Pedowitz made three key recommendations to the league: create a hot line to anonymously raise questions about gambling and game integrity issues; make available any complaints the league receives about refs - beginning in the 2008-09 playoffs - to both teams to avoid suspicions of bias; provide more access to referees for both fans and media.
The report also suggests mandatory gambling education for players. "We believe that gambling can expose the players and the League to significant risks, and therefore it is important that players be educated regarding those risks," the report says. Boston Celtics players Paul Pierce and Ray Allen agreed gambling's an issue that should be addressed.
"Throughout the years we have a number of different meetings. ... A gambling meeting wouldn't hurt," Allen said from training camp in Newport, R.I. "I think its just as important to educate the guys to make sure they don't give money away that you've worked hard for and you want to continue to work hard for. The education would definitely help."
Pedowitz said that if he owned a team, he wouldn't even want his players taking part in card games on the team plane.
"The sickness of compulsive gambling can affect many people. ... We worry about players," Pedowitz said during a conference call. "This can ruin your life."
Commissioner David Stern ordered the investigation last year after former referee Donaghy was charged with betting on games he officiated and providing inside information to gambling associates to win their bets. He's currently serving a 15-month sentence after pleading guilty to conspiracy to engage in wire fraud and transmitting betting information through interstate commerce.
Some of the recommendations have already been implemented, and Stern said he will urge his owners to approve the rest of them at the league's Board of Governors meetings later this month in hopes of avoiding another scandal.
"We will be up there with the very best, and no one will have a better system than we do," he said. "All of that said, the idea that criminal activity will exist every place else in the world except sports is something that we can't guarantee. But we're going to have the most effective system that's ever been devised."
The report agreed with the federal government that there was no evidence that Donaghy made any calls to affect the outcome of games after studying his work in 17 of them, including 16 during the 2006-07 in which it was believed Donaghy made picks.
Pedowitz's firm conducted more than 200 interviews with referees, and team and league personnel during an investigation that cost several million dollars to complete the 116-page report. The report's release was delayed as Donaghy's case dragged on, so some of the changes Pedowitz suggested already have been made, such as the restructuring of the referees operations department and the clarifying of rules involving casino gambling.
Stern already was aware through Pedowitz's interviews that nearly all his referees had violated some form of the gambling rules, so Stern said last year he would change them to make them more easily enforceable. Previously, referees only were allowed to gamble at a race track during the offseason and couldn't enter the gaming section of a casino.
Referees are now allowed in the offseason to bet at a race track, off-track betting establishment or a casino - though still not the sports book. However, a referee must notify the league's security department within 24 hours of placing such a bet.
Although the report found referees broke league rules involving casino gambling, none of their activities reached the criminal level. It disputed Donaghy's allegations of specific misconduct and favoritism toward certain players and teams, but warned "because the potential for referee bias remains a threat to the integrity of the game, the League can do more."
Stern didn't share Pedowitz's concern about card games, as long as they are done legally. However, he does want players to realize the dangers of being involved with people connected to gambling, as Donaghy was.
He said the report's call for better education about the dangers of gambling involved the "education about why they are at the center of information. Really about who they are with and what information they give, because gamblers are always looking for an edge. That's the concern that we are looking to address."
Army Major General (Ret.) Ronald L. Johnson, who served 32 years in the Army, was hired over the summer as senior vice president, referee operations in response to the investigation. Longtime ref Bernie Fryer became the NBA's vice president and director of officials, and Joe Borgia was appointed vice president of referee operations.
Stern has asked Pedowitz to review the new program at the end of the season.
On Thursday, he praised the choice of Johnson, who will address the complaints teams have about the performance - and in some cases, perceived bias - of certain officials. "It's clearly an issue if the teams have a perception," Pedowitz said. "If it's there, it should be dealt with."
The NBA learned in June 2007 that the FBI was investigating Donaghy. Though the commissioner said from the start that Donaghy was the only criminal, he appointed Pedowitz and his firm two months later to investigate the entire referee operations department.
Pedowitz's team completed its work months ago. However, the league was advised not to release its findings until the federal government finished its investigation. The league had hoped Donaghy would agree to speak to the investigators, but he never did.
The report was further delayed after Stern ordered referees to be re-interviewed after Donaghy's lawyer released a letter during the NBA finals accusing officials of rigging playoff series in 2002 and '05 to ensure better TV ratings.
It also backed the government's stance that referee Scott Foster wasn't involved in any of Donaghy's misconduct. Donaghy called Foster 134 times from October 2006-April 2007, but the FBI and Pedowitz were satisfied that Foster's description of their relationship as longtime friends provided a reasonable explanation for the calls.