Congress told the FTC that Washington leaders may have engaged in “unlawful” behavior

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Washington leaders and owner Daniel Snyder “may have engaged in troubling, protracted and potentially illegal financial conduct” that allegedly involved withholding up to $5 million in refundable deposits from season ticket holders and also concealing money that was supposed to be shared between union owners American football, according to a letter the House Oversight and Reform Committee sent to the Federal Trade Commission on Tuesday.

The 20-page letter, a copy of which was recently obtained by The Washington Post, details allegations made by Jason Friedman, a former vice president of sales and customer service who worked at the franchise for 24 years. The letter says that Friedman told committee members that the team kept “two sets of ledgers,” including one set of financial records used to report certain ticket proceeds to the NFL. The letter cites documents indicating that the team’s financial wrongdoing has extended to tickets registered in the name of Commissioner Roger Goodell. She points to the evidence it says indicates that the revenue the team generated through these practices was known internally as “juice,” and details allegations that the leaders incorrectly attributed such revenue to being earned through a college football game of Navy Notre Dame in FedEx Field or Kenny Chesney’s party, not to be part of the NFL revenue sharing pool.

The allegations of financial wrongdoing came to light when the commission reviewed documents and interviewed witnesses in its inquiry into the team’s workplace and the NFL’s handling of the matter. The team has widely denied such allegations, and the oversight committee has not verified them beyond the evidence presented in the letter.

“Given the FTC’s authority to investigate unfair or deceptive business practices, we are submitting information and documents disclosed by the FTC for its review, to determine whether leaders have violated any provision of the law imposed by the FTC and whether additional action has been taken. In the committee’s letter, “We ask that you take any other action you deem necessary to ensure that all funds are returned to their rightful owners and that those responsible for their conduct are held accountable.”

Leaders did not immediately respond to a request for a response to news of Tuesday’s letter. Earlier this month, the team said it had not committed any financial wrongdoing.

“The team categorically denied any indication of financial irregularities of any kind at any time,” the leaders said in a statement at the time. “We adhere to rigorous internal processes that comply with industry and accounting standards, are audited annually by a globally respected independent audit firm, and are subject to regular audits by the NFL. We continue to cooperate fully with the work of the committee.”

The letter was signed by Representative Carolyn B. Maloney (DN.Y.), Committee Chair, and MP Raja Krishnamurthy (Democrat), Chair of the Subcommittee on Economic and Consumer Policy, addressing the Chair of the Federal Trade Commission (FTC). Lina M. It was copied to the committee’s Republican leaders, Goodell and Attorney General Jason S. Miyares (right) from Virginia, and Brian E.

“We write to share evidence regarding troubling business practices by Washington leaders that have been uncovered during the commission’s ongoing investigation into the team’s workplace misconduct,” the letter reads. “Evidence obtained by the Commission, including emails, documents and data from former employees, indicates that senior executives and team owner, Daniel Snyder, may have engaged in a troubling, long-standing, and potentially illegal pattern of financial behavior that has caused harm. Thousands of fans of the team and the National Football League (NFL).”

The NFL did not immediately respond to a request for comment on the letter.

A Republican spokesperson for the Oversight Committee said Democrats are “attacking a private company using allegations that a disgruntled former employee had limited access to the team’s financial resources, was fired for violating team policies, and has his own history of creating a toxic workplace environment.” The spokesman said Republicans would provide the FTC “additional context to make sure they have the full story when evaluating Democrats’ recent rhetoric and not just one-sided, carefully selected information.”

Eight days ago, the leaders said in a statement that “there was absolutely no withholding of ticket revenue at any time by the leaders,” adding that anyone who “has provided testimony indicating withholding of revenue has committed perjury, quite simply and simply.”

This prompted attorney Lisa Banks to say the team had “discredited” Friedman, one of her clients. Banks and fellow attorney Debra Katz called Tuesday’s letter “damned” and said in a statement: “It is clear that team misconduct goes far beyond the sexual harassment and abuse of staff already documented and has also affected the bottom line for the NFL, and other NFLs.” Owners and fans of the team.”

In the letter, the committee said it interviewed Friedman on March 14. Friedman “provided a detailed description of leaders’ toxic work environment, culture of impunity, and lack of accountability by executive leaders” and “also described a pattern of deeply troubling actions.” practices directed by senior leadership, including Mr. Snyder,” the letter states.

According to the letter, Friedman “provided the commission with information and documentation indicating that commanders routinely withhold security deposits that should have been returned to customers who purchased multi-year season tickets for specific seats, referred to as seat leases.” Friedman told the committee that “team executives have directed employees to erect roadblocks to prevent clients from getting the security deposits they are owed — effectively allowing the team to keep that money,” the letter said.

Leaders deny withholding revenue. The attorney claims the evidence presented.

According to the letter, Friedman told the committee that the team would not accept redemption requests via email and failed to inform all tenants of a change made after 2000 that no longer required security deposits for new club seat rental agreements. Friedman told the commission that some clients forgot deposits or, in the case of corporate accounts, may have taken over the account without knowing the refund request.

“Essentially, the team maintains these security deposits, many of which must go back into the hands of clients or former clients,” Friedman told the committee, according to Tuesday’s letter.

According to the letter, Friedman told the commission that at one point, the team had “a scramble to passively reach as much as possible everyone with a refundable on-file security deposit in one of three local jurisdictions” in Maryland, Virginia or DC, depending on applicable laws. them in that jurisdiction. But until then, the team “intentionally created additional obstacles to reduce the likelihood of pursuing tenants” by requesting a letter requesting a refund, the letter Friedman told the committee.

The committee’s letter stated that as of July 2016, based on Friedman’s interview and documents he provided to the committee, “the team had security deposits for “about 2,000 accounts” belonging to customers and fans totaling “about $5 million.”

Some team executives have used the term “juice” to refer to revenue that was intentionally misallocated in the franchise accounting system and attributed to unrelated events, the letter Friedman told the committee. According to the letter, Friedman testified that Snyder and Mitch Gershman, who was then the team’s operations manager, would ask him to “identify security deposits that are in dormant accounts where, in my estimation, the probability of a customer coming in and asking for it. The return of the deposit is as close to zero as possible, and then back the security deposit in system and transfer the balance that will be in the customer’s account to juice.”

Friedman told the committee that such allocations would be made in part to avoid contributions to the domestic revenue pool that NFL teams must share with the league and other franchises. Friedman told the committee that the practice “has occurred over several years” and was “conducted at the direction and for the benefit of Mr. Snyder,” the letter states. It ended around 2017, Friedman told the committee, after Snyder ordered it to stop by Stephen Choi, the team’s former chief financial officer.

Gershman and Choi did not immediately respond to requests for comment.

Congress investigates allegations of financial wrongdoing by leaders

According to the letter, Friedman told the committee that he had been instructed by Choi: “Dan doesn’t want us to mess with it anymore. Just leave him alone. Don’t touch any of the money. Don’t try to return it to customers, don’t try to turn it into juice, just leave it alone.”

According to a spreadsheet provided to the committee by Friedman, two season cards that appeared in Goodell’s name as of July 2016 had a non-refundable deposit of approximately $1,000. The deposit appears to have been taken before Goodell was elected as an NFL commissioner in 2006, according to spreadsheets. The letter stated that the committee “has not specified when the security deposit will be paid or whether it has since been returned.”

The spreadsheets, according to the commission’s letter, also appear to show 28-seat security deposits held by the NFL at different times, with non-returned insurance deposits totaling about $13,000 as of 2016. The commission offered to submit Friedman’s spreadsheets to the Commerce Commission federation.

According to the letter, Friedman told the committee that team executives had “deliberately begun not reporting ticket revenue in the team’s electronic database that should have been shared with the league” after a 15-year waiver by the NFL setting out how much a team should share from Revenue from club seats that expired in 2012.

The committee’s letter read: “The executives apparently achieved this by mishandling or misappropriating a portion of ticket revenue from Leaders Games as fees related to special events, such as concerts or college football games, which were not subject to revenue sharing with the association. American football.”

Daniel Snyder has pledged to support the NFL investigation. His actions tell a different story.

Friedman told the commission he had “wrongly processed” $162,360 in proceeds from Commanders game tickets as derived from a Navy-Notre Dame game at FedEx Field, based on guidance from Choi in an email dated May 6, 2014. Choi wrote, according to a letter Committee: “The juice goes to the Navy vs ND game.”

Friedman told the commission that the leaders avoided disclosure in such a situation by charging $55 for a ticket listed in their statement as a $44 cost.

“These are the two sets of books,” Friedman told the committee. “So in this particular case, there is a set of books that have been given to the NFL and not including $162,000, but then there is a set of books that are kept internally for Mr. Snyder and Mr. Snyder — I think just Mr. Snyder, actually, And people in his inner circle probably, that illustrates what we’ve already done, which will include $162,000 worth of juice.”

Friedman told the commission that the books were kept by Choi and another person whose name has been omitted from the letter obtained by The Post. According to the committee’s letter, team executives appear in an April 1, 2013 email to “discuss the intentional processing of shareable proceeds of $88,000 from Leaders Games tickets as fraudulent, non-shareable licensing fees at the May 25, 2013, Kenny Chesney concert at FedEx Field.”

Rachel Engleson, the team’s former director of marketing and client relations, wrote to the committee that “it was known and/or rumored in the office that there was a ‘movement’ of funds in connection with tickets,” according to the letter. Ingleson informed the commission that she told attorney Beth Wilkinson this during a 2020 interview that was part of the Wilkinson investigation into the team’s workplace.