The Matt Leinart Flag Football League, a for-profit company, used the former USC Heisman Trophy winner’s non-profit foundation to secure access and special rates for sports fields around Orange County that otherwise would not have been available to the league, The Orange County Register has learned.

Ryan Leinart, Matt’s brother and executive director of the Matt Leinart Foundation, acknowledged to the Register that although the “Matt Leinart (Flag Football) League is a separate entity” from the Leinart Foundation, the league used the foundation’s non-profit status to acquire fields for the league at local schools and parks.

Because the league registered with local government agencies and school districts as a non-profit group, Matt Leinart Flag Football was able to use fields normally not available to for-profit groups and saved tens of thousands of dollars by paying special reduced rental fee rates reserved for non-profit organizations.

During one three-month period last spring in Costa Mesa alone, the league’s non-profit status allowed it to pay nearly $50,000 less in rental fees than it would have as a for-profit group.

Costa Mesa officials including Mayor Steve Mensinger and other city council members repeatedly disregarded city policies and regulations in granting the Leinart flag football league non-profit status and access to city fields. The city’s parks and recreation director said at one point he was so uncomfortable with city officials’ insistence that the Leinart league be allowed to use park facilities that he resigned.

Even after Ryan Leinart told the Register that the Huntington Beach-based youth flag football league was not part of the non-profit foundation, Robert Leinart, Ryan and Matt’s father, wrote a letter to the Costa Mesa City Council requesting the league continue to be granted status otherwise only available to non-profit groups under city regulations.

The Costa Mesa Parks and Recreation Commission decided last week to recommend the flag football league be granted a one-year extension. The commission is expected to approve the recommendation Thursday.

At least one Orange County school, Sage Hill School, stopped providing the Leinart league with field access because of concerns about the flag football league’s for-profit status.

The Los Angeles-based Matt Leinart Foundation is a 501(c)(3) non-profit group. Leinart was selected by Arizona as the 10th pick overall in the 2006 NFL draft. He signed a six-year contract with the Cardinals worth $51 million. Leinart played four injury-riddled and largely disappointing seasons in Arizona before moving on to Houston for two seasons and then Oakland for a final campaign in 2012.

Leinart set up the foundation in 2006, according to documents filed with the Internal Revenue Service. The foundation had revenues of $334,256 for the fiscal year 2013, according to a May 15 draft of financial filing with the California Attorney General obtained by the Register.

Ryan Leinart is the foundation’s executive director and receives an annual salary of $90,000, according to a review of the foundation’s filings with the IRS for the past four fiscal years. Matt Leinart contributed $25,000 to the foundation during the 2013 fiscal year, the most recent year with available records, and $75,000 in 2012.

Other major contributors to the foundation include billionaire Tor Peterson of the Swiss commodities trading group Glencore ($100,000 in 2013, $150,000 in 2012), the John and Hilda Arnold Foundation ($40,000 in 2013), the Argyros Family Foundation ($25,000 in 2013) and the NFL Foundation ($5,000).

The foundation contributed $32,985 to non-profit groups in 2013 and had another $155,629 in expenses for “charitable purposes” – $13,947 in office administrative fees, $2,741 in meals, $54,075 in expenses for a football camp for underprivileged youth, $20,062 in promotions, $46,583 on a bowling fundraiser and another $18,221 on a golfing fundraiser.

ML Flag Football registered with the California Secretary of State as a limited liability company Nov. 8, 2011, and at a time when interest in youth flag football was exploding amid growing concerns about concussion and other health issues related to the full-contact game.

Matt Leinart Flag Football runs leagues in Irvine, Newport Beach/Costa Mesa and South County. The league costs $170 per player and Matt Leinart Flag Football also runs summer camps and a weekly academy for quarterbacks and wide receivers.

“The Matt Leinart Flag Football League is a separate entity that was started by myself and two coaches who have a shared passion for kids to play flag football,” Ryan Leinart said in an email to the Register. “There were other community leagues out there, but with our experience, we felt that we could offer a unique sports experience for kids.”

But the Leinart league ran into a significant obstacle – field access.

“What we found is that most cities require a 501(c)(3) in order to rent their fields,” Ryan Leinart said. “We talked with our legal counsel and were advised that it was OK to proceed with the foundation lending its non-profit status to the Matt Leinart Flag Football League. Because the foundation’s mission is to provide opportunities for youth to get involved in sports, we felt that by using our non-profit status in this manner, we were fulfilling our mission.”

But Sage Hill wasn’t OK with the arrangement between the for-profit league and the non-profit foundation and did not renew the flag football’s field lease with the school.

“Our policy at Sage Hill is to only lease to 501(c)(3) non-profits,” said Torrey Olins, the school’s director of communications and marketing. “We don’t do business with for-profits.”

“Sage (Hill) contacted the Matt Leinart Flag Football League and indicated that they were not comfortable with the structure,” Ryan Leinart said. “As a result, they did not renew the flag football league’s contract until paperwork is resubmitted showing the compliance with their guidelines.”

But the for-profit league continues to receive non-profit status and benefits with other Orange County cities and schools. The Leinart league has Category II status with the City of Irvine. Among the eligibility requirements for Category II status, according Irvine policy, is, “A copy of the organization’s State of California nonprofit incorporation papers or tax-exempt IRS 501(c)(3) letter.”

“The City of Irvine received documents from the Matt Leinart Foundation that meet all of these (Category II) requirements,” said Craig Reem, director of public affairs and communications for the City of Irvine. “The Matt Leinart Foundation operates the Matt Leinart Flag Football program in conjunction with the NFL Flag Football program.”

Ryan Leinart, however, acknowledged that, “The foundation is not running the leagues. We have collaborated with the Matt Leinart Flag Football League to use our non-profit status.”

In Costa Mesa, the Leinart league has not only enjoyed the benefits usually only afforded to a non-profit organization but Mayor Mensinger and City Council member Gary Monahan first pushed for the city to grant the league Group 3 status in 2014.

Costa Mesa Parks and Recreation director Robert Knapp said he resigned in 2014 because of pressure from city officials to give the Leinart league access to fields at the Jack Hammett Sports Complex.

Knapp said he thought the access to those fields should be granted to other sports organizations that had greater interest in the community and because the city was already renting field space to another flag football league.

Knapp said he was also uneasy because the Leinart league did not meet requirements for having certain percentages of participants that are Costa Mesa residents.

“I was instructed by (Costa Mesa CEO Thomas R. Hatch) to make it happen for them, get them the fields,” Knapp said referring to the Leinart league. “So I decided to move on.”

To receive Group 3 status, an organization must have 501(c)(3) status. City of Costa Mesa Recreation Department permit contracts include the following question: “Are you a non-profit organization with a valid 501 c within the City of Costa Mesa?” On two permit contracts dated Jan. 20 and Feb. 4 of this year, the Leinart league answered “yes,” according to forms prepared by the recreation department obtained by the Register.

The Jan. 20 form detailed an agreement between the Leinart league and the recreation department to rent three fields at the Hammett facility between March 6 and May 22 for a total of 180 hours. The league was charged the Group 3 rate of $25 per hour. It was also charged an additional $15 for 60 hours for using fields with permanent lights. Under the agreement, the Leinart league paid $4,500 in rental fees plus another $900 for using fields with lights for a total of $5,400.

If the league had been charged the city’s normal rental rate for non-resident for-profit groups of $239 per hour the rent would have $43,020.

According to the Feb. 4 agreement, the recreation department rented the Leinart league fields at Costa Mesa High on 26 dates between Feb. 12 and May 14 for a total of 52 hours. The league, again paying the Group 3 rate, paid a total of $1,300 in rental fees. If it had been charged the non-resident for-profit rate, the bill would have been $12,428. Between the two rental agreements, the Leinart league paid $49,648 less in rental fees than it would have if it had been required to pay the regular for-profit rate.

Mensinger and Hatch did not respond to questions submitted to them by the Register. Monahan said he was comfortable with the Leinart arrangement and said the city was looking into plans that would benefit both the Leinart league and a rival youth football league.

“We knew that once the Matt Leinart League made it through their (first) few seasons and got their feet off the ground, we would benefit from donations made from a portion of their proceeds,” Ryan Leinart said.

The league donated $10,000 to the foundation in 2013, according to an IRS filing.

Costa Mesa officials last year took a much harder stand with a rival flag football league. Newport-Mesa Friday Night Lights is run by the non-profit Orange County Youth Sports Association and serves approximately 800 players from kindergarten to eighth grade.

Costa Mesa officials in February 2014 charged the league with $48,889 in additional fees for using the Hammett facility because the league violated a city policy. Under the city policy, sports groups must pay field-use fees only if they “utilize profits from the organization to pay local executive staff and or/board members.”

The league avoided paying the fees by submitting a letter to the city in September stating that the league’s chief administrator, Commissioner Scott Mahaffy, did not receive financial compensation from the profits of the operation. Mahaffy in fact did receive compensation.

Ryan Leinart did not respond to questions about whether he received compensation from the Matt Leinart Flag Football League.

Orange County YSA officials said they erroneously assumed the league was exempt from paying field-use fees because a non-profit group cannot generate profit.

“There is some ambiguity as the policy is written,” Mark Broersma, president of the Orange County YSA, told the Register in 2014. “We’re a nonprofit – we don’t generate profit.”

Ryan Leinart said the Leinart league starting this fall will no longer use the non-profit foundation to secure fields.

“We only had good intentions in allowing our non-profit status to be used to secure city fields,” Ryan Leinart said. “We sought legal counsel who advised us that this was acceptable. It wasn’t until we started hearing from the rival league that raised questions about our structure that we looked into this further. We immediately reached out to a few (of) our locations to check in on this, met with them and discussed the steps that we needed to take to get our structure on track.

“At this point, our plan is that starting with the Fall 2015 season, the Matt Leinart Foundation will remove itself from the paperwork to secure city fields. The Matt Leinart Flag Football League will continue to operate, but as an operator commissioned by a different 501(c)(3) non-profit to run its programs. The change will allow the league to be in full compliance with the preferred city structure that is largely based on an insurance and liability framework. The cities have seen the results of what our programs can do and we appreciate their support as we get things in order. We never intended to operate in a manner that was not in line with their policies. We simply did not know.”

But Ryan Leinart’s statements appear to be contradicted by a June 17 letter Robert Leinart wrote to the Costa Mesa City Council. In the letter written on Matt Leinart Flag Football stationery, the elder Leinart writes to “request a one year extension of our Group 3 user status for the Matt Leinart Flag Football League. We have been ecstatic with the growth of our Costa Mesa league in the last year.”

Contact the writer: sreid@ocregister.com