[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/
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                    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.]

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