House committee urges Federal Trade Commission to investigate ‘troubling’ conduct of commanders

The House Oversight and Reform Committee sent a 20-page letter to the Federal Trade Commission on Tuesday, urging the agency to examine a “troublesome, longstanding, and potentially illegal pattern of financial conduct” by Washington commanders and from owner Dan Snyder.

The letter includes allegations made by former Washington employee Jason Friedman, who accused the team of withholding up to $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 commanders also kept two sets of financial records to withhold a portion of ticket revenue that was supposed to be shared with visiting teams. Friedman shared emails, allegedly from other team employees, that he says support his claims. He also provided members of Congress with a spreadsheet he says was exported from a Commanders database that sheds light on security deposit practices, according to the committee’s letter to the FTC.

The team, asked to comment on the latest allegations on Tuesday, referred to an earlier statement released last month in which the organization denied “any suggestion” by the former employee of “financial impropriety of any nature whatsoever at any time”.

But the new charges represent a potentially dramatic expansion of the scope of the congressional panel’s investigation into the commanders.

“This new information about potential financial misconduct suggests that the rot under Dan Snyder’s leadership runs much deeper than imagined,” said Rep. Carolyn Maloney, Democrat of New York and chair of the oversight committee, in a press release. “It further heightens concerns 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 work culture, Mr. Snyder may also have misled the team’s fans and the NFL.

“While our investigation remains focused on the toxic work environment of commanders, I hope the FTC will review this troubling financial conduct and determine if further action is necessary. We must be held to account.”

The FTC did not respond to a request for comment on whether to open a new investigation into Snyder in light of the letter.

If the FTC takes action, the investigation would be the last investigation into Snyder.

The Oversight Committee’s investigation continues, and the NFL has also launched a review into the claims of a former Washington employee who accused Snyder of inappropriately touching his thigh at a work dinner circa 2005 or 2006. The allegations, made by Tiffani Johnston, came to light in February during a congressional roundtable convened by the committee.

Friedman, the former Commanders vice president of sales and customer service who worked for the team for 24 years, previously wrote to the committee that he saw Snyder try to bring Johnston into his limo.

In his March 14 testimony, according to the letter, Friedman told the committee that the commanders intentionally failed “to repay security deposits and took various steps to retain as much of that money as possible.” The team, Friedman said, called that revenue — along with other “extra money” — “juice,” then diverted it to other unrelated events.

Friedman told the committee that Mr. Snyder and Mitch Gershman, a former supervisor of Friedman who served as the team’s chief operating officer, asked him to return security deposits to inactive accounts in the system. the team and convert the credit which would then be on the customer’s account. in 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 totaling about $5 million in 2016.

Friedman, according to the letter, said the practice stopped in or around 2017 when Snyder became “a little concerned that maybe some people were on to them here.” Friedman said Snyder, through then-CFO Stephen Choi, ordered Friedman to stop.

Before that, Friedman said the practice had gone 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 which 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 expiration of the agreement, the letter states.

Friedman told the committee that after Snyder bought the team in 1999, team leaders began ordering “employees to set up roadblocks to prevent customers from getting security deposits. owed to them – allowing the team to keep that money,” according to the letter.

Friedman told the committee that many customers had forgotten that deposits were refundable, especially accounts in which the point of contact had changed to someone else.

“One of the other reasons the team was able to do this is because people were passing tickets down through their families,” Friedman said, according to the letter. “So, you know, a mother passes the notes to her daughter and in doing so does not tell her that there is a security deposit in the account. And then when the girl decides not to renew the tickets, she does not know how to ask for the refund of her deposit. And, again, the team keeps it and makes no effort to try and refund the money.

Regarding the team’s alleged misconduct in withholding ticket revenue, Friedman said the team redirected ticket sales from games to other events such as a 2014 Kenny Chesney concert and a Navy-Notre Dame football game in 2014. The league’s collective bargaining agreement calls for all 32 teams to share 40% of ticket revenue in a visiting team fund. Commanders previously denied this specific allegation last week.

The Republican side of the Democratic-controlled Oversight Committee called Tuesday’s letter an “attack” on a “private company unrelated 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 team finances, was fired for violating team policies and has his own story of building a ‘a toxic work environment,’ the spokesperson said. “As late as January 2022, this employee was begging to return to his job with the team.

“Republicans on the committee will provide the FTC with additional context to ensure they have the full story when evaluating the Democrats’ latest letter and not just one-sided, hand-picked information.”

Lisa Banks, Friedman’s attorney, tweeted that the Republican response does not address the substance of the allegations, “which are serious and supported by documents.” She wrote that Republicans were trying to use “deviation and denigration” as a defense.

In a separate statement, Banks and fellow attorney Debra Katz called the House letter “a roadblock.” The letter was addressed to FTC Chairman Lina M. Khan and copied to the attorneys general of Virginia, Maryland and the district, as well as the NFL.

“Given the authority of the Federal Trade Commission (FTC) to investigate unfair or deceptive trade practices, we are providing the information and documents uncovered by the committee for your review, to determine whether the commanders violated any provision of the law enforced by the FTC and whether further action is warranted,” the letter read. “We ask that you take any other steps you deem necessary to ensure that all funds are returned to their rightful owners and those responsible are held accountable for their conduct.”

An NFL spokesperson 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 Chairwoman Mary Jo White to review the serious issues raised by the committee,” a league spokesperson said.

Aurora J. William