agency, whose “presence would then attract additional athletes to sign with the firm.” Bush and his stepfather wanted “to keep money within the family,” Cohen said. “In order for that plan to work, they needed financing.” All of the initial funding for New Era came from Michaels and Lake, the lawyers said.

The controversy erupted nearly a year ago after allegations from Michaels and Lake that they had provided cash to Bush’s family, as well as a home for which the family had failed to pay more than $50,000 in rent, according to Watkins. The conflict became public after Bush had signed with another sports agent.

The former USC tailback, who signed a contract with the New Orleans Saints that reportedly could be worth up to $60 million, has repeatedly stated that neither he nor his family did anything wrong. People close to him contend that the young athlete and his parents might have been led astray by unscrupulous agents.

A federal grand jury in San Diego was investigating allegations by Bush lawyer David Cornwell that Lake tried to extort money from his client.

Cornwell declined to be interviewed for this article, but he faxed a brief statement complaining about the media. The statement concluded: “We respectfully withdraw from this public circus.”

Cohen and Watkins said they plan to file separate legal actions against Bush and his family. Cohen said his client has been trying to “recover the losses incurred ... in connection with the failed enterprise.” He specified no amount. Watkins said his suit on Lake’s behalf would ask for $3.2 million.

This week, The Times reported that Lake previously tape-recorded conversations in which Bush and his stepfather allegedly acknowledge receiving cash and gifts. The report was based on statements of a source close to the controversy.

The status of the tapes is uncertain.

Bush and his family -- including his stepfather, mother Denise and half brother Jovan Griffin -- have received about $50,000 in cash disbursements from New Era, according to Watkins. Part of that amount, $13,000 in cash, was given to LaMar Griffin as part of the business of New Era, the lawyer said.

Griffin went to Los Angeles, where he and Bush used the cash to buy a 1996 Chevrolet Impala, Watkins said. It was unclear whether the USC athlete knew the origin of those funds.

Associates of Bush have privately criticized Lake and Michaels, suggesting the would-be agents violated state laws that, among other things, regulate how agents may solicit athletes as clients.

But Cohen and Watkins contend that Bush and the Griffins already were partners of the new sports agency when they received funds.

“The money that was provided by Michaels was really in connection with the formation of New Era,” Cohen said. “How the Griffins chose to [spend it] was up to them.”

The New Era investors were an unlikely pair with no history in the sports agency business.

Michaels, a San Diego businessman, was a real estate investor and an official for the Sycuan Indian tribe’s development corporation. Lake had been convicted of felony drug violations and was on probation.

Lake, reportedly a friend of the Griffin family and an acquaintance of Michaels, helped introduce Bush and his family to Michaels in 2004. The first meeting involved only the stepfather, who met Lake and Michaels at a San Diego Chargers game.

Cohen, who took over as the attorney for Michaels four months ago, said his client “was not out there looking to start a sports marketing agency. It was the family coming to Michaels because Michaels had the financial means.”

If substantiated, the Cohen-Watkins allegations could menace some of USC’s major sports achievements in recent years.

Bush could be deemed retroactively ineligible for the 2004 and 2005 seasons, during which USC won a national championship and then lost in the title game. The Trojans could be required to forfeit victories from those seasons and face additional sanctions.

Cohen said that in researching the case he had found “no information or indication that USC had actual knowledge of any of this.” Watkins noted that USC running backs coach Todd McNair also socialized with Michaels and Lake at least once, but might have known nothing about the business arrangements.

Outside the locker room after the Rose Bowl, McNair said he “didn’t know anything.” Coach Pete Carroll said this week that his program is continuing to cooperate with NCAA and Pac-10 investigators.

“We’re not looking to damage USC, we’re not looking to implicate Reggie Bush in any NCAA violations,” Cohen said. “This is a business dispute, nothing more.”

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Times staff writers Sam Farmer and Gary Klein contributed to this report.

david.wharton@latimes.com