WASHINGTON - Nearly two years, $43,000 dollars, and 300 staff hours after it began, the Office of Thrift Supervision's fantasy sports scandal is over.

An independent arbitrator ended the saga by ruling against the agency this month in a grievance brought by the OTS' unionized employees. He ordered the agency to pay legal costs, reimburse its employees for lost pay, and rescind the reprimands it had issued to them.

The agency had accused 11 staffers of misusing government property and "gambling" after it discovered in February 1993 that they had created fantasy sports leagues, which were run after hours, mostly in a nearby bar.

After a detailed internal investigation, the OTS disciplined the players. The OTS said its employees misused government property by sending brief electronic mail messages discussing the games. Staffers brought the case to an arbitrator, who ruled in their favor after five days of hearings.

In fantasy leagues, sports fans select imaginary dream teams by "drafting" players from various professional sports teams. League members score points when players on their imaginary teams do well in real games.

The arbitrator, Rolf Valtin, concluded that the OTS, "conducted an investigation which, in its nature and magnitude, was akin to a criminal investigation." He sided with the employees after concluding that the fantasy sports scandal, "is a classic case of overreaction from misconception."

The fantasy sports players were elated by the arbitrator's decision.

"I feel like Joe Namath after the '69 Super Bowl - we told them it was going to be a rout, and now they have the paper in front of them to prove it," said Peter A. Hull, an OTS paralegal specialist and fantasy sports player who was one of the targets of the agency's investigation.

After the inquiry, the OTS suspended Mr. Hull and another leader of the fantasy sports league - David A. Sjogren, program manager for corporate analysis - for two weeks without pay.

In addition, Mr. Hull, Mr. Sjogren and four others had reprimands placed in their personnel files, making them more vulnerable to layoffs as the OTS downsizes. One staffer got a formal warning, and the other four players accepted the agency's offer of making a charitable contribution in lieu of facing further disciplinary action.

But the arbitrator said those punishments were too harsh and that the OTS went overboard in its pursuit of the fantasy sports matter.

The players agree. "I feel vindicated that the decision came out as strongly favorable as it did," Mr. Sjogren said. "I still don't understand why they let it go this far."

OTS spokesman William Fulwider said the agency had not yet decided whether to appeal the arbitrator's decision. "We don't agree with his interpretation and analysis of certain facts in the case," he said.

The lawyer who represented the OTS staffers through their union blasted the agency for misusing its time by devoting so many resources to such a trivial matter. "I could see no greater abuse of efficiency than what occurred with this case," said Charles T. Smith 2d, a partner at Baltimore- based Ober, Kaler, Grimes & Shriver. "There was no essential issue from the agency's point of view that was at stake here."

The arbitrator wrote that "the playing of the game did not interfere with the timely performance of the grievants' assigned work and did not mar the fulfillment of OTS' mission."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.