The Washington Commanders wrote a letter to the Federal Trade Commission, refuting claims of financial improprieties, and laying out their case for why there should be no investigation.
The 22-page letter was written by team attorney Jordan Siev and was sent to the FTC chair. There were 83 pages of signed affidavits, emails and texts.
Paul Szczenski, the team's former director of finance for more than eight years, said in a signed affidavit that he never helped maintain or saw anyone else maintain the books.
Those points were made by the House Committee on Oversight and Reform in a letter to the FTC last week, highlighting allegations made by Friedman, who spent 24 years in the organization's ticket department as the vice president of sales and customer service. He was fired two months after Wright took over.
The FTC does not usually state whether or not it will investigate the matter. The letter to the FTC was copied on by the attorney generals in Maryland, Washington, D.C., and Virginia.
Washington's letter called Friedman's claims baseless, false and reckless, and based on speculation, according toMitch Gershman, Washington's former chief. Friedman was out of the loop because he did not work in the accounting department, according to Gershman and others. The finance and accounting departments worked at the stadium in Landover, Maryland, which is approximately one hour from the practice facilities in Ashburn, Virginia.
The committee never gave the team a chance to respond to the charges. Friedman was portrayed as a disgruntled former employee who had lobbied several people in the organization, including Wright, via email and text to allow him to return, while also sending a letter to the owner praising him.
He told Wright via email that he had had a year to reflect on his past failures. I am remorseful for the mistakes I have made. If you welcomed me, I would come back to help at a moment's notice.
According to Friedman, the organization categorized revenue from standing-room only tickets to Washington games as revenue from college games and concerts, which allowed them to pocket the money and not share it with the NFL. He claimed that they failed to refunds security deposits on season tickets, which cost $5 million.
Washington says it has proof that it did not divert revenue from the games. Friedman produced a May 6, 2014, email with Stephen Choi, then Washington's chief accounting officer, that requested help processing additional ticket sales and revenue.
The email said that Friedman was charging $55 per ticket, but they were priced at $44 in the system. bogus licensing fees would be written off as the difference. He was told to apply the juice from the extra $11 per ticket to the Navy-Notre Dame game. The term "juice" was used for hidden revenue for the team. Washington stated in his letter that "juice" was an upside in revenue.
40% of revenue must be shared by teams with the other 31 teams. The college game was considered non-shareable revenue, which meant that Washington would receive an additional $162,360 without losing a portion of the revenue-sharing pool.
Friedman was dropped from the chain after the email was forwarded to accountants. In an August email, Flythe, who was listed as a manager in the team's ticket finance department, told Choi and Szczenski that the Navy licensing fee had been changed to a 14RedRev.
The team is audited yearly by an outside firm, and every several years by an NFL auditor, according to the letter. Revenue from non-NFL events at FedEx Field were not audited, according to Friedman. That is not true according to Washington's letter.
In his affidavit, Szczenski said there were no categories of events that were not included in the audited financial statements.
The Committee should not have relied on Friedman's testimony when it came to the revenue-sharing scheme. Washington's letter says the team had a $27 million waiver from the NFL that limited revenue sharing because it was paying for projects approved in 2013 and finished two years later. The team had a 15-year waiver that ended in 2012 because it had paid for the stadium, according to the letter.
The letter states that Friedman was wrong about how the team handled security deposits. He claimed that the team created artificial barriers to make it difficult for consumers to collect security deposits. They would target deposits from people who forgot they made one, or those who didn't know one existed. He said that with corporate accounts, the name might change over time and the new person might not know about the initial deposit. Friedman said team executives told employees to make it difficult for customers to receive their deposits by increasing the steps needed to receive the money. Some deposits were returned.
The team stopped charging security deposits a year after the owner became the owner, according to Friedman. Friedman never brought these allegations to him, according to the man who left the team in 2011. Szczenski said in his affidavit that the only deposits that were converted to revenue were when a customer failed to honor their contract. He said there was an extra $200,000 of revenue in the 10-year period.
The organization sent a letter to customers in the summer of 2014, telling them that they might be entitled to a refund based on their remaining balance. The name and address on the account were checked out. The email address customers could send to instead of the letter was also included.
The team's unclaimed property, including security deposits, was reviewed by the Unclaimed Property Division of Virginia's Department of the Treasury, which had full access to the team's security deposit information. After the review, the department did not recommend further action, but it did demand that the team pay $7,330.15 in unclaimed funds to the state.
The team did not approve of Friedman selling general admission tickets to brokers.
The Committee was told by Friedman that he was made the fall guy for this practice. Friedman told potential customers that there were no general admission tickets available. There was no NFL policy against selling to ticket brokers in 2009. The contracts entered into by Friedman were not approved by the finance or legal department. The letter claimed that Friedman was able to keep the agreements secret by using a rubber stamp of Gershman's signature.
Gershman said in his affidavit that he and other senior executives were ordered to cancel the contracts immediately. It would not have made sense for Mr. Snyder to order the broker sales to be canceled and then turn around and do it again later.
Friedman should be fired after this incident, according to an affidavit by Donovan. Friedman claimed that he got a raise instead of being fired.
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