On March 2, 2012, the NFL concluded after a thorough investigation that from 2009 to 2011, the Saints implemented a bounty program which rewarded players for deliberately attempting to knock opposing players out of games. The slush fund was determined to be administered by defensive coordinator Gregg Williams, who joined the team in 2009. An extensive league investigation found that Payton was implicated in the Bounty Scandal. The league determined Payton went as far as to orchestrate a cover-up when the league first investigated it in the 2009-10 offseason. When informed that the league was investigating reports of a bounty program, Payton met with Williams and assistant head coach Joe Vitt and told them, "Let's make sure our ducks are in a row."[28]
According to a league memo, the NFL reopened its investigation late in the 2011 season. Just before the Saints' playoff game against the Detroit Lions, league officials alerted Saints owner Tom Benson that they had found irrefutable evidence of the Saints' bounty program.[29][30] When general manager Mickey Loomis informed Payton that the league had reopened its investigation, Payton failed to shut the alleged program down.[28]
On March 22, 2012, NFL Commissioner Roger Goodell suspended Payton for the entire 2012 season, effective April 1. Payton became the first head coach in modern NFL history to be suspended for any reason. Goodell was particularly upset that Payton and other Saints officials had lied to him about the scheme. For instance, during its investigation, the league uncovered an email that Michael Ornstein, the agent for former Saints running back Reggie Bush, had sent to Payton. In reality, the Ornstein email wasn’t directly sent to Payton, instead it came to team spokesman Greg Bensel, who then forwarded it to the coaching staff with this message: “email from Orny (he asked that I send it) the dude is in prison so I told him I would.” [31] The email stated "put me down for $5000 on "Green Bay Packers quarterback Aaron Rodgers".[30] "It's a running joke going for three years," Ornstein said. "Ornstein's email is just another example of the speciousness of the quote-unquote evidence that Commissioner (Roger) Goodell claims to have to support his erroneous accusations against Jonathan and the other players," lawyer Peter Ginsberg said. "As more of the evidence is revealed in the media, it is becoming more and more apparent how irresponsible the NFL's actions have been." [32] When confronted with the email, Payton initially claimed he never read it, but subsequently admitted that he had.[29][33] In an interview with ESPN's Adam Schefter, Goodell implied that Payton would have faced significant punishment even if he'd been more forthcoming. In Goodell's view, Payton's contractual obligation to supervise his assistants meant that, at the very least, he should have known about the scheme and shut it down immediately.[34] In the league's announcement of sanctions against the Saints, Payton was faulted for violating a provision of the league constitution that requires coaches to inform their owners about team operations, as well as to "avoid actions that undermine or damage the club's reputation or operating success."[28]