The feud between the Washington Commanders and Congress got more testy on Tuesday with the House Committee on Oversight and Reform reporting to the Federal Trade Commission that the team may have engaged in financial improprieties under Daniel Snyder’s ownership.
The Committee sent a 20-page letter to FTC Chair Lina Khan alleging “evidence obtained by the Committee, including emails, documents, and statements from former employees, indicate senior executives and the team’s owner, Daniel Snyder, may have engaged in a troubling, long-running, and potentially unlawful pattern of financial conduct that victimized thousands of team fans and the National Football League.”
The letter goes on to state that “Commanders executives may have withheld millions of dollars in refundable security deposits owed to customers upon the expiration of their multi-year seat leases and may have taken steps to prevent customers from collecting these deposits.
“According to a former team executive, the Commanders ‘failed to properly refund those security deposits intentionally and took various steps to retain as much of that money as possible.’ ”
The former team executive is former sales executive Jason Friedman, who testified before the Committee.
The Committee further alleges, “Documents indicate that as of 2016, the team may have retained up to $5 million in deposits from approximately 2,000 customers.”
And here’s the problem for club owner Daniel Snyder:
The letter also alleges “information and documents obtained by the Committee further suggest that the Commanders concealed revenues that were owed to the NFL as part of a revenue-sharing agreement that redistributes revenues to 32 teams in the League and helps set salaries for the League’s football players.”
If true, the allegations mean Snyder was basically defrauding his business partners in the NFL because ticket revenue is shared among all 32 NFL teams, with 40% of it deposited in a visiting team fund. That is the point of the league’s revenue-sharing commitment.
And his business partners, the league and other NFL owners, are unlikely to take kindly to such behavior.
So if the FTC somehow rules the evidence is true, Snyder’s ability to remain owner of the team will be in serious jeopardy.
The Commanders previously insisted there have been no financial misdeeds.
“The team categorically denies any suggestion of financial impropriety of any kind at any time,” a statement released by the team previously said. “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.”
This isn’t the first time the Washington Commanders/Football Team have run afoul of the Oversight Committee.
House Committee on Oversight and Reform members Reps. Carolyn Maloney (D-N.Y.) and Raja Krishnamoorthi (D-Ill.) asked the NFL for information from its investigation into Washington Football Team last October.
“We write to request documents and information concerning the Washington Football Team’s (WFT) hostile workplace culture and the National Football League’s (NFL) investigation into this matter,” Maloney and Krishnamoorthi said in a letter to NFL Commissioner Roger Goodell sent last fall.
The lawmakers expressed concern about the league’s handling of its WFT investigation, which lasted for a year but didn’t result in a written report.
The NFL Tuesday afternoon released a statement from league spokesman Brian McCarthy:
“We continue to cooperate with the Oversight Committee and have provided more than 210,000 pages of documents. The NFL has engaged former SEC chair Mary Jo White to review the serious matters raised by the committee.”
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