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Commanders deny allegations of financial improprieties in lengthy letter to FTC

In a letter to the Federal Trade Commission, an attorney for the Washington Commanders said recent allegations of financial improprieties are "baseless," and a congressional committee's investigation into team activities was conducted in "a one-sided, deficient, and partisan fashion.” (Jonathan Newton/The Washington Post)
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The Washington Commanders sent an 18-page letter to the chair of the Federal Trade Commission on Monday that described the allegations of financial improprieties made by a former team employee and detailed by the House Committee on Oversight and Reform as “baseless” and asserted that “no investigation is warranted.”

The rebuttal claims the committee’s letter, which was sent to the FTC on Tuesday, “relies solely on the uncorroborated, false testimony of a single disgruntled former employee,” referring to former vice president of sales and customer service Jason Friedman, who worked for the team for 24 years.

In an interview with the committee and through shared emails and documents, Friedman alleged that Washington engaged in a long-running practice of withholding refundable deposits from season ticket holders and hiding money that was supposed to be shared among NFL owners.

The team described the committee’s letter as “one-sided” and “uncorroborated” and included declarations from four former executives — team counsel David Donovan, chief operating officer Mitch Gershman, director of finance Paul Szczenski and senior vice president Michael Dillow — as well as documents and text exchanges to dispute Friedman’s claims.

Congress details allegations of Commanders’ ‘unlawful’ conduct to FTC

“We are confident that, had this referral not come from a Congressional Committee, the FTC would exercise its discretion to decline to open an investigation based on the uncorroborated and implausible allegations of a single disgruntled former employee, especially one with such notable impairments to his credibility as set forth below,” read the team’s letter, which was signed by attorney Jordan Siev of Reed Smith LLP. “We respectfully suggest that the FTC should not be influenced by the patina of credibility created by a congressional referral when the actual investigation pursued by the Committee in question was conducted in such a one-sided, deficient, and partisan fashion.”

The letter was addressed to FTC chair Lina M. Khan and copied to Rep. Carolyn B. Maloney (D-N.Y.), the Oversight Committee’s chairwoman; Rep. Raja Krishnamoorthi (D-Ill.), the chairman of the subcommittee on economic and consumer policy; Republican leaders of the committee; NFL Commissioner Roger Goodell; and attorneys general Jason S. Miyares (R) of Virginia, Brian E. Frosh (D) of Maryland and Karl A. Racine (D) of D.C.; among others.

Throughout the letter and its 17 accompanying exhibits, the team describes Friedman as an “untrustworthy” former employee who was fired for “professional misconduct” in October 2020 and later pleaded to be rehired. The letter said Friedman “repeatedly berated his staff, including minority women” and “created a culture of fear.” Included in the exhibits are emails purported to be sent from Friedman that include derogatory and misogynistic language.

Szczenski described Friedman’s claims as “speculative, uninformed guesswork” and said he “had virtually no visibility into the Team’s accounting function. He was not present at meetings of the accounting team or included in [their] communications except in very limited circumstances when it involved his department,” according to the letter.

Friedman’s attorneys, Lisa Banks and Debra Katz, said in a statement Monday that Friedman “stands by his testimony, which was truthful and based on his experiences with the team.” The attorneys previously have said that Friedman has “contractual constraints” that prohibit him from speaking publicly about his allegations regarding the team.

“He is happy to answer follow-up questions from Congress, the FTC, or any government agency,” the attorneys said in Monday’s statement. “[Friedman] is also prepared to defend himself publicly against these allegations if Mr. [Daniel Snyder] permits him to do so. In the meantime, we will communicate directly with the team about these demonstratively false allegations.”

The committee’s letter said, based on Friedman’s interview and documents he provided, that as of July 2016 “the team had unreturned security deposits for ‘around 2,000 accounts’ belonging to customers and fans totaling ‘approximately $5 million.’ ”

According to the committee’s letter, Friedman also said the team maintained “two sets of books,” including financial records that were used to underreport ticket revenue to the NFL. Friedman told the committee that the team misallocated ticket revenue from Commanders games and other events, including a Navy-Notre Dame football game and a Kenny Chesney concert, so it wouldn’t be included in the NFL’s revenue-sharing pool. Friedman told the committee that Washington avoided detection by charging more for a ticket than it was listed for in the team’s manifest.

The committee cited documentation that showed the team’s financial improprieties may have extended to tickets registered in Goodell’s name and evidence that the revenue earned through these practices was known internally as “juice.”

In the team’s letter, Donovan and Szczenski said that league auditors had access to all of the team’s financial records, including those from non-NFL events, such as concerts and college football games at FedEx Field. The letter states that the specific allegations of misappropriated revenue cited by Friedman — the Navy-Notre Dame game and Chesney concert — “were known and analyzed by the Team’s auditors” and its financial records show that it supplied its auditors the revenue schedules as part of its fiscal year 2014 and 2015 audits.

“The Team’s auditors, unsurprisingly, did not find anything amiss with the revenue generated by the Navy-Notre Dame game, and the Kenny Chesney concert, because the Team booked the revenue for each event appropriately,” the letter stated.

The team also denied that it referred to revenue hidden from the NFL as “juice.” Instead, it claims “juice” was slang for “upside in revenue,” often used in reference to the team’s revenue shared with brokers.

“If a broker sold a ticket for above face value,” the letter states, “the Team and broker would split the profits according to an agreed-upon percentage, which was referred to as the ‘juice.’ That revenue had a slang term associated with it in no way means it was hidden or misreported. Friedman’s speculation is, again, unfounded.”

In the committee’s letter, Friedman alleged that the team’s practice of withholding refundable security deposits from season ticket holders and installing barriers for them to receive their money stretched over multiple years. According to the committee’s letter, Friedman said that the team would not accept refund requests by email and failed to inform all lease holders of a change made after 2000 no longer requiring security deposits for new seat leases.

In response, the team said its collection of deposits for “most categories of seats” ended “approximately one year” after Snyder bought the team from the Jack Kent Cooke estate in 1999. In the letter, Szczenski said that security deposits were recorded as a liability and not an asset and that the team “cannot do anything with the funds except refund it when possible or convert it to revenue in case of a default.”

“Over the last ten years, the total amount of security deposits applied to revenue — all due to defaults — is just over $200,000, an immaterial amount in comparison to the Team’s overall income,” the letter said.

Friedman, according to the initial letter sent to the FTC, told the committee that he was instructed by team executives to get “juice” out of some dormant accounts. But the team denied this Monday and specifically referenced a Sept. 12, 2013, email from Friedman that it says shows him as the one proposing to take $100,000 from customers’ security deposits.

Accompanying the team’s letter are multiple emails and text messages said to be from Friedman in which he pleads with Snyder and team president Jason Wright to bring him back. In the letter, the team said that Friedman last asked to be rehired Jan. 4, 2022.

The Commanders’ denial of Friedman’s allegations still leaves unclear the ensuing action by the FTC and included parties. The FTC confirmed that it received the team’s letter but declined further comment through a spokesman.

The Commanders’ denial of Friedman’s allegations still leaves unclear the ensuing action by the FTC and included parties.

The FTC confirmed that it received the team’s letter but declined further comment through a spokesman.

“The Committee has been clear that the focus of its investigation is on the team’s toxic workplace and the NFL’s handling of that matter, which is why the Committee provided the statements and documents from Mr. Friedman about potential financial misconduct to the FTC to determine whether additional investigation is warranted,” a committee spokesperson said Monday. “The team has failed to fully address the issues raised in the Committee’s letter. If the team maintains that it has nothing to hide, it should welcome an independent review by the FTC, or the NFL, which is reportedly examining these issues as well.”

The team’s letter prompted a response from eight women who previously worked for the Commanders and have since alleged sexual misconduct and verbal abuse from male co-workers.

The women — Ana Nunez, Brittany Pareti, Dominique Dupras, Emily Applegate, Megan Imbert, Melanie Coburn, Monica Elliott and Tiffani Johnston — released a statement on social media Monday that said co-owners Daniel and Tanya Snyder “started a smear campaign” against Friedman “while completely deflecting and distracting the public from the truth: that the Snyders operate a franchise on corrupt and toxic behavior.”

A spokesperson for Racine, D.C.’s attorney general, said in a statement Friday that his office considers the allegations detailed in the committee’s letter serious and “if we find evidence that they have violated District law, we won’t hesitate to take action.”

Frosh said in an interview last Tuesday that “if what Mr. Friedman described is accurate, it could be a violation of Maryland’s Consumer Protection Act.”

The NFL declined to comment Monday. The league said last week that the allegations detailed in the committee’s letter would fall under the scope of the current NFL investigation being conducted by attorney Mary Jo White.

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