Commanders Investigation Reveals ‘Troubling’ Financial Inconsistencies

A congressional investigation of the Washington Commanders identified “troubling, long-running, and potentially unlawful pattern of financial conduct” and passed those details along to the Federal Trade Commission. 

The House Oversight Committee laid out the allegations against the Commanders and owner Dan Snyder in a 20-page letter to the FTC on Tuesday.

“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 far too long,” Carolyn Maloney, chair of the Oversight Committee, said in a statement.

“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.”

A Commanders spokesperson pointed to a prior statement from the team where it denied allegations of holding back ticket revenue.

“We continue to cooperate with the Oversight Committee and have provided more than 210,000 pages of documents,” NFL spokesperson Brian McCarthy in a statement to FOS. “The NFL has engaged former SEC chair Mary Jo White to review the serious matters raised by the committee.”

White was tapped to investigate the latest harassment claims made against the Commanders and Snyder. Snyder has denied the allegations.

At least one person with knowledge of the Commanders’ finances was subpoenaed by the House Oversight Committee on Tuesday, a source told Front Office Sports. FOS first reported that subpoenas were likely on March 31.

The consequences of the Commanders potentially withholding revenue not only impacts the league’s 31 other teams financially. While 40% of net ticket revenue is required to be dispersed among teams, ticket revenue is also factored into the salary cap each year.

“The owners are not going to be happy with a partner who cheats them out of some money,” said Jodi S. Balsam, a professor at the Brooklyn Law School who worked as a lawyer for the NFL for nearly two decades. “The big exposure for the owners is that they could be subject of an unfair labor practices charge.”

That would start with NFL Players Association filing a complaint with the National Labor Relations Board, although there’s no indication the union has made such a decision yet.

Jason Friedman, an employee at the Commanders’ ticket office for 24 years, provided much of the information to the committee used in the letter, including spreadsheets and emails.

The allegations include: 

• The Commanders “created artificial barriers to discourage customers from requesting” refundable deposits due to them. Friedman provided documents that showed as of July 2016 the Commanders still held about $5 million in unreturned deposits from around 2,000 accounts. 
• Those unclaimed deposits were some of the alleged improprieties referred to internally “the juice,” the term given for revenue that wasn’t reported to the NFL and, in turn, not shared in violation of NFL bylaws. 
• The team “repeatedly concealed ticket sales revenue that should have been shared with the NFL” allegations backed up by documents and information provided by Friedman. 
• Team executives “intentionally” underreported ticket revenue in its database by “falsely processing or misassigning” ticket revenue from Commanders games as fees related to other events at FedEx Field, including a Kenny Chesney concert.

The Oversight Committee mentioned Snyder multiple times and alleged that Snyder had knowledge of the questionable accounting practices.

The letter stated that an unnamed former executive interviewed by the committee told investigators the team kept “two sets of books” — something FOS first reported on March 31. One set was “shown to Mr. Snyder” and accurate accounting of revenue that was “shown to Mr. Snyder.”

“The primary mission of the Oversight and Reform Committee is to root out waste, fraud, abuse, and mismanagement in the federal government,” a Republican Oversight Committee spokesperson said in a statement. “Democrats instead are using all of their resources to publicly attack a private company with no connection to the federal government. Even worse, Democrats are attacking a private company using the claims of a disgruntled ex-employee who had limited access to the team’s finances.

“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.”

FOS reported previously that the House Oversight Committee’s investigation that began in October as a probe into hostile workplace allegations expanded into alleged financial irregularities and allegations that the Commanders failed to pass along ticket revenue to the league.