Congress: Commanders may have broken laws

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Washington Commanders failed to refund the security deposit, concealed revenue and kept two sets of financial books, the U.S. House Oversight and Reform Committee claimed in a letter it sent to the Federal Trade Commission.

The 20-page letter described what the committee said was a multi-year process of changing records to hide revenue that led to more profits for the organization. The allegation of financial inadequacies was made by former longtime employee Jason Friedman, who met with members of the committee on March 14 as part of its investigation into the team’s workplace culture.

According to emails and an Excel sheet he provided to the committee, Friedman claimed the team could have kept as much as $ 5 million in deposits from about 2,000 customers.

“Honestly, while reviewing the allegations, it sounds like a description of some organization from ‘The Godfather’ and not an NFL football team,” the rep said. Raja Krishnamoorthi (D-Ill) to ESPN. I have signed the letter with the chairman of the committee, rep. Carol Maloney (D-NY). “It really helps to color the culture and impunity that other witnesses have described and the evidence of severe dysfunction.”

In a statement included in the letter, Maloney said: “This new information on potential financial misconduct suggests that the rot under Dan Snyder’s leadership is much deeper than imagined. It further reinforces the concern that this organization has been allowed to operate with impunity for too long. long.”

In the letter, the committee says Friedman claimed the team maintained two books – one that was shared with the NFL with the underreported ticket revenue – and another that contained the exact revenue and was shown to owner Dan Snyder.

Washington denied the allegations, citing a statement issued by the team on March 31. A spokesman for the team said in this release: “The team categorically rejects any suggestion of an economically inappropriate nature at any time. We adhere to strict internal processes that are consistent with industry and accounting standards, audited annually by a globally respected independent audit firm and are also subject to regular reviews of the NFL.

The House Oversight and Reform Committee may still hold a hearing on the workplace investigation. Krishnamoorthi said, for now, they want to let the FTC investigate the economic charges.

“It seems that every week or every time we talk to a witness, we learn something new,” Krishnamoorthi said. “At this point, I will not be surprised by anything the witnesses say about the team … The ownership thinks it can get away with things that other people cannot.”

Friedman, who spent 24 years in the organization before being fired in October 2020, discussed several allegations with the committee: non-refund of security deposit to customers; the organization that converts security deposits into non-shareable revenue; the concealment of ticket revenue from the NFL and misleading customers into selling more expensive tickets.

Friedman, who began working for the franchise under the late owner Jack Kent Cooke, held the title of vice president of sales and customer service when he was fired. According to the letter, his job was to “monitor sales and customer service for all regular and premium seats at FedEx Field, including club, dream and lodge seats.”

When FedEx Field opened in 1997, the organization demanded a one-time refundable deposit for certain premium seats as well as private skybox suites. The deposit was 25% of the price of the seats. This deposit was to be returned within 30 days of the expiry of the agreement.

But, Friedman said, after Snyder bought the team in 1999, team leaders told employees to make it difficult for customers to receive their deposits by increasing the steps required to receive the money. Some deposits were returned.

Friedman said they would also keep the deposits from people who had either forgotten them, or from family members who inherited the seats from a deceased relative and did not know the refunded deposits existed. With company accounts, he said, the name of the deal may change over time, and once again, the new person may not know about the first deposit.

Friedman said he was told by Snyder and his former chief operating officer, Mitch Gershman, to find dormant accounts where the likelihood of the customer stepping up and asking for a refund is “as close to zero as possible.” They would then convert the credit on the customer’s account, which reflected the security deposit, into what they called “juice” – or revenue earned by the team through this practice.

He said many of these exercises began in earnest after the team’s revenue from participation dropped around 2006, when “according to the letter, things started to get a little tougher for the team financially.”

Friedman said they ended this practice around 2017 after Snyder, through their CFO, Stephen Choi, asked him to stop. Choi, who is no longer with the organization, did not immediately respond to a request for comment.

Friedman told the committee: “I think they had become a little worried that there might be some people here. And it really stopped in droves.”

Friedman also presented the committee with a spreadsheet showing two season tickets registered to NFL Commissioner Roger Goodell, with a non-returnable deposit of $ 1,000. The spreadsheet showed that the deposit was collected before Goodell was elected commissioner in 2006. According to the letter, the committee does not know when the deposit was paid or whether it was returned.

According to an email from Friedman on May 6, 2014, I have requested help from Choi to process additional ticket sales and revenue from pitch tickets for the upcoming season. In the email, Friedman told Choi that he charged $ 55 per ticket, but they were priced at $ 44 in the system. Choi asked him to use the “juice” from the extra $ 11 per ticket for the Navy-Notre Dame match to be held the same year.

Teams must share 40% of their revenue with the other 31 teams. But the college game was considered revenue that could not be shared, which meant Washington would receive an additional $ 162,360.

Friedman told the committee that such scenarios happened “at least a dozen times.”

In an email dated April 1, 2013, the letter states that executives “appear to be deliberately discussing the treatment of” $ 88,000 in shareable revenue from gaming tickets as non-shareable license fees from a Kenny Chesney concert the following month.

Friedman also said Choi and Gershman told him to “misrepresent” the availability of regular admission tickets. Washington used to boast a season ticket waiting list of 160,000 – in 2018, former operations manager Brian LaFemina said for the first time that there was no waiting list. Friedman said he would tell fans they could avoid the waiting list by buying premium tickets. The team would sell the seats for general access to ticket brokers.

Friedman said the team’s former attorney general, Dave Donovan, accused him of being a junk employee. Friedman said he was asked to write a letter of apology to Snyder about this practice. But, Friedman said, he was never reprimanded, and instead he later received a pay raise.

Friedman told the committee he kept these emails because “I knew what was happening in those emails was wrong and I did not want to be hung out to dry by the team again and get someone to come back and claim that I did it. this on my own. “

Former teammate Rachel Engleson, who worked for Friedman, told the committee she had let attorney Beth Wilkinson know about rumors about this economic practice during her study of Washington’s workplace culture. Engleson told the committee that Friedman had shared his reasons for keeping emails or other documents regarding various requests.

The NFL’s investigation resulted in a $ 10 million fine. The league said Snyder went away from the team’s daily duties.

Congress then began examining Washington’s workplace culture in October. In February, former teammate Tiffani Johnston said in a roundtable session that Snyder had put his hand on her knee, against her wishes, under the table at a dinner party. He later tried to force her into his limousine, a claim confirmed by Friedman. The league is now investigating that claim; Johnston refused to speak to Wilkinson, so it was the first time it had been raised.

Regarding the letter to the FTC, a Republican spokesman said: “The Republicans in committee will provide the FTC with additional context to ensure they have the full story when assessing Democrats’ latest letter and not just one-sided cherry-picked information.”

Krishnamoorthi also said the NFL has not handed over “all the documents it should.” He said the league produces documents on an ongoing basis.

“But we find that the NFL and team ownership keep pointing fingers at each other as to why they are not producing more information,” Krishnamoorthi said, “and the fact is that we are getting the information in other ways and more witnesses are coming forward. , as you can see from Mr Friedman’s testimony that they are willing to talk about a lot over a long period of time. “

The NFL on Tuesday released a statement to ESPN from spokesman Brian McCarthy.

“We continue to work with the oversight committee and have provided more than 210,000 pages of documents. The NFL has engaged former SEC Chairman Mary Jo White to review the serious issues the committee has raised,” the league said.

In a statement, Lisa Banks and Debra Katz, the attorneys representing Friedman and about 40 other former employees, called the economic practice “judgmental.”

The statement said in part: “Clearly, the team’s abuse goes far beyond the sexual harassment and abuse of employees that has already been documented and has also affected the bottom line for the NFL, other NFL owners and the team’s fans.”


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