Washington Commanders may have engaged in ‘unlawful’ financial conduct, says Congress to FTC

Congress asks FTC to investigate Commanders' financial issues

A congressional committee released a document alleging that the Commanders held back $5 million dollars in refundable deposits from thousands of FedEX season ticket holders.

WASHINGTON (FOX 5 DC) - Members of Congress have sent a letter to the Federal Trade Commission saying senior Washington Commanders’ executives, including team owner Dan Snyder, may have engaged in potentially unlawful financial conduct, affecting thousands of fans and the NFL.

Download the FOX 5 DC News App for Local Breaking News and Weather

According to emails, documents and statements from former employees obtained by the Committee on Oversight and Reform, officials believe the Commanders may have intentionally withheld millions of dollars in refundable deposits owed to fans, and concealed revenues that were owed to the NFL as part of the league’s revenue-sharing agreement.

Reports: Congress looking into Commanders cash management

FOX 5's Josh Rosenthal spoke with former NFL in-house counsel Jodi Balsam who says the Commanders recent allegations -- if true -- are important for two reasons.

The committee says they conducted an interview with former Commanders sales executive Jason Friedman as part of the ongoing investigation into the Commanders' workplace culture and the NFL’s handling of the internal investigation of this matter.

Friedman, a 24-year veteran of the organization and one of Snyder’s longest-serving employees, oversaw sales and customer experience for all seating at FedEx Field and held the position of Vice President of Sales and Customer Service at the time of his separation from the team in October 2020.

According to Friedman, in 1997, under previous ownership, the team began requiring fans to enter into multi-year leases for certain premium seating which could only be secured with a one-time refundable deposit of 25% of the price of the seats for one year.

The committee says Friedman explained that after Snyder acquired the team, he continued this practice for all premium seating until 2000 when the policy was changed, and deposits were only required for private skyboxes.

Internal documents obtained by the committee reveal that at least some of these lease agreements required that security deposits be returned within 30 days of the agreement ending. However, Friedman stated that under Snyder’s leadership, team executives instructed Friedman to withhold the security deposits from customers at the end of their lease terms and to create artificial barriers to discourage customers from requesting the return of their deposits.

Friedman says the Commanders also improperly converted unclaimed security deposits into revenue to be used for other purposes. This revenue was referred to as "juice" by some Commanders executives.

During his interview, Friedman said that Snyder and Mitch Gershman, Friedman’s former supervisor and then-Chief Operating Officer for the Commanders, would specifically instruct him to:

"Go identify security deposits that are on dormant accounts where, in my estimation, the likelihood of the customer coming forward and asking for their deposit back is as close to zero as possible, and then return the security deposit in the system and convert the credit that would then be on the customer’s account into juice.

"The money would then be allocated to a similar license fee, handling fee, interest fee. It would get converted into something where, A, we didn't have to share it with the league, and B, there was no outstanding obligation related to it. Meaning we didn't have to issue out a ticket to a customer related to that line item."

Based on Friedman’s interview and information that was exported from an electronic database and reviewed by the Committee, the committee says it appears that Friedman has identified approximately 2,000 customers who paid refundable deposits totaling $5 million and whose money was not returned as of 2016.

Friedman also provided information and documents indicating that Commanders executives repeatedly concealed ticket sales revenue that should have been shared with the NFL by underreporting the revenue.

Commanders executives allegedly falsely processed or misassigned a portion of the ticket revenue from Commanders games as fees related to special events, such as concerts or college football games, which did not have to be shared with the league.

According to Friedman, the Commanders avoided detection of these practices by failing to include in their ticket manifests the actual prices charged for tickets. The unreported revenue that was collected by the Commanders, or "juice," would then be assigned as non-sharable revenue in its accounting systems and concealed from the NFL.

The Commanders reportedly maintained two sets of books: one that was shared with the NFL but underreported certain ticket revenue, and another internal set of books that included the complete and accurate revenue and was, according to Friedman, "shown to Mr. Snyder." This practice appears to be reflected in two emails between team executives and Mr. Friedman—one from April 1, 2013 and another from May 6, 2014—that Friedman provided to the Committee.

The committee says another former team employee, Rachel Engleson, confirmed that "it was known and/or rumored in the office that there was ‘moving around’ of money regarding tickets," and stated that she had informed an investigator hired by the NFL about this issue during an interview in 2020.

The NFL sent FOX 5 the following statement regarding the new information from the Oversight Committee:

"We continue to cooperate with the Oversight Committee and have provided more than 210,000 pages of documents. The NFL has engaged former SEC chair Mary Jo White to review the serious matters raised by the committee."

A Washington Commanders Spokesperson sent FOX 5 this statement last week:

"There has been absolutely no withholding of ticket revenue at any time by the Commanders. Those revenues are subject to independent audits by multiple parties. Anyone who offered testimony suggesting a withholding of revenue has committed perjury, plain and simple."

SUBSCRIBE TO FOX 5 DC ON YOUTUBE

Lisa Banks and Debra Katz, who represent over 40 former Washington Commanders employees, released the below statement in response to the committee’s letter to the FTC revealing fraudulent financial practices on the part of the Washington Commanders and Dan Snyder:

"The Committee’s letter to the FTC, the state attorneys general, and the NFL about the Washington Commanders’ fraudulent financial practices is damning. It’s clear that the team’s misconduct goes well beyond the sexual harassment and abuse of employees already documented and has also impacted the bottom line of the NFL, other NFL owners, and the team’s fans. We are proud of our many clients who have come forward at great personal risk to reveal the truth and bring us closer to total transparency about the full extent of the dysfunction at the Washington Commanders."

News Washington, D.C.Washington Football Team U.S.