Danny Ferry is under fire for reading racially insensitive comments from a scouting report during a team meeting. (David Goldman/AP Photo)

Atlanta Hawks owner Bruce Levenson may have removed himself from a dysfunctional situation by announcing on Sunday that he would sell his controlling interest in the franchise following the discovery of a two-year-old racially insensitive e-mail, but the saga is far from over. The attention has now shifted to General Manager Danny Ferry, whose use of an inflammatory comment about Luol Deng during a free agency conference call last June ignited the current firestorm that resulted in the departure of the second NBA owner in the past five months because of tactless racial comments.

Late Monday evening, Atlanta television station WSB obtained a two-page letter written on June 12 by Hawks co-owner Michael Gearon Jr., who wanted Levenson to either fire Ferry or ask for his resignation.

Gearon detailed the phone call in which Ferry made an inappropriate remark about Deng and wrote that it was “far worse” than the racially charged comments that led to a lifetime ban for former Los Angeles Clippers owner Donald Sterling.

“They were not from a private conversation — they were in a business environment on a business matter in front of a dozen or more people,” Gearon wrote. “If Ferry would make such a slur in a semi-public forum, we can only imagine what he has said in smaller groups or to individuals.”

According to multiple published reports, Ferry read aloud insensitive background information compiled by a source outside the Hawks organization on Deng, a two-time all-star from South Sudan. The comment under scrutiny read, “He’s a good guy overall. But he is not perfect. He’s got some African in him. And I don’t say that in a bad way.”

Gearon’s version differed some from previously recorded accounts and didn’t mention whether the comment was read or came directly from Ferry: “With respect to one potential free agent, a highly-regarded African-American player and humanitarian, Ferry talked about the player’s good points, and then went on to describe his negatives, stating that ‘he has a little African in him. Not in a bad way, but he’s like a guy who would have a nice store out front but sell you counterfeit stuff out the back.’” Gearon wrote that Ferry completed his comments by describing the player “as a two-faced liar and cheat.”

Gearon, who shared a managing partner role with Levenson but lacked effective say in decision-making, continued: “We were appalled that anyone would make such a racist slur under any circumstance, much less the GM of an NBA franchise on a major conference call. One of us can be heard on the tape reacting with astonishment…. Ferry’s comments were so far out of bounds that we are concerned that he has put the entire franchise in jeopardy.”

At least one rival executive found the fact Ferry didn’t censor the report disturbing when reached for comment before Gearon’s letter was made public.

“I don’t care if you’re black or white, you don’t put that in a professional document. Whoever wrote it needs to be sanctioned for it,” an Eastern Conference executive said. “The scouting report is far more offensive than the stuff Levenson said.”

National Basketball Players Association acting Executive Director Ron Klempner issued a statement on Monday regarding the situation in Atlanta that read: “We’ve had continuing discussions with the league office about the incidents of disturbing statements attributed to representatives of the Atlanta Hawks’ franchise. We recognize that there is an ongoing investigation regarding the circumstances, and we will continue to monitor these events and take any action we deem appropriate.”

Deng, whose family escaped civil strife in his native Sudan to Egypt and later England, has a model reputation around the league. He is involved in several charities in Africa and has participated in the league’s Basketball Without Borders program. In April, Deng was named winner of the J. Walter Kennedy Citizenship Award by the Professional Basketball Writers Association. A 10-year veteran, Deng signed a two-year, $20-million contract with the Miami Heat last July. Both Ferry and Deng played for Coach Mike Krzyzewski at Duke.

“I’m proud to say I actually have a lot of African in me, not just “a little.” For my entire life, my identity has been a source of pride and strength,” Deng said in a statement Tuesday evening. “Every person should have the right to be treated with respect and evaluated as an individual, rather than be reduced to a stereotype. I am saddened and disappointed that this way of thinking still exists today. I am even more disturbed that it was shared so freely in a business setting. However, there is comfort in knowing that there are people who aren’t comfortable with it and have the courage to speak up. In the same way a generalization should not define a group of people, the attitude of a few should not define a whole organization or league.”

Ferry released a statement on Tuesday morning in which he said he repeated comments gained from numerous sources during background conversations and scouting about different players. “Those words do not reflect my views, or words that I would use to describe an individual and I certainly regret it,” Ferry said in the statement. “I apologize to those I offended.”

In his statement, Ferry said he “reached out” to Deng on Monday morning. Yahoo! Sports reported that Ferry also apologized to Deng’s agent, Ron Shade. When asked about the comment regarding his client, Shade, wrote in a text message, “It’s a little disheartening to hear but we are just focusing more on Luol preparing for the season than anything.”

The comment also prompted a review of how the organization deals with issues regarding race. That review unearthed Levenson’s 2012 e-mail to Ferry and fellow Washington-based co-owners Ed Peskowitz and Todd Foreman that contained “inappropriate and offensive” remarks about the team’s inability to attract a larger fan base, especially those in preferred demographic of whites between the ages 35-55. In the letter, which the Hawks revealed on Sunday, Levenson speculated that large black crowds “scared away” southern whites and that there weren’t enough affluent blacks in the area to build a sustained season-ticket base.

Levenson announced his intention to sell his share of the franchise on Sunday.

“If you’re angry about what I wrote, you should be,” Levenson said in his statement. “I’m angry at myself, too. It was inflammatory nonsense. We all may have subtle biases and preconceptions when it comes to race, but my role as a leader is to challenge them, not to validate or accommodate those who might hold them. I have said repeatedly that the NBA should have zero tolerance for racism, and I strongly believe that to be true.”

Bruce Levenson, owner of the Atlanta Hawks, said he will sell his controlling interest in the NBA team because of racially insensitive remarks he made in an e-mail. (Reuters)

Hawks chief executive Steve Koonin, who joined the organization in April and will run the team’s operations until a sale is made, told the Atlanta Journal-Constitution that the law firm of Alston and Bird spoke to 19 people and reviewed over 24,000 documents during the internal investigation.

Koonin stated that Ferry has received an undisclosed discipline for his comments on Deng but would keep his job. The NBA also had no plans of punishing Ferry as of Monday. The comment Ferry allegedly read in his report came from someone outside the organization, Koonin said.

Ferry signed a six-year, $18 million contract with the Hawks in 2012, fewer than three weeks before Levenson sent out his e-mail. A former NBA player who starred at DeMatha and Duke, Ferry also is the son of former Washington Bullets general manager Bob Ferry. He served as general manager of Cleveland for five years, helping the franchise reach the NBA Finals in 2007, and also was an executive with the San Antonio Spurs on two occasions.

“I am committed to learning from this and deeply regret this situation,” Ferry said in the statement. “I fully understand we have work to do in order to help us create a better organization; one that our players and fans will be proud of on and off the court, and that is where my focus is moving forward.”

Gearon wrote he wasn’t sure if Levenson and Peskowitz were listening to the entire call but mentioned that it was recorded for partners unable to participate live.

“If Ferry’s comments are ever made public, and it’s a safe bet to say they will someday, it could be fatal to the franchise,” Gearon wrote. “We are especially fearful of the unfair consequences when we eventually get thrown under the bus with Ferry.”