The U.S. Olympic Committee is a dysfunctional, unhealthy organization that needs radical restructuring before it can resume its mission of serving the nation's best athletes, according to testimony yesterday during a Senate Committee on Commerce, Science and Transportation hearing.
Committee chairman John McCain (R-Ariz.) said he will create an independent panel to recommend speedy changes to the USOC, with the results coming as early as this summer. McCain said he wants the changes to be implemented as soon as possible so that the organization's ongoing management problems do not become a liability to New York's efforts to win the 2012 Summer Games.
"We must restore faith in this organization in the eyes of our athletes, the American people, and the international sports community," McCain said at the opening of the two-hour hearing. "To do this, we must first be sure that the structure of the organization is in line with the USOC mission to 'preserve and promote the Olympic ideal as an effective, positive model that inspires all Americans.' "
Darryl Seibel, chief communications officer for the USOC, said "we welcome the continued involvement and interest of Sen. McCain, Sen. [Ben Nighthorse] Campbell [R-Colo.] and the committee. These are important issues. And we share the concern of the committee in making certain we're doing all that we should in support of America's athletes."
McCain suggested Donald M. Fehr, executive director of the Major League Baseball Players Union, be involved in putting together the independent panel. Fehr, who serves on the USOC board of directors as a representative of the public sector, said "nobody has talked to me about doing that. Any reaction I would have about that would be confidential."
McCain's committee held a similar hearing two weeks ago, in the wake of conflict-of-interest allegations against chief executive officer Lloyd Ward that had led to the resignation of several members of the organization's ethics committee and sparring between Ward and then-USOC president Marty Mankamyer. Mankamyer resigned last week.
Attorney Fred Fielding, who was hired by the USOC to investigate the Ward situation, said his investigation unearthed an unhealthy atmosphere "where the open hostility between the CEO and the president was known to all, with a history of spying and feuding."
"I don't like to see a program that we put together on a sound footing unravel because of personalities and personal ambitions," said Sen. Ted Stevens (R-Alaska), who sponsored the 1978 Amateur Sports Act, which served as the basic legislation that created the USOC.
Neither Ward nor any senior USOC staff officials were invited to testify at the hearing, an indication that McCain and the Congress are willing to go forward without much input from the organization, which is conducting its own internal review. McCain said he feared the internal review "will amount to nothing more than a reshuffling of chairs on the deck of the Titanic."
Witness Donna de Varona, a former Olympian and member of the international relations committee of the USOC, said the USOC's 123-member "unwieldy" board and the 500-member staff operate on two tracks like parallel lines with no point of intersection for common purpose.
"We encourage Congress to exert its oversight powers in the most vigorous possible manner," said De Verona.
Campbell called on Ward to resign for the good of the athletes and the organization.
"A partial housecleaning is not going to cure the problem," said Campbell, who appeared as a guest of the committee because of his stature as a 1964 Olympian in judo. Fixing the USOC, he said, "is going to require downsizing and streamlining."
David F. D'Alessandro of Boston-based John Hancock Financial Services, which has paid more than $100 million as an Olympic sponsor during the last decade, criticized the USOC for lack of clarity in reporting its finances in its filings with the Internal Revenue Service.
"The public cannot tell what the USOC gets, its value, or how it is distributed," D'Alessandro said. "The question is, how much, what is it, and where does it go? . . . Clearly the USOC has lost its way."
The organization employed Arthur Andersen accountants for its financial books until the accounting firm went out of business, which happened in the wake of the scandal surrounding the Enron Corp. The firm of KPMG has replaced Andersen, according to chief financial officer Early Reese.
The majority of USOC annual average of $125 million in revenue (about 80 percent) comes from domestic and international sponsorship and from broadcast rights, Reese said. No direct support is received from the government.
D'Alessandro said an inefficient use of money and a bloated bureaucracy give the USOC little bang for its buck. He proposed improving the organization's standards for financial reporting, reducing the size of the governance structure and requiring the USOC to spend 85 cents of every dollar on athletes. The USOC currently spends 77 cents of each dollar on athlete programs, according to a spokesman.