Congress shares details with FTC of alleged Washington Commanders financial scams against customers and the NFL
The U.S. House Oversight & Reform Committee is indeed exploring potential financial improprieties within the Washington Commanders organization. The Committee now wants a federal agency to get involved.
According to the Washington Post, the Committee sent a 20-page letter to the Federal Trade Commission regarding allegations that the team may have withheld as much as $5 million in refundable deposits from season-ticket holders, and that the team may have hidden cash that was to be shared by all NFL franchises.
Former Washington employee Jason Friedman, who spent nearly a quarter-century with the organization, told the Committee that the team kept two sets of books, and that one set of financial information underreported ticket revenue to the league. The process of intentionally allocating revenue to the wrong event was known, according to Friedman, as “juice,” with the team allegedly spreading revenue that should have been shared with the league to non-NFL events at FedEx Field.
As bad as that sounds, it’s separate from an alleged scam to keep security deposits from season-ticket holders.
Friedman, according to the letter, “provided the Committee with information and documents indicating that the Commanders routinely withheld security deposits that should have been returned to customers who had purchased multiyear season tickets for specific seats, referred to as seat leases,” and that “team executives directed employees to establish roadblocks to prevent customers from obtaining the security deposits they were due -- effectively allowing the team to retain that money.”
Those claims will remind some of the rebate controversy that resulted in a multi-year investigation of Pilot Flying J, the truck-stop company previously owned and operated by Browns owner Jimmy Haslam. Haslam somehow avoided prosecution in that case. If Friedman’s evidence is accurate and persuasive, members of the Commanders organization may have to worry about indictments, too. Including owner Daniel Snyder.
The practices apparently ended in 2017, according to Friedman.
Here’s an example of how the “juice” practice allegedly worked. Friedman told the Committee that he “falsely processed” $162,360 in Commanders ticket revenue as arising from a Navy-Notre Dame game at FedEx Field. The team’s former chief financial officer, Steven Choi, allegedly directed Friedman to do it this way, in a May 6, 2014 email.
“So this is the two sets of books,” Friedman told the Committee, based on the letter obtained by the Post. “So in this particular case, there’s a set of books that’s submitted to the NFL that doesn’t include the $162,000, but then there’s a set of books that’s kept internally shown to Mr. Snyder and Mr. Snyder’s -- I believe just Mr. Snyder, actually, and the people in his inner circle maybe, that shows what we actually did, which would include the $162,000 of juice.”
If Friedman has documents to back up his claim, that’s a major problem for the organization and for Snyder. Likewise, it’s impossible for the league to remain quiet about this -- even if some in the league office would likely prefer that nothing come of it.
Those who should have caught it will face tough questions from the other teams. Especially given the all-too-cozy relationship between NFL general counsel Jeff Pash and former team president Bruce Allen.
Where it goes from now remains to be seen. The FTC should investigate. A local prosecutor should investigate. The NFL should investigate. Lawsuits should be filed, especially by those whose security deposits may have been stolen -- if Friedman’s allegations are accurate.
Ultimately, it could be time for the NFL to finally rid itself of Daniel Snyder. It’s arguably long overdue.