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

The Washington Commanders on Monday strongly disputed claims of money improprieties in a letter to the Federal Trade Fee, laying out the case for why there really should be no investigation by the government establishment.

The 22-web site letter, written by team legal professional Jordan Siev and tackled to FTC chair Lina M. Khan and attained by ESPN, rebutted allegations by previous workforce staff Jason Friedman that the team experienced engaged in nefarious economic procedures, impacting buyers and the NFL, to improve their earnings. In addition to the letter, there had been 83 pages of signed affidavits, e-mail and texts.

Paul Szczenski, the team’s previous director of finance for more than 8 several years, claimed in a signed affidavit that, “I can state unequivocally that I never ever assisted maintain, or noticed any person else sustain, a ‘second set’ of textbooks.'” He was one particular of three former high-ranking staff officials who submitted signed affidavits.

All those details were created by the Home Committee on Oversight and Reform in a letter to the FTC last 7 days, highlighting allegations manufactured by Friedman, who spent 24 years in the organization’s ticket department as the vice president of revenue and buyer support. He was fired in Oct 2020, two months following Jason Wright took about as team president.

The FTC acknowledged getting the letter, but commonly does not point out irrespective of whether or not it will examine the make any difference. It also could be turned above to the legal professional generals in Maryland, Washington, D.C., and Virginia all had been copied on the letter to the FTC.

Washington’s letter called Friedman’s statements “baseless” as nicely as “wrong and reckless” and dependent on “pure speculation,” according to Mitch Gershman, Washington’s former main operating officer, who still left the staff in 2015 but five yrs later was accused by former staff members of sexual harassment in a Washington Publish posting. Gershman and other people said Friedman was out of the loop simply because he did not work in the accounting department and was therefore not privy to all economical conversations. Friedman labored at the team’s stadium in Landover, Maryland, which is roughly a single hour from the practice amenities in Ashburn, Virginia, where by in accordance to the letter the finance and accounting departments labored.

Also, the letter explained the committee hardly ever gave the group a possibility to respond to Friedman’s fees. It also painted Friedman as a disgruntled previous staff who, until finally a short while ago, had lobbied several persons in the firm — such as Wright — by means of e-mail and by text to allow him to return, though also sending a letter to owner Dan Snyder immediately after his firing in October 2020 praising him.

In January, he explained to Wright by way of e mail, “I have experienced a yr to mirror on my previous shortcomings. I’ve learned, and I am remorseful for these shortcomings. If you welcomed me, I would be back there to support at a moments see.”

Friedman claimed the organization experienced knowingly classified earnings from standing-place only tickets to Washington video games as income gathered from college online games and concert events, thus letting them to pocket the income and not share a portion with the NFL. He also mentioned that they failed to refund protection deposits on season tickets, alleging it afflicted 2,000 prospects at a price of $5 million.

But Washington’s letter claims it has proof that it did not divert revenue from NFL game titles to other events. Friedman had generated a May well 6, 2014, e mail with Stephen Choi, then Washington’s chief accounting officer, that asked for support on processing additional ticket sales and income.

The electronic mail stated that Friedman was charging $55 for each ticket, but they had been priced at $44 in the process. The variance would be composed off as bogus licensing service fees. According to the email, Choi directed him to use the “juice” from that extra $11 for each ticket to the Navy-Notre Dame activity to be held that exact same year. Friedman claimed “juice” was a expression for hidden earnings for the staff. Washington’s letter said that “juice” was slang for “an upside in revenue.”

Groups are expected to share 40% of their profits with the other 31 teams. But the school sport was considered non-shareable profits, which intended that Washington would get an more $162,360 devoid of losing a portion to the earnings-sharing pool.

Washington’s letter stated that Choi forwarded this e mail to accountants, dropping Friedman from the chain. In an August e-mail, Trey Flythe, then stated as a manager in the team’s ticket finance section, explained to Choi and Szczenski that the “Navy licensing payment has been switched to a 14RedRev.” That intended it was now viewed as 2014 Redskins profits the e mail incorporated a monitor shot of the accounting for the total of $162,360 listed below 14RedRev.

The team’s letter also pointed out that they are subjected to annually audits by an outside the house business, BDO, and just about every many many years by an NFL auditor, Ernst & Younger. Friedman alleged that earnings from non-NFL events at FedEx Discipline ended up not subjected to all those audits. Washington’s letter suggests which is not real.

In his affidavit, Szczenski said, “there were being no categories of activities that had been ‘excluded’ from external audits live shows, faculty soccer games, and soccer matches were all element of the Team’s audited monetary statements, and all could be subjected to scrutiny by the auditors.” Former standard counsel David Donovan stated the very same in his affidavit.

The letter also states the Committee should really not have relied on Friedman’s testimony regarding when the alleged earnings-sharing plan transpired. Friedman stated it occurred “largely from 2010 to 2015.” Washington’s letter suggests the crew experienced a $27 million waiver from the NFL that constrained earnings sharing because it was shelling out for assignments authorised in 2013 and concluded two years later on. The letter claims this waiver was known in the team’s accounting and finance division, but “unbeknownst to Friedman.” Before that, Washington experienced a 15-year waiver that finished in 2012 because it had paid for the stadium alone.

The letter also suggests Friedman was erroneous about how the staff dealt with stability deposits. He claimed right after Snyder acquired the group in 1999 that the crew established artificial boundaries to make it tough for individuals to accumulate security deposits. Or they would target deposits from people today who had overlooked they produced just one, or people who inherited seats and didn’t know one particular existed. He stated with company accounts, the name on the agreement could modify more than time and, after again, the new particular person may not know about the initial deposit. Friedman said workforce executives advised personnel to make it complicated for clients to obtain their deposits by raising the measures essential to obtain the revenue. Some deposits did get returned.

Also, Friedman mentioned to the Committee that the staff stopped charging protection deposits a year right after Snyder grew to become owner. Donovan, who left the staff in 2011, mentioned Friedman under no circumstances brought these allegations to him. In his affidavit, Szczenski explained the only deposits converted to earnings occurred when a client defaulted on their contract. He said in a 10-calendar year span that resulted in an excess $200,000 of profits.

The letter also incorporated a duplicate of a letter the firm sent to buyers in 2014, informing them that they might be entitled to a refund dependent on their remaining balance. It provided containers to look at as to no matter whether the title and deal with on the account ended up suitable. It also contained an tackle to deliver the letter back to collect the refund as perfectly as an e-mail handle they could mail to in its place.

Also, the letter states that the team’s unclaimed house, like safety deposits, were being reviewed in 2014 by the Unclaimed Property Division of Virginia’s Office of the Treasury, which experienced complete accessibility to the team’s safety deposit details. Just after the evaluate, the division did not recommend even more action but as an alternative demanded they pay out $7,330.15 in unclaimed funds to the state as “deserted house.”

Finally, the letter stated the workforce did not approve of Friedman’s exercise of promoting standard admission tickets to brokers in 2009.

Friedman had alleged to the Committee that he was made the drop guy for this apply, telling them Choi and Gershman instructed him to misrepresent their ticket problem. Friedman reported he would convey to likely consumers that no common admission tickets have been readily available and thrust them towards purchasing club level seats. In accordance to the letter, there was no NFL plan versus providing to ticket brokers in 2009. It also mentioned that none of the contracts entered into by Friedman have been authorised by the team’s finance or legal division. The letter alleged that Friedman employed a rubber stamp of Gershman’s signature, allowing for him to “keep the agreements magic formula.”

“When [Snyder] was informed, he was not satisfied,” Gershman claimed in his affidavit. “He directed me and other senior executives to cancel the contracts quickly, and we put in months negotiating with brokers to undo the promotions insofar as we could. It would have built no sense for Mr. Snyder to have directed these broker profits only to change all over and cancel them later on, with substantial money charge to the Staff.”

Donovan mentioned in his affidavit he recommended to Snyder that Friedman be fired right after this incident. Friedman alleged that instead of staying fired, he been given a raise.