Washington Commanders strongly deny fiscal misconduct in letter to Federal Trade Commission

The Washington Commanders on Monday strongly disputed statements of economic improprieties in a letter to the Federal Trade Fee, laying out the situation for why there ought to be no investigation by the governing administration establishment.

The 22-page letter — written by group lawyer Jordan Siev, dealt with to FTC chair Lina M. Khan and acquired by ESPN — rebutted allegations by former staff worker Jason Friedman that the team experienced engaged in nefarious monetary procedures, impacting buyers and the NFL, to increase its revenue. In addition to the letter, there ended up 83 web pages of signed affidavits, emails and texts.

Paul Szczenski, the team’s former director of finance for far more than 8 decades, reported in a signed affidavit that, “I can point out unequivocally that I never helped keep, or observed any person else preserve, a ‘second set’ of guides.'” He was 1 of a few previous superior-ranking staff officers who submitted signed affidavits.

Those people points have been designed by the Residence Committee on Oversight and Reform in a letter to the FTC previous week, highlighting allegations created by Friedman, who put in 24 a long time in the organization’s ticket department as the vice president of sales and client provider. He was fired in October 2020, two months following Jason Wright took over as group president.

The FTC acknowledged receiving the letter but normally does not state no matter if it will investigate the make a difference. It also could be turned about to the lawyers general in Maryland Washington, D.C. and Virginia. All had been copied on the letter to the FTC.

Washington’s letter termed Friedman’s promises “baseless” as perfectly as “untrue and reckless” and centered on “pure speculation,” in accordance to Mitch Gershman, Washington’s former main functioning officer, who still left the workforce in 2015 but five many years later on was accused by former staff of sexual harassment in a Washington Put up posting. Gershman and many others reported Friedman was out of the loop since he did not work in the accounting section and was hence not privy to all financial discussions. Friedman labored at the team’s stadium in Landover, Maryland, which is close to one hour from the observe services in Ashburn, Virginia, where according to the letter the finance and accounting departments worked.

Also, the letter mentioned the committee under no circumstances gave the team a opportunity to answer to Friedman’s expenses. It also painted Friedman as a disgruntled former personnel who, until finally just lately, had lobbied a number of people today in the business — including Wright — through electronic mail and by textual content to enable him to return, while also sending a letter to proprietor Dan Snyder after his firing in 2020 praising him.

In January, he advised Wright via email, “I have had a calendar year to replicate on my past shortcomings. I’ve realized, and I am remorseful for these shortcomings. If you welcomed me, I might be again there to assistance at a times discover.”

Friedman claimed the firm had knowingly classified revenue from standing-area only tickets to NFL online games as revenue gathered from higher education video games and concert events, therefore enabling them to pocket the income and not share a portion with the league. He also said that it unsuccessful to refund safety deposits on time tickets, alleging that it impacted 2,000 consumers at a price of $5 million.

But Washington’s letter says it has proof that it did not divert revenue from NFL video games to other activities. Friedman experienced produced a Might 6, 2014, e mail with Stephen Choi, then Washington’s main accounting officer, that asked for help on processing additional ticket gross sales and income.

The e-mail said that Friedman was charging $55 for each ticket but they ended up priced at $44 in the technique. The change would be composed off as bogus licensing charges. According to the email, Choi directed him to apply the “juice” from that additional $11 for each ticket to the Navy-Notre Dame match to be held that same calendar year. Friedman mentioned “juice” was a time period for hidden income for the workforce. Washington’s letter said that “juice” was slang for “an upside in income.”

Groups are essential to share 40% of their income with the other 31 groups. But the school game was regarded non-shareable revenue, which meant that Washington would get an more $162,360 with out losing a part 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 email, Trey Flythe, then shown as a supervisor in the team’s ticket finance department, told Choi and Szczenski that the “Navy licensing charge has been switched to a 14RedRev.” That intended it was now considered 2014 Redskins revenue the email included a screenshot of the accounting for the total of $162,360 outlined underneath 14RedRev.

The letter also pointed out that the crew is subjected to yearly audits by an outdoors firm, BDO, and every various years by an NFL auditor, Ernst & Youthful. Friedman alleged that profits from non-NFL activities at FedEx Industry had been not subjected to these audits. Washington’s letter says that’s not correct.

In his affidavit, Szczenski reported, “there ended up no categories of activities that had been ‘excluded’ from exterior audits concerts, faculty soccer video games, and soccer matches were all aspect of the Team’s audited fiscal statements, and all could be subjected to scrutiny by the auditors.” Former common counsel David Donovan stated the exact same in his affidavit.

The letter also says the Home committee must not have relied on Friedman’s testimony with regards to when the alleged profits-sharing scheme transpired. Friedman claimed it transpired “mostly from 2010 to 2015.” Washington’s letter says the team had a $27 million waiver from the NFL that confined earnings sharing due to the fact it was spending for initiatives accepted in 2013 and finished two a long time later. The letter suggests this waiver was acknowledged in the team’s accounting and finance division but “unbeknownst to Friedman.” In advance of that, Washington experienced a 15-12 months waiver that ended in 2012 since it had paid for the stadium itself.

The letter also says Friedman was improper about how the team managed security deposits. He claimed that immediately after Snyder acquired the group in 1999 the group established artificial boundaries to make it hard for consumers to acquire stability deposits. Or they would goal deposits from people who had forgotten they created 1 or individuals who inherited seats and did not know just one existed. He mentioned with company accounts, the title on the arrangement could alter above time and, once once again, the new human being may possibly not know about the preliminary deposit. Friedman said crew executives instructed personnel to make it tricky for customers to get their deposits by growing the steps required to receive the cash. Some deposits did get returned.

Also, Friedman mentioned to the Residence committee that the crew stopped charging protection deposits a calendar year following Snyder became owner. Donovan, who left the group in 2011, explained Friedman in no way introduced these allegations to him. In his affidavit, Szczenski mentioned the only deposits transformed to income occurred when a customer defaulted on their contract. He reported in a 10-12 months span that resulted in an additional $200,000 of revenue.

The letter also involved a copy of a letter the group despatched to customers in 2014, informing them that they could be entitled to a refund primarily based on their remaining harmony. It incorporated boxes to verify as to no matter if the identify and handle on the account have been proper. It also contained an deal with to ship the letter back again to gather the refund as effectively as an e-mail address clients could send to in its place.

In addition, the letter states that the team’s unclaimed home, including security deposits, was reviewed in 2014 by the Unclaimed Assets Division of Virginia’s Department of the Treasury, which had complete entry to the team’s stability deposit data. Right after the evaluation, the section did not recommend further more action but instead demanded the staff fork out $7,330.15 in unclaimed funds to the point out as “abandoned home.”

At last, the letter mentioned the team did not approve of Friedman’s apply of promoting general admission tickets to brokers in 2009.

Friedman had alleged to the Property 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 explained he would tell probable customers that no basic admission tickets were obtainable and press them towards acquiring club-degree seats. In accordance to the letter, there was no NFL policy towards marketing to ticket brokers in 2009. It also mentioned that none of the contracts entered into by Friedman have been permitted by the team’s finance or authorized office. The letter alleged that Friedman employed a rubber stamp of Gershman’s signature, letting him to “retain the agreements secret.”

“When [Snyder] was educated, he was not joyful,” Gershman claimed in his affidavit. “He directed me and other senior executives to cancel the contracts immediately, and we invested months negotiating with brokers to undo the discounts insofar as we could. It would have produced no sense for Mr. Snyder to have directed these broker income only to convert all-around and cancel them afterwards, with considerable economical expense to the Group.”

Donovan stated in his affidavit that he suggested to Snyder that Friedman be fired soon after this incident. Friedman alleged that alternatively of being fired, he received a raise.

Lisa Financial institutions and Debra Katz, Friedman’s attorneys, reported Monday that their customer “stands by his testimony, which was truthful and based on his activities with the workforce. He is pleased to reply stick to-up inquiries from Congress, the FTC, or any authorities agency” and is “organized to defend himself publicly from these allegations if Mr. Snyder permits him to do so. In the meantime, we will converse specifically with the staff about these demonstratively phony allegations.”

A Household Committee on Oversight and Reform spokesman claimed in a statement that the Commanders have “unsuccessful to completely deal with the concerns raised in the Committee’s letter. If the staff maintains that it has absolutely nothing to disguise, it must welcome an independent review by the FTC, or the NFL, which is reportedly inspecting these problems as very well.”