Congress Sends Details of ‘Troubling' Commanders' Financial Conduct to FTC

Congress details 'troubling' Commanders' financial conduct to FTC originally appeared on NBC Sports Washington

A Congressional committee investigating the Washington Commanders has sent a letter to the Federal Trade Commission detailing "a pattern of deeply concerning business practices that were directed by senior leadership," including owner Dan Snyder, based on allegations made in an interview with a former team executive.

In light of that interview, the House Committee on Oversight and Reform has shared the evidence stemming from it — which features information and documents it claims support the ex-employee's allegations — in hopes that the FTC will review and decide if "further action" should be taken.

"[Washington] may have engaged in a troubling, long-running, and potentially unlawful pattern of financial conduct that may have victimized thousands of team fans and the National Football League," the Committee wrote in a statement on Tuesday. "The Commanders may have intentionally withheld millions of dollars in refundable deposits owed to fans, and concealed revenues that were owed to the NFL as part of the League’s revenue-sharing agreement."

The Oversight Committee letter went to the FTC as well as the attorneys general for Virginia, Maryland and the District of Columbia and NFL Commissioner Roger Goodell. 

Jason Friedman, who was with the Washington organization for 24 years and served as a vice president of sales and customer service, provided the Committee with the evidence it has passed on to the FTC. Per the Committee, Friedman alleged in part that:

• Team executives "instructed [him] to withhold the security deposits" from fans who purchased premium seating and to "create artificial barriers to discourage customers from requesting the return of their deposits."
• The team "improperly converted unclaimed security deposits into revenue to be used for other purposes," revenue that some executives "referred to as 'juice.'" Those instances "would occur when team executives believed the Commanders were 'a little behind' on sales numbers."
• The team maintained “two sets of books”—one that was shared with the NFL but underreported certain ticket revenue, and another internal set of books that included the complete and accurate revenue and was “shown to Mr. Snyder.”

Friedman additionally explained to the Committee that Snyder and former Chief Operating Officer Mitch Gershman would tell him to identify "dormant" fan accounts where the unclaimed security deposits could easily be put back into Washington's system as "juice." At that point, Washington could then convert the deposit into something that wouldn't have to be shared with the league, Friedman said.

If Friedman's assertions about the withheld revenue, the security deposit handling and "juice" are proven true, Snyder and the franchise could face significant punishment. It would be be guilty of withholding money from every other NFL squad. A club is required to deposit 40% of ticket revenue from home games into a dispersal pot shared among the 32 NFL teams. 

When reached for comment, the Commanders pointed back to a statement first given by a team spokesperson on March 31.

"The team categorically denies any suggestion of financial impropriety of any kind at any time. We adhere to strict internal processes that are consistent with industry and accounting standards, are audited annually by a globally respected independent auditing firm, and are also subject to regular audits by the NFL. We continue to cooperate fully with the Committee’s work."

Attorneys Lisa Banks and Debra Katz, who represent Friedman as well as dozens of female ex-employees of the club who have publicly described a "toxic" workplace environment during much of Snyder's tenure as owner, released a statement regarding the Committee's letter.

"The Committee’s letter to the FTC, the state attorneys general, and the NFL about the Washington Commanders’ fraudulent financial practices is damning," Banks and Katz wrote. "It’s clear that the team’s misconduct goes well beyond the sexual harassment and abuse of employees already documented and has also impacted the bottom line of the NFL, other NFL owners, and the team’s fans. We are proud of our many clients who have come forward at great personal risk to reveal the truth and bring us closer to total transparency about the full extent of the dysfunction at the Washington Commanders."

Rep. Carolyn B. Maloney, D-N.Y., Chairwoman of the Oversight and Reform Committee, demanded "accountability" in the Tuesday announcement from Congress. She and Rep. Raja Krishnamoorthi, D-Ill. were the ones who sent the letter to the FTC that contains the information gleaned from Friedman's interview.

"This new information on potential financial misconduct suggests that the rot under Dan Snyder’s leadership is much deeper than imagined," Maloney said. "It further reinforces the concern that this organization has been allowed to operate with impunity for far too long. This new information suggests that in addition to fostering a hostile workplace culture, Mr. Snyder also may have cheated the team’s fans and the NFL."

“The fact that the Committee, while investigating evidence of sexual harassment and workplace misconduct, also uncovered evidence of what appears to be a scheme to cheat fans and the NFL tells you all you need to know about Dan Snyder and how he is running this organization," Krishnamoorthi said.  “The question is what other potential wrongdoings are the Commanders engaging in, and what is the extent of the dysfunction atop their leadership?"

The Committee consists of 25 Democrats and 19 Republicans. A Republican Oversight Committee spokesperson, meanwhile, expressed distaste for the amount of time being spent on investigating the Commanders, stating that the "primary mission of the Oversight and Reform Committee is to root out waste, fraud, abuse, and mismanagement in the federal government."

"Democrats are attacking a private company using the claims of a disgruntled ex-employee who had limited access to the team’s finances, was fired for violating team policies, and has his own history of creating a toxic workplace environment," the spokesperson for the Republican members said Tuesday. "As recently as January 2022, this employee was begging to get his job back with the team. Committee Republicans will be providing the FTC with additional context to ensure that they have the full story when evaluating the Democrats’ latest letter and not just one-sided, cherry-picked information."