USA Gymnastics, the sport’s embattled national governing body, had more than $1.78 million in expenditures in February, according to a report the organization filed with the U.S. Bankruptcy Court this week.
Of that $1.78 million, USA Gymnastics spent $900 on Safe Sport, the organization’s program to educate and raise awareness about sexual and physical abuse within the sport and investigate predatory and abusive individuals.
In other words USA Gymnastics spent a fraction of a percentage point of its total budget on Safe Sport in February.
For more than three years, through four CEOs, in Congressional hearings, in media interviews, during a series well funded public relations campaigns and in court filings, top USA Gymnastics officials have stressed the organization’s commitment to Safe Sport and addressing sexual abuse and the culture within the sport that enabled predatory behavior of individuals like former U.S. Olympic and women’s national team physician Larry Nassar.
But financial records for the first 14 full months since USA Gymnastics filed for Chapter 11 with the U.S. Bankruptcy Court Southern District of Indiana in December 2018 raise questions about the organization’s commitment to Safe Sport, according to a review of financial records by the Southern California News Group.
Less than 3 percent of all USA Gymnastics expenses between January 2019 and February 2020 were spent on Safe Sport, according to hundreds pages filings with the U.S. Bankruptcy Court.
“They have made no commitment to change,” Mick Grewal, a Michigan attorney, said of USA Gymnastics.
USA Gymnastics listed $38.51 million in total expenses between January 2019 and February 2020, according to bankruptcy filings. During that same period, against the backdrop of the worst sex abuse scandal in American sports history, USA Gymnastics reported $1.13 million in Safe Sport expenditures.
Nearly 30 percent of all USA Gymnastics expenditures–$11.47 million– during the 14-month period went to legal fees.
The financial records, said John Manly, an Irvine attorney, “lays bare the strategy by USA Gymnastics where they’ve tried to convince Congress, tried to convince the media, tried to convince the public that they’ve changed. They haven’t changed. This is just putting more lipstick on a pig. It’s the same old thing: all they care about is money and medals.”
Financial records also seem to support the assertion by critics that USA Gymnastics continues to be more focused on marketing and branding than changing the sport’s culture of abuse.
USA Gymnastics hired Kerry Perry, a marketing executive, as CEO and president in December 2017. She replaced Steve Penny, who was forced to resign in March 2017. Perry was fired in September 2017 in large part for mishandling the organization’s response to the Nassar scandal. Current USA Gymnastics CEO and president Li Li Leung previously worked as the NBA’s vice president for global partnerships.
USA Gymnastics had combined marketing and communications/media expenses of $1.83 million for the 14-month period. SCNG asked USA Gymnastics for explanation on why the organization only spent $900 on Safe Sport in February. USA Gymnastics did not provide a direct answer to the question and instead responded with a broad statement about the organization’s Safe Sport efforts.
“Safe Sport efforts are becoming part of USA Gymnastics’ broader culture, not just one department’s responsibility,” USA Gymnastics said in a statement to SCNG. “Because every department in our organization is focused on making changes that keep our athletes safe and healthy, the number reflected in this line item does not come close to representing the entirety of the resources invested in safety, nor is it a correlation to the work done.
“As just a few examples, so far in 2020: USA Gymnastics has signed a contract with the Positive Coaching Alliance to help create content to teach positive coaching techniques, and partnered with Spot TV to help promote remote access to training for parents; the Safe Sport team presented to the USA Gymnastics Board of Directors and trained all new staff members on Safe Sport policies; and the Safe Sport department created an Athlete Safe Sport Summary for all USA Gymnastics National Team athletes and a one-page summary for all event staff to help foster a better understanding of Safe Sport. Every member of USA Gymnastics’ staff has received – and will continue to receive – critical training on Safe Sport policies, how to identify misconduct, and mandated reporting requirements.
“All of this, and much more, has occurred while the Safe Sport department has continued to investigate and close cases and serve as a trusted resource for the community’s questions. The primarily service-based department currently has eight full-time and contracted personnel, and will be hiring additional staff in the coming months. Their salaries are not accounted for in the Safe Sport budget, yet their tireless work is entirely focused on Safe Sport.”
But financial records continue to raise questions about the primary focus of USA Gymnastics and, according to critics, bolster the argument that the organization remains tone deaf more than 3 ½ years after the Nassar scandal became public.
In February 2019, just weeks after filing for bankruptcy, USA Gymnastics listed $363,143 in monthly marketing expenses. Those expenses were in addition to the $58,370 the organization spent that month on marketing specific events such as the American Cup and Nastia Liukin Cup.
That same month USA Gymnastics spent $42,684 on Safe Sport.
“It just shows that all this talk about change, all this talk about how they care about survivors is complete crap,” said Manly, who represents approximately 180 Nassar survivors.
Said Grewal, who represents more than 160 Nassar survivors, “I have clients who are still members of USAG, who are still coaches, working in USAG gyms and they’re not seeing any change. It’s just lip service. You know the expression ‘action speaks louder than words’? Well we’ve seen no action.”
Financial records also reveal that the U.S. Olympic and Paralympic Committee and the National Gymnastics Foundation increased their financial support of USA Gymnastics even as USOPC executives and attorneys in Congressional hearings, court proceedings and interviews tried to distance the organization from the NGB.
USA Gymnastics’ primary sources of revenue during the bankruptcy have been fees from its members and grants from the USOPC and the National Gymnastics Foundation.
USA Gymnastics had $1.73 million in revenues in February 2020. Membership fees accounted for $956,868 of February’s revenue.
“The worst part of this is USAG is doing this, paying attorneys off the piggy banks of nine-year-old girls dreaming of one day becoming Olympians,” Manly said.
USOPC and the National Gymnastics Foundation provided USA Gymnastics $241,052 in grants in February. USA Gymnastics received $2.25 million in grants from the two organizations between January 2019 and this past February. Records do not breakdown exact amounts of the grants for each of the two organizations.
“The (USOPC) is propping them up,” Manly said referring to USA Gymnastics.
The USOPC did not immediately respond to a request for comment.
The National Gymnastics Foundation is a non-profit, tax exempt organization with $14.27 million in assets.
The organization said its mission statement “is to provide for the sustainability and promotion of the sport, and support the ongoing education and outreach efforts of USA Gymnastics through the preservation and growth of its assets.”
Jim Morris, the former president of Pacer Sport and Entertaintment, the parent group of the NBA’s Indiana Pacers, is the NGF chairman. Morris has also served as the USOPC’s treasurer and chairman of the USOPC audit and entertainment committee.
Olympic champion Nastia Liukin is also on the NGF board.
A $217 million settlement proposal outlined in a 77-page disclosure statement filed with the U.S. Bankruptcy Court last month would require the 517 Nassar survivors to release the USOPC and others from “any and all claims arising from or related to Abuse Claims or Future Claims.”
In addition to the USOPC and Penny, the settlement proposal also calls for survivors to agree to release former U.S. Olympic coaches Don Peters and John Geddert, former U.S. Olympic and national team directors Martha and Bela Karolyi, USA Gymnastics senior vice president Rhonda Faehn, former USA Gymnastics board chairman Paul Parilla, former USA Gymnastics president Bob Colarossi, former USA Gymnastics national teams manager Amy White, former USA Gymnastics sports medicine official Debra Van Horn and the All Olympia Gymnastics Center in Southern California from future claims.
“USOPC is a beneficiary of the Settlement Election’s release and its injunctions,” according to the filing.
“The only way the USOPC will agree to” the settlement “is if it is protected by the release and injunctions described” in the agreement.
USA Gymnastics received $76,263 in USOPC and NGF grants in January 2019, the first full month after the organization filed for bankruptcy protection. The amount of grants dipped to $55,738 the next month and to $44,679 by April 2019. The two groups provided USA Gymnastics $59,141 in June 2019 before grants jumped to $221,692 the following month.
The amount of USOPC and NGF monthly grants continued to climb to $254,019 in August 2019 and $368,322 last November.
“The (USOPC) is telling anybody who will listen that they don’t control USAG,” Manly said. “That’s not true. They’re giving them hundreds of thousands of dollars each month. The USOPC strategy for months has been ‘oh, we don’t control them.’ It’s all lies. They done this to get Congress off their back, to get the media off their back, and to wait and delay until the survivors can’t take it anymore and (USAG) pays (survivors) nickels on the dollar.”
