The Washington Commanders on Monday strongly disputed statements of monetary improprieties in a letter to the Federal Trade Commission, laying out the scenario for why there should really be no investigation by the govt establishment.
The 22-webpage letter — published by crew lawyer Jordan Siev, dealt with to FTC chair Lina M. Khan and acquired by ESPN — rebutted allegations by former staff employee Jason Friedman that the group experienced engaged in nefarious money tactics, impacting people and the NFL, to maximize its income. In addition to the letter, there ended up 83 webpages of signed affidavits, emails and texts.
Paul Szczenski, the team’s former director of finance for more than eight a long time, said in a signed affidavit that, “I can point out unequivocally that I by no means aided retain, or noticed everyone else preserve, a ‘second set’ of textbooks.'” He was one particular of a few former large-ranking team officials who submitted signed affidavits.
All those details were designed by the House Committee on Oversight and Reform in a letter to the FTC previous 7 days, highlighting allegations made by Friedman, who put in 24 several years in the organization’s ticket division as the vice president of gross sales and customer provider. He was fired in October 2020, two months just after Jason Wright took above as staff president.
The FTC acknowledged acquiring the letter but usually does not point out no matter whether it will examine the matter. It also could be turned more than to the attorneys common in Maryland Washington, D.C. and Virginia. All were being copied on the letter to the FTC.
Washington’s letter known as Friedman’s claims “baseless” as effectively as “phony and reckless” and based on “pure speculation,” according to Mitch Gershman, Washington’s former main operating officer, who still left the team in 2015 but five decades later on was accused by previous staff of sexual harassment in a Washington Article report. Gershman and other individuals explained Friedman was out of the loop for the reason that he did not get the job done in the accounting office and was thus not privy to all economical conversations. Friedman labored at the team’s stadium in Landover, Maryland, which is somewhere around just one hour from the apply facilities in Ashburn, Virginia, in which in accordance to the letter the finance and accounting departments labored.
Also, the letter explained the committee never ever gave the staff a chance to respond to Friedman’s expenses. It also painted Friedman as a disgruntled former staff who, right up until recently, experienced lobbied various people in the organization — which include Wright — via e mail and by textual content to make it possible for him to return, although also sending a letter to owner Dan Snyder immediately after his firing in 2020 praising him.
In January, he instructed Wright by using e-mail, “I’ve experienced a 12 months to reflect on my previous shortcomings. I have learned, and I am remorseful for these shortcomings. If you welcomed me, I might be again there to enable at a times see.”
Friedman claimed the firm experienced knowingly classified earnings from standing-place only tickets to NFL game titles as revenue collected from university video games and concerts, therefore allowing them to pocket the income and not share a portion with the league. He also stated that it unsuccessful to refund protection deposits on period tickets, alleging that it affected 2,000 consumers at a cost of $5 million.
But Washington’s letter suggests it has evidence that it did not divert profits from NFL games to other events. Friedman had made a May well 6, 2014, e-mail with Stephen Choi, then Washington’s main accounting officer, that asked for assistance on processing supplemental ticket sales and profits.
The e mail said that Friedman was charging $55 for every ticket but they ended up priced at $44 in the procedure. The difference would be prepared off as bogus licensing fees. According to the electronic mail, Choi directed him to use the “juice” from that added $11 per ticket to the Navy-Notre Dame activity to be held that similar calendar year. Friedman mentioned “juice” was a expression for hidden profits for the team. Washington’s letter mentioned that “juice” was slang for “an upside in profits.”
Teams are necessary to share 40% of their profits with the other 31 groups. But the higher education activity was regarded as non-shareable profits, which meant that Washington would receive an added $162,360 without having getting rid of a portion to the revenue-sharing pool.
Washington’s letter stated that Choi forwarded this e-mail to accountants, dropping Friedman from the chain. In an August e-mail, Trey Flythe, then detailed as a supervisor in the team’s ticket finance office, informed Choi and Szczenski that the “Navy licensing cost has been switched to a 14RedRev.” That meant it was now thought of 2014 Redskins income the electronic mail incorporated a screenshot of the accounting for the quantity of $162,360 detailed underneath 14RedRev.
The letter also pointed out that the team is subjected to annually audits by an outdoors business, BDO, and each individual many yrs by an NFL auditor, Ernst & Young. Friedman alleged that earnings from non-NFL gatherings at FedEx Industry were being not subjected to those people audits. Washington’s letter suggests that’s not correct.
In his affidavit, Szczenski claimed, “there have been no groups of events that were ‘excluded’ from exterior audits concert events, university football online games, and soccer matches had been all part of the Team’s audited fiscal statements, and all could be subjected to scrutiny by the auditors.” Previous basic counsel David Donovan reported the exact in his affidavit.
The letter also states the House committee need to not have relied on Friedman’s testimony about when the alleged revenue-sharing scheme happened. Friedman stated it transpired “largely from 2010 to 2015.” Washington’s letter claims the staff had a $27 million waiver from the NFL that limited income sharing for the reason that it was having to pay for jobs accredited in 2013 and finished two a long time afterwards. The letter says this waiver was recognized in the team’s accounting and finance division but “unbeknownst to Friedman.” In advance of that, Washington experienced a 15-calendar year waiver that finished in 2012 due to the fact it had compensated for the stadium itself.
The letter also states Friedman was incorrect about how the crew handled protection deposits. He claimed that immediately after Snyder bought the workforce in 1999 the team established synthetic limitations to make it complicated for individuals to accumulate security deposits. Or they would goal deposits from men and women who experienced neglected they created just one or those people who inherited seats and failed to know a single existed. He explained with corporate accounts, the name on the settlement could change over time and, at the time once more, the new person may well not know about the preliminary deposit. Friedman mentioned group executives told workforce to make it hard for buyers to receive their deposits by increasing the ways essential to acquire the income. Some deposits did get returned.
Also, Friedman observed to the Dwelling committee that the team stopped charging stability deposits a calendar year soon after Snyder became operator. Donovan, who left the staff in 2011, stated Friedman under no circumstances brought these allegations to him. In his affidavit, Szczenski explained the only deposits transformed to income transpired when a client defaulted on their deal. He stated in a 10-12 months span that resulted in an more $200,000 of income.
The letter also provided a copy of a letter the business despatched to prospects in 2014, informing them that they may possibly be entitled to a refund dependent on their remaining harmony. It bundled boxes to check as to whether the name and tackle on the account have been suitable. It also contained an handle to send out the letter again to acquire the refund as effectively as an e-mail handle customers could send out to alternatively.
Moreover, the letter states that the team’s unclaimed home, including security deposits, was reviewed in 2014 by the Unclaimed House Division of Virginia’s Department of the Treasury, which experienced full access to the team’s protection deposit data. After the critique, the department did not advise further motion but as an alternative demanded the crew pay $7,330.15 in unclaimed resources to the state as “abandoned house.”
Eventually, the letter reported the group did not approve of Friedman’s follow of providing typical admission tickets to brokers in 2009.
Friedman had alleged to the Home committee that he was built the tumble guy for this follow, telling the committee that Choi and Gershman explained to him to misrepresent their ticket predicament. Friedman said he would notify likely clients that no normal admission tickets were being obtainable and thrust them towards buying club-amount seats. In accordance to the letter, there was no NFL policy in opposition to marketing to ticket brokers in 2009. It also stated that none of the contracts entered into by Friedman had been accepted by the team’s finance or lawful office. The letter alleged that Friedman made use of a rubber stamp of Gershman’s signature, making it possible for him to “hold the agreements magic formula.”
“When [Snyder] was knowledgeable, he was not joyful,” Gershman reported in his affidavit. “He directed me and other senior executives to cancel the contracts instantly, and we expended months negotiating with brokers to undo the bargains insofar as we could. It would have built no feeling for Mr. Snyder to have directed these broker gross sales only to change all over and cancel them later on, with considerable financial cost to the Workforce.”
Donovan mentioned in his affidavit that he recommended to Snyder that Friedman be fired right after this incident. Friedman alleged that in its place of remaining fired, he been given a increase.
Lisa Banking companies and Debra Katz, Friedman’s lawyers, explained Monday that their customer “stands by his testimony, which was truthful and centered on his ordeals with the workforce. He is delighted to response comply with-up thoughts from Congress, the FTC, or any governing administration company” and is “geared up to protect himself publicly in opposition to these allegations if Mr. Snyder permits him to do so. In the meantime, we will talk immediately with the group about these demonstratively untrue allegations.”
A Home Committee on Oversight and Reform spokesman reported in a assertion that the Commanders have “unsuccessful to totally deal with the issues raised in the Committee’s letter. If the team maintains that it has practically nothing to cover, it should really welcome an independent evaluate by the FTC, or the NFL, which is reportedly examining these difficulties as properly.”