[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
LEGISLATIVE EFFORTS TO REFORM THE U.S. OLYMPIC COMMITTEE
=======================================================================
HEARING
before the
SUBCOMMITTEE ON
COMMERCE, TRADE, AND CONSUMER PROTECTION
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
JULY 16, 2003
__________
Serial No. 108-39
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
__________
88-430 U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2003
----------------------------------------------------------------------------
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpr.gov Phone: toll free (866) 512-1800; (202) 512�091800
Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001
COMMITTEE ON ENERGY AND COMMERCE
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL BILIRAKIS, Florida JOHN D. DINGELL, Michigan
JOE BARTON, Texas Ranking Member
FRED UPTON, Michigan HENRY A. WAXMAN, California
CLIFF STEARNS, Florida EDWARD J. MARKEY, Massachusetts
PAUL E. GILLMOR, Ohio RALPH M. HALL, Texas
JAMES C. GREENWOOD, Pennsylvania RICK BOUCHER, Virginia
CHRISTOPHER COX, California EDOLPHUS TOWNS, New York
NATHAN DEAL, Georgia FRANK PALLONE, Jr., New Jersey
RICHARD BURR, North Carolina SHERROD BROWN, Ohio
Vice Chairman BART GORDON, Tennessee
ED WHITFIELD, Kentucky PETER DEUTSCH, Florida
CHARLIE NORWOOD, Georgia BOBBY L. RUSH, Illinois
BARBARA CUBIN, Wyoming ANNA G. ESHOO, California
JOHN SHIMKUS, Illinois BART STUPAK, Michigan
HEATHER WILSON, New Mexico ELIOT L. ENGEL, New York
JOHN B. SHADEGG, Arizona ALBERT R. WYNN, Maryland
CHARLES W. ``CHIP'' PICKERING, GENE GREEN, Texas
Mississippi KAREN McCARTHY, Missouri
VITO FOSSELLA, New York TED STRICKLAND, Ohio
ROY BLUNT, Missouri DIANA DeGETTE, Colorado
STEVE BUYER, Indiana LOIS CAPPS, California
GEORGE RADANOVICH, California MICHAEL F. DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire CHRISTOPHER JOHN, Louisiana
JOSEPH R. PITTS, Pennsylvania TOM ALLEN, Maine
MARY BONO, California JIM DAVIS, Florida
GREG WALDEN, Oregon JAN SCHAKOWSKY, Illinois
LEE TERRY, Nebraska HILDA L. SOLIS, California
ERNIE FLETCHER, Kentucky
MIKE FERGUSON, New Jersey
MIKE ROGERS, Michigan
DARRELL E. ISSA, California
C.L. ``BUTCH'' OTTER, Idaho
Dan R. Brouillette, Staff Director
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Commerce, Trade, and Consumer Protection
CLIFF STEARNS, Florida, Chairman
FRED UPTON, Michigan JAN SCHAKOWSKY, Illinois
BARBARA CUBIN, Wyoming Ranking Member
JOHN SHIMKUS, Illinois HILDA L. SOLIS, California
JOHN B. SHADEGG, Arizona EDWARD J. MARKEY, Massachusetts
Vice Chairman EDOLPHUS TOWNS, New York
GEORGE RADANOVICH, California SHERROD BROWN, Ohio
CHARLES F. BASS, New Hampshire JIM DAVIS, Florida
JOSEPH R. PITTS, Pennsylvania PETER DEUTSCH, Florida
MARY BONO, California BART STUPAK, Michigan
LEE TERRY, Nebraska GENE GREEN, Texas
ERNIE FLETCHER, Kentucky KAREN McCARTHY, Missouri
MIKE FERGUSON, New Jersey TED STRICKLAND, Ohio
DARRELL E. ISSA, California DIANA DeGETTE, Colorado
C.L. ``BUTCH'' OTTER, Idaho JOHN D. DINGELL, Michigan,
W.J. ``BILLY'' TAUZIN, Louisiana (Ex Officio)
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Bauer, Kirk M., Executive Director, Disabled Sports USA...... 27
Marshall, Frank, Co-Chair, USOC Governance and Ethics Task
Force, Director, The Kennedy/Marshall Company.............. 13
Myler, Cameron A., Milbank, Tweed, Hadley & McCloy........... 21
Ramo, Roberta Cooper, Modrall, Sperling, Roehl, Harris & Sisk 8
Schiller, Harvey W., President and CEO, Assante US........... 11
(iii)
LEGISLATIVE EFFORTS TO REFORM THE U.S. OLYMPIC COMMITTEE
----------
WEDNESDAY, JULY 16, 2003
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Commerce, Trade,
and Consumer Protection,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2322, Rayburn House Office Building, Hon. Cliff Stearns
(chairman) presiding.
Members present: Representatives Stearns, Shimkus, Shadegg,
Terry, Schakowsky, Stupak, McCarthy, and Strickland.
Also present: Representative Buyer.
Staff present: Brian McCullough, majority professional
staff; Ramsen Betfarhad, majority counsel; William Carty,
legislative clerk; and Chris Knauer, minority investigator.
Mr. Stearns. Good morning. The subcommittee on Commerce,
Trade and Consumer Protection is in order. And if we can just
have the door closed, we will get started.
There is overwhelming consensus that the United States
Olympic Committee has stumbled recently in fulfilling its
mission. It is not necessary, I think this morning, to recount
the lapses that have tarnished this organization in recent
years, but it is nevertheless the reason why we are here today.
The concerns have been voiced from all corners so
passionately about the need to right the ship that carries
countless hopes, countless dreams, and inspiration that the
time to act is now.
So I commend everyone involved in the effort to examine the
United States Olympic Committee and provide us with their
recommendations. The 5 volunteers recommended by our Senate
colleagues and the 10 members of the USOC's internal task
force, including the co-chairs of the Commission and Task Force
are here today, have sacrificed their valuable time and energy
over the past several months to serve this cause. I understand
Mr. Fehr and Dr. Schiller even went so far as to make a special
trip last week for a meeting to discuss concerns regarding one
of the more complicated issues involved in reform.
Additionally, Ms. Ramo has altered her schedule to participate
today. My colleagues, their dedication is emblematic of the
level of commitment of each member of this Independent
Commission, the Task Force, and everyone else involved who has
given their time to this effort and to that we are extremely
grateful.
The importance of the Olympic movement and our efforts to
make appropriate changes cannot be underestimated. We endeavor
to take measured steps ensuring achievement of the desired
results, which is meaningful reform. We are aware of the time
sensitivities associated with having a revamped USOC structure
in place. Accordingly, working in a bipartisan manner, we have
drafted legislation today based upon the recommendations
provided by the Commission and the Task Force. At the
suggestion of our Democratic colleagues, we have included a
provision to establish a compliance program with the
expectation it will prevent future problems. Based largely on
the information we receive today we will incorporate any
necessary changes into the draft, introduce it, and prepare to
move it expeditiously after the August recess.
At the outset of our efforts to understand where reforms
are necessary, we held a hearing to receive the views of those
intimately familiar with the USOC and its shortcomings. We
posed the question: What was responsible for the increasingly
frequent lapses of our Olympic Committee. The answers were
nearly unanimous.
The two reasons presented to this committee as the foremost
sources for these failings were: (1) the unwieldy governance
structure of more than 120 directors that often led to a
cultural counterproductive politics and divisiveness that
hindered effective management; and (2) the scope of the USOC's
mission was so broad that it undermined its ability to achieve
its full potential. The recommendations of both groups confirm
these two areas were ripe for reform as there was a consensus
that they must be changed.
I agree with the recommendations to streamline the
governance structure and narrow the mission of the USOC to
transform it into a more effective organization with a single
focus. Among the similarities in the recommendations, both the
Commission and the Task Force have proposed a dramatic
reduction in the size of the Board while increasing the role of
independent directors, eliminating the current Executive
Committee, empowering the CEO to make all the management
decisions, and focusing the mission of the organization on the
athletes themselves.
Although there is general consensus on these
recommendations, the committee does not need to call a hearing
to discuss the issues where there is agreement. Rather, there
are details contained in the recommendations where the
respective groups diverge and the committee requires further
information before making final decisions for legislation.
Given the relationship to the International Olympic
Committee Charter that recognizes the USOC as our National
Olympic Committee, many of the recommendations have been made
with the intention of remaining consistent with the Charter and
must be evaluated in that context. Were it not for these
external constraints the task would be far easier.
So my colleagues, I am anxious, as I know you are, to hear
from our witnesses today as we seek to understand the nuances
of the recommendations and determine the tradeoffs involved in
each of the proposed reforms. I have specific questions related
to the role of the Assembly, the proposed position of the
Speaker, and the relationship to the IOC charter.
So I look forward to continuing a productive dialog so that
we may all feel confident that we have improved this wonderful,
great organization.
And with that, the ranking member, welcome.
Ms. Schakowsky. Thank you, Mr. Chairman. I want to thank
you for holding this hearing to examine the recommendations on
how to restructure the U.S. Olympic Committee.
I also want to thank Mr. Stupak for his interest and
leadership on this issue.
We all love the Olympics. They are special because they are
a global tradition that Americans share in. The Olympics can
transcend political divisions, racial and ethnic divisions,
geographical and economic divisions. In every Olympic year,
athletes around the world train hard with one common goal in
mind, and that's an Olympic medal. The rest of us wait
expectantly for the personal stories of athletes from around
the world who have overcome seemingly insurmountable hurdles to
become Olympians, we wait for the upsets, the dreams come true,
the world records. And we wait for the tears of joy and the
tears of defeat that come with tough competition. These are all
part of the wonderful Olympic experience.
And yet, if the Olympics are to remain a positive
experience for American athletes, coaches, trainers and fans it
is important that our governing body be free from scandal and
doubt.
I agree with the Chairman that it is important that we
examine the U.S. Olympic Committee and take steps to reform it
so that it can be an effective and ethical committee. Reform is
critical in order to keep alive the dreams and hopes of all
potential athletes, from young children watching the Olympics
on TV to those who are already of world class caliber.
I am eager to hear from each of you about your
recommendations on how to reform this committee. I agree that
it should be much smaller than it currently is and that the
organization's governance and funding must be more transparent
and accountable to all of its constituents.
I am especially curious to learn more about the issue of
the ombudsman, which I understand is an important tool for
amateur athletes who are navigating through a variety of
Olympic rules and regulations and for athletes who need an
outside voice to help resolve problems.
I am also interested in exploring the idea of having a
representative from the Paralympic sports on the Board.
I would like to thank all the witnesses for being here and
for all of your work and dedication to the Olympic movement.
Thank you, Mr. Chairman.
Mr. Stearns. I thank my colleague.
The vice chairman of the subcommittee, Mr. Shadegg from
Arizona.
Mr. Shadegg. Thank you, Mr. Chairman. And thank you for
holding this important hearing.
For millions of Americans and individuals around the world,
the Olympics inspire hope and patriotism and encourage team
work. My daughter just over a year ago inspired our family to
go to the Olympics in Salt Lake City, and we had a tremendous
experience there. And I think it was very rewarding for her and
her brother and a wonderful experience for our entire family.
In recent years, however, we have seen the noble ideals of
the Olympics clouded by some ethical and financial concerns. It
is important, both to our Nation and to our Nation's athletes,
that the U.S. Olympic Committee carry out its mission of
encouraging and supporting the athletes who represent their
Nation at the highest level of sports.
I want to thank the members of the USC Governance and
Ethics Task Force and the Independent Commission. Your efforts,
I believe, will steer the USOC back to its proper course and
instill a new focus and direction.
I also want to thank you, Mr. Chairman, for your continued
dedication to this issue and for your efforts to ensure that
Congress meets its responsibilities to the USOC and to our
Nation's athletes.
I believe that both the Task Force and the Commission have
made a number of important recommendations. First and foremost,
I am pleased that both have narrowed the mission of the USOC.
Currently the USOC is serving a significant number of diverse
purposes and stakeholders, all of which are competing for the
limited time and resources of the USOC. This has resulted in a
USOC that is in direct contrast to the disciplined and focused
athletes it serves.
I look forward to hearing from our witnesses and to working
with you, Mr. Chairman, on this issue. While I do not want
Congress to involve itself in the day-to-day management of the
USOC, we have an opportunity to set some direction for the
committee so it can return to its mission and do its job for
our Nation and our Nation's athletes.
Again, thank you, Mr. Chairman. I look forward to hearing
from our witnesses.
Mr. Stearns. I thank my colleague.
The gentleman from Michigan, Mr. Stupak.
Mr. Stupak. Thank you, Mr. Chairman. And I want to thank
you and ranking member Schakowsky for their interest in this
issue and their commitment to moving forward with real and
positive changes to the U.S. Olympic Committee.
As I mentioned in the March hearing, this subject has held
a special interest for me, in large part, because of the
Olympic Education Center at Northern Michigan University in my
District. I would like to be able to go back to my district and
tell the hard working athletes that train at Northern, to tell
them that we are working to make the USOC work better for them
and their Olympic ideals and dreams can become a reality. That
is why I am pleased to work with the Chairman and ranking
member on this legislation to restructure the USOC.
I agree with many of the findings of the Task Force, the
Ethics and Governance Task Force formed by the USOC, and the
Independent Commission that was requested by the Senate and the
changes that are necessary to reform the USOC. This legislation
and hearing are excellent steps toward achieving the necessary
changes to the USOC.
I also strongly support the compliance program included in
this legislation to ensure that past excesses and violations do
not reoccur despite the best intentions.
I look forward to hearing from the witnesses today with
regards to any changes or modifications that may be necessary
to make this legislation an even better product.
We have had a good dialog on this issue and I am sure that
today's hearing will result in some good positive feedback.
Thank you, and I yield back the balance of time.
I would like to welcome the witnesses for coming here
today.
Mr. Stearns. I thank the gentleman.
And we are also delighted to welcome Mr. Steve Buyer. He
has an avid interest in this, and any comments he would like to
have, I would be glad to offer him an opportunity.
Mr. Buyer. All right. Thank you, Mr. Chairman. I appreciate
you allowing me to sit on the subcommittee. And I would like to
compliment you, Mr. Chairman, for your conducting two hearings
on the issue.
I would like to send a special note of thank you to Dr.
Harvey Schiller, a fellow graduate, and for his contributions
over the years to accomplishing the Olympic goals.
I would also like to recognize John Smyth. John is the
Director of the Olympic Training Center and he was the
intermural director while I was a cadet there with my brother.
And he is a class act.
On January 11 of this year, my wife and I, Joni, were in
San Diego, California. And I had read an article in the local
paper about the ARCO training facility, and also I had been
keeping track in the press clippings of the concerns and some
of the self-dealing allegations and conflicts of interest. And
all of it was very concerning to me. And I thought, you know,
here I sit on the Commerce Committee and I wonder what
jurisdiction we have over this particular issue. And I think
what I need to do is go out and have a visit.
So we placed that phone call. And Steve Bull, I appreciate
your help. He is the Director of the Government Relations with
USOC Washington office, arranged a tour. Now why was that tour
important? It is important because I had never been around
Olympians before. I had never seen the facility. And you want
to talk a fresh air; just talking to the Olympians.
I remember my wife and I walking into one of the training
facilities. I think they were sisters, they may have been
twins, kayak or canoe, and they were so positive. And you turn
around and you meet another Olympian and it is hi, how are you?
How you doing today? And Joni and I looked at each other and it
is like, ``What did they have for breakfast. I want what they
had for breakfast.'' And everyone there was so positive, not
only the staff and the trainers and there was just such an
incredible positive atmosphere. It is like no negative vibes
were permitted at the Olympic Training Center.
And I walked away from that tour very enthusiastic, and
actually very proud. Proud of the efforts, proud of the vision
of a lot of people.
And when you think about our society and that for which we
place on the pedestal; Americans place Olympians right up there
at the top because they sacrifice so much in the pursuit of
excellence. And America recognizes that. And so when there is
anything that begins to tarnish that or somebody tries to take
advantage toward some self-interest or self-dealing or
conflicts of interests, I think the American people have a
right to be concerned.
And when you see these Olympians living out their dreams
and it shows on their faces, and you also see that commitment
of the facility's staff to excellence, that is what the Olympic
spirit is all about.
And so I came back and I spoke to Cliff Stearns and said we
really need to do something about this, after also having some
discussions with Steve Bull. And, Steve, I want to thank you
because you are leaving a positive imprint in what you have
done in your contact with us. It did not take a lot of
persuasion with Chairman Stearns because he also had mutual
interests and said yes, we are going to take this up and let us
have at it.
And I think it is important that both bodies, not just the
Senate, but also the House have a voice. And so we take your
recommendations. We leave an imprint. And we work with the
Senate. And, hopefully, we can come to a conclusion that is
satisfactory to everyone, and more in particular the Olympic
spirit.
So, I appreciate the work that all of you have done. And I
think it is very appropriate that we focus now on the
differences. I do not think it is appropriate at all to focus
on some of the problems of the past. The only thing that it
will help us is, perhaps, be a beacon. You say, ``My gosh,
Steve, how can some of these allegations be a beacon?'' No,
because we do not want to repeat those problems of the past.
And I concur with your recommendations for a smaller
governing body. I find it quite interesting to figure out how
this assembly is actually going to work, so I am going to be a
good listener here to your recommendations. Because I can see
more problems than you ever anticipated by having such a large
assembly. But I will be a good listener.
And, Mr. Chairman, I want to thank you for your leadership
on the issue.
Mr. Stearns. I thank my colleague.
Mr. Buyer. I yield back.
Mr. Stearns. Mr. Terry.
All right.
[Additional statements submitted for the record follow:]
Prepared Statement of Hon. Barbara Cubin, a Representative in Congress
from the State of Wyoming
Thank you, Mr. Chairman, for holding this hearing.
I would like to welcome the distinguished witnesses before us
today. Your insight will be tremendously valuable in the continuing
discussion on how best to govern the U.S. Olympic Committee (USOC).
The U.S. Olympic program exudes the very essence of the American
Spirit. It provides enormous opportunities to any man, woman or child
who dares to dream big enough. The message is clear to all with the
ambition--your hard work, determination and God given talents can soar
here.
In recent months, troubling factors within the USOC have come to
light. It is now time to focus on how to avoid future discrepancies as
the USOC's governing body is reorganized. The panelists before us today
have been in the trenches, working diligently to examine the current
situation and outline exactly what a more effective structure would
entail.
It is my hope that the testimony heard today will further
illuminate the pathway to a stronger Olympic movement in our country. I
look forward to hearing from the Governance and Ethics Task Force and
the Independent Commission representatives. Collectively, we can work
to ensure the most effective conclusions are drawn and implemented on
all levels.
Thank you, Mr. Chairman and I yield back the remainder of my time.
______
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee
on Energy and Commerce
Mention the Olympics, and visions of breathtaking performances and
inspirational stories of athletes in pursuit of greatness flash into
our minds. Unfortunately, mention the US Olympic Committee lately, and
the feelings aren't as warm or inspirational. As our witnesses know
very well, too many of the headlines the USOC has garnered in recent
years involve management breakdowns, ethical scandals, and personnel
problems.
It is with much regret that we have arrived at the point where all
experts and individuals involved in the US Olympic movement agree that
Congress must act to restore the integrity and confidence in this
organization. However, I believe it is a positive sign that the
individuals and groups within the USOC have acknowledged and embraced
the need for drastic reforms. The USOC could have taken an alternative
direction after the most recent problems surfaced. Instead, it took the
admirable step to form its own Task Force and propose very credible
reforms. It is definite improvement over past decisions made by the
USOC and bodes well for the future of the organization.
It is rare to see anyone give up power in exchange for the
betterment of the organization. The willingness of the current USOC
membership to voluntarily recommend a diminished role for itself and
cede control speaks volumes about the importance of this organization
to so many people and is the reason we are committed to enacting
meaningful reform.
I think I speak for everyone as I thank each of you here today--and
those involved who are not here--for your service to this cause. You
have made great personal sacrifices to volunteer your time and energy
for the betterment of an organization that will serve future
generations of American athletes and inspire our nation. It is a
selfless act of public service that deserves our praise and
appreciation. We value your insight and depend upon your expertise to
get this right.
No matter what the final legislative product looks like--and I
expect it will closely reflect the recommendations provided--the
reforms as proposed by both the Independent Commission and the USOC's
Task Force are dramatic. A cultural change is never easy and will
require time to take root throughout the organization. However, I am
confident the USOC will emerge a more professional and efficient body
that better serves our country and our athletes.
I look forward to a productive dialogue as the Committee develops
legislation to restore the US Olympic Committee as a universal
standard.
Mr. Stearns. We would like to welcome the witnesses. I tell
my colleagues that we have two people from the Independent
Commission that Senator McCain was instrumental in getting
pointed. And then we have two folks from the Task Force at the
USOC. So it is unique this morning in that we have two
independent voices here that we have an opportunity to hear
from.
So I want to welcome the witnesses. Ms. Roberta Cooper
Ramo, the attorney for Modrall, Sperling, Roehl, Harris & Sisk;
Dr. Harvey W. Schiller, Ph.D., President and CEO of Assante US.
Both of those from the Independent Commission.
Then we have from the Task Force we have: Mr. Frank
Marshall, Co-Chair, USOC Governance and Ethics Task Force
Director of The Kennedy/Marshall Company, and; Ms. Cameron A.
Myler, attorney, Milbank, Tweed, Hadley & McCloy, and; Mr. Kirk
Bauer, Executive Director Disabled Sports USA.
So it was a sacrifice, I am sure, for many of you to get
here, but I appreciate you doing it and we will have great
opportunity to hear from you.
So I welcome, Ms. Ramo, why do you not start. And we will
go from my left and to my right. Just make sure your speaker is
on.
STATEMENTS OF ROBERTA COOPER RAMO, MODRALL, SPERLING, ROEHL,
HARRIS & SISK; HARVEY W. SCHILLER, PRESIDENT AND CEO, ASSANTE
US; FRANK MARSHALL, CO-CHAIR, USOC GOVERNANCE AND ETHICS TASK
FORCE, DIRECTOR, KENNEDY/MARSHALL COMPANY; CAMERON A. MYLER,
MILBANK, TWEED, HADLEY & McCLOY; AND KIRK M. BAUER, EXECUTIVE
DIRECTOR, DISABLED SPORTS USA
Ms. Ramo. Ah, the resonance that I've always wanted.
Mr. Stearns. The power.
Ms. Ramo. I do not know about the power, just the
resonance.
Thank you, Mr. Chair, and members of the committee.
We very much appreciate your inviting Dr. Schiller and I to
testify here today. I want the committee to know that we are
joined by Donna D. Verona, a member of our committee an Olympic
Gold Medalist who is here with us. We are very appreciative;
Dick Ebersol of NBC Sports who is a member of our Commission
and Don Fehr were completely unable to get here. Don came in, I
think, about midnight last night into New York from England. So
they asked us to please apologize to you for their absence.
In March, as you know, we were asked by the United States
Olympic Committee at the request of Congress, the five of us,
to undertake a review of the current culture and structure and
state of the U.S. Olympic Committee and to make recommendations
for reform based on the combined enormous experience of our
Commission with both the Olympic movement and with for profit
and nonprofit boards of varying kinds, particularly paying
attention to governance issues. Though we came to this
Commission together from varied points of views, our findings
are solidly unanimous on all points.
First, we find the culture and organizational mechanics of
the USOC, the architecture that is, disastrously out of order
and in its present state irreparable. The result, we think, of
the over politicized culture has been to put personal and
political agenda ahead of the good of the entire movement and
appropriate support of the athletes. The last few years there
has been constant upheaval at the top with regular resignations
of both presidents and CEOs. The trust of the American people
and our athletes in our view has been completely wasted.
With the Athens Olympics and really 1 year virtually from
today, we believe that change must be immediate and wholesale
and are very grateful that with all else that this House has to
do, you understand the important significance of this matter to
the American people and to the world.
We believe that change must be immediate and wholesale. In
our report, which you have, we make a series of extremely
detailed recommendations. Part of the reason that we spent so
much time in detail is because the organizational enterprise is
such a complex enterprise we felt if we didn't weigh out how
all the pieces fit together from the perspective of people who
knew a great deal about the Olympic movement and about
nonprofit governance, particularly because additionally we are
part of an international movement, that it would be very
difficult for there to be real change.
Following this review of the way things are and following,
by the way, the principles of Sarbanes-Oxley, or I guess in
this House better Oxley-Sarbanes, we recommend as follows; this
is just a summary:
First, that the current 124 member Olympic Committee and
Executive Committee be replaced with a 9 member board with a
majority, and this is very important to us, a majority of
independent directors. Without a working majority, well
recognized independent leaders with the agenda, only the agenda
of the American people and the athletes as their brief, we
believe that no real change will be possible.
Additionally, we recommend, and several of you asked
questions about this in your opening statements, that the
current U.S. Olympic Committee become an assembly with the
deletion of all of the former officers to make it slightly
smaller. It's currently, I think, 124. But we actually believe
that there is an omission from the current USOC which should
definitely be a part of the assembly, and that are Olympic
alumni; that is our former Olympic athletes have so much to
contribute. As Representative Buyer indicated, their experience
in both training for and participating in the international
Olympic events gives us a kind of wellspring of goodwill and
information that we think would be very valuable to the
movement as a whole.
In our view and in our report we said that the assembly
would elect its own speaker who would sit as an ex-officio
member of the board. However, after extensive individual
consultations with the internal commission and others, we now
believe that the speaker should be in a non-voting ex-officio
role.
The U.S. Olympic movement is a part of a large and complex
international movement and we understand and endorse with
appropriate voting controls that the members of the
International Olympic Committee who are from the United States
should be ex-officio members of the U.S. Olympic Committee
Board. We recommend that the new board retain a CEO who will
have extensive power under the policy guidance of the board to
manage the day-to-day affairs of the U.S. Olympic Committee and
to implement the policies of the board. In our report we
suggest financial transparency. In fact, reporting to this body
whistleblower protection and a profound contraction of
committees which have, I think, caused a good deal of upheaval
of the USOC itself and also cost an enormous amount of money.
Because of the emergent nature of the current situation we
ask, understanding all else that you all have to do, that the
Congress implement our recommendations as swiftly as possible
so that the nominating committee we recommend can be in place
by September 1 and an entirely new board sitting and in charge
no later than January 1, 2004. The five of us have spent
countless hours in our efforts because we each believe,
especially in today's world, of the importance of the
international Olympic movement, of its ideals, and we all
believe that the United States Olympic governing body should be
the best governance, embody the best governance practices of
the 21st century and be an organization that lives up to the
magnificent performance of its athletes.
In conclusion, Mr. Chair, I would just like to read 2 or 3
sentences from our report. ``The U.S. Olympic Committee is in
turmoil. It has breached the trust of the American people and
betrayed the Olympic ideals that it has pledged to preserve.
The USOC must be reformed immediately by putting in place a
small board of directors with five highly qualified independent
directors, an empowered accountable chief executive officer, a
representative assembly that gives voice to the myriad
volunteers comprising the Olympic movement in the United
States.''
Thank you very much.
[The prepared statement of Roberta Cooper Ramo follows:]
Prepared Statement of Roberta Cooper Ramo, Co-Chair Independent
Commission of U.S.O.C.
Mr. Chair and members of the Committee: Thank you for inviting Dr.
Schiller and I to testify today. We are joined by Donna De Varronna, an
Olympic gold medal swimmer, and a member of our commission Dick Ebersol
could not be here today and my co-chair Don Fehr arrived in New York
late last night from England and was unable to be here first thing this
morning.
In March, at the request of Congress we were asked by the U.S.O.C.
to undertake an independent review of the current state of the U.S.O.C.
and to make recommendations for reform based on the combined enormous
experience our Commission has with the Olympic movement, the U.S.O.C.
and both for profit and non-profit governance. Though we come from
varied points of view, our findings and recommendations are solidly
unanimous on all points.
We find the culture and organizational structure of the U.S.O.C.
disastrously out of order and irreparable in its present state. The
result of its highly politicized culture has been to put personal and
political agendas ahead of the overall good of the Olympic movement and
appropriate support of the athletes. During the last few years, there
has been constant upheaval at the top with regular resignations of both
Presidents and CEO's. The trust of the American people and our athletes
has been wasted. With the Athens Olympics in one year we believe that
change in the U.S.O.C. structure and personnel must be immediate and
wholesale.
Our report makes a series of detailed recommendations which I would
like to summarize for you very briefly. Following the important
principles of the Sarbanes/Oxley legislation and the recommendations of
the New York Stock Exchange, we recommend that the current 124 member
U.S. Olympic Committee and its Executive Committee be replaced by a
nine member board with a majority (five) of Independent Directors.
Having a majority of Independent Directors is the keystone of our
recommendations and a significant difference between our
recommendations and those of the Internal Task Force. No real change
will be possible without a working majority of well recognized
independent leaders, with only the Olympic agenda of the American
people and its athletes as their brief.
Secondly, we recommend that the current USOC become an Assembly
with the deletion of former Officers and the addition of three Olympic
Alumnae. This Assembly would elect its own Speaker who would sit as an
ex Officio member of the Board. The Assembly will give an important
voice to the volunteer movement, the athletes, and the National
Governing Boards of sports that together make up the Olympic family in
the United States. However, after extensive individual consultations
with the Internal Commission and others we now believe that the Speaker
should be in a non-voting Ex Officio member of the board.
The U.S. Olympic movement is a part of the large and complex
International Olympic movement. We understand and endorse, with
appropriate voting controls, that U.S. Members of the IOC should be ex
officio members of the newly constituted U.S.O.C. Board with limited
voting rights.
We further recommend that the new Board retain a CEO who, under the
policy control of the Board, will have extensive powers to manage the
day to day affairs of the U.S.O.C. and to implement policies of the
Board. In our report, we also suggest financial transparency through
frequent reports to Congress, whistle blower protection and a profound
contraction of committees.
Because of the urgent nature of the current situation we ask, with
respect for all else you have to do, that the Congress implement our
recommendations and report as swiftly as possible. To properly prepare
for the Athens Olympics, a nominating committee should be in place by
September 1st and a totally new Board sitting and in charge by January
1, 2004.
The five of us have spent countless hours because we each believe
in the importance of the Olympic ideals. We believe that the U.S.
Olympic Committee should embody all of the best governance practices of
the 21st Century. The U.S.O.C is a body created by the Congress. Our
report describes detailed independent recommendations for change that
we unanimously believe are required now to change both the results
obtained by the Committee for our athletes and the reputation of the
United Sates Olympic Committee. Thank you ladies and gentlemen for your
time and concern about this important matter.
Mr. Stearns. I thank the gentlelady.
Dr. Schiller.
STATEMENT OF HARVEY W. SCHILLER
Mr. Schiller. Thank you, Chairman Stearns, respected
members of the U.S. House Subcommittee on Commerce, Trade, and
Consumer Protection, ladies and gentlemen, thank you for the
opportunity to appear today to discuss the United States
Olympic Committee, its governance and organization.
I want to thank fellow Citadel graduate, Representative
Buyer again, for his comments.
And I also want to make quick comment about the gentleman
sitting on my left. He's the producer of the new movie coming
out next week ``Seabiscuit.'' And so I know he took a time from
things that he should be marketing the film to be here today.
So thanks for doing that, Frank.
As you may know, I previously served as Executive Director
USOC from 1989 through 1994 and now serve as Chair of the
Management Committee of the US bid city for the 2012 Olympic
Games, New York 2012.
I agree that there has been enough discussion regarding the
numerous missteps of the USOC these past months. I hope that
our attention will now be focused on creating a system of
governance that is effective in carrying out the stated mission
of the Olympic Committee as well as providing for the
protection of a resource so important to every American.
I believe the specific recommendations made by both the
USOC internal task force as well as those of our committee will
meet the expectations of those who are charged with the
oversight of the Olympic Movement in the United States.
The board structure and voting provisions contained in our
recommendations will insure independent consideration of the
matters important to the success of America's athletes. I would
like to restate that independence and endorse the Senate
version of the proposed legislation that recommends five
independent members as members of the board. It provides for a
continuing voice from those representing Olympic sport bodies,
athletes, international representatives, and the American
public. Our assembly provisions will allow a continued
representative body of sport in the United States meeting
annually to discuss the role of community based organizations,
disabled sports groups, the armed forces, the school and
college communities, Olympic athletes past and present as well
as those speaking on behalf of the public. Neither body, the
board or the assembly, can accommodate a specific
representative of each and every organization participating in
sport in this country. That is impossible. The breakdown of the
system we are trying to repair was caused, in the main, by the
parochial interests of those claiming to do what was best for
all but truly only serving themselves.
We all need to recognize as well is that the U.S. Olympic
Committee is an organization of limited financial resources. It
can serve to provide the leadership necessary to establish
goals for athletic activity, but it cannot--it cannot meet the
financial needs of each and every sport organization in this
country. Without enormous government support, even the needs of
Olympians and Paralympians remain a challenge. The protection
of the Olympic name and marks are the main source of funding to
the U.S. Olympic Committee and must not be diluted. The new
governance structure suggested to your Committee allows the
Board of Directors to speak in an independent manner consistent
with the best interests of the organization. In addition, we
all must insure that those selected to serve, staff and
volunteer alike, are of the highest quality possible and their
efforts are appreciated by all.
I urge the members of this Committee to consider the
recommendations of the two task forces in the most serious
manner and move the legislation through the Congress as soon as
possible.
I do want to say that there are potentially some minor
changes that may be necessary to comply fully with the IOC
Charter.
Thank you.
[The prepared statement of Harvey W. Schiller follows:]
Prepared Statement of Harvey W. Schiller
Chairman Stearns, respected members of the U.S. House Subcommittee
on Commerce, Trade, and Consumer Protection, ladies and gentlemen,
thank you for the opportunity to appear today to discuss the United
States Olympic Committee, its' governance and organization. My name is
Harvey Schiller. I presently serve as a member of the Senate appointed
task force to review and recommend changes to the current system of
governance of the United States Olympic Committee. As you may know, I
previously served as Executive Director of the USOC from 1989 to 1994,
and now serve as Chair of the Management Committee of New York 2012,
the USOC bid city for the 2012 Olympic Games.
I believe there has been enough discussion regarding the numerous
missteps of the USOC these past months. I would hope that our attention
will now be focused on creating a system of governance that is
effective in carrying out the stated mission of the USOC as well as
providing for the protection of a resource so important to every
American. Our current Olympic athletes and those who aspire to be part
of this special movement deserve a system that will support their
participation in the best possible way. I believe the specific
recommendations made by both the USOC internal task force as well as
those of our committee will meet the expectations of those who are
charged with the oversight of the Olympic Movement in the United
States.
The board structure and voting provisions contained in our
recommendations will insure independent consideration of the matters
important to the success of America's athletes. It provides for a
continuing voice from those representing Olympic sport bodies,
athletes, international representatives, and the American public. The
assembly provisions will allow a continued representative body of sport
in the United States meeting annually to discuss the role of community
based organizations, disabled sports groups, the armed forces, the
school and college communities, Olympic athletes past and present as
well as those speaking on behalf of the public. Neither body, the Board
or the Assembly, can accommodate a specific representative of each and
every organization participating in sport in this country. The
breakdown of the system we are trying to repair was caused, in the
main, by the parochial interests of those claiming to do what was best
for all but truly only serving themselves.
The USOC is an organization of limited financial resources. It can
serve to provide the leadership necessary to establish goals for
athletic activity, but it cannot meet the financial needs of each and
every sport organization in this country. Without enormous government
support, even the needs of Olympians and Paralympians remain a
challenge. The protection of the Olympic name and marks are the main
source of funding to the USOC and must not be diluted. The new
governance structure suggested to your Committee allows the Board of
Directors to speak in an independent manner consistent with the best
interests of the organization. In addition, we all must insure that
those selected to serve, staff and volunteer alike, are of the highest
quality possible and their efforts are appreciated by all.
I urge the members of this committee to consider the
recommendations of the two task forces in the most serious manner and
move the needed legislation through the Congress as soon as possible.
Thank you.
Mr. Stearns. Thank you, gentleman.
Mr. Marshall, welcome.
I think I'm going to see ``Seabiscuit'' this week or next
over with Jack Valenti. He's invited the Commerce Committee
over. So we welcome you.
STATEMENT OF FRANK MARSHALL
Mr. Marshall. Thank you very much, Mr. Chairman and member
of the Committee, and thank you for the ``Seabiscuit'' plug.
My name is Frank Marshall. I am the Vice President-
Treasurer of the United States Olympic Committee. As you know,
I am a movie producer and serve on the board of directors of
the Los Angeles Sports Council and the UCLA Foundation Board of
Governors. Before becoming USOC Vice President in 2000, I
served on its Board of Directors as a public sector member for
8 years. During the past 5 months, I have had the significant
pleasure and privilege of serving as a co-chair of the USOC's
Governance and Ethics Task Force.
The top level recommendations of the Independent Commission
and the USOC Task Force are very similar. However, there are
fundamental differences with respect to certain
recommendations, and we believe those differences are not
simply not matters of degree but go to the core of how the USOC
is and should be governed.
The most significant difference is the concept and
treatment of the Olympic Assembly. Both the Commission and the
Task Force agree that it is important to have a mechanism for
USOC leadership, officers, and committee members, to
communicate with the many diverse organizations in the Olympic
family in the United States once annually through the creation
of an Olympic Assembly. However, the Commission has recommended
that the Olympic Assembly be of nearly the same size as the
current board and the USOC pay for all of the costs of its
meetings, that the Olympic Assembly vote on substantial matters
concerning the USOC's governance, including all ``Olympic
matters.'' The Commission also would have the Olympic Assembly
elect a presiding officer who will be a member of the new board
and will have a voice as a spokesperson for the USOC.
In effect, the Commission has recommended that the current
124 member USOC Board, with minor differences (such as
eliminating officers and changing the name), will remain a
governing body, just with a somewhat reduced set of governance
responsibilities. Those are all functions that the Task Force
believes must not be performed by a body of more than 110
people, but rather must be functions of the smaller, 11-member,
9-vote Board that we recommend.
The Task Force has estimated that these governance
recommendations could results in over a $1 million per year in
administrative cost savings. For the USOC to continue to
underwrite the costs of the annual Olympic Assembly, as
recommended by the Commission, that estimated cost figures
would have to be reduced by at least $250,000 per year and the
Commission has left its Assembly with so many governance
responsibilities that the more than 110-person Assembly may
need more than one meeting a year, thereby creating additional
expense.
Additionally, there will be a substantial administrative
burden on the USOC's CEO and the staff if they have to organize
and run an assembly that will be conducting elections and
voting on governance issues. For the Olympic Assembly to vote
on anything will require the creation of complex rules and
regulations concerning who can vote and the extent to which
various constituents' votes will be weighted. The assembly the
Commission recommends would subject all Olympic issues to the
constituent-based decisionmaking and the politics that have
plagued the USOC for the past 20 years.
The Commission's assembly would also create constant heated
disputes about what are Olympic issues and would constantly put
the USOC board against the assembly as they debate these issues
that should be submitted to the 100 member board before being
decided.
The Task Force envisioned the Olympic assembly as an
important forum and business meeting for the board and all the
organizations and the individuals involved in the Olympic
family. If the Olympic assembly is also given governance
responsibility and the need to elect a speaker, that will take
the time and focus away from the proper functioning of that
group. Importantly, as we know from USOC's current Board of
124, the Olympic Assembly is simply too large a body for there
to be meaningful education or debate and decisions cannot be
made on a timely basis by such a large group that meets only
once a year.
It is essential that Congress not mandate the USOC continue
with a governance body of more than 100 people. The entire
concept of reform was to place all management in the hands of
the CEO with governance in a small and effective board.
The USOC is not an organization that requires volunteers to
function. In fact, volunteer involvement now detracts from
efficient management, interferes with staff functioning and
often overlaps staff authority. This must stop for the USOC to
be effective and well run.
The Commission's recommendations create the speaker of the
assembly position, an individual who will serve on the board
and will speak on behalf of the USOC family. That threatens the
success of the one voice strategy of the USOC, creates a
position that competes with the chair and the CEO,
unnecessarily creates an additional position on the board and
potentially threatens the USOC achievement of its mission.
The Task Force also disagrees with the Commission
recommendation that the board must consist of a majority of
independent directors. Contrary to arguments of the Commission,
the principles of Sarbanes-Oxley simply do not apply here.
Underlying Sarbanes-Oxley is the notion that shareholders for
in-profit corporations need to be protected from improper
conduct by directors who are also part of management. Here,
under both sets of recommendations, there will not be any
member of the management on the Board, so the notion that
somehow having the Board. Under both recommendations, all
directors will be independent of management as defined in the
for-profit sector. Using Sarbanes-Oxley metaphor here
misperceives the purpose of independent directors, which is to
rid the USOC of directors loyal only to their constituencies.
In addition, the Task Force is concerned about having a
group of independent directors who may or may not be
knowledgeable about Olympic sport with a majority of votes
while the directors who are knowledgeable about Olympic sport,
the athlete, the NGB, the IOC members of the Board, have a
minority of those votes. We believe the IOC is also concerned
about this issue.
The Task Force has recommended that the new ethics
committee should consist completely of independent individuals
who are not board members. The Commission has recommended that
the entire ethics committee be members of the board. It would
seem obvious that an ethics committee of board members would
not be sufficiently independent to review issues of ethics
related to members of the board or members of management who
deal with the board members on a regular basis.
Likewise, the Task Force recommends that the initial
Nominating and Governance Committee, which selects the initial
members of the new board, should be composed of independent
members, while the Commission recommends that the current
constituent groups should select the initial board members.
The Task Force believes that we need to show that the old
culture is gone, create a break with the past and select board
members who will be best able to govern the USOC. We do not
believe that the constituencies are as likely to select the top
quality board members as would the committee of independent
individuals. We fear that the candidates for the board will be
subjected to enquiries or unstated assessments about what
constituencies they support or favor as part of the selection
process.
The Task Force recommends that the USOC's mission be
changed as it exists in the current statute but the Commission
does not. The Task Force thinks it is important that the
seeming entitlements for various groups and perspectives set
forth in the statute should be eliminated to allow the USOC and
its NGBs to focus on the overall mission. The purposes that
would be removed, while generally good things for the United
States, should not be responsibilities given to the USOC,
especially since the Commission and Task Force agree that the
USOC does not have the time or the resources to achieve them
and their inclusion distracts from the USOC's primary mission
of serving the----
Mr. Stearns. Mr. Marshall, just to interrupt you just to
see if you could sum up if you could.
Mr. Marshall. I understand. Thank you.
Mr. Stearns. Good.
Mr. Marshall. Once again, I would like to thank you for
allowing me to testify today, and I think you for your
diligence in insuring that the USOC cleans up its act. We are
now realizing the silver lining of the storm cloud that was
hanging over the organization earlier this year. The job is far
from done and the next step is the implementation of the
appropriate recommendations of these two groups.
Thank you for being willing to see this process through.
[The prepared statement of Frank Marshall follows:]
Prepared Statement of Frank Marshall, Vice President-Treasurer, United
States Olympic Committee
Mr. Chairman, and members of the Committee, thank you for providing
the chance for me to appear and speak to you today.
My name is Frank Marshall. I am the Vice President-Treasurer of the
United States Olympic Committee. I am a movie producer and serve on the
board of directors of the Los Angeles Sports Council. Before becoming
USOC Vice President in 2000, I served on its Board of Directors as a
public sector member for several years. During the past 5 months, I
have had the significant pleasure and privilege of serving as a co-
chair of the USOC's Governance and Ethics Task Force.
USOC President Bill Martin had the tremendous foresight in early
February 2003 to appoint a cross section of 10 USOC and outside persons
and 4 outside consultants of substantial character to review the USOC's
governance process and recommend changes to improve the USOC's
governance. My fellow members of the task force were co-chair Bill
Stapleton, and members Gwendolyn Baker, Robert Balk, Fraser Bullock,
Chris Duplanty, Gordon Gund, James McCarthy, Cameron Myler, and Lisa
Voight, and outside consultants John and Miriam Carver, George Cohen,
and Mal Wakin. I am pleased that the organization, with few exceptions,
continues to demonstrate its commitment in this area. Mr. Chairman,
unless there is objection, I would like to place in the record along
with this written statement the report of the Task Force.
The recommendations of the Independent Commission and the USOC Task
Force are, at the top level, very similar. Both groups recommend that
the organization's mission become focused on athletes and athletic
performance, first and foremost. Both groups recommend that the USOC's
governance must shrink dramatically to bring the USOC into line with
modern best practices of good governance for organizations of the size
and stature of the USOC. Both groups recommend dramatically reduced
Board sizes, with the Commission recommending a new board with 10 votes
and 13 members, and the Task Force recommending a new board with 9
votes and 11 members. Both groups recommend that the USOC must take
substantial steps toward breaking down the structures and incentives
for the culture of political quid pro quo that had heretofore existed
at the USOC. Both groups also recognized the need to clearly define the
roles of the governance and staff functions in the organization. I am
pleased that two groups examining this organization were able to agree
on so much, yet do so independently of each other.
However, as you might expect, there are differences in what the two
groups recommend, though I am pleased to say that those differences are
generally in the details rather than in the top line recommendations.
The Task Force attempted to come to agreement with the Commission on
the differences between the two reports during the past three weeks,
but the differences remain unresolved.
The most significant difference is in how the Olympic Assembly is
treated. There has been general agreement that it is important for
there to be a mechanism for USOC leadership, officers, and committee
members, to communicate with the many diverse Olympic organizations
that comprise the Olympic family in the United States and that these
groups should be able to communicate once annually with the USOC
through the creation of an Olympic Assembly.
The Task Force has very strong feelings about the Commission's view
of the role of the Olympic Assembly, and those thoughts differ
substantially from the Commission's view. The differences are not
merely theoretical; they have substantial governance and transaction
costs associated with them, with the Task Force's recommendations
reducing both.
The Commission has recommended that the Olympic Assembly be of
nearly the same size as the current Board, that the USOC pay for all of
the costs of its meetings, that the Olympic Assembly vote on
substantial matters concerning the USOC's governance, including
amending the USOC Constitution, and that the Olympic Assembly elect a
presiding officer who will be a voting member of the new Board and who
will have a voice as a spokesperson for the USOC in communicating with
the outside world. In effect, the Commission has recommended that the
current 124 member USOC Board, with minor differences (such as
eliminating the officers and changing the name), will remain a
governing body, just with a somewhat reduced set of governance
responsibilities. The Commission's Olympic Assembly would remain, like
the current Board, a body that elects a spokesperson (called the
Speaker instead of the President), decides whether the USOC goes to the
Olympic Games, whether the USOC will propose that one of our cities
host the games, will select the US bid city, will approve all changes
in the USOC Constitution, and decide all other Olympic matters. Those
are all functions that the Task Force believes must not be functions
performed by a body of more than 110 people, but rather must be
functions of the smaller, 11-member, 9-vote Board.
We believe the Commission may have retained this larger, governing
Olympic Assembly because of concern that the IOC's Olympic Charter
might require it, but it is clear from our discussions with the IOC and
from the text of the Olympic Charter that the Task Force's proposal, to
let the Olympic NGBs and athletes vote on certain, very limited
Olympic-related issues is likely to be sufficient. Nothing in the
Olympic Charter requires the large governance body called for by the
Commission. In fact, to have such a body vote on Olympic matters is
contrary to the IOC's Olympic Charter. As the Commission's report
references, to continue the Assembly as a voting, governing body, will
require elections, provisions about terms of office for the members of
the Assembly, and provisions about removing Assembly members. It is the
strongly-held view of the members of the Task Force that the Assembly
will be unable to fulfill the Task Force's goals of facilitating
communication between the USOC Board and CEO on the one hand, and the
constituent groups that are represented in the Assembly if the Assembly
also must continue to perform all the governance functions the
Commission recommends leaving in that 110-member body.
The Task Force devoted substantial time and attention to the
question of whether the USOC should pay the costs for representatives
of member organizations to attend the annual Olympic Assembly. The Task
Force believes that the Olympic Assembly should be valuable to the
members of the Assembly and that those members should only attend if
they share the view that attendance at the Assembly is valuable to
them, as indicated by their willingness to pay the travel costs for
their representatives. If the Olympic Assembly is not worth the travel
costs to send a representative, perhaps the Olympic Assembly should be
improved and enhanced, but the solution is not for the USOC to
underwrite the costs of bringing people to attend an Olympic Assembly
that they do not believe is worth the cost. However, the Task Force
understands that there has not been an Olympic Assembly, so it may be
difficult to assess its value without attending the first annual
session. Therefore, the Task Force recommends that the USOC pay the
members' travel costs to the first annual Olympic Assembly, to be held
in 2004, and in subsequent years the USOC should do whatever is
possible to arrange group rates or discounted travel, but NGBs and PSOs
and members of the Multi-Sport Organizations should be required to pay
their own travel costs associated with the Olympic Assembly, starting
in 2005. The Task Force has estimated that implementation of its
governance recommendations could result in over $1 million per year in
governance administrative costs savings. For the USOC to continue to
underwrite the costs of the annual Olympic Assembly, as recommended by
the Commission, that estimated savings figure would have to be reduced
by at least $250,000 per year and the Commission has left its Assembly
with so many governance responsibilities that the Commission's report
anticipates in several places that the more than 110-person Assembly
may need more than one meeting each year, thereby causing additional
expense for each meeting.
It is the strongly held view of the Task Force that it would be the
wrong direction for the Olympic Assembly to be an organization that
votes on any issues relating to the governance of the USOC.
First, for the Olympic Assembly to vote on anything will require
the creation of complex rules and regulations concerning who can vote
and the extent to which various constituents' votes will be weighted.
Similarly, there will have to be a much more formalized process to
assess whether additional organizations associated with the Olympic
movement in the United States will be permitted to become members of
the Olympic Assembly because the Olympic Assembly members voting to add
organizations to membership may suffer a reduced voting share as a
result of voting to add those organizations.
Second, if as the Commission recommends, the Olympic Assembly were
to be called upon to vote on issues relating to the governance of the
USOC, such as selection of bid cities or the participation of the USOC
in the Olympic Games or the composition of the USOC Constitution, that
would subject those decisions to the constituent-based decision making
and the politics that have plagued the USOC for the past twenty years.
Rather than be subject to a vote on the merits, or on the basis of what
would serve the best interests of the USOC, using a process based on
solid governance principles, those decisions could become once again
the victim of block voting, votes exchanged for other benefits, and
other distortions that have been the source of many of the problems
identified in this Report. To allow the Olympic Assembly to vote on any
issues will effectively leave the current 124-member Board in place
with all of its problems and costs and with much of the same authority
and responsibility.
Third, the Olympic Assembly and the council meetings associated
with that meeting should be an integral part of moving the USOC, the
NGBs, the athletes, and the other organizations in the Olympic Assembly
toward the Olympic Mission. The Olympic Assembly will be focused on
cooperation between and among athletes, NGBs and the members of the
Multisport Organization Council to advance the Mission. It will also be
an important forum for the exchange of information and ideas between
the Board and all the organizations and individuals involved in the
Olympic Assembly. If the Olympic Assembly is also given governance
responsibility or the power to vote and make decisions on limited
issues, that will take time and focus away from the proper functioning
of that group. It will also mean that the over 110 members of the
Olympic Assembly will spend months in advance of each meeting on the
telephone and communicating by email, politicking and lobbying one
another about the issues to be voted upon in the upcoming meeting of
the Olympic Assembly, again distracting those individuals and their
organizations from what they should be doing to advance the Olympic
Mission.
Fourth, as we know from current experience with the USOC's current
Board of 124 individuals, the Olympic Assembly is simply too large a
body for there to be meaningful education of the membership or
meaningful debate at the meetings of that group. And, many of the
decisions the Commission would assign to the Assembly need to be made
on a timely basis. The fact that the Assembly is only supposed to meet
once a year means the proper functioning of the USOC would continue to
be delayed while the organization waits for the annual meeting of the
Olympic Assembly or spends an additional $250,000 on a special meeting
of the Olympic Assembly (special meetings also place enormous
administrative burdens on the USOC) or the decisions would have to be
made pursuant to relatively meaningless mail ballots sent to the over
110 people on the Olympic Assembly.
Fifth, the creation of an Olympic Assembly with legislative and
other decision making authority would create an entity that might
interfere or compete with the ability of the Board and CEO to focus on
the USOC's achievement of its mission. It will take issues that are
central to the Mission away from the CEO and the Board, and leave the
organization in a position where one part of the organization may make
decisions or take actions that will be contradicted by other parts of
the organization. That is precisely one of the problems that led to the
commencement of the governance reform process in which we now find
ourselves.
The Task Force examined the creation of a role for an individual to
oversee the functioning of the Olympic Assembly and determined that
this individual should be drawn from the Board, and not be an
individual who has a new position on the Board or otherwise has rights
or obligations to speak on behalf of the USOC or the Olympic Assembly
or any other group. The Commission's recommendations set up a position
for an individual which position will serve on the Board and will have
rights to speak on behalf of the US Olympic family. The creation of the
position of speaker of the Olympic Assembly with a visible, public role
and a vote on the new Board of Directors is contrary to the view of the
role of the Olympic Assembly. This threatens the success of a one voice
public relations strategy at the USOC, creates a position that competes
with the Chair and the CEO, unnecessarily creates an additional
position on the Board, and otherwise potentially threatens the USOC's
achievement of its mission.
The Commission recommends that its Speaker of the Assembly share a
fractional vote with the International Olympic Committee members from
the United States. While the Task Force recommends in its report
providing fractional voting to the IOC members among themselves only,
the Task Force would view it as consistent with its recommendations if
the IOC members were to be given one vote apiece and the rest of the
Board members had their votes weighted upward by a factor of at least
3, though we would have to ensure that any increases in IOC members
from the United States would not dilute the athletes' 20% voting power
percentage.
The Task Force has recommended that one member of the Board,
perhaps rotating among the Board membership as determined by the Board,
shall serve as the Chair of the Olympic Assembly each year. It is the
view of the Task Force that this individual should consult with the
chairs of each of the three councils and should be responsible for the
organization and conduct of the Assembly, but this individual shall
have no separate or special functions as a result of this person
serving as Chair of the Olympic Assembly. This individual would be
answerable to the overall USOC Board, not to all the constituent groups
of the Olympic Assembly. To do as the Commission suggests would invite
a return to the many media and governance problems that the USOC saw
during January and February of this year.
In short, the Olympic Assembly should be a business meeting of the
USOC, collecting all of the individuals involved in the Olympic
business in the discussion and communication of issues that affect
them; it should not be a new form of the bully pulpit or a political
apparatus focused on things not related to the business of the U.S.
Olympic family. The Task Force disagrees with the idea that the USOC
must have an Olympic Assembly that is used as a tool for keeping
volunteers involved in the organization or that the USOC even needs to
be concerned with that to become better governed. The USOC is not an
organization dependent on volunteers for its functioning, and in fact
volunteers have often stood in the way of efficient, effective
governance of the organization currently. While there is an important
role for volunteers in the organization, it is not because the
organization is dependent on them for its functioning.
The Task Force also disagrees with the recommendation of the
Commission that the Board should consist of a majority of independent
directors. Contrary to the arguments of the Commission, the principles
of the Sarbanes-Oxley statute simply do not apply here. Underlying
Sarbanes-Oxley is the notion that shareholders in for-profit
corporations need to be protected from improper conduct by directors
who are also part of management. Here, under both sets of
recommendations, there will not be any management involved on the
Board, so the notion that somehow having the Board consist of a
majority of individuals who meet the specific definition of independent
director set forth by either group is compliant with Sarbanes-Oxley
simply is a misplaced metaphor. Under both recommendations, all of the
directors on the new Board will be independent as that is defined in
the for-profit sector. Using the Sarbanes-Oxley metaphor here
misperceives the purpose of independent directors in these proposals,
which purpose is to rid the organization of individual directors loyal
only to their constituencies, not to somehow deal with the issues at
the heart of the distinction between outside and inside directors in
for-profit institutions.
With respect to giving one identifiable group of directors a
majority, the Task Force believes that no one group should be able to
control the outcome of any single vote. Rather, the Task Force believes
that it is healthy for governance to have each group of directors have
to negotiate and build consensus with some other group to be able to
accomplish things. In addition, the Task Force is concerned about
having a group of independent directors, who may or may not be
knowledgeable about sport, have a majority of votes and having the
directors who are knowledgeable about sport, the athlete, NGB, and IOC
members of the Board, have a minority of those votes, which we also
understand is a concern of the International Olympic Committee.
The Task Force also disagrees fundamentally with the Commission
that the Board's officer, the Chair, should only be drawn from among
directors considered ``independent''. In effect, this creates a caste
system among Board members if a substantial majority of them are not
able to run for this office. The Task Force recommends that all members
of the Board should be eligible to run for the office of Chair, except
for the members of the Board who are also International Olympic
Committee members. The reason for the Task Force distinction for the
IOC members is that by the terms of the Olympic Charter they owe their
loyalty to the IOC. As a result, they could not simultaneously serve as
the organization's leader without constantly running afoul of conflict
of interest rules. The athlete and NGB nominated directors under the
Task Force's model would be independent in many ways since they would
have had to have given up all of their ties to the organization
nominating them upon taking office, so they should also be eligible to
stand for election as Chair.
There are other areas in which the Task Force has divergent views
on the details of the Commission's report, particularly on the subject
of the Commission's recommendation for the continuation of two sets of
organic documents, a Constitution and Bylaws, with the Board being able
to change one and the Olympic Assembly being able to approve changes to
the other. The Task Force is recommending simplifying those complicated
and often redundant documents into a single, clear, less complex
document that is subject to amendment only by the Board.
The Task Force and the Commission disagree on the composition of
the new Ethics Committee, with the Task Force recommending that that
committee consist completely of non-Board members and the Commission
recommending that that committee consist of all Board members. An
ethics committee of Board members will not be sufficiently independent
to review issues of ethics related to members of the Board or members
of management who deal with the Board members on a regular basis. The
Task Force also recommends some great detail for reforming the ethics
and compliance process at the USOC, and the Commission's
recommendations in these area are very general. The Task Force believes
that the ethics and compliance process, including education, must be
changed, that it must become a vibrant and important part of the way
the organization conducts itself, and that the USOC must commit to a
standard of ethical conduct that is a model for all nonprofit
organizations going forward.
Similarly, the Task Force recommends that the initial Nominating
and Governance Committee, which selects the new directors, should be
composed of independent members, while the Commission recommends that
the current constituent groups should select the initial Board members
and that the Commission should select the chair of the committee, which
in the view of the Task Force would create a bad political process not
as likely to yield Board members who will best be able to govern the
USOC. The Commission has also recommended that the subsequent
Nominating and Governance Committee, which will select Board members in
the future, consist of all Board members, while the Task Force has
recommended that that committee consist of a majority of independent,
non-Board members, to avoid the many concerns expressed about a self-
perpetuating Board, with the Board members possibly selecting their
friends and allies to fill the vacant seats and to succeed them.
The Task Force proposes a stronger definition of independence for
directors than does the Commission, with the Task Force definition
excluding from service all current members of the USOC Board unless
they are nominated by the NGBs or the AAC. In essence, the Task Force
recommendations have caused all of the members of the Task Force to
take themselves out of the ability to run for office as independent
directors in the new Board, but the Commission recommendations would
permit that. The Task Force believes that this is an important symbol
of the organization's commitment to the independence of the new Board,
as the Commission's recommendation would make it possible for all of
the supposedly independent members of the new Board, along with the IOC
members, and the members nominated by the AAC and the NGB Council to be
individuals who have been serving on the current USOC Board during all
the recent problems. The Task Force believes that would send the wrong
message. The independent members of the new Board need to be
independent of the old Board, as well.
The Commission appears to have recommended a greater role for the
Board in overseeing various aspects of USOC operations, including the
hiring and firing of certain USOC staff which would in a traditional
corporation be the prerogative of the CEO, while the Task Force
recommendations make a very clear and bright line distinction between
what are operational concerns within the province of the CEO and what
are governance concerns within the province of the Board. The Task
Force also recommends that the international relations function of the
USOC be managed completely by the CEO, consistent with policies set by
the Board and oversight of the Board, while the Commission suggests
that the Board may be directly involved, independent of the CEO, in
various aspects of the international relations activities of the USOC.
This conflict in roles as engendered in the USOC's current organic
documents is what led in part to the USOC's current governance
problems, so we do not recommend continuing this.
There are a couple of other areas where the Commission has made
recommendations that the Task Force considered as well, but rejected
because the governance experts with whom we have consulted were clear
with us that those types of recommendations are issues that should be
left to the new Board.
The Task Force generally supports the Commission's recommendation
on the creation of an advisory group to assist in the transition from
the current governance structure to a new one, but the Task Force
believes that the composition and role of that advisory group should be
defined by the new Board.
The Task Force recommends that the USOC's mission be changed as it
exists in the current statute but the Commission does not. The Task
Force thinks it is important that the seeming entitlements for various
groups and perspectives set forth in the statute must be changed to
allow the USOC, and its NGBs, to focus on the overall mission. The
purposes that would be removed, while generally good things for the
United States, should not necessarily be given to the USOC or its NGBs
to be responsible for them, unless they further the USOC's mission.
How should we resolve the differences between the two sets of
recommendations? I think that answer is clear, but first I must
emphasize that we are sure we can work out any differences in a manner
that will satisfy any timeline set by Congress for doing so. The Task
Force did not recommend that substantial legislation about governance
processes be put in the statute, because making those things the
subject of legislation makes it difficult for the organization to
respond should its operating environment change. However, the Congress
could legislate very general principles on which the Commission and the
Task Force agree as a way to express the will of Congress and protect
against the organization backsliding. Those areas could include the
size and general composition of the Board and the fundamental roles of
the CEO and the Board. Congress could also legislate the organization's
mission statement, and basic parameters about ``independence'' as
needed for directors serving on the USOC Board. However, Congress
should stay away from becoming too detailed in its legislation, in part
because that is where the two groups differ and in part because that is
where the new Board should have some opportunity to determine its own
direction. The USOC itself is able to change its own organic documents
to address some of these detail issues, and the USOC intends to do so
in a manner that is consistent with whatever the legislative process
yields, and the USOC will do so by the deadline later this week for
making submissions for changing its organic documents. The Task Force
will be submitting its recommendations for consideration by the USOC
Board at the October 2003 Board of Directors meetings; we are unsure of
the intentions of the Commission in this regard.
Once again, I would like to thank you for allowing me testify today
and I thank you for your diligence in ensuring that the USOC cleans up
its act. We are now realizing the silver lining the storm cloud that
was hanging over the organization earlier this year. The job is far
from done and the next step is the implementation of the appropriate
recommendations of these two groups. Thank you for being willing to see
this process through.
Mr. Stearns. Ms. Myler, welcome.
STATEMENT OF CAMERON A. MYLER
Ms. Myler. Thank you. Thank you.
Good morning, Mr. Chairman and members of the Subcommittee.
I thank you for the opportunity to appear here today and to
address issues concerning the pending reform of the United
States Olympic Committee. My name is Cameron Myler and I appear
before you as a member of the United States Olympic Committee's
Governance and Ethics Task Force. I am currently an attorney
with Milbank, Tweed, Hadley and McCloy in New York, but perhaps
more importantly in this context, I am an athlete and a four
time Olympian in the sport of luge. I am also a member of the
USOC's Athletes' Advisory Council, the Board of Directors, and
a number of other USOC committees.
I am extremely proud of the work accomplished by the Task
Force, and am equally impressed by the efforts of the
Independent Commission. Although there are differences in the
details, the overall governance structure recommended by each
group fulfills the objective of establishing an organization
that will be more transparent, independent, and accountable to
all of its constituents. I would like to address several
differences between the reports of the Task Force and the
Independent Commission. While those differences may seem
inconsequential on their face, they are of the utmost
importance to the future of the USOC and the athletes that it
serves.
The first point of difference relates to the athlete
ombudsman, a position that was established by the 1998
amendments to the Ted Stevens Olympic and Amateur Sports Act of
1978. One of the most important functions of the ombudsman is
providing independent advice to athletes at no cost above the
relevant provisions of the Sports Act particularly the
provisions relating to an athlete's right to compete.
The ombudsman has been and continues to be an invaluable
resource not only to athletes, but to the USOC and the national
governing bodies in aiding in dispute resolution and in
ensuring that the rights afforded to athletes by the Sports Act
are protected.
The process for hiring, firing, and overseeing the conduct
of the ombudsman was intentionally structured to support
independence of action, while simultaneously integrating the
ombudsman into the operational structure of the USOC. This has
allowed the ombudsman to be an effective and fully informed
voice on behalf of the athletes. This structure and a reporting
relationship provides both insulation and organizational
inclusion, and is working well. It is working so well in fact,
that this is an issue that was not addressed by the Task Force.
However, the Independent Commission has recommended that
instead of reporting to the chief executive officer of the USOC
and the AAC, the ombudsman should report directly to the board.
While the Commission's intention underlying this recommendation
may have been to provide more independence to the Ombudsman,
this change will have the practical impact of divorcing the
Ombudsman both from the operational activities of the
organization both from the operational activities of the
organization--via contact with the CEO--and more importantly
from the athletes through contact with the AAC. I respectfully
recommend that the ombudsman continue to report and operate
under the current arrangement.
A second area of difference between the reports relates to
athlete representation on the new board of directors. The
Sports Act and the USOC Constitution and Bylaws require that
athletes must have no less than 20 percent of both membership
and voting power on all USOC and National Governing Bodies'
Boards of Directors and other committees. In any of the
scenarios proposed if the new board has 11, 12 or 13 members
athletes will have less than 20 percent voice. Despite this,
the Athletes' Advisory Council fully supports this change
because it is one founded on the principle that a smaller board
is necessary for and results in better governance. The athletes
have recognized for years that having a role in an ineffective
governance structure dominated by politics and secret dealings
among various constituencies is not useful or productive and is
not in the best interests of the organizations or the athletes
it serves.
In an effort to serve and protect the interests of the
entire organization, the AAC will support a very narrow
exception to the requirement for 20 percent membership, an
exception that would apply only to the USOC Board of Directors
and only if athletes on the Board retain 20 percent of the
vote. It is the AAC's unwavering belief that the voice and vote
requirement must continue to apply to all other committees and
task forces of both the USOC and NGBs. The 20 percent voice and
vote granted by the Sports Act has played a critical role in
helping the USOC and NGBs fulfill their respective missions by
keeping those organizations connected to the life-blood of the
Olympic Movement--athletes.
A third area of difference between the reports relates to
the composition of the nominating and governance committees.
This seemingly small difference could have an enormous impact
on the USOC.
First of all, both the Independent Commission and the Task
Force recommend that the nominating committee consist of five
members. However, the Commission has recommended that the five
members be appointed, one each, by the Athletes' Advisory
Council, the NGB Council, the public sector board members of
the current board of directors, the Task Force and the
Independent Commission. Under the Commission's recommendation
it is possible for all of those individuals to be members of
the current board of directors. This means that the individuals
who have been involved in the USOC that we are trying to
jettison could be the very people selecting the new board of
directors. The Task Force has recommended a much more
independent initial nominating committee. The AAC, NGB Council
Public Sector Board Members, Task Force and Independent
Commission would each still be able to appoint a member but no
current board members would be eligible to serve.
Furthermore, the Independent Commission has recommended
that any subsequent nominating committee consist wholly of then
current board members. This would allow for a self perpetuating
board with board members in the position to select their
friends and allies to fill vacant seats and to and to succeed
them, the very type of behavior the USOC has been criticized
for in the past. The Task Force instead recommendations that
all subsequent nominating committee consist of a majority of
independent non-board members. This measure is necessary to
ensure that the board is an effective and dynamic body and that
the nominating committee retains an appropriate levels of
independence.
A fourth related area is the composition of the ethics
committee. The Task Force recommends that there be a committee
comprised of five members who meet the definition of
independence, and none of whom serve on the board of directors.
The Independent Commission, however, recommends an ethics
committee comprised entirely of members of the board.
This is a time when we must ensure that there are no real
or perceived questions regarding any ethical matter, included
among them the possibility of even the perception of
``insider'' misdealing or conflicts of interest. All ethical
questions must be addressed by a group that is totally
independent in both appearance and facts. This is in the best
interests not only of the institution whose reputation we are
endeavoring to restore, but for the protection of the new board
members from whom we will be asking so much of their time and
energy in guiding the USOC back to a position of integrity and
prestige. This function must be backed up by a vigorous
internal compliance staff function with an appropriate
reporting relationship and appropriate resources to ensure that
the USOC becomes a model of corporate compliance going forward.
My last issue relates to the proposed assembly. The
Athletes' Advisory Council in particular is extremely concerned
that the Independent Commission's recommendation that the
Assembly, which is essentially the current Board of Directors
with minor changes in membership, will continue to make major
governance decisions concerning the USOC. This recommendation
of the Commission will prevent much of the benefit of the major
reforms recommended by the Task Force and, to a lesser extent,
the Commission from taking place. In effect, the Commission's
recommendations would make the new Board a subset of the
Assembly, subject to review and oversight in areas potentially
of bid selection, changes in the USOC Constitution, and all
other ``Olympic issues.'' The politics, campaigning, promises
exchanged for votes, and decisions being made by a body too
large to effectively govern the USOC would continue. These are
the cement boots that have been drowning the USOC for decades.
Mr. Stearns. Ms. Myler, I will need you just to sum up.
Ms. Myler. Certainly.
I would like to thank everyone involved with this effort to
restore the United States Olympic Committee to a position
worthy of the respect and confidence of the American people and
this Congress. I particularly would like to commend the members
of the Independent Commission and the Task Force for their
excellent work. I believe the few adjustments recommended by
the Task Force today will result in a structure that will allow
the USOC to achieve its objectives, and ensure that the affairs
of the United States Olympic Movement are characterized by
unquestioned integrity, professionalism, and dedication to
America's athletes whom the organization was created to serve.
[The prepared statement of Cameron A. Myler follows:]
Prepared Statement of Cameron Myler
Good morning, Mr. Chairman and members of the Subcommittee. Thank
you for the opportunity to appear here today and to address issues
concerning the pending reform of the United States Olympic Committee
(USOC). My name is Cameron Myler and I appear before you as a member of
the United States Olympic Committee's Governance and Ethics Task Force
(the ``Task Force'') that developed recommendations for a new
governance structure for the USOC. Although I am currently an attorney
with Milbank, Tweed, Hadley and McCloy in New York City, I have a
considerable amount of experience in the Olympic Movement, first as an
athlete and a four-time Olympian in the sport of luge, and subsequently
as a member of the USOC's Athletes' Advisory Council (AAC), the USOC's
Board of Directors, as well as a number of other USOC committees and
task forces. I currently serve the USOC as an At-Large member of the
AAC and as a member of the Board of Directors.
I am extremely proud of the work accomplished by the USOC Task
Force, and am equally impressed by the efforts of the Independent
Commission. Although there are differences in some of the details, the
overall governance structure recommended by both groups fulfills the
objective of establishing an organization that will be more
transparent, independent, and accountable to all of its constituents,
not the least of which is this Congress, and will better serve our most
important constituents, America's Olympic athletes.
Assuming, then, that the recommendations for the overall structural
changes will be adopted with perhaps minor adjustments, let me address
a few areas where there are differences between what was recommended by
the Task Force and the Independent Commission. While these may seem to
be secondary details, they are of utmost importance to the future of
the USOC and the athletes that it serves.
The first point of difference between the reports of the
Independent Commission and the Task Force relates to the athlete
Ombudsman, a position that was established by the 1998 amendments to
the original Amateur Sports Act of 1978. The Ombudsman is responsible
for providing independent advice to athletes at no cost about the
applicable provisions of the Ted Stevens Olympic and Amateur Sports Act
(the ``Act''), and the constitution and bylaws of the USOC, the
National Governing Bodies (NGB), Paralympic Sports Organizations,
International Federations of sport, the International Olympic
Committee, the International Paralympic Committee, and the Pan-American
Sports Organization. The Ombudsman also provides athletes with
independent advice relating to the resolution of any dispute involving
the opportunity of an athlete to participate in the Olympic Games, the
Paralympic Games, the Pan-American Games, world championship
competition or other protected competition as defined in the
constitution and bylaws of the USOC. Furthermore, the Ombudsman assists
innumerable athletes navigate the ever-changing policies and
requirements of the U.S. Anti-Doping Agency and the World Anti-Doping
Agency.
The Ombudsman is an invaluable resource not only to the athletes,
but also to the USOC and the NGBs in aiding in dispute resolution and
in ensuring that the rights afforded to athletes by the Act are
protected. Since the position was created, the Ombudsman has far
exceeded expectations on everyone's part, even winning over skeptics
who doubted the necessity for creating this position in the first
place.
The process for hiring, firing, and overseeing the conduct of the
Ombudsman is structured to support independence of action, while
simultaneously integrating the Ombudsman into the operational structure
of the USOC as an effective and fully informed voice on behalf of the
athletes. It is a structure and a reporting relationship that provides
both insulation and organizational inclusion, and is working well, so
well in fact, that it was not even addressed by the Task Force.
However, the Commission appears to have some concerns which I feel are
unfounded and, if their proposed changes are implemented, could weaken
the effectiveness of the Ombudsman.
Specifically, the Commission recommends that the current reporting
relationship be shifted so that instead of reporting to the Chief
Executive Officer (CEO) and the AAC, the Ombudsman would report to the
Board. While I understand that the Commission's intention underlying
this recommendation may have been to provide more independence to the
Ombudsman, this change will have the practical impact of divorcing the
Ombudsman both from the operational activities of the organization (via
contact with the CEO), and more importantly from the athletes (via
contact with the AAC). I respectfully recommend that the Independent
Commission's proposal in this area be rejected and that the Ombudsman
continue to report and operate under the current arrangement.
A second area of difference between the reports relates to athlete
representation on the proposed new Board of Directors. The Act and the
USOC Constitution and Bylaws stipulate that athletes must have no less
than 20 percent of both membership and voting power on all USOC and
National Governing Bodies' Boards of Directors and all other committees
and task forces. This provision has been critical to ensure that
athletes have both representative voice and voting authority on all
matters affecting athletes.
The membership of the AAC fully recognizes that the recommended
size of the new USOC Board of Directors--11 members as proposed by the
USOC Governance and Ethics Task Force and 13 members as recommended by
the Independent Commission--is founded on the principle that a smaller
board is necessary for, and results in, better governance. The AAC also
recognizes that both groups were faced with satisfying at least five
additional requirements: 1) the International Olympic Committee (IOC)
provision that all members of the IOC from the United States serve on
the ``executive organ'' of the USOC, 2) the IOC provision that Olympic
sport representatives (which may include athlete representatives) have
a majority of the vote on Olympic sport matters, 3) the recognized
governance principle that Boards be comprised of a majority of
independent directors, 4) the provision of the Act requiring that
athletes must have at least 20 percent of both membership and voting
power, and 5) the prevailing wisdom that there should be an equal
balance in membership between athletes and NGBs from Olympic sports.
The AAC recognizes that in the proposals of both the Independent
Commission and the Task Force, athletes would have less than 20 percent
voice. The concept of voice and vote is one that is critically
important to athletes, and has been the foundation for athlete
involvement in the Olympic Movement. I'm sure that each of you can
relate from your personal experiences to the fact that having voice--
and with it the opportunity to share meaningful input before a decision
is made--is equally, if not more important, than the opportunity to
vote. That being said, the athletes also recognize that it is nearly
mathematically impossible to satisfy all five requirements outlined
above given the fact that there are currently three IOC members from
the United States.
The bottom line is that the AAC is committed to the principles of
the Olympic Movement, the USOC as a whole, and the creation of a new
governance structure that will enable the organization to operate
efficiently, effectively and ethically. In an effort to serve and
protect the best interests of the entire organization, the AAC will not
oppose a very narrow exception to the requirement for 20 percent
membership (that applies only to the USOC Board of Directors), but only
if athletes on the Board retain 20 percent of the vote. It is the AAC's
unwavering belief that the voice and vote requirement must continue to
apply to all other committees and task forces of both the USOC and
NGBs. The 20 percent voice and vote granted by the Act has played a
critical role in helping the USOC and NGBs fulfill their respective
missions by keeping those organized connected to the life-blood of the
Olympic Movement--athletes.
We encourage further review by the House Commerce, Trade, and
Consumer Protection Subcommittee of this specific change after 2004,
since the number of IOC members from the United States may have changed
by that time, and the IOC requirements relating to Board membership may
have changed as well. Lastly, we encourage the Subcommittee and the
USOC to consider a Board size that will allow America's athletes to
retain as close to 20 percent membership on the USOC Board of Directors
as possible with the assumption that the voting power of athletes is
always at least 20 percent.
The AAC is completely aware that by giving governance of the
organization completely to either an eleven or thirteen member Board,
many athletes will lose their role in governance, because over twenty
members of the current Board are athletes. However, athletes have
recognized for years that having a role in an ineffective governance
structure, dominated by politics and secret dealings among various
constituencies is not useful or productive and is not in the best
interests of the organization or the athletes it serves. Furthermore,
the new structure provides for input from many and governance by few--a
principle which is inherently endorsed by both the Independent
Commission and the Task Force in their reports and was embraced by the
members of the AAC at its most recent meeting.
A third area of difference between the two reports relates to the
composition of the Nominating and Governance Committee, where a
seemingly small difference could have an enormously negative effect on
the USOC. Both the Independent Commission and the Task Force recommend
the creation of an initial five-person committee to select the first
directors of the newly-constituted USOC Board of Directors. The
Commission has recommended that the initial Nominating and Governance
Committee consist of five members, appointed one each by the AAC, NGB
Council, Public Sector Board members, the Task Force, and the
Independent Commission. Under the Commission's recommendation, all of
the individuals on the initial Nominating and Governance Committee
could be members of the current USOC Board. In addition, though they do
not provide reasons, the Commission recommends that the chair of the
initial Nominating and Governance Committee be appointed by the
Independent Commission.
The Task Force, on the other hand, has recommended a more
independent initial Nominating and Governance Committee, with the
initial committee being appointed one apiece by each of the above
groups but with no current board members eligible to serve. The Task
Force also believes that the initial committee should be able to select
its own chair from among its members.
Furthermore, the Independent Commission has recommended that the
subsequent Nominating and Governance Committee, which will select
future Board members, consist wholly of then-current Board members. In
keeping with principles of independence, the Task Force has recommended
that such a Nominating Committee consist of a majority of independent,
non-Board members, to avoid the many concerns expressed about a self-
perpetuating Board, with the Board members possibly selecting their
friends and allies to fill the vacant seats and to succeed them. The
Task Force's preliminary recommendations, which proposed that just
three of the five members of the Nominating and Governance Committee be
members of the Board, received a strong negative reaction throughout
the Olympic community on this particular point. The Task Force listened
to the concerns of all constituent groups, including the AAC, who
recommended that it was not just desirable, but necessary that the
Nominating Committee be comprised of a majority of independent members.
However, the Independent Commission has moved in a direction that would
allow an ineffective Board to perpetuate itself by not bringing in new,
dynamic individuals necessary to increase the organization's
performance and effectiveness.
A fourth related area is the composition of the Ethics Committee.
The Task Force recommends that there be a committee comprised of five
members who meet the definition of independence, and none of whom serve
on the Board of Directors. The Independent Commission recommends an
Ethics Committee comprised entirely of members of the Board. I believe
this is a mistake.
The Task Force, and most observers of the Olympic Movement agree
with the Independent Commission's finding on page seven of their report
that ``there is a widespread loss of confidence in the USOC,'' and
later on, on page ten, where they observe that ``there are inherent
conflicts of interest on the Board of Directors.''
This is a time when we must ensure that there can be absolutely no
question regarding any ethical matter, included among them the
possibility of even the perception of ``insider'' misdealing or
conflict of interest. Regardless of the character and quality of the
new Board members, which I trust will be of the highest caliber, it
should be mandatory that all ethical questions be addressed by a group
that is totally independent in both appearance and fact. This is in the
best interests not only of the institution whose reputation we are
endeavoring to restore, but for the protection of the new Board members
from whom we will be asking so much of their time and energy in guiding
the USOC back to a position of integrity and prestige. Consequently, I
advocate that the Task Force's recommendation for the composition of
the Ethics Committee guide the legislation that will ultimately reform
the USOC. This function must be backed up by a vigorous internal
compliance staff function with an appropriate reporting relationship
and appropriate resources to ensure that the USOC becomes a model of
corporate compliance going forward. The Task Force has made a number of
recommendations concerning this area that we hope you will consider
including in the forthcoming legislation.
A fifth concern relates to the proposed Olympic Assembly. The AAC
is extremely concerned about the Independent Commission's
recommendation that the Olympic Assembly, which is essentially the
current Board of Directors with minor changes in membership, will
continue to make major governance decisions concerning the USOC. This
recommendation of the Independent Commission will prevent much of the
benefit of the major reforms recommended by the Task Force (and, to a
lesser extent, the Independent Commission) from taking place. In
effect, the Independent Commission's recommendations would make the new
Board a subset of the Assembly, subject to review and oversight in
areas of bid selection, changes in the USOC Constitution, and all other
``Olympic issues.'' The politics, campaigning, promises exchanged for
votes, and decisions being made by a body too large to effectively
govern the USOC would continue. These are the cement boots that have
been drowning the USOC for decades. In addition, there cannot be one
voice of the USOC if a ``Speaker of the Assembly'' and the Assembly
itself will be allowed to compete with the Board and the CEO as the
official spokesperson for the USOC. Again, the AAC fully supports the
recommendations of the Task Force.
Finally, I would like to say that not only as a Task Force member,
but more importantly as an Olympian, I agree with all of the comments
made by Frank Marshall in his testimony today concerning other areas of
differences between the reports of the Independent Commission and the
Task Force.
I wish to conclude by thanking everyone concerned with this effort
to restore the United States Olympic Committee to a position worthy of
the respect and confidence of the American people and of this Congress.
I particularly want to commend the members of the Independent
Commission and the Task Force for all of their hard work, which
resulted in excellent recommendations. I believe that the few
adjustments recommended by me and our Task Force Chairman Frank
Marshall will result in a structure that will allow the USOC to achieve
its objectives, and ensure that the affairs of the United States
Olympic Movement are characterized by unquestioned integrity,
professionalism, and dedication to America's athletes whom the
organization was created to serve.
Mr. Stearns. I thank the gentlelady.
Mr. Bauer.
STATEMENT OF KIRK M. BAUER
Mr. Bauer. Mr. Chairman, can you hear me okay.
Mr. Stearns. I can hear you, yes. Good.
Mr. Bauer. Mr. Chairman, thank you very much for the
opportunity to testify. My name is Kirk Bauer, I am Executive
Director of Disabled Sports USA. I have been involved with the
disabled sports movement since 1970, 33 years, since I lost my
leg from a hand grenade during an ambush in Vietnam while I was
serving in the U.S. Army there.
I also want to commend Frank Marshall for his new movie. My
wife read the book and she's bugging me about being the first
one in line to watch the movie, so I am going to get dragged
along on that. And I do wish you best of success on that.
As part of the paralympic movement, first of all I want to
say that we commend both reports and both the Task Force and
the Independent Commission for their work. And in the large
picture, we agree with most of the recommendations that they
have made. And I will go over that later, but at the risk of
sounding redundant and of running out of time, I would like to
say the one major area where we disagree. And that is
representation on the board of directors for paralympic sport.
The Paralympics during the 1996 Games were and are billed
as the second largest sporting events in the world behind the
Olympic. It's internationally recognized by the International
Olympic Committee, the IOC flag flies over the Paralympic
Games.
When you have an amputee that runs at a 10.9 second 100
meter dash, just 1 second behind the fastest man in the world,
I think we begin to realize the superb level of athletic
ability and excellence of these fine athletes.
In addition to that, the Congress in its wisdom has seemed
to legislate two purposes for the U.S. Olympic Committee. In
1978 they were designated the National Olympic Committee to
represent the USA. And in 1998 in the Ted Stevens Olympic and
Amateur Sports Act Amendments they were designated to be the
National Paralympic Committee. So we believe for all of these
reasons that it's very important that the board of directors
have on its membership those individuals, those constituents
for which the organization exists. And we would liken this to,
in short a good strong analogy, if you started an Hispanic
rights organization, would you think about not including on the
board of directors, on the governing board, someone of Hispanic
origin? And for a variety of reasons, symbolically and
substantially, we think it is important to have both voices on
the board. The board needs that knowledge base so they can
understand the Olympic movement and the paralympic movement and
when they make decisions they have peers who can provide the
kind of necessary input that they will need to make intelligent
decisions.
And symbolically we think it is important that they have a
voice that we be empowered.
The U.S. Olympic Committee has taken great pains and the
Task Force and the Commission reiterate that, that the primary
objective and mission of the USOC is the Olympic. We understand
that. But they also have a mission to be the paralympic
organization and the Independent Commission says that they
should be promoting Olympic and Paralympic athletes. And so we
think it's a major omission to recognize all this and then say
you are going to have Olympic and organizational and athlete
representation, but not Paralympic organizational and athlete
representation.
I would like to, though, address some of the other issues
because I think we want to make straight for the record that
this Committee understands that we concur with the vast
majority both the Task Force and the Commission's work. We
definitely believe that the board should be drastically
downsized. We definitely believe that it should have a majority
of independent directors drawn from the corporate business
world, from the broadcasting world and from the sports world.
But the broadcasting and sports world business side so people
that understand how to run a business can help USOC run like a
business. They are a $100 million a year business.
We also believe that nine is not this large number, nine
voting members. Some guru got hired and said nine is the magic
number. We believe it should be small, but we do not think that
that should be at the expense of important voices on the
committee that represent the constitute groups. And I cite in
my testimony AT&T, Motorola, General Motors, IBM, Compaq,
Brunswick, Black & Decker; all of which have more than nine
members on their board of directors and they seem to be doing
just fine, thank you.
We also agree with the accountability and the transparency
that is necessary for an efficient operation of this entire
organization. And we would like to see more transparency in how
the money is spent. It is very difficult to get information
about where it goes.
And finally comment is just to say, again, we understand
the priority of the Olympic. The USOC has made that very clear.
They spent $.97 of every dollar on the Olympics. They spend
$.03 of every dollar on the Paralympics. So right there that
statement is clear enough. But we do believe that on the board
there should be a voice for the Paralympics sports movement.
[The prepared statement of Kirk M. Bauer follows:]
Prepared Statement of Kirk M. Bauer, Director of Disabled Sports USA
Thank you for the opportunity to provide information to the The
Committee on Energy and Commerce, Subcommittee on Commerce, Trade and
Consumer Protection, U.S. House of Representatives, as it considers the
mission and reorganization of the USOC. I am Kirk M. Bauer, JD, and I
represent Disabled Sports USA, a Community-Based Organization Member of
the USOC. I have been involved with Disabled Sports USA since 1970,
after losing my leg from a hand grenade during an ambush in Vietnam in
1969, while serving in the U.S. Army. I have been executive director of
DS/USA since 1982. (BA Political Science, University of California,
Berkeley (1974); Juris Doctor, Boston University (1978); member U.S.
Disabled Ski Team (1980); Disabled Vietnam veteran. Resume attached.)
SUMMARY
The committee has received two reports addressing the need to
reorganize the governance structure and focus of the U.S. Olympic
Committee. They are the USOC Governance and Ethics Task Force and the
Independent Commission on Reform of the USOC. I will refer to them as
the ``Task Force'' and ``Independent Commission'' for brevity.
Both reports are very long and detailed. To summarize and keep this
response short and to the point, Disabled Sports USA (DS/USA) agrees
with most of the recommendations from both reports. This includes the
need for a narrower focus of the USOC mission to produce competitive
Olympic and Paralympic athletes; to drastically reduce the size of the
USOC governing body; to include more independent and business oriented
board members; and to eliminate constituent based governance and
replace it with a more independent business-oriented structure. The
USOC is now a $100+ million per year operation and needs to be run like
a business.
DS/USA also supports both reports' recommendations to establish a
strong CEO staff structure with responsibility, authority and
accountability to make day to day decisions to carry out the USOC
mission. Again, DS/USA agrees with report language, seeking
implementation of a strong ethics structure with the goal of
eliminating conflict-of-interest and self-dealing problems; and
providing protection for those who attempt to report or address ethics
problems.
DS/USA also agrees that there needs to be more performance-based
standards tied to USOC funding given to member organizations of the
USOC; and for more public transparency in funding allotments and
spending. However, DS/USA strongly disagrees with both reports on the
following issue: The newly restructured governing board should include
representation from Paralympic Sports. Neither report recommends this.
NEW, SMALLER BOARD NEEDS ``CONSUMER'' REPRESENTATION
The Congress has thought it important enough to provide federal
legislation to task the USOC to carry out two missions. One is to be
the National Olympic Committee of the USA (Amateur Sports Act of 1978);
and, secondly, to be the National Paralympic Committee of the USA (1998
Ted Stevens Olympic and Amateur Sports Act Amendments).
The two reports recognize these two roles and recommend that the
USOC in its narrowed mission include both Olympic and Paralympic
Sports. However, inconsistently, both reports recognize the need for,
and recommend directors on the new board, to represent only Olympic
National Governing Bodies and Olympic athletes; but not Paralympic
Sports and Paralympic athletes.
No matter what size board, any nonprofit board needs some
``consumer'' representation, those who represent the constituents for
which the nonprofit exists. This is important both substantially and
symbolically. The governing entity needs to include peers from the
sport who can inform and provide background and experience to enhance
the decision-making of the entire board. In the give and take of
decision-making at a board meeting, the entire board must have the
knowledge base that only these groups can provide. This is not to
encourage special interests, but to provide critical background
knowledge and information, to assist in all board members' decision-
making. It is also important, symbolically, to have represented
constituents for whom the nonprofit exists. This is a form of
representation and empowerment for those whom the board serves. An
analogy would be to imagine a nonprofit organization that advocates for
Hispanic interests, not having anyone of Hispanic origin on its
governing board of directors.
Both reports realize the importance of board representation from
those who represent the purpose for which the nonprofit exists. But
they stop at Olympic Sports. USOC also represents Paralympic Sports.
I agree with this rationale of having some consumer representation
on the board, but maintain that since the USOC is federally mandated to
be both The National Olympic Committee and The National Paralympic
Committee for the USA, both constituent groups need representation on
the new board of directors. DS/USA recommends a director from the
Paralympic Athletes and one drawn from U.S. Paralympics and Disabled
Sports Organizations.
Although not mandated by federal law, I also believe that a
representative on the board from the Community-Based Organizations
would improve the boards governing capabilities. They serve a vital
interest for millions of potential Olympians and Paralympians in
communities across the country. At the very least they should have non-
voting status on the board.
MISSION OF USOC SHOULD BE NARROWED
Presently, the USOC is trying to be too many things to too many
constituents. It should be narrowed from the thirteen ``purposes'' that
now exist. Primarily, its task should be . . .'' To support the Olympic
and Paralympic athlete in achieving sustained excellence . . .''
(Independent Commission Report, page 20).
ROLE FOR ALL MEMBERS OF THE USOC IN THIS TASK
That being said, there is a role for ALL of the members of the USOC
in achieving this goal. Keeping this goal as primary, the Olympic
National Governing Bodies and the Community-Based Organizations,
including the Disabled Sports Organizations, can be tasked to achieve
it. In fact, many Olympic and Paralympic athletes are identified and
trained through the programs offered by the Disabled Sport
Organizations and other members of the CBO's including the Armed
Services. Their support is a crucial part in achieving the mission of
the USOC.
One simple example can illustrate this. Most recruitment for
Olympic Sport athletes is through community and school programs. On the
other hand, most recruitment for Paralympic Sport comes about because
of contact the Disabled Sport Organizations make with the 7000 plus
rehabilitation hospitals in the country. That is where most athletes
with disabilities originate.
Even if the National Olympic Sport Governing Bodies were to all
adopt a policy of developing Paralympic athletes within their own
programs tomorrow, they would not have the infrastructure and
``pipeline'' to immediately tap the rehab hospitals and develop the
grass roots programs to bring these athletes along. This is one example
of where the role of the DSOs' remains so important.
MISSION OF USOC TO INCLUDE PARALYMPIC SPORT
Both the Task Force and The Independent Commission Report include a
recommendation for the USOC to govern and support Paralympic Sport and
athletes. DS/USA agrees that this should be one of the primary missions
of a refocused USOC and Board.
The USOC assumed the role and responsibility as the National
Paralympic Committee by board vote in the mid-1990s. Subsequent to
that, The 1998 Ted Stevens Olympic and Amateur Sports Act provided
federal legislation for the USOC to serve as the National Paralympic
Committee for the USA.
SUPPORT REORGANIZATION OF USOC BOD: SMALLER/SETS POLICY
The USOC board of directors should be reorganized into a radically
smaller number, which formulates and defines policy, approves the
budget and hires the executive director. Concurrently, there needs to
be a strong executive director with the authority, responsibility and
accountability to implement the policy and budget decisions of the
board; and is responsible for the day-to-day operation of the USOC
without undue interference from the board of directors or USOC
volunteer entities. This model has consistently proven to be the most
effective one for nonprofit organizations.
SMALLER BOARD BUT NO MAGIC NUMBER IN ``9'': FORTUNE 500 HAVE MORE
The USOC hired a management guru who claims that the board should
be no more than nine members to function efficiently. The Independent
Commission has accepted this as ``gospel'' and structured the new board
so radically that important constituent representation and input has
been excluded.
There is definitely a need for a smaller board, but DS/USA
maintains that this should not be at the expense of some constituent or
consumer representation. Hundreds, if not thousands, of major public
corporations have boards with more than nine members and they are doing
fine, thank you. To mention a few: Motorola Corporation, General
Motors, IBM, AT&T, Compaq/HP Computer Corporation, Brunswick
Corporation, and Black & Decker, all have more than nine members on
their boards, some as many as 18.
DS/USA is not committed to an exact number, but does believe that
it should be 15 or under. Either reports recommendations of between 9
and 11 members will be an improvement, but there needs to be Paralympic
representation.
RECOMMEND BOARD HAVE MAJORITY PRIVATE SECTOR BUSINESS INTERESTS
DS/USA agrees with the Independent Commission recommendation that
the reconstituted board should include a majority of voting members who
have strong private sector business expertise and are not tied into any
one of the sport organizations that are members of the USOC. The
present structure, where sport interest members hold a majority-voting
bloc, is dysfunctional, fragmented and too subject to the individual
self-interest of member organizations.
The new board members should be those with access to resources that
will assist the USOC in increasing its funding. In the nonprofit field,
we call this the ``Three Gs''. ``Give, Get or Get Out''. This might
include representatives of the top funding sources of USOC. Some might
consider this a conflict. I would argue that they would be good
stewards of the funds they committed, and in determining how these
funds could be spent most effectively to develop the best Olympic and
Paralympic athletes in the World.
ANY CHANGE OF THE PRESENT STRUCTURE WOULD BE AN IMPROVEMENT
From the point of view of Disabled Sport USA, the present
governance structure has resulted in a lack of focus on Paralympic
Sport; no development of clear goals and objectives for Paralympic
Sport; no development of an effective marketing and fundraising plan;
and drastic underfunding of the Paralympics.
ANY change from the present structure will be an improvement. The
USOC needs to move toward a board that can look at the big picture, set
achievable goals and then hold the professional staff and member
organizations accountable for implementing those goals.
ACCOUNTABILITY FOR ALL SPORTS BODIES WITHIN USOC
Disabled Sports USA agrees with both reports that demand
accountability for funds given to members of the USOC to develop
Olympic and Paralympic Sport, including more transparency in how funds
are spent and the results. If funding is provided to National Governing
Bodies to develop Paralympic athletes and training programs, then those
NGBs must be accountable for how funds are used in an effective manner.
Presently, Disabled Sports Organizations, including Disabled Sports
USA must be accountable for their expenditures and report on specifics
of how they reach and train Paralympians and Paralympic hopefuls.
Similar imposition of standards for NGBs does not exist and there
is no adequate public accounting of how the funds provided by USOC and
US Paralympics are spent. This has resulted in at least one instance in
which an NGB received a $250,000 grant from US Paralympics, and did not
increase funding for an existing program serving Paralympic athletes in
that year. It also did not have to report on how it served the
Paralympic athletes.
PARALYMPIC SPORTS NEEDS GREATER SHARE OF USOC FUNDING
Presently, all spending on Paralympic Sport by the USOC amounts to
about 3% of total funding. The Disabled Sports Organizations have had
their funding cut by 50% or more and are being told that no funding
will be available after 2004 and that 2004 funding is in question. Yet
no system is in place to replace the vital role that DSOs play in
identification, recruitment and training of Paralympic hopefuls.
Even the present funding, is inadequate to fund efforts to
participate in the ``second largest'' sporting event and program in the
world behind the Olympic Games. In the past, the Disabled Sports
Organizations have presented proposals that support a commitment of
approximately 10% of USOC budget to make a serious attempt to develop
Paralympic sports and athletes in the USA. This still leaves 90%
funding for what the USOC acknowledges is its ``primary''
responsibility, the Olympic Sport movement. Whatever the number, the
present support is inadequate and deprives the majority of top
Paralympic athletes with the resources to train, to receive benefits
like health insurance and to obtain the same status as Olympic athletes
in access to USOC training programs and facilities.
ROLE OF U.S. PARALYMPICS
The U.S. Paralympics should be tasked with the goal of working with
the Olympic National Governing Bodies and other groups to implement
plans to include Paralympic athletes in NGB programs. This should
include access for Paralympic athletes in all USOC programs, including
medical insurance, the Olympic Gold Program, priority access to U.S.
Olympic Training Centers and other services provided to Olympic
athletes.
U.S. Paralympics should not create new individual Paralympic Sport
Organizations. This would be an expensive, duplicative and inefficient
manner to develop Paralympic Sport. The Olympic National Governing
Bodies should be the primary and preferred vehicles for this effort.
In fact, that is what was intended when the 1998 Ted Stevens
Olympic and Amateur Sport Act states that Paralympic athletes should be
included in the programs of the NGBs whenever ``feasible''. The
Independent Commission report recommends this course of action (page
58) and Disabled Sports USA supports that recommendation.
INCLUSION IS ACHIEVABLE AND PRACTICAL
In this process of working to include Paralympic athletes in
National Governing Body programs, we need to keep in mind practical
considerations such as cost and time to implement these plans. These
are challenges but they are manageable. This process will take many
years to complete but we all need a clear plan and agreement on where
we are going. We don't have that now. To keep things in perspective,
there are half as many (21) sports on the Paralympic compared to the
Olympic agenda. So we are only talking about affecting half the Olympic
Sport structures.
Two NGBs, U.S. Sailing and U.S. Tennis Association, have assumed
responsibility for developing elite Paralympic athletes. U.S. Ski and
Snowboard Association has adopted the U.S. Disabled Ski Team, but we
are constantly hearing rumors, that certain powerful people within USSA
want to kick the USDST out of its programs. Because there is no clear
requirement to prevent any NGB to move in this direction, we fear that
this could happen at any time.
In addition, other NGBs have begun to develop programs and have
indicated a commitment to include Paralympic athletes. This includes
USA Cycling, USA Volleyball, U.S. Track & Field, and USA Swimming. This
makes a total of at least seven NGBs who are moving toward developing
plans and including Paralympians and Paralympic Sport into their
programs. This is one-third of the total number of NGBs who have
Paralympic Sports. They have developed models that can be used for
other sports. This process needs to continue; but we first need a clear
agreement that the end results is Paralympic athletes participating in
training and sports competitions conducted by National Governing
Bodies.
NEEDS CLEAR MANDATE TO OLYMPIC NATIONAL GOVERNING BODIES TO INCLUDE
PARALYMPIANS: CLEAR DEFINITION OF WHAT ``FEASIBLE'' MEANS
The 1998 Ted Stevens Olympic and Amateur Sports Act states that
Paralympic athletes should be integrated into the programs of the
Olympic National Governing Bodies ``whenever feasible''.
What is needed is a clear set of standards and goals and a
requirement, as part of the conditions of membership as an NGB, that
NGBs develop and implement plans for incorporating Paralympians and
Paralympic Sport into their programs.
At the very least, USOC needs to develop a clear definition of what
``feasible'' means so that it doesn't come to a simple decision that
the NGB doesn't want to include Paralympians. Five years after the
passage of the 1998 Amendments, the USOC has still not defined what
``feasible'' means in terms of the requirement of the NGBs to include
Paralympic Sport. Without these conditions, NGBs are free to just say
they don't want to assume Paralympic responsibility and there is no
recourse to change this decision.
WAYS TO INCREASE FUNDING AND ``GROW THE PIE''
A: U.S. Paralympics and resource development: independent marketing
In order to increase funding to benefit all, The U.S. Paralympics
needs to be set free to develop a marketing package to brand and sell
the Paralympics and identify funding sources independent of Olympic
funding sources. Right now there is no clear direction on this. Some
Olympic sponsors seem to assume that they also sponsor the Paralympics.
There is no clear mandate for USP to go after non-Olympic sponsors,
even when the Olympic sponsors refuse to provide support for use of the
Paralympic name and effort.
If necessary, we recommend that this option for U.S. Paralympics be
mandated by federal legislation. Only in this way can US Paralympics
``Grow-The-Pie'' of funding so that there is a financial incentive for
Olympic National Governing Bodies to develop and support Paralympic
Sport.
B: Federal funding as a possibility
The USOC does not seek direct federal funding for Olympic Sport.
This should not prevent the U.S. Paralympics or Community-Based
Organizations from seeking federal funding to make Olympic programs
accessible. These initiatives could be developed to provide funds for
special adaptive sports equipment, architectural modifications and
sports specific training for coaches and officials in disability
adaptations to the sport. Perhaps the U.S. Olympic Foundation could be
a vehicle to develop and apply for federal funding initiatives for
Paralympic Sport and/or combined programs of the Community-Based
Organizations.
Funding initiatives might be sought under the special recreation
projects program conducted by the Rehabilitation Services
Administration, Department of Education; health initiatives under the
National Institutes of Health and the Centers for Disease Control; or
other agency programs. I urge the newly constructed USOC and its board
to consider these options for funding; and thus provide a means to
expand and include Paralympic Sport into the Olympic agenda.
CONCLUSION AND SUMMARY
Reconstitute the Board of Directors of the USOC to a smaller body;
with a majority private sector, business-oriented, independent
representation. Include Olympic, Paralympic and Community-Based
Representation to represent those constituents for which the USOC
exists. Narrow the mission of the USOC ``To support the Olympic and
Paralympic athletes in achieving sustained excellence . . .''
(Independent Commission, page 20). Use all of the member organizations
of the USOC, including Disabled Sport Organizations and Community-Based
Organizations, to achieve that goal.
Develop Paralympic Sport through the existing programs of the
Olympic National Governing Bodies of the USOC. At the same time, allow
the U.S. Paralympics to develop and implement an independent marketing
and fundraising campaign for Paralympic Sport. Increase USOC allotment
of resources from the present 3% of total funding to 10%. Explore new
sources of funding including non-Olympic sponsors for Paralympics and
federal funding for achieving Paralympic Sport inclusion and
development.
Mr. Stearns. I thank the witnesses. And I just would like
to say before we start the questioning, I make unanimous
consent for all members on the Subcommittee to put their
opening statements as part of the record or any questions they
may have thereof.
Let me just start with the general principle in my line of
questioning. As a result of what we saw, we have seen how
things are broken down, and of course I think there's equal
blame to go around, would you all agree that every aspect of
the current structure should be on the table for consideration
or is there anything in your mind that is sacrosanct that we
cannot touch? Because as legislators we want to hear from you,
and I am presuming that you will agree that every aspect of the
current structure on the table for discussion is something we
could look at. If anybody disagrees with that or everybody
agree with that? Mr. Marshall?
Mr. Marshall. Yes, I agree with that. The way we approached
it in the Task Force was to have a clean sheet of paper.
Mr. Stearns. Right.
Mr. Marshall. And provide for what would be the best
governance that we could come up with.
Mr. Stearns. Okay. Now, just looking at this from the
outside, it looks to me the biggest disagreement is with the
assembly; that is the voting rights. We have this assembly and
then we have, whether it is 13 members or 9 members, the
Independent Commission has voting rights and the Task Force
does not have voting rights. Am I correct there? No?
Ms. Ramo. Actually, Mr. Chair, if I could just spend a few
minutes explaining the assembly?
Mr. Stearns. Sure.
Ms. Ramo. In our initial report we did suggest that the
speaker of the assembly have certain small voting rights. But
as I said in my testimony, as extensive discussion with the
internal group and other group we come today to recommend to
you that that not be the case. So the speaker would not in our
current view have to have voting rights at the board level.
But I do want to point out that much of what was said about
the assembly I think is not a close reading of our report. Our
report gives full control over the governance and the business
issues of the U.S. Olympic Committee to the small board. If you
look at our report, and we discuss the responsibilities of the
assembly, I will just read one sentence to you because I think
it explains it best.
``The Assembly will convene annually to advise the USOC
Board on issues facing the U.S. Olympic Movement and its
athletes, and to bring proposals and concerns of the various
represented constituencies to the attention of the Board and
the chief executive officer.''
We do believe that the huge and important and vibrant
volunteer movement that supports all Olympic athletes and a lot
of amateur athletes from childhood, really, with boys and girls
clubs needs to have an opportunity to get together.
Mr. Stearns. Well, let us assume, okay, so now you are
saying the assembly will have no voting rights?
Ms. Ramo. Well, what we are saying are two things. We are
suggesting that the speaker of the assembly by an ex-officio
member of the board.
Mr. Stearns. Oh, I understand.
Ms. Ramo. But without a voting right.
Mr. Stearns. Yes, I understand that.
Ms. Ramo. And that the assembly itself, you are quite
right, not be really a governing body except as absolutely
required by----
Mr. Stearns. Okay. So let us say you have the actual
working constitution of the U.S. Olympic Committee, does the
assembly vote on that at all?
Ms. Ramo. Under our suggestion, Mr. Chair, what would
happen is that the board, only the board, could actually bring
to the assembly any changes in the constitution or the bylaws.
Mr. Stearns. So let us say that they brought it to them,
would they need the assembly concurrence before the board could
act?
Ms. Ramo. This is just on the issue of constitution and
bylaws.
Mr. Stearns. Right. Right. Just in that.
Ms. Ramo. The assembly would vote yes, but if they voted no
things would stay the same. In other words, the assembly does
not have the ability to change the constitution or bylaws
itself.
Mr. Stearns. So the board says we need to change the
constitution. We need to change the language.
Ms. Ramo. Right.
Mr. Stearns. So they say, okay, we are going to go to the
assembly. And the assembly says we vote on it and we say no
changes. And that is what you are saying?
Ms. Ramo. Right.
Mr. Stearns. Okay. Now, how about you folks? Tell me from
your standpoint how that would work. If the board decides they
want to change the constitution, what rights do you give the
assembly? Mr. Marshall?
Mr. Marshall. No voting rights.
Mr. Stearns. No voting. So that the board itself could
change the constitution themselves?
Mr. Marshall. Yes, sir.
Mr. Stearns. Okay. Now, that is a very distinctive
difference between the two of you. So I guess we as legislators
have to ultimately decide.
Mr. Schiller. If I may make a comment, Mr. Chair?
Mr. Stearns. Sure.
Mr. Schiller. I think there's actually a comprise here.
Mr. Stearns. Okay. That is what we are always looking for.
Mr. Schiller. I believe that the intent of our proposal was
to meet requirements of the International Olympic Committee
Charter. And that Charter says that when it comes to those
specific issues, the bodies that govern sport in the country,
the national governing bodies, combined with the athlete votes
must be in the majority. And what we tried to do in terms of
our recommendations specific to the assembly so as not to
confuse the board's action was to say for certain things that
were truly Olympic in nature, that that would allow----
Mr. Stearns. So you are just making a distinction in the
issues?
Mr. Schiller. What could be done is to give the board back
the items that could be approved by the assembly and use
weighted votes so that the majority of votes on those issues--
--
Mr. Stearns. I would say you are getting a little
complicated because your position might be a little bit not as
strong. I mean, that is my interpretation.
I understand you went to Lucerne yourself to speak to the
International Olympic Committee?
Mr. Schiller. Yes.
Mr. Stearns. What did they tell you?
Mr. Schiller. Well, their initial position was contrary to
all of ours.
Mr. Stearns. Oh, really? Well, you might just share what
they said.
Mr. Schiller. I think what they wanted to ensure was that
on truly Olympic matters that the sport bodies in line with the
Charter have the majority vote. And what we presented back to
them was on all other matters the independent members should
have the majority vote within the board structure.
Mr. Stearns. Okay. Let us say we went with what Dr.
Marshall and what these folks came up with, how would your
feeling be if we as legislators decide that, you know, if we
start to open up the tent and let the no's get in, it might
just start opening this whole thing again?
Mr. Schiller. Personally I believe that moving that back to
the board I support.
Mr. Stearns. Okay. So the board would have a real governing
authority absolute under their approach. And your issue try to
give the assembly sort of an opportunity to have some say so
with the constitution and legislative side? We are just trying
to wrestle with this whether, you know----
Mr. Schiller. Yes, sir. The disconnect is going to be with
the Charter.
Mr. Stearns. Yes.
Mr. Schiller. And that is where we have to be careful.
Mr. Stearns. Okay.
Mr. Schiller. And as long as in certain issues--in certain
issues as we discussed when we were in Lucerne last week, that
the majority of the sport bodies exercising no voting majority
would only be for very, very specific issues relating to things
that were truly Olympic in nature. For example, an example was
given, the decision to boycott the games, which historically--
--
Mr. Stearns. Ah. That is a very important decision.
Mr. Schiller. Historically in this country caused an
enormous amount of dissention among organizations and
government.
Mr. Stearns. Yes.
Mr. Schiller. In that particular case should not the sport
bodies themselves make that decision or should it be the
independent members?
Mr. Stearns. Okay. Mr. Bauer, I am just going to close and
ask you this question. You have made a strong case for the
disabled to have voting rights on the board. Does the
organization you are talking about include people who cannot
hear? Is that include in the disabled, hearing loss? Just yes
or no.
Mr. Bauer. The Paralympic Games do not include athletes who
have hearing impairment.
Mr. Stearns. Okay. And what about who are blind?
Mr. Bauer. Yes.
Mr. Stearns. It does? And what about mental disabilities?
Mr. Bauer. No. It is primarily for physical disabilities
relating to mobility. That is spinal cord injury, orthopedic
impairments like amputations and visual impairments and the
like.
Mr. Stearns. But you indicated that a person with hearing
loss is not part of your----
Mr. Bauer. It is part of the Olympic movement.
Mr. Stearns. But not part of your----
Mr. Bauer. The Federal legislation that established the
USOC as the National Paralympic Committee deals with the
Paralympics.
Mr. Stearns. I think we all are empathetic, and
particularly in your case since you have made the ultimate
sacrifice that very few of us have ever made, but I just submit
that if you start to give your organization the opportunity,
then what happens as an elected official I see then the other
people come to me and say ``Well, why not me'' people who have
lost hearing or then the people who say I can run the 9\1/2\ or
10 minute 100 yards but I have a mental disability. I mean, I
am just saying that it starts to move forward, and I just hope
you will be sensitive to the fact as we try to reorganize this,
it is going to take a lot of skill on us to come up with a bill
and get the Democrats and the Republicans and independents
together. So your particular case is going to be very sensitive
to us, but I am not sure how we will handle it, but it is
difficult.
So my time has expired.
Ms. Myler. Could I respond to that?
Mr. Stearns. Sure.
Ms. Myler. Thank you.
The representatives on the board of directors from the
Athletes' Advisory Council and the National Governing Body
Council were not intended to exclude any paralympic athletes or
paralympic representatives. Should paralympic sports
organizations come into existence, those individuals certainly
could have a seat on the board through the NGB Council. And, in
fact, right now on the Athletes' Advisory Council there are 2
paralympic athletes. So those athletes could be one of the
representatives designated by the AAC. And a number of national
governing bodies have taken the paralympic aspects of their
sport inside their organizations. So that opens up another
avenue of opportunity.
Ms. Ramo. Mr. Chairman, could I make a quick comment about
that also?
One of the reasons that we feel that the assembly is so
important is because that body does give us an opportunity to
continue to have the voices of each of those groups heard. And
they will have through the assembly an opportunity to make
clear to the board what their individual needs are on an annual
basis. So that is one of the reasons we believe so strongly in
having the assembly.
Also, there is nothing in anything that we have said that
would keep one of the independent directors from actually being
somebody who fell in one of those categories. And, in fact, our
hope is that people who are independent directors will have the
feeling that they represent all of those constituencies on the
board.
Mr. Stearns. My time has expired.
Gentleman from Michigan.
Mr. Bauer. I would like to respond to what was just said.
Mr. Stearns. Sure.
Mr. Bauer. Yes, in theory what Cameron stated is correct.
The reality is that the paralympic movement does not have at
this point in time an effective voice on either the NGB Council
or on the Athletes' Advisory Council. When you are talking
about 40 plus athletes and after 5 years of negotiating getting
2 athletes on; that is the kind of treatment, quite frankly,
that the paralympic movements gets within the Olympic movement.
And what we are saying is that the USOC is both the Olympic
Committee and the Paralympic Committee of the United States and
we believe that they should have representation on the board.
In a practical manner, yes, in theory they could move up
through the NGBs, in theory they could get on through the
Athletes' Advisory Committee but their representation at this
time is token and does not have any meaningful significance. So
that is why we are maintaining that we need that voice.
Mr. Stearns. The gentleman from Michigan.
Mr. Stupak. Well, thank you.
I understand the concern that another group may come, but
the Paralympics look like it is the second largest event. I
would think that they would have at least some kind of
representation on the board. However, how did you come up with
nine people and eliminate it to nine? Can anyone answer that? I
mean, 10 does not seem unreasonable to me.
Ms. Ramo. Part of what we did, Representative, was we felt
very strongly that we should maintain, first of all, the 20
percent representation of the athletes. Also, many of us have
served on many boards of varying kinds and we recognize that in
order to move this forward we needed a very small board. But
the other part that we thought was very important was that
aside from the athletes and the national governing bodies, that
you could not start adding individual constituencies, as you
heard, for example, the Paralympics do not include the deaf
movement, without enlarging the board so much that it would be
impossible to move forward. So we believe that the independent
directors should represent all of those groups and that the
assembly is really the proper place because there you do have
room for everybody with their individual constituent concerns
to speak.
Mr. Stupak. And the board of directors comes from the
assembly?
Ms. Ramo. No, it does not.
Mr. Stupak. So it comes from, according to this,
independent, two will come from the AAC and two come from----
Ms. Ramo. Right. Two athletes, two national governing
boards.
Mr. Stupak. National governing boards?
Ms. Ramo. Exactly.
Mr. Stupak. Who decides those people?
Ms. Ramo. Our recommendation is in nominating, the original
nominating process we actually agree with the internal
commission, and that is that for the athletes and the national
governing board that each of those groups propose a slate to
the nominating committee. In our configuration of it, and I
think it is not much different from the internal commission,
they would propose a slate of six from which the nominating
committee would choose two each. The independent directors
would be chosen by the nominating committee as a whole.
Mr. Stupak. Well, I do not think there is anything magical
about nine, so I would suggest you look at especially the
Paralympics. They are just a large part of it and a large part
of the Olympic movement.
Ms. Myler. Could I follow up on that?
Mr. Stupak. Sure.
Ms. Myler. I would like to reenforce one of the points that
Roberta made, and I think ultimately it is not so much a
distinction between 9 or 10 people, but that the new board of
directors is based on the principles of good governance and
that each one of those board members has at their interest the
USOC, that they are not there to represent a constituent group.
And the members that come from either the Athletes' Advisory
Council or the National Governing Bodies will have to
relinquish their positions on each of those bodies.
Mr. Stupak. But we all come to a board or as a Member of
Congress with certain ideas we would like to push. And just
because you go to a board of directors, you do not
automatically lose that preference you may have or the ideas
you would like to push. I mean, really I would like to see the
USOEC, Olympic education centers, be represented on here. I
mean, I am not advocating that, but that is what I would like
to see.
I mean, if you read this testimony on page 63 you talk
about funding being dramatically increased, and then we go on
page 2 here and you talk about funding again here of these
reports, the cost may be disproportionate to the value and
organization, constant meddling by people, but yet the Olympic
Education Centers do not have any money to stay open. I mean,
you have got so much money here. So I mean, we can argue this
all day, and I do not mean to argue it all day, but I think
Paralympics certainly should have a spot and should, hopefully,
can do something on this board of director thing.
But anyone else want to add before we go on?
Mr. Schiller. Yes, sir. And I have been a supporter of the
Educational Center.
Mr. Stupak. Yes, I know you have been.
Mr. Schiller. And continue to be. We would not have had
some additional success in winter sports especially.
Mr. Stupak. Including the luge.
Mr. Schiller. Especially winter sports.
One of the dramatic changes we made from the previous board
was the exclusion of both the community based organization and
the educationally based group, the NCA specifically, which is
the No. 1 provider of athletes into the system. And I would
just like to reiterate what the other people have said. It does
become somewhat parochial to have specific representation and
adding to that. And I recognize the role of the paralympics in
the world and how well they have done.
Mr. Stupak. Sure. Well, hopefully that is something we can
continue to discuss.
You know, a lot of us sat on the oversight investigation,
we did the Atlanta and Salt Lake Games, and all the problems we
had there. And in the House version we have the compliance
programs. So let me just ask a little bit about the compliance
program. And I think a lot of problems with Atlanta, and some
of them could have been handled if we had professional staff
that is retained from year-to-year to assure that we have
compliance. And that is sort of the purpose behind the
compliance program that is in the House bill.
And the purpose of the new compliance program is to provide
the USOC with the tools to constantly monitor its own
participants and to address problems before they become
outright scandals, as we have seen. Essentially what is
envisioned is that we will have a senior managing director
responsible at the highest level for policing the organization
and responding in the allegations that get reported through a
formal hotline. He or she will have a small staff to both
investigate the problems, audit problem areas and help correct
systemic difficulties when discovered.
What are your thoughts of our attempt to add the compliance
program to the USOC? Good idea, bad idea, suggestions?
We will start, Mr. Marshall, maybe?
Mr. Marshall. Well, we totally agree that the USOC and its
member organizations should have a complete commitment to
compliance with the ethics policies. I believe that our
recommendation of the Task Force is to create an ethics
oversight committee of independent directors.
Speaking as the treasurer, I would like not to create
something that adds more administrative costs to USOC. But I
think with the new code of ethnics and an ethics compliance
officer that we should be able to deal with any situations that
come up and be in compliance with your suggestions.
Mr. Stupak. Who would be staffing then? Who would do the
investigation if there is a complaint or a problem that is
developing if you have a professional staff?
Mr. Marshall. Well, the ethics officer would do the
investigations and handle any----
Mr. Stupak. So it would be a one person office?
Mr. Marshall. Yes, and then there would be a committee that
would investigate anything that turned out to be more serious.
Mr. Stupak. The committee would be volunteers?
Mr. Marshall. Volunteers, yes.
Mr. Stupak. Okay. All right.
So, Ms. Ramo?
Ms. Ramo. Yes. I was on the committee that did the
investigation of the Salt Lake City bid oversight, so I am very
familiar with all of those problems in implicit detail.
I have not had an opportunity, because I just saw it very
late last night, to really look at the compliance part. But I
think that the important issues are addressed by having a
majority of independent directors.
One of the things that we suggested is that the internal
auditor report directly to the audit committee and the internal
directors. And that we allow the board to really set out a
whole series of whistleblower opportunities for people.
I do worry somewhat about both the cost of having an organ
that does nothing but constantly investigate itself, not only a
cost in terms of dollars, but the cost in terms of the
functioning of the organization. Among other things, we require
or suggest that you require that the CEO and the CFO of the
U.S. Olympic Committee have to certify the financial results.
And I think that will go a long way toward making sure that the
kinds of things that you are concerned about in compliance
really work to everybody's advantage and are transparent.
Mr. Stupak. Yes, but does not the board investigate itself?
Is that not the same problem we have had with all the corporate
problems? And then Mr. Marshall says actually Sarbanes does not
apply to the USOC because it is not a private shareholder
company? So I think we need some kind of compliance there with
some teeth in it that can do it. Because Salt Lake City was not
bad, you ought to look at Atlanta if you want to see a bad
situation.
Ms. Ramo. Well, actually one of the things that we say in
our report because we agree with you about that very much, is
that the restrictions that we recommended the USOC put in,
which they did, in terms of what goes on both cities be
continued. So there would be no change in that regard. And I
disagree, although I think Mr. Marshall is correct as a legal
matter, that Sarbanes-Oxley does not apply. Our whole point was
that the ideals of Sarbanes-Oxley should apply to this group.
It is an enormous business opportunity. It is a federally
chartered corporation and we believe that the principles of
Sarbanes should apply. So we absolutely agree with you about
that.
Mr. Shadegg [presiding]. The time of the gentleman has
expired.
The Chair should explain, that Chairman Stearns was called
to the floor. He has an obligation there. He expects to be back
fairly soon. We will proceed through questioning and, if time
allows, we will have a second round.
At this time the Chair would like to call on the gentleman
from Nebraska for 8 minutes.
Mr. Terry. Thank you, Acting Chairman.
Two thoughts keep running through my mind as we discuss the
composition of the new board and the desire for a majority, not
arguing the number, but that a majority of that number be
independent.
It struck me when Mr. Bauer was talking, and I do not want
to get into what the definition of ``is'' is, but what is the
definition of independent? It seems to me that if we put a
broadcaster in there and their network is bidding on the
Olympic, they are not independent anymore.
So, Ms. Ramo, what do you think independent should mean in
regard to this particularly bill?
Ms. Ramo. Actually, in our report those are very important
questions. Somebody bidding on the Olympics could not be a
member of the board. We are very clear that you cannot do
business in any material way. In fact, we define specifically
about what can be in your family and we are quite specific
about that. So that could actually not arise, not only in terms
of the independent directors but that would be true of the
board of directors as a whole.
Additionally, even when it comes to things like the
International Olympic Committee members we provide that there
are many things on which there might be a conflict in which
they could not vote as well.
So our definition of independent is set out in our report
and it includes all of the--in fact, this also relates I think
to Mr. Stupak's concerns. It includes all of the things that
you cannot do. And additionally we note that there might be
something that would be not material at the time. It requires a
disclosure of everyone annually that they say that they are
not, that they have no business relationships at all and that
their immediate family has no business relationships at all.
And they have to certify every member of the board of that
annually, and that is part of what would be disclosed to the
Congress.
Mr. Terry. All right. It seems to me there would also be
some, as well as you are trying to report to create an
objectivity in relation to independent, there seems to be some
inherent subjectivity to independence as well. If you are not
on a checklist, is there a way to determine whether somebody is
truly independent just because they do not have a family or an
obvious business connection, where it is something that was not
initially thought about? Is there a check and balance built
into the system?
Mr. Schiller. I think time will tell. I think the issue
that you bring up is extremely important. I think that trying
to establish independence, I think there is an element of
disclosure where people are part of that, and knowing that
there can be some evaluation of whether they can act. But how
they act after that. Keep in mind that the assembly is made up
of groups that incorporate the Armed Forces, school and college
community, religious organization, community based
organizations and so forth. So any individual in this country
could be a member of the Church of Latter Day Saints, which is
a member of the community based organization or Jewish
Community Centers, or Catholic Youth Organization, or Boys or
Girls Club, or high schools or colleges, or park and recs, or
YMCAs; they are all part of that community base. So we are not
expecting that people would not come in with that kind of
experience. It really is a demonstration of how involved they
are at the operating level of those organizations.
Mr. Terry. That is a very good point.
The other thing that struck me is that we talked about or
you talked about it, really tweaking or even maybe a major
overhaul of the mission statement or charter statements of the
USOC. I am just curious, is that specifically set forth in your
report? What would you encourage just sitting here today, what
would be your one or two sentence mission statement?
We will start with you, Ms. Ramo?
Ms. Ramo. We actually do propose a mission statement. I am
sort of searching for it here, Representative.
Let me just say that we thought that all of the purposes in
the Ted Stevens Amateur Athletic Act are all excellent purposes
and that it was a problem, really, of priorities. And that the
board had been unable, because of the politics of things, to
really exercise the kind of priorities that are necessary. And
I am looking right here to find----
Mr. Terry. So there is a proposed change then to the
mission statement?
Ms. Ramo. Yes, there is. The current mission statement
focuses on it being the world's best Olympic Committee. We
think that has the emphases on the wrong syllable; that is
really not what it is about at all. And what we recommend that
the mission statement be is the new USOC board should adopt the
following mission: ``To support U.S. Olympic and Paralympic
athletes in achieving sustained competitive excellence while
preserving the Olympic ideals.''
Mr. Terry. Very good.
Anyone else that think that the mission statement should be
slightly different?
Ms. Myler. What the Task Force proposed is slightly
different. It reads: ``Help U.S. Olympic and Paralympic
athletes achieve sustained competitive excellence and preserve
the Olympic ideals, and thereby inspire all Americans.''
Mr. Terry. So it is similar, although worded differently,
but philosophically it shifts it away from making the committee
better to placing the right emphasis on the athletes. I think
that is the right direction.
Mr. Bauer. If I may add to that comment?
Mr. Terry. Yes, sir.
Mr. Bauer. We agree, particularly with the Commission's
language, but both of them are very good. I think the whole
point here, though, is not to give the USOC a checklist of very
specific things. This is a broad statement that is consistent
with the Olympic mission. And then it is the duty of the newly
reconstituted board to do what it is supposed to do, and that
is set policy, set priorities, set the budget and run a
business. And that is where you leave it up to the board to
decide how to implement that mission. And that is what we are
all trying to say here is it needs to be done and is not being
done right now.
Mr. Terry. Well, let us follow up on that. Because Mr.
Stupak broached this area. In regard to the board, it seems
like there would be tremendous power brought to that board. In
a corporate setting the shareholders are the check on the board
of directors. Here there is no philosophical equivalent to
shareholders. You have an assembly, but you have reduced their
powers, in essence. So what should be the proper oversight to
ensure that the board remains true to the mission statement?
Ms. Ramo?
Ms. Ramo. This is one of the reasons that we do believe
that the assembly is important, because its voice would
certainly be heard in this body along with the rest of the
world if the board itself was not being successful in anyway,
was not being independent and was not being appropriate.
I also point to two other things. First of all, our
recommendation is that there be a report to the Congress
annually, in the Senate version it is every 2 years. I think
that would probably be a better idea just because we expect the
report to be quite extensive and so the idea would be that
there would be annual financial reporting and biannual
reporting of everything that went on.
Additionally, we recommended, and I believe the internal
commission does not disagree with this, that we know what would
be the best organizational operative system today we think. But
we suggest that this be a 10 year test and that there be a
requirement that the entire U.S. Olympic Committee be reviewed
again in its functioning in 10 years. Because just as no one
could have predicted Enron I think 10 years ago, we feel that
although we know what in today's climate would work the best,
we certainly cannot see that far ahead and recommend that there
be a 10-year review by this body.
Mr. Terry. All right. Anybody else?
Mr. Marshall. Yes. I would like to also comment on one of
the ways that we got here. And that is that the Stevens Act
sets out a whole menu of purposes of the corporation that
really the USOC to become all things to all people. And I think
it's a good idea to prioritize, but it would be a better idea
to modify the Act to take out some of the issues and some of
the purposes that are listed there so that the board knows what
to focus on. The board knows that we are focused on the
Olympics. We are really focused on getting our athletes to the
podium. And not focused on things like getting overweight
Americans off the coach. And that is really how we got here.
There are too many things for us to do in this Act and we
should modify the Act to narrow the focus so that the board
knows what they are doing.
Mr. Terry. We appreciate that.
Mr. Shadegg. The time of the gentleman has expired. The
Chair would like to call on the gentleman from Illinois, Mr.
Shimkus, for 5 minutes.
Ms. Myler. Could I add one more thing, please?
Mr. Shadegg. Certainly.
Ms. Myler. A couple of other ways in which there is
oversight over the board. By the recommendation of the Task
Force the nominating and the governance committee would consist
of a majority of independent not directors of board, but
individuals outside of the board. So there is external
oversight over what the board is doing. And then certainly
through the American people by means of Congress.
Mr. Schiller. Mr. Chairman, just one more thing.
One of the issues that we have in this country is we
actually have no national sport body aside from the U.S.
Olympic Committee. So I think we have to be very, very careful
about restricting the kind of considerations that something
like the Olympic Committee should or should not be considering.
There are issues of diversity, there are issues of
stimulation and how you get people involved, there are health
issues and so forth. We are an organization of limited
resources. You cannot do everything. But I think it still
remains as the single body in the United States that has an
overall view of athletic activity in this country.
Mr. Shadegg. The gentleman from Illinois.
Mr. Shimkus. I am glad I was going to give Dr. Schiller, I
saw you wanted to answer. I was going to give you some of my
time so I am glad you got in there because, obviously, the
Olympic movement is a great movement and it does inspire
people, and a vast majority of them, a vast majority of them
will never get to the podium. But to minimize the importance of
the aspirations for the whole body, I would hope that we have a
major health crises in this country and it is the lack of
physical activity and obesity of our children. Everybody knows
it. And I would think that the Olympic movement could be
helpful in sustaining that. And I would not be supportive of
just limiting it to the world class athletes and the focus.
Because we preach leadership by example, at least that is in my
educational background and there's no greater examples. And we
have got some Olympic athletes that, just like the whole world,
we might question whether they are going to be good examples,
but that is the way life is.
I was really interested in this assembly talk. And then
also I got focused on the, what do we call them, the delegates,
the board, however we want to term them. And it reminded me of,
I serve on the NATO Parliamentary Assembly. And the NATO
Parliamentary Assembly are members of legislative branches from
around the country of NATO countries, and we are advisory to
the NATO Council. The NATO Council are Ambassadors that are
seated in Brussels. And we meet three times a year to discuss
NATO policies, to draft up resolutions, to present to the NATO
Council for them to do whatever they do. They probably
disregard many of them, but hopefully they get a sense of what
the legislative branch of the--actually, the governments that
actually are paying for that and our appropriations begin in
the House of Representatives, our concerns. And especially with
the ramifications of NATO in the past year, it is a great
sounding board for problems, discussions, concerns. And we have
any real authority. It is advisory. But it is very, very
important.
So, to my colleagues, I am intrigued by that and I think it
is a pretty good proposal. And I would be one that would not
believe that has merit. Because I think you got to put and
responsibility. You got to hold them accountable. And you got
to have transparency. So that if you have this other body that
is giving recommendations, whether they really do. But I have
seen in this form, I think it has been very helpful in our
relationships with our NATO allies. So maybe you can take that
back with you.
And I am sorry I missed the beginning. But this nine or
whatever number of these board of directors, how are they going
to be appointed?
Ms. Ramo. Our recommendation is as follows: First of all,
we believe that this first board has to be appointed by
someone. And the internal commission we thought came up with a
very excellent idea, which is an initial nominating committee
that is composed of one member from their group, one member
from our group, a member of the athletes, a member of the
National Governing Board and a member of the public sector. And
that would be the initial nominating committee. It would
nominate in our proposal the five independent directors and it
would choose the two athlete representatives from a slate of 6
that would be presented by the Athletes' Advisory Council. And
the two National Governing Board members would be nominated
equally from a slate of six to be presented by the National
Governing Board. So that's how the initial group would take
place.
One of the changes also is that we suggest term limits and
we suggest staggered terms. The U.S. Olympic Committee operates
an enormous complex business and you do not want everybody
turning over all at once. Because if you had wholesale
turnover, it would really be a disaster for the group. So we
also suggest staggered terms.
We also recommend, Representative, that the initial
nominating committee nominate a chair of the board to start
with as well. I think this whole operation and the transition
will be so complex that all five of us really feel strongly
that you are going to have to go out almost and recruit
somebody to be the chair because of the time that will be
considered.
After the first board and chair have been selected, and
again this is a change from our initial proposal, we believe
that any member of the nine could now be nominated as chair.
Initially we suggested that it be one of the independents. But,
again, after consultation with the internal group we think it
could be any of the nine.
Mr. Shimkus. And that will be elected by the board members
themselves?
Ms. Ramo. By the board. There will be a nominating
committee of the board. In our formulation we have set out who
it is. It would be one athlete, one National Governing Board
slot and three members of the nominating committee.
Mr. Shimkus. How long would be a term, and then how long
are the term limits and then what are the staggered years?
Ms. Ramo. Right. We propose that no one with one exception
be allowed to serve for longer than 6 years. The exception is
that if the chair, we propose a 4-year term for the chair, and
if the chair is at the end of his or her 6 years, they would be
allowed to serve 2 more years if they were in the middle of the
chair's term. We recognized as we started talking about that if
you didn't do that, you would have to have as chair someone who
had just started on the board.
In order to comply with the International Olympic Committee
rules we had originally suggested staggered terms. They operate
on a 4-year basis and so we recommend and hope that in your
bill you would be able to do 4-year term with a 2-year
extension, which we think would comply with the IOC and not
really change the heart of what we are doing.
Mr. Shimkus. And I do not want to take advantage of too
much time, but I'm a term limits proponent. I think here in
Washington those who believe in that have come to the
realization that 6 years for here is really too short. I am a
12-year guy. I think that is good. I would just throw that at.
And the other thing I have experienced in knowledge is that
the disadvantage of the lame duck aspect of term limits. It
really does, even when there is a rumor of someone leaving, it
does impact on the ability of an individual to be as assertive
or for people to follow with that hanging over folks' heads.
And so I applaud it, although you may want to look at some of
the revisions. Especially with the Olympic cycle being 4 years,
I mean a board member is going to be one real cycle and then
they are out.
Ms. Ramo. It is sort of a cycle and a half now that the
Olympics are every 2 years.
Mr. Shimkus. Right.
Ms. Ramo. So it worked out fairly well that way.
I would just say in my own experience on several corporate
boards in which there is an age limitation, I have not noticed
any diminution of authority. In fact, I think people really
look very carefully at the people who have been there the
longest. And in my experience in volunteer and nonprofit
organizations, I would say the same thing is really true. You
are very grateful to have anybody who has been there for the
full time and they really serve as educators of the brand new
people on the board as well.
But like you, I feel in this case there are many wonderful
Americans who could serve and a term limit of some sort is very
important to keeping everything refreshed and independent.
Mr. Shimkus. Thank you, Mr. Chairman.
Mr. Shadegg. The time of the gentleman has expired.
The Chair would call upon the gentleman from Indiana, Mr.
Buyer.
Mr. Buyer. Dr. Schiller, you had recently had a meeting
with the IOC to discuss some of their concerns with the
Commission's proposals. Could you explain their concerns and
how we might address them?
Mr. Schiller. Thank you.
The Chair of the committee, Don Fehr, who is head of the
Baseball Players Association. I traveled to Lucerne last week
to meet with President Rogge, the President of the
International Olympic Committee, to address a small number of
issues that were brought forward by the IOC, both to the
Congress and to the leadership of the USOC that regard
compliance with the Charter in several areas. One was the
length of time that people served. I think we can work around
that.
The Charter has some specific requirements that terms
coincide with the quadrennial period, the 4-year period. I
think that is something that would be easily covered within
this legislation.
The more important matter was the votes of the
International Olympic Committee members on the suggested boards
from both the internal and on the external commission. The IOC
held that they did not like the IOC members having fractional
votes and weighted votes and asked that they have individual
votes.
They also asked that in matters that relate to Olympics, as
I mentioned earlier in the testimony, specifically for things
like boycotting the games and so forth, that the votes among
the board members be weighted in such a fashion that the sport
bodies have the majority of the vote and with that, the votes
of the athlete members and the IOC members be in the majority
beyond the independent members.
I think those are the major issues that we discussed.
Mr. Buyer. Earlier there was a comment by Ms. Ramo that
Sarbanes-Oxley does not apply. One of the nice things about
being in Congress is that we have this; it is the power of the
pen or the pencil. So if you say to us it does not apply, we
can make it apply, right?
So not just we are to follow the ideals, well while we are
drafting legislation if you think it is a good idea that we
actually pen that in, tell us right now.
Ms. Ramo. Thank you, Representative Buyer. I am acutely
aware in my profession of the power of both the pencil point
and the erase part of your pencil of this particular body.
What I meant to say and what our committee genuinely
believes, is that the ideals of Sarbanes in which an
organization as important to this country as the U.S. Olympic
Committee, those ideals of Sarbanes which require a majority of
independent director. Actually, Sarbanes does not actually
require a majority of independent directors, but the new SEC
rules, I believe, interpreting Sarbanes do.
We feel the idea of independence is the most important part
of what we are doing here. Because that way the board would
have as its constituents the right constituent, and that is the
American people and the athletes as a whole. And so we hope
that in your formulation you will follow our recommendation as
to a majority of independent directors.
Mr. Buyer. This is what is bothering me.
Ms. Ramo. Sure.
Mr. Buyer. What is bothering me is two things. I have
this--and I did not come to this hearing with this feeling, but
now all of a sudden I have it. That there is an appearance of
wholesale change, an appearance. So what we are going to do is
we are going to reduce the board from 124, we are going to
reduce it to a smaller number. We are going to create an
assembly. We are still going to try to be all things to all
people. We are going to try to make as many people as we
possible can. We are also going to add esthetics to this to
give the appearance that we are really making changes and, gee,
we are going to place greater emphasis on the independent and
less emphasis on the athletes. Understand how I feel at the
moment, and that does not necessarily make me feel very
comfortable.
So if it is all about the athletes, I think those athletes
need that voice at the board. Now, I do not want to create a
large board, but I sure do not like the idea of saying that
independent voices are required to have a majority because we
are going to have the esthetics appearance of the American
people that we are going to change. And I just am not feeling
very comfortable.
Dr. Schiller, put me in a comfort zone, and I would like to
hear from the athletes.
Mr. Schiller. Well, I think there is one specific issue
that I think all of the recommendations and the suggested
legislation fix, and that is defining the authority between the
volunteer members of the organization and the staff as a start.
And I think we would not have been in the situation that we
have been today had that been defined in a better way before.
Now as regards to your particular position, I think it is
absolutely important that the focus be on the athletes. I do
not want to misread on that. Keep in mind if you look at the
National Governing Body representatives, typically they have
had athletic experience. Many of them that provide the
leadership of the National Governing Bodies today have been
Olympians or world class athletes.
In addition to the athlete members, the IOC members. Of the
three IOC members from the United States today, two have
accomplished much, much in the international world in both the
Olympic world and the in the world championship world. The
other individual is a representative of a sport in a different
manner. And it is not meant to exclude the independent members
of having athletic experience, either.
So I think, you know, to get a well rounded board with a
range of experiences, the majority of those people will have
been athletes as such.
Ms. Myler. As an athlete and as a member of the current
board, who will soon disappear and gladly so, I have a couple
of points.
First, I do not believe that it is necessary to have a
majority of independent directors on the board. The
independence provides by four directors on a board of nine
would certainly provide perspective from the outside, from the
American public and provide a balance to the board of
directors. The other individuals on the board certainly will
have some experience, more experience with the Olympic movement
with the governance and the business of sports. And the idea of
the Task Force's proposal was that no one group of people would
have a majority. So it would be necessary for athletes to work
with NGBs and to work with the independent directors to form a
consensus and make decisions that are for the good of the
organization. And there is certainly independence in our
proposal of the nominating committee. And we believe that that
is a critical part of maintaining independence in the board.
And another point about Sarbanes-Oxley, which the
definition of independence there relates more to independence
from management. And when Mr. Marshall said that that did not
apply to the construct of the USOC, I think in that particular
respect he is right. We are certainly not opposed to the
concept of independence and, in fact, we have created our
recommendations around that.
Ms. Ramo. May I respond to this also, just on one point.
Mr. Buyer. Yes.
Ms. Ramo. The best analogy I can think of is a great public
university, of which you have several in our state. And that is
what athletes need, and I think this is why we have had support
from the athletes of the general ideas of both of our Task
Force and report from the five major governing bodies that
govern the major Olympic sports in terms of number is because
the complexity and the money, and the needs of all of the
training facilities, the training of the athletes and raising
money are so great that what everyone wants is to provide a
first rate in terms of quality board in a size small enough to
run the enterprise in a very serious way so that the athletes
at all levels have the benefit of this enormous amount of money
and can succeed.
Mr. Buyer. Thank you.
Mr. Shadegg. The time of the gentleman has expired.
I believe the Chairman of the subcommittee is on his way
back. But at this time, as previously announced, we will begin
the second round of questioning for any members who want to
have a second round.
At this time the Chair would recognize Mr. Stupak.
Mr. Stupak. Thank you, Mr. Chairman.
First of all, Ms. Ramo, would you provide your testimony to
the committee? Yours is the only testimony we do not have.
Ms. Ramo. Yes. I apologize. I will see that you have it in
the next day.
Mr. Stupak. Okay. Thanks.
And getting back to this compliance section, and I know Mr.
Buyer was hitting that up there a little bit. In the best
universities with the best boards it does not guarantee
problems do not occur. And the problems we have had with the
Olympics, as I said we have been on O&I now for 10 years, has
been ethical lapses. And even the best boards have those
problems, and the Enrons. We have been all through that. And if
I take a look at it, I am looking at this document, the report
of the U.S. Olympic Committee Governance and Ethics Task Force,
you had at page 95 for your ethics officer, and when I read
this through, it is about a page long, most of it this person
does is to certify that everyone has submitted their ethics
disclosure form and did not find any conflicts of interests.
And when I look at it, if I read this right, the ethics officer
is going to have to take care of all USOC members, which could
be as many as 500 people, the bid committee members,
volunteers, athletes, host city employees. So this poor ethics
officer if he or she is doing this, is just going to be
spending their whole year going through all these disclosure
forms to make sure people have submitted them and that they are
filled out and look for conflict of interest.
So what do you do if you just have an ethics officer and
you do not have the compliance section, that work portion, if
you have a complaint from the bid city up in New York or you
have a sexual harassment case up at the USOEC up in Northern
Michigan, or a volunteer complains about something that happens
in Colorado Springs?
One frustration that was voiced to us throughout this was
people made complaints but nothing was ever done. And unless
you have some staff who is going to actually do this and try to
bring some compliance to your new ethics, I am afraid you are
going to be right down the same old rocky road.
Mr. Marshall. May I answer that?
Mr. Stupak. Sure.
Mr. Marshall. Yes. It is not just the ethics officer. The
ethics officer will work in conjunction with the general
counsel and their staff. We are also proposing an ethics
education program and additional provisions in the constitution
and bylaws dealing with ethical situations.
Mr. Stupak. But this general counsel, is that going to be a
full time employee of USOC?
Mr. Marshall. Yes.
Mr. Stupak. And what kind of staff are they going to have?
Mr. Marshall. They will have a staff of 3 or 4 people, as
far as I know.
Mr. Stupak. The intent of the language that we are trying
to do is to make sure that we formalize this procedure so we
are not guessing on who has to do it. I mean, if you are going
to go to Enron and all that, I think someone said no one could
anticipate Enron. As soon as the Private Security Litigation
Reform Act of 1995 passed, most of us said you are going to
have scandals in the country, those of us who voted against
this, more than 85 of us, because you took away the aiding and
abetting statute. You took away a statute of limitation. You
took away--required to certify the corporate statement or the
forward looking statement, but after you certify it and you
just say based upon my best knowledge and belief this is true,
and then you can lie on every page thereafter and you cannot be
actionable. The burden of proof standard was changed.
So you got to have some compliance there, we have got to
have something formalized there, not just an ethics officer who
is looking at disclosure forms and a general counsel, who I am
sure will be looking at contracts for bids and everything else.
And I am just concerned that we do not have enough compliance
there.
Let me shift gears a little bit, though, if I can. Dr.
Schiller, you had indicated that IOC had some concerns about
how this is all going to work out. For the record, why do the
IOC members have to be on the USOC board in the first place?
Mr. Schiller. From the viewpoint of the International
Olympic Committee they feel that the Olympic marketing and the
Olympic designations and the Olympic movement are really
something that they award as a franchise to national Olympic
committees, to nations.
Mr. Stupak. So they use the franchising or marketing, we
have to have people on there?
Mr. Schiller. Yes.
Mr. Stupak. Well, would these people then who are IOC but
will be on USOC, will they take the oath in first the IOC or to
the USOC?
Mr. Schiller. No one is required to take an oath to the
USOC. The IOC members take an oath to the IOC. And that creates
some of the conflict that was brought up Roberta that on
certain matters they should be excluded from the
considerations.
Mr. Stupak. Well, if you do this weighted voting system, it
seems like on some things the IOC wanted weighted voting on
things like, I think you said if we are going to boycott an
Olympics, only the athletes could vote on that one, right?
Mr. Schiller. The intent was that the majority of the votes
would be held by the sports bodies.
Mr. Stupak. Yes.
Mr. Schiller. The National Governing Body.
Mr. Stupak. But whether or not to boycott if there is going
to be country policy, would that not be an athletic decision?
Well, what about doping? Let us say doping in the Olympics, is
that--you start getting these weighted--where sometimes you get
the weight here and sometimes you get a majority here. There
are no real clean lines of distinction on some of these issues.
Mr. Schiller. You are absolutely right. And I think that
one of the points that we have discussed is that there really
needs to be a definition of those matters in a better way and
there needs to be some way to resolve disputes on those matters
within the organization.
Mr. Stupak. You guys do not have, like IOC does not have
anything like a parliamentarian or anything like that, like
past precedent that you refer to on the IOC that we use quite a
bit?
Mr. Schiller. Not that I am aware of.
Mr. Stupak. Thank you.
Mr. Marshall. I would like to make a comment on that, if I
may?
Mr. Stupak. Sure.
Mr. Marshall. The Task Force has suggested a compromise to
hopefully comply with the IOC Charter in that we are a created
body that is comprised of the Olympic sport NGBs, the ACC
members of those sports and a board of directors to deal with
these Olympic only matters. And that would reduce the number of
people and only Olympic people that would be involved in voting
on Olympic matters and take it away from the larger assembly.
Mr. Stupak. Well, on this voting thing, should IOC members
then have full voting rights on the USOC or shall we weight
their votes on our board of directors?
Mr. Marshall. In our proposal they would have one vote, but
the rest of the board members would have three votes.
Mr. Stupak. So they have a third of a vote because there is
three?
Mr. Marshall. Yes.
Mr. Stupak. Okay. The rest of you agree with that, a third
of a vote versus one vote? Dr. Schiller or Ms. Ramo?
Mr. Schiller. Our proposal was different. But initially we
had given the IOC members a weighted vote within the
organization, that is they would all add up to one.
Mr. Stupak. Okay.
Mr. Schiller. That has been challenged by the International
Olympic Committee who felt that they should have an individual
vote.
Mr. Stupak. Three then, in other words?
Mr. Schiller. Yes.
Mr. Stupak. Yes. Okay.
Ms. Ramo. If I cold, Mr. Stupak? In the way that it would
actually work in the bill that has been proposed by the Senate,
90 percent of the vote would be held by the other groups,
although we have no control over the actual number of bodies
that sit from the IOC, so that is one of the problems with it.
And so this is the way to contain the vote. And additionally,
we set out very specifically a laundry list of things upon
which they would not vote. But on matters of Olympic sport they
would vote in that weighted fashion.
Mr. Stupak. Thank you.
And thank you, Mr. Chairman.
Mr. Stearns. I thank you.
Well, I think when I was asking questions, it seemed like
the Independent Commission now indicates that you recommend the
speaker that would be on the board but it had non-voting
rights? That is where you are at today.
Let me ask you a question. We heard Mr. Buyer talk. Do you
think maybe that a compromise would be to let the Paralympics
be on the board with non-voting rights? Just yes or no.
Ms. Ramo. There is nothing that prohibits a member of the
Paralympic group from being one of the independent directors,
one of the NGB directors or one of the athlete directors. But
we do not think that constituent based, then we would ask, I
think, about the Special Olympics or any of the other groups.
And so we think it is that kind of constituent based
designation on the board that has caused the problems.
Mr. Stearns. What effect does a non-voting member on a
board have? I mean, I was trying to think of that. Everybody
sits down. You have a non-voting member. Does anybody look for
his nod or not? I mean, what effect does a non-voting--and I do
not know in the corporate world that they have non-voting
members. Ms. Myler?
Ms. Myler. I think the concept of the speaker of the
assembly could seriously complicate relations between the board
and the assembly. First of all, the speaker will have to be
elected by the assembly. So there certainly will be, I think,
politicking.
Mr. Stearns. So you know where his allegiance will be. I
know where mine is; the people who elect me.
Ms. Myler. And if there is an issue of, as the Commission
proposed, the assembly voting on Olympic issues, then the
speaker's presence on the board would certainly be able to
influence what issues are Olympic related, what issues aren't
Olympic related. And I think there will be a constant that will
really create a tension between the two groups.
Mr. Stearns. Mr. Bauer, do you want to comment on what my
question was?
Mr. Bauer. Well, certainly. First of all, our whole
position is that if both task forces and the Congress are going
to recognize that the missions of the USOC are to promote the
Olympics and the Paralympics, that as a minimum there needs to
be that consumer representation on the Board. That is our
position.
Now, you asked----
Mr. Stearns. You would not accept a non-voting.
Mr. Bauer. Let me, if I may, continue.
Mr. Stearns. Sure.
Mr. Bauer. To be frank with you, anything is an
improvement. Okay. You know, we have been dealing with these
small steps for 25 years. And so the longer answer to your
question is anything is an improvement. And is there an effect
when you have a non-voting member? We think there is because,
again, that person is considered a peer on the board, he's in
there or she is in there listening and talking and exchanging
and providing information and----
Mr. Stearns. And depending upon the personality of the
person, it could be very influential.
Mr. Bauer. Well, and the knowledge. And the knowledge. So
that is where the give and take in a board meeting is so
important to have those people there instead of hearing about
it after the fact, behind closed doors, ``oh, what did so-and-
so-say, well what was their position, well how did our position
get put forward.'' You know that kind of thing.
Mr. Stearns. If nothing else, he or she could go back to
the assembly and then the assembly could start a lobby job
based upon what the speaker said. Yes. Okay.
Ms. Myler. If I could just follow up----
Mr. Schiller. Mr. Chair?
Mr. Stearns. Yes, Dr. Schiller?
Mr. Schiller. I continue to be supportive of the disabled
sports organizations across the board; those that are part of
the Paralympics and those that are not. I think that the
opportunities that those multi-sport competitions give for
individuals in terms of competing and having that opportunity
to be on the victory stand is somewhat unique. And this country
has done more than any other country to provide that
opportunity.
The concern that I have and continues to be in terms of the
representation specifically of one group versus another, is how
diverse that has to be to satisfy so many. And I think that
continues to be the challenge.
And just another reminder again that it can be that the
independent members, the athlete members and certainly the
governing body members, could come from that organization. And
in addition, several national governing bodies have very, very
strong disabled programs that support the Paralympics. Skiing
is an example as one of them.
Ms. Ramo. If I might comment on the issue of ex-officio
members of boards. I have been on many boards that have ex-
officio members and I have been an ex-officio member myself on
a board. In terms of the speaker issue, I personally do not see
any harm and much good that would come from an election by this
variety of people that include Paralympics, the deaf and all
the community based organizations of the speaker.
In our formulation now we recommend that they be ex-officio
but without a vote. What I think what that does is it gives a
wonderful opportunity for the board itself to hear the concerns
of those many groups certainly filter through a leader that
they have either chosen or that you suggest be chosen in
another way. They have absolutely no vote or power in that way,
but I think it very much helps with the openness, which I know
that this body is trying to achieve and we are trying to
achieve in terms of the relationship of the governing board of
the Olympic family as a whole in the United States.
Mr. Stearns. Let me change the subject a little, Ms. Myler.
This is dealing with the ombudsman. How is this person
selected? Again explain that to me.
Ms. Myler. Their recommendation is made by the Athletes'
Advisory Council.
Mr. Stearns. Okay.
Ms. Myler. And then the board, I believe, votes on that.
Mr. Stearns. You had expressed in your testimony when we
read it over regarding the proposed change of reporting of this
individual from the CEO to the board. So the question I have
since you are an athlete, just give us an example some of the
issues that come up where we need to have this connection
between this individual and the CEO. Just give me some idea of
these issues that you are very concerned about.
Ms. Myler. Well, a number of the issues that the ombudsman
deals with relate to the Sports Act, to athlete's rights to
compete, to doping issues. And I think it is really important
that the ombudsman report to the CEO, who is involved in the
day-to-day operations of the organization, has contact with
U.S. Doping Agency, the world anti-doping agency and it allows
the ombudsman to be an integral part of the management of the
organization. It is critical that he or she is up to speed on
all of the issues that might effect athletes.
Second, I do not know that it should be the purview of the
board to oversee what the ombudsman is doing on a daily basis.
I think both groups, the Independent Commission and the Task
Force, have recommended that the board set policy and deal with
the budget and do more long term planning and then the staff
and CEO will implement that.
So I do not think that the board should be overseeing the
ombudsman for that reason, too.
Mr. Stearns. And do you see an issue of independence for
the ombudsman reporting to paid staff?
Ms. Myler. I spoke with the ombudsman before preparing for
this testimony, and he indicated that there is not an issue of
independence relating to his independence. He is able to
accomplish what he needs to, interact with athletes and provide
advice that is independent.
Mr. Stearns. Independent.
Ms. Myler. Independent of the USOC.
Mr. Stearns. Okay. Someone else? Yes, Ms. Ramo?
Ms. Ramo. Mr. Chair, I wanted to say that we are completely
supportive of the idea that the board should not interfere with
the day-to-day operations of what the ombudsperson is going to
do. The reason that we made the suggested change was really to
strengthen their independence to make sure that just as with
the internal auditor and the general counsel, there is an
opportunity if there is a problem with the CEO for an
ombudsperson to go directly to the board. And that was the sole
purpose of doing that.
Mr. Stearns. Okay. Anyone else on that issue?
Mr. Marshall. Well, if it ain't broke do not fix it.
Mr. Stearns. Okay. I see.
Well, let me just conclude my comment. Dr. Schiller, when
you were over talking to the IOC, let us say we are somehow
able to get the Task Force and Independent Commission together
and we come up and we have a piece of legislation. And I think
we have a bill right now that we are starting to circulate, a
draft bill, and I know Senator McCain is going to have a
similar bill. Is there anything right now that the IOC would
say hold it, you know, you are all wrong? I mean, do you see
any conflict with them based upon you have had two hearings now
on this? Is there anything in the back of your mind that we
should be a little aware of here before we march out here
without maybe even contacting the IOC as legislators to be sure
that we are all on the same page and so that for once now we
have an agreement and we can all go forward together here and
they feel more confident, and so forth?
Mr. Schiller. We have tried to be in constant contact with
them on the issue, but I continue to mention during this
hearing, and that is on specific Olympic matters that the
majority--this is their issue--that the majority of the voters
be represented by the sports bodies in this country on the
board. That is really the main issue.
Mr. Stearns. That is the main issue?
Mr. Schiller. Yes, sir.
Mr. Stearns. Okay. My time has expired. And we have had 2
rounds.
Mr. Buyer is obviously very interested and we would be glad
to offer him an opportunity for questions.
Mr. Buyer. Thank you, Mr. Chairman.
Dr. Schiller, in your testimony you stated that the U.S.
Olympic Committee is an organization with limited financial
resources. It can serve to provide the leadership necessary to
establish goals for a lot of the activity, but it cannot meet
the financial needs of each and every sport organization in
this country. I would like for you to explain that to me, and
how do the Commission's proposed governing structure protect
again any problems that arise for the clash of all these
parochial interests, mostly revolving around the funding
issues?
Mr. Schiller. Well, it is the statement it is all about
money, and it continues to be, I think. It has been in the past
and it will be going forward. But in comparison to many other
major nations of the world on how they are funded compared to
the U.S. Olympic Committee, ranging from Italy where they have
a national lottery that provides perhaps more than $1 billion a
year to their sports programs, to others that may have direct
subsidies, in this country the annual budget of the U.S.
Olympic Committee is approximately $100 million or so right
now. But those monies are needed to run educational centers,
training centers, the staff, a variety of things, drug testing
and so forth. The monies that are left over for direct athlete
support, of course logistically sending the team for the games,
the Pan American Games, the Olympic Games and others,
outfitting the team, providing medical support and so forth;
leaves a very small amount that would be used for athlete
support. And my comment was really made to say that each and
every organization ranging from those that represent disabled
organizations to deaf, to Special Olympics, to seniors; there
are things called the Transplant Games, to the Gay Games, to
others all make requests of funds to support their
organizations. And it is incumbent upon the new board and the
new governance structure within the recommendations of the
staff and the CEO to ensure that the monies are allocated in
the right and a proper way, and provide some priority. And that
should be done with experience and what the major mission of
the organization is.
Mr. Buyer. Mr. Marshall, you are a board member. Are you
comfortable with the present structure that this is going to
resolve a lot of these differences? The proposed structure?
Mr. Marshall. Yes. I think we have some minor differences
to work out, but I do believe that the best governance is a
very small board that sets the long range strategy and goals
for the USOC. I do feel that they need to really be Olympic
related and that we cannot be all things to all people, and we
must really focus in on what is important for the athletes.
Ms. Ramo. Mr. Buyer?
Mr. Buyer. Yes, ma'am.
Ms. Ramo. On one point. When we look at what the whole pot
of money is, overwhelmingly it comes from television revenue.
And it was surprising to me to see how little money had
actually been raised by the U.S. Olympic Committee above that
amount.
One of the prime things that I think a brand new top notch
board should do is focus itself on raising more money
independently from the television revenues so that some of
these things can be taken care of in a more adequate fashion.
Mr. Buyer. Well, I am going to remain a good listener. And
I am most hopeful that you mean it when yo say you want to
empower a CEO. When you empower that CEO, then you can begin to
act like a board rather than being involved in so much of the
day-to-day operations.
I also will go back and digest this. And I want to work
with you, Mr. Chairman, on the constitution of the board and
the numbers.
Mr. Chairman, I sort of continue to be uncomfortable about
this quest for an esthetics appearance of independence and
right now I kind of fell down on the number of four independent
directors rather than saying well we must have this majority
just for the appearance of change. I do not think we can do it
just based on that. But I want to work with you, Mr. Chairman.
Mr. Stearns. I welcome your participation.
Mr. Buyer. Thank you.
I yield back.
Mr. Stearns. We have concluded our hearing. I want to thank
all of you. I know you took a lot of your valuable time. Of
course, all the activity and work you did on your study is
appreciated.
So we will conclude our hearing.
I would say, Mr. Marshall, that I come from Ocala, Florida.
We have almost 500 horse farms in Ocala. So you will have a big
turnout for your movie in Ocala, Florida.
I do not know how many times I can say this, but we wish
you the best and we thank all of you for attending.
Mr. Marshall. Thank you very much.
Ms. Ramo. Thank you very much, Mr. Chair.
Mr. Stearns. The subcommittee is adjourned.
[Whereupon, at 12:10 p.m., the subcommittee was adjourned.]