Where the Clippers-Raptors, Kawhi Leonard trade stands amidst federal investigation

Kawhi Leonard expects to rejoin the Raptors, seven years after leaving the franchise in free agency for the Clippers.

The Clippers and Raptors have had a trade agreement in place to send Leonard back to Toronto for 2 ½ months.

And yet, as of Friday, Leonard was officially on the Clippers’ roster, with there being uncertainty of when the Raptors will acquire him.

That uncertainty has been brought back to the forefront in light of federal prosecutors opening a criminal investigation into the Clippers over allegations the team circumvented the NBA’s salary cap for Leonard.

On June 30, two months before the NBA announced the penalties for the Clippers’ violations of the league’s salary cap rules by “initiating off-court income opportunities” for Leonard with four different companies, the Clippers agreed to trade Leonard to the Raptors for Brandon Ingram, Gradey Dick, two unprotected first-round draft picks (2031 and 2033), a 2027 first-round pick swap and two second-round picks. 

The trade was put on hold on July 9 amidst the NBA’s investigation of the Clippers-Leonard scandal, with the Raptors stating it was going to wait until the league’s investigation was complete since they would’ve assumed the risk for any potential outcome of the investigation impacting Leonard. 

But the findings of the investigation, and punishments stemming from it, have been known for over a week: A $30 million fine for the Clippers; Clippers owner Steve Ballmer (one year), president of business operations Gillian Zucker (one year) and president of basketball operations Lawrence Frank (six months) all being suspended for their roles in the scandal; Leonard being forced to pay the NBA $700,000 for restitution for improper benefits he received from the Clippers, and his uncle and former business manager, Dennis Robertson, being been banned by the NBA from all business dealings for five years.

But with the start of training camp two weeks away, an element of timing is coming into play. 

As first reported by NBA Insider Jake Fischer, Leonard was in South Florida this week as part of an organized minicamp with Raptors players, but was a limited participant because the trade isn’t official yet. 

Marc Stein reported on Friday that the Clippers and Raptors are able to co-submit the trade for league approval for it to become an official transaction. 

So what’s the hold up?

The main reason the trade hasn’t happened yet has been the unknowns surrounding the Clippers’ internal infrastructure.

With Ballmer and Zucker suspended, the Clippers governor in Ballmer and one of its alternate governors in Zucker aren’t allowed to be involved in the franchise’s operations. 

Nor is Frank, who is in charge of the Clippers’ basketball operations.

The only alternate governor who is permitted to be involved with the Clippers’ operations is Dennis Wong, who owns 1% of the franchise. Besides Ballmer, he’s the only person with an ownership stake in the Clippers.

The NBA would likely have to approve Wong as the Clippers interim/temporary governor before Leonard’s trade to the Raptors is official.

A potential roadblock: Wong sent Aspiration Partners, which was one of the four companies involved in the Clippers-Leonard scandale along with Boingo Wireless, Daktronics and Lockton Insurance, $1.99 million through his DEA 88 Investments. And nine days later, Aspiration paid Leonard $1.75 million as part of its endorsement deal with the star forward. 

Wong wasn’t mentioned in the 35-page summary report by Wachtell, Lipton, Rosen & Katz, which was the law firm that investigated the Clippers for cap circumvention.

It isn’t clear whether the NBA will approve Wong as the Clippers temporary governor. 

It also isn’t clear who is and who will be running the Clippers basketball operations while Frank is suspended. 

Clarity may come during or after the NBA’s Board of Governors meetings on Monday and Tuesday in New York. 

But until then, the stalled trade involving the Clippers, Raptors and Leonard will likely remain unresolved.