New York Attorney General Andrew Cuomo began investigating the Kansas Athletics Department last week along with 39 other college athletic departments to determine whether they received kickbacks for steering athletes and students to preferred education lenders.

This week, the Athletics Department is firing back.

“In the press release,” Associate Athletic Director Jim Marchiony said, “they made what I consider a huge leap assuming that because a company was a sponsor of an Athletic Department that that Athletic Department was taking kickbacks. There were quotes in there that in my view were unconscionable and borderline unethical.”

Cuomo distributed the release last Wednesday. He also served subpoenas and document requests to the 40 athletic departments, 38 of which are Division I schools.

“Students trust their University’s athletic departments because so much of campus life at Division I schools centers around supporting the home team,” Cuomo said. “To betray this trust by promoting loans in exchange for money is a serious issue, especially when Division I schools already generate tremendous revenue from their student athletes. Today’s action is an important new step as we continue to examine the unethical conflicts that pervade the student loan industry.”

Marchiony said the Athletic Department was not happy that the Attorney General’s office sent the press release to the media before contacting Universities. He also took exception to the wording of the release.

“In my view, that is guilty before proven innocent,” Marchiony said. “That is insinuating Athletic Departments are taking kickbacks.”

The investigation began after the Attorney General’s office uncovered that Dowling College received $75 for every loan application that was directed to University Financial Services, a student loan provider, from the school’s athletic department.

The Attorney General also seeks to determine if athletic departments are using school team names, mascots, colors and logos, to imply that UFS is the school’s official lender. Dowling had agreed to put links to UFS on their athletic department’s website and distribute UFS promotional materials to direct students towards UFS loans.

The University of Kansas recently pulled a UFS advertisement that had been on display at kuathletics.com.

“While this process unfolds, we want to make sure that everyone understands that we want to cooperate fully with the New York Attorney General,” Marchiony said. “We thought that if this will help that process, then we were willing to do that. We know that we have done absolutely nothing wrong, but we just want to show the Attorney General that we want to cooperate as much as we can and then, after this issue is settled, we can talk about putting it back on the website.”

Marchiony said the University had no direct relationship with UFS. The school’s multi-media rights, which include corporate sponsorships, are owned by Host Communications. This permits Host to sell sponsorships of Kansas Athletics. Kansas must approve these sponsorships, but the contract is between the company and Host.

“UFS is not permitted to say that they are a preferred lender of Kansas athletics,” Marchiony said. “That is very clear in the contract. It also specifies that UFS says that it is not a part of Kansas athletics. Kansas Athletics does not receive or ask for money from UFS based on how many students apply for loans at UFS.”

Marchiony said KU participated in the federal direct-lending program, which allows students to get loans directly from the federal government.

The subpoenas and information requests ask the University to disclose documents relating to agreements made between the athletic department and UFS and documents that reflect why UFS was chosen as the athletic department’s recommended lender.

The Attorney General’s office wants athletic departments to prove a recommendation of UFS was not in exchange for payment from the business, bur rather the culmination of an evaluation of UFS interest rates. A payment arrangement would constitute revenue sharing, which is a violation of federal law.

“Kansas Athletics has never asked for or received one penny from any financial institution service company based on the number of loan applications that are processed through that company,” Marchiony said. “We don’t give names to companies, to any companies, of current or past student athletes for any reason.”