The House Oversight and Reform Committee sent a 20-page letter Tuesday to the Federal Trade Commission, urging the agency to review a “troubling, long-running, and potentially unlawful pattern of financial conduct” from the Washington Commanders and owner Dan Snyder.
The letter includes allegations made by former Washington employee Jason Friedman, who accused the team of withholding as much as $5 million in refundable deposits from season-ticket holders in testimony given to the committee last month.
Friedman, according to the letter, told members of Congress on March 14 that the Commanders also kept two sets of financial records in order to withhold a portion of ticket revenue that was supposed to be shared with visiting teams. Friedman shared emails, purportedly from other team employees, that he said support his allegations. He also provided members of Congress with a spreadsheet he said was exported from a Commanders database that shed light on the security deposit practices, according to the committee’s letter to the FTC.
The team, asked to comment Tuesday on the latest allegations, referred to an earlier statement issued last month in which the organization denied “any suggestion” on the part of the former employee “of financial impropriety of any kind at any time.”
But the new charges represent a potentially dramatic expansion of the scope of the congressional panel’s probe of the Commanders.
“This new information on potential financial misconduct suggests that the rot under Dan Snyder’s leadership is much deeper than imagined,” said Rep. Carolyn Maloney, a New York Democrat and chairwoman for the Oversight Committee, in a statement. “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.
“While the focus of our investigation remains the Commanders’ toxic work environment, I hope the FTC will review this troubling financial conduct and determine whether further action is necessary. We must have accountability.”
The FTC did not respond to a request for comment on the possibility of opening a new investigation into Snyder in light of the letter.
If the FTC does take action, the investigation would be the latest probe into Snyder.
The Oversight Committee’s probe continues and the NFL has also launched a review into claims from a former Washington employee who accused Snyder of touching her thigh inappropriately while at a work dinner around 2005 or 2006. The allegations, made by Tiffani Johnston, came to light in February during a congressional roundtable hosted by the committee.
Friedman, the Commanders’ former vice president of sales and customer service who worked for the team for 24 years, previously wrote to the committee that he witnessed Snyder trying to coax Johnston into his limo.
In his March 14 testimony, according to the letter, Friedman told the committee that the Commanders failed to refund “security deposits intentionally and took various steps to retain as much of that money as possible.” The team, Friedman said, referred to this revenue — along with other “extra money” — as “juice” and then diverted it to other unrelated events.
Friedman told the committee Mr. Snyder and Mitch Gershman, a former supervisor of Friedman’s who served as the team’s chief operating officer, instructed him to return security deposits on dormant accounts into the team’s system and convert the credit that would then be on the customer’s account into juice.”
According to a spreadsheet provided to the committee, there were at least 2,000 accounts — including one apparently to NFL Commissioner Roger Goodell — that had unreturned security deposits that totaled around $5 million as of 2016.
Friedman, according to the letter, said the practice stopped in or around 2017 when Snyder got “a little bit concerned that maybe some people were onto them here.” Friedman said Snyder, through then CFO Stephen Choi, instructed Friedman to stop.
Before then, Friedman said the practice went on for several years. Under former owner Jack Kent Cooke, Friedman said the team began requiring season-ticket holders to enter into multi-year leases for certain premium seats that required “a one-time refundable security deposit of 25% of the price of the seats for one year.” The deposit would be refunded within 30 days of the agreement expiring, the letter reads.
Friedman told the committee that after Snyder purchased the team in 1999, team executives began directing “employees to establish roadblocks to prevent customers from obtaining the security deposits they were due — effectively allowing the team to retain that money,” according to the letter.
Friedman told the committee that many of the customers forgot that the deposits were refundable, particularly accounts in which the point of contact became someone else.
“One of the other reasons the team was able to do this is because people would pass tickets down in their family,” Friedman said, according to the letter. “So, you know, a mother passes the tickets down to her daughter, and as she does that, doesn’t tell her that there’s a security deposit on the account. And then when the daughter decides not to renew the tickets, she doesn’t know to ask for her security deposit back. And, again, the team just keeps it and doesn’t go out of their way to try and refund the money.”
As for the team’s alleged misconduct in withholding ticket revenue, Friedman said the team rerouted ticket sales from games into other events such as a Kenny Chesney concert in 2014 and a Navy-Notre Dame football game in 2014. The league’s collective bargaining agreement calls for all 32 teams to share 40% of ticketing revenue into a visiting team fund. The Commanders previously denied that specific allegation last week.
The Republican side of the Democrat-controlled Oversight Committee blasted Tuesday’s letter as an “attack” on a “private company with no connection to the federal government.” A Republican spokesperson described Friedman as a “disgruntled ex-employee” who was fired from the team.
“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 said. “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.”
Lisa Banks, an attorney for Friedman, tweeted the Republican response does not address the substance of the allegations, “which are serious and supported by documentation.” She wrote that Republicans were trying to use “deflection and disparagement” as a defense.
In a separate statement, Banks and fellow attorney Debra Katz called the House’s letter “damming.” The letter was addressed to FTC Chair Lina M. Khan and copied to attorney generals from Virginia, Maryland and the District, as well as the NFL.
“Given the Federal Trade Commission’s (FTC) authority to investigate unfair or deceptive business practices, we are providing the information and documents uncovered by the Committee for your review, to determine if the Commanders violated any provision of law enforced by FTC and whether further action is warranted,” the letter reads. “We request that you take any other action you deem necessary to ensure that all funds are returned to their rightful owners and that those responsible are held accountable for their conduct.”
An NFL spokesman said in a statement Tuesday that it continues to cooperate with the committee and has turned over 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,” a league spokesman said.
• Matthew Paras can be reached at mparas@washingtontimes.com.
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