[Senate Hearing 108-974]
[From the U.S. Government Publishing Office]
S. Hrg. 108-974
REFORM OF THE
UNITED STATES OLYMPIC COMMITTEE
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
JUNE 24, 2003
__________
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South
CONRAD BURNS, Montana Carolina, Ranking
TRENT LOTT, Mississippi DANIEL K. INOUYE, Hawaii
KAY BAILEY HUTCHISON, Texas JOHN D. ROCKEFELLER IV, West
OLYMPIA J. SNOWE, Maine Virginia
SAM BROWNBACK, Kansas JOHN F. KERRY, Massachusetts
GORDON H. SMITH, Oregon JOHN B. BREAUX, Louisiana
PETER G. FITZGERALD, Illinois BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada RON WYDEN, Oregon
GEORGE ALLEN, Virginia BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire BILL NELSON, Florida
MARIA CANTWELL, Washington
FRANK R. LAUTENBERG, New Jersey
Jeanne Bumpus, Republican Staff Director and General Counsel
Robert W. Chamberlin, Republican Chief Counsel
Kevin D. Kayes, Democratic Staff Director and Chief Counsel
Gregg Elias, Democratic General Counsel
C O N T E N T S
----------
Page
Hearing held on June 24, 2003.................................... 1
Statement of Senator McCain...................................... 1
Statement of Senator Stevens..................................... 13
Prepared statement........................................... 15
Statement of Senator Sununu...................................... 18
Witnesses
Balk, Robert, Paralympic Representative, United States Olympic
Committee's Athletes' Advisory Council......................... 20
Prepared statement........................................... 22
Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado........ 2
Prepared statement........................................... 3
de Varona, Donna, Olympian and Sports Commentator; Member, U.S.
Olympic Committee Independent Commission....................... 10
Ebersol, Dick, Chairman, NBC Sports and Olympics; Member, U.S.
Olympic Committee Independent Commission....................... 8
Prepared statement........................................... 8
Fehr, Donald M., Co-Chair, Independent Commission on Reform,
United States Olympic Committee (USOC)......................... 4
Prepared statement........................................... 6
Godino, Rachel Mayer, Chair, Athletes' Advisory Council, United
States Olympic Committee....................................... 24
Prepared statement........................................... 26
Marbut, Robert, Chair, USOC National Governing Bodies Council,
United States Olympic Committee................................ 29
Prepared statement........................................... 31
Ramo, Roberta Cooper, Attorney, Modrall Sperling; Co-Chair, U.S.
Olympic Committee Independent Commission....................... 6
Scherr, Jim, Chief of Sport Performance, United States Olympic
Committee...................................................... 34
Prepared statement........................................... 37
Schiller, Dr. Harvey W., President and CEO, Assante U.S.; former
Executive Director of U.S. Olympic Committee; Member, U.S.
Olympic Committee Independent Commission....................... 9
Stapleton, William, Vice President, United States Olympic
Committee...................................................... 39
Prepared statement........................................... 41
Appendix
Snowe, Hon. Olympia J., U.S. Senator from Maine, prepared
statement...................................................... 51
REFORM OF THE
UNITED STATES OLYMPIC COMMITTEE
----------
TUESDAY, JUNE 24, 2003
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 9:30 a.m. in room
SR-253, Russell Senate Office Building, Hon. John McCain,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JOHN McCAIN,
U.S. SENATOR FROM ARIZONA
The Chairman. Good morning. I welcome the members of the
United States Olympic Committee's Independent Commission and
the other witnesses who are appearing before the Committee
today, and thank those who made special arrangements to be
here.
The purpose of this hearing is to examine the recently
released report of the USOC Independent Commission in
furtherance of this Committee's ongoing effort to reform the
USOC governance structure and to fulfill the original intent of
the 1978 Amateur Sports Act.
As you are aware, at the request of this Committee the USOC
created the Independent Commission to review the structure of
the organization. The creation of the Independent Commission
was in response to the seemingly endless series of embarrassing
events that beset the USOC and threatened the organization's
credibility in the eyes of our athletes, the American people,
and the international sports community.
Last week, the Independent Commission released its report.
In its report, the Commission recommended significant changes
to the structure of the USOC. I would like to commend the
members of the Independent Commission who are appearing before
this Committee today, and I applaud them for their objectivity
and dedication. I know how hectic their schedules already are,
and I thank these individuals for their willingness to
volunteer their time and expertise to reform the USOC.
The USOC also created an internal task force to review the
organization simultaneous to the Independent Commission's
review. While I did not oppose any effort by the USOC to
conduct such a review, I believed it necessary for this
Committee to receive a more objective analysis of the troubles
that plagued the organization. However, the fact that the
reports of the internal task force and the Independent
Commission are so similar is evidence that the internal task
force was serious in its efforts to improve the USOC.
I thank its members, including Mr. Stapleton and Mr. Balk,
who are here today, for their service. I agree with the
conclusion of the Independent Commission that the USOC, quote,
breached the trust of the American people and betrayed the
Olympic ideals that it has pledged to preserve, unquote.
As this Committee moves forward over the next few weeks in
developing legislation, I'm hopeful that the members will
remain cognizant of the fact that the Olympic movement is not
about people who attach themselves to the organization for
their own benefit. It is a movement that is driven by athletes
who dedicate their bodies and souls to improving their God-
given talent with the hope of some day realizing their Olympic
dreams.
The USOC is an entity entrusted by the American people with
the privilege of being the custodian of these dreams. However,
as the organization has continued to grow and the agenda of
individual constituencies have become paramount to the common
objectives of the USOC, the athletes have become an
afterthought, and the victims of egregious misbehavior.
While this Committee intends to act quickly in reforming
the USOC, we will not act with haste. We will hear from those
who may be positively or adversely affected by the
recommendations of both reports, and we will move quickly
thereafter in developing legislation. I thank the witnesses for
being here, and I look forward to their testimony.
Senator Campbell is here and is well-known for his deep and
dedicated involvement on this issue.
Senator Campbell.
STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL,
U.S. SENATOR FROM COLORADO
Senator Campbell. Thank you, Mr. Chairman, for allowing me
to sit with the Committee once again, for something I am deeply
committed to and interested in. I have been blessed like few
Americans in having been a member of the team which I identify
very strongly with, and I know, as many people do, that there
are some drastic reforms needed, and you alluded to all of
those, and I won't repeat those. So with your permission, I
would like to submit my complete written opening statement for
the record and just abbreviate, if I can.
The Chairman. Without objection.
Senator Campbell. I also was very impressed with the
efforts of the Independent Commission and the USOC's internal
task force, and I was pleasantly surprised that so many of the
things that they spoke to not only needed to be spoken to but
were basically seen by both groups, that the oversight of both
those Committees recognized that we have to make major changes
and undo some pretty significant damage that has been done to
the Olympic movement in the eyes of the average American.
Simply put, the athletes ought not to struggle to survive
while administrators--only a few, by the way, so we don't cast
aspersions on all the people that work so hard for the Olympic
movement, but a few certainly have developed sort of a system
of self-promotion and privilege.
I would like to think that they represent a very few, and
that we're on the right track now, but I also agree with you
that we need to move as quickly as we can, but at the same time
do it very carefully, because we certainly don't want to be
back here next year or the year after trying to repeat or
revisit the whole issue again, but with Athens coming up in
less than about, I guess, another 18 months or so, it is
important that we put this thing to rest, make sure the
American public regains their confidence in our Olympic
movement and the people that have supported it and worked so
hard for the Olympic movement feel comfortable that we're on
the right track in helping them.
Certainly, our State and the City of Colorado Springs has
been right from the inception, since the Olympic Committee was
first reestablished at old Ent Air Force Base at Colorado
Springs, have taken a particular interest in this, and they
certainly offer their help and their support and their prayers
to make sure that we're going in the right direction with this
movement.
Thank you, Mr. Chairman.
[The prepared statement of Senator Campbell follows:]
Prepared Statement of Hon. Ben Nighthorse Campbell,
U.S. Senator from Colorado
Thank you, Mr. Chairman. And I again want to thank you for inviting
me to sit on this committee today as well as for having allowed me to
be included in the past. This issue is near and dear to my heart and I
want to see this somewhat sordid chapter in United States Olympic
Committee history closed as quickly as possible.
The reports provided by the Independent Commission and the USOC's
own internal task force are a good step in closing this chapter. I want
to thank them for the quality of work they have done in a relatively
short period of time. This reform is not an easy task.
I must say that I am not shocked that the findings and
recommendations both groups have made are so similar. Obviously,
everyone sees the same problems. Overall, the USOC's governance
structure must change. The mission statement must change. But the
culture of the USOC must change too.
I've stated before that the vast majority of athletes, coaches,
trainers, and officials are doing an admirable job with upholding the
Olympic ideals. Given the medal count at the last Games, it is apparent
that someone someplace is doing something right. But, as in all things,
it can be better. Efficiency and transparency will be the key words for
this reform. While these words will have little direct effect on how
fast someone will run or swim or how much weight someone can lift, it
can provide for an easier and better life of training for these
athletes, many of whom still live and train on a paycheck by paycheck
basis.
There is no question in my mind that getting it back on track is
going to require streamlining and downsizing of the USOC boards. Who
knows how many more medals could have been won if someone weren't
flying first class and staying in 5-star hotels when the money could
have been spent on training for the athletes. There are far too many
people who feel that they need to have a say in how things are run,
even on a day-to-day basis, and too many who feel that the Olympic team
is their own team.
It is a wonder that the USOC has been as successful as it has been
with the sick culture that has permeated it over that past 20 years.
But we need to return the USOC to the athletes. That is what this is
all about. The United States is the strongest country in the world and
its athletes and their training facilities and programs should reflect
this.
This reform movement isn't a vendetta against any single person or
group who is to blame for the current ills of the USOC. In fact, I am
hoping that this reform makes the USOC a better environment in which to
work. I hope that the USOC employees feel safer about voicing their
views given that we will push for some sort of whistle blower
protection for them in the legislation that we create. I wish that
these would have been in place years ago, or we might not be in this
situation today.
I also want to protect those USOC employees who have made their
homes in Colorado Springs for so many years. I have heard rumblings
about moving the headquarters of the USOC to another city, possibly New
York City. This would be a terrible mistake and I will not allow this
to happen. The moving expenses would far outweigh the benefits of
moving the headquarters and I don't want another dime wasted on the
governance and management of the USOC. I can't, and I don't think that
this committee can make it clear enough: the money raised is first and
foremost for the benefit and training of athletes, not for extra
cushions on the chairs of those sitting in offices with pretty views of
skylines. Once again, Colorado Springs will remain to be the
headquarters of the USOC.
I understand the need for these changes to occur sooner rather than
later. But we want to make sure that we do this right so that we don't
have to be back here doing this again in two years or four years. But
the changes will be made and some individuals and some groups won't be
happy with the changes. After spending the last 30 years or so in
politics, I have learned again and again that you can't make everyone
happy at the same time. What fun would that be?
Again, thank you Mr. Chairman and I will have some questions for
our witnesses at the appropriate time.
The Chairman. Thank you. I welcome the witnesses, Mr.
Donald Fehr, who is the Executive Director of Major League
Baseball Players Association; Ms. Roberta Cooper Ramo, who is
an Attorney at Modrall Sperling and Co-chair of the U.S.
Olympic Committee Independent Commission; Mr. Dick Ebersol, who
is the Chairman of NBC Sports and Olympics, and a member of the
U.S. Olympic Committee Independent Commission; Dr. Harvey
Schiller, President and CEO of Assante U.S.; and Ms. Donna de
Varona, Olympian and sports commentator, and member of the
United States Olympic Committee Independent Commission.
Welcome to the hearing, and thank you for your hard work,
and we would like to hear from you in whatever format you would
like to pursue.
STATEMENT OF DONALD M. FEHR, CO-CHAIR,
INDEPENDENT COMMISSION ON REFORM,
UNITED STATES OLYMPIC COMMITTEE (USOC)
Mr. Fehr. Thank you, Mr. Chairman, Senator Campbell. I
think we will be relatively concise this morning. I just have a
few brief opening comments, and then I will turn it over to the
other members of the panel for a brief description of some of
the specifics of our report.
Only some 16 months ago, all Americans celebrated a
spectacularly successful Winter Olympic Games in Salt Lake
City. The athletes there achieved unprecedented success. Since
then, unfortunately, and in particular over the last winter, we
didn't read very much in the newspaper about the success of our
athletes' or athletic programs' preparations for Athens.
Instead, what we read were a continuing list of stories
about alleged wrongdoing, questionable behavior, and sometimes
silly antics of certain members of the volunteer leadership and
the then professional staff. To put it bluntly, by that time
the USOC had become an object of ridicule and satire, and
certain members of its volunteer and staff leadership had
become objects of scorn and derision. Within a period of only
the last 14 months, two volunteer presidents and a full-time
CEO had resigned under pressure.
In the wake of these events, both this Committee and a
sister Committee in the House held hearings to exercise their
statutory oversight responsibilities. At those hearings,
Members of the Committees I think expressed the widespread view
that the operations of the USOC as publicly reported had become
sort of a bad joke, and that changes had to be made quickly.
This Committee was appointed at the request of three
members of this Committee to look at the culture and structure
of the USOC and to make specific findings and recommendations
for change, which we have done. I do want to point out that it
was not our role to investigate any alleged wrongdoing by any
individual or group, or to make any findings in that regard,
and we did not, nor did we believe it our role to make any
policy decisions about the operations of the USOC. Rather, we
focused on the governance structure and the underlying culture.
It seems to us that the primary focus of the USOC can
simply be stated to be the support and encouragement of our
Olympic and Paralympic athletes, and the organizations and
programs through which they are developed to the very best of
its ability, and in so doing the American people, who we
believe are the ultimate stakeholders in the U.S. Olympic
movement, have a right to and do expect the volunteer and staff
leadership to work together to conduct the business and
operations of the USOC in a manner which will best achieve that
result, but which at the same time is fully consistent with the
very best standards of governance we can devise, the highest
standard of ethics, and a recognition of and a commitment to
public service.
Moreover, the American people and the athletes have a right
to expect that the volunteer and staff leadership will bring
the same kind of dedication to their efforts that the athletes
must bring in order to achieve the kind of success that we've
seen.
When we examined the USOC structure and culture measured
against the standards, we concluded simply that both the
structure and the culture which produced it are broken, and
that a drastic overhaul is in order.
For the reasons we stated in our report, we unanimously
recommend that the USOC be substantially restructured without
delay, by which we mean that we think a new governance
structure and a new Board of Directors should be and can be in
place not later than January 1, and that the Stevens Act, the
Amateur Sports Act be amended, but only as necessary to require
that the governance structure we recommend be implemented.
Our recommendations are fully set forth in the report,
which I incorporate by reference and ask to be made a part of
the record of this hearing.
The Chairman. Without objection.
Mr. Fehr. Finally, it is our belief that if these reforms
are promptly implemented, we believe that the USOC can and will
again earn the respect of the athletes it exists to serve, and
regain the confidence of the American people, and if it doesn't
do that, then it's not going to be successful going forward.
With that, I'd like to turn the microphone over to my Co-
Chair, Ms. Ramo, and have her begin to describe some of the
specifics.
[The prepared statement of Mr. Fehr follows:]
Prepared Statement of Donald M. Fehr, Co-Chair, Independent Commission
on Reform, United States Olympic Committee (USOC)
Mr. Chairman and Members of the Committee:
My name is Donald M. Fehr, and I have been privileged to serve as a
Co-Chair of the Independent Commission on Reform of the United States
Olympic Committee (USOC), along with the other co-chairs, Roberta
Cooper Ramo, and Dick Ebersol, Dr. Harvey Schiller and Donna De Varona.
The Independent Reform Commission, appointed on 3 March of this year at
the suggestion of three members of this Committee, submitted its report
last Thursday, 19 June.
Only some 16 short months ago, all Americans celebrated a
spectacularly successful Winter Olympic Games in Salt Lake City, during
which U.S. Olympic athletes achieved unprecedented success.
Regrettably, since that time, and especially over this last winter, the
performance of our athletes has been pushed to the side, and, instead
the media has been full of stories about alleged wrongdoing and other
questionable behavior by members of the volunteer leadership and
professional staff of the USOC. To put it bluntly, the USOC has become
an object of ridicule and satire; and members of its volunteer and
staff leadership have become objects of scorn and derision. Within the
last fourteen months alone, two USOC presidents and the CEO have
resigned under pressure.
In the wake of these events, committees in both the Senate and the
House held hearings in the exercise of their statutory responsibility
to oversee the USOC. The statements made by the Senators and Members of
Congress attending the hearings reflected the widespread view of the
American people that the operations of the USOC had become a very bad
joke, that the conduct of many in positions of responsibility was
simply an embarrassment, and that changes had to be effected, and
quickly. To that end, this Independent Commission was appointed to
report to the USOC and to the Congress on the culture and structure of
the USOC, and to make specific recommendations for change.
The primary focus of the USOC should be the support and
encouragement of our Olympic and Paralympic athletes, and the
organizations and programs through which they are developed, to the
very best of its ability. In so doing, the American people--who, after
all, are the ultimate stakeholders in the U.S. Olympic movement--have a
right to and do expect that the volunteer and staff leadership of the
USOC will work together to conduct the business and operations of the
USOC in a manner which will best achieve that result, and which will be
fully consistent with the best standards of governance, the highest
standards of ethics, and a commitment to public service. Moreover, the
American people have a right to and do expect that the volunteer and
staff leadership will bring to the tasks entrusted to them the same
kind of effort and dedication that our athletes bring to their
endeavors.
When we examined the USOC structure and culture, measured against
these standards, we concluded that both the governing structure of the
USOC, and its underlying culture which produced that structure, are, in
a word, broken, and that a drastic overhaul is in order.
For the reasons stated in our report, we unanimously recommend that
the USOC be substantially restructured without delay, and that the
Stevens Act be amended to require that the governance structure we
recommend be implemented. Our recommendations to effect that overhaul
are fully set out in our Report, which I incorporate by reference and
ask be made a part of the record of this hearing.
If these reforms are promptly implemented, we believe that the USOC
can and will again earn the respect of the athletes it is its purpose
to serve, and regain the trust and confidence of the American people.
The Chairman. Thank you. Welcome, Ms. Ramo.
STATEMENT OF ROBERTA COOPER RAMO, ATTORNEY,
MODRALL SPERLING; CO-CHAIR, U.S. OLYMPIC COMMITTEE
INDEPENDENT COMMISSION
Ms. Ramo. Thank you, Senator McCain.
Senators, you asked us to give the Congress a frank
assessment of the current state of the United States Olympic
Committee and our most thoughtful and independent view of any
required reforms. From our varied perspectives, we arrive at a
totally unanimous assessment of the current situation. With our
combined experience on Olympic matters and in for-profit and
nonprofit governance, we also unanimously believe a wholesale
and radical change of the governing structure of the United
States Olympic Committee is required. We find that the
deteriorating quality of decisionmaking, management, and
leadership of the USOC is so serious that Congress must act to
mandate a new governance structure.
There is only one year to the Athens Olympics, and without
complete change in leadership and focus in the short term and
in the longer term the success of our athletes and the
resonance of Olympic ideals in our country are in peril.
Our report lays out in great detail the architecture for a
new USOC that will support our Olympic and Paralympic athletes,
will replace the chaos and embarrassing spiral of errors of the
current constituent-based system with a governing structure
that includes the general principles of Sarbanes-Oxley, the new
rules of the New York Stock Exchange, and the best practices of
major nonprofit organizations. We suggest this by putting in
place a very small board with a majority of independent
directors, directors who are sought for service because of
their successful careers in a variety of complex settings.
The complexity of the enterprise that the USOC has become--
it has a budget now of over $450 million in each 4-year
period--requires a diverse leadership, people who are
sophisticated men and women whose fiduciary bond is to the
American public, the athletes, the volunteers, and to the
international ideals of the Olympic movement, and whose
fiduciary obligation is not to a personal agenda or to
individual constituents' benefits.
We have parsed out the roles we believe appropriate for
volunteers and professional staff. To encourage the recruiting
of a first-rate CEO and senior staff, and to give us an
appropriate united voice in the international Olympic
community, we suggest in our report financial transparency and
whistleblower procedures.
As Don said, we ask in our report for an amendment of the
Ted Stevens Amateur Athletic Act to set this new structure in
place. We hope that a nominating committee can begin work by
September 1, and that a totally new Board could be seated and
in charge by January 1, 2004.
We believe we have met the appropriate requirements for
representation by athletes, representation by a national
governing board, and kept a focus on the proper role of the
volunteers, without whom the Olympic movement would not exist.
We have streamlined the organization to make it a model of
what a federally chartered nonprofit with an international role
should be. In this time of global tension, the common language
of sport and the ideals of excellence and personal sacrifice
lived by athletes all over the world are more important than
ever.
On behalf of all Americans, but especially all athletes, we
thank you for this speedy hearing of our views, and look
forward, if asked, to helping turn our recommendations for
change into reality of a United States Olympic Committee
admired by all and respected by the international Olympic
community.
Thank you.
The Chairman. Thank you.
Mr. Ebersol, welcome.
STATEMENT OF DICK EBERSOL, CHAIRMAN, NBC SPORTS
AND OLYMPICS; MEMBER, U.S. OLYMPIC COMMITTEE
INDEPENDENT COMMISSION
Mr. Ebersol. Thank you, sir.
Senators at the age of 19, at the end of my sophomore year
of college, I was offered the opportunity of a lifetime, to
become the first ever Olympic researcher for American
television. The sole purpose of that job was to travel
extensively through the United States and Europe to get to know
the elite Olympic athletes of the world and to write up their
life stories into mini-biographies which would allow our
announcers and commentators to describe in detail their stories
of hope and inspiration.
To the millions and millions of American television viewers
who so passionately admire and love the Olympics and above all
Olympic athletes, more than any movie or soap opera, these
heroic stories of our athletes overcoming some level of
adversity to succeed against the odds, and their dogged
tenacity to always push forward, no matter how difficult the
struggle, these stories, coupled with the unscripted drama of
Olympic competition, have become the main method of passing the
theme of Olympic inspiration, the Olympic dream from one
generation of young Americans to another.
That is, until now. These last 3 or 4 years, when we
seemingly cannot open a newspaper without reading of Olympic
scandals, Olympic screw-ups, a U.S. Olympic Committee which has
had three volunteer presidents and four paid CEOs in the less
than 3 years since the Olympic flame was extinguished in
Sydney.
In other words, the Olympic movement in the United States
has too often moved from the sports pages to the front pages.
These stories have been about executive ego-tripping,
mismanagement and malfeasance. They sure have not been about
the athletes, and they certainly have not been inspirational.
Today, in this room, I hope we will begin not a marathon
but a sprint of deliberate speed toward giving our Olympic
athletes an organization worthy of them, one which inspires
their hope and their trust, one which above all teaches and
itself upholds the Olympic ideals. It can be done, Senators.
Our Commission strongly believes that our recommendations
for a more streamlined and independent governance structure,
plus a culture cleared of as many conflicts of interest as is
humanly possible, can and will succeed, but time is critical.
The Athens games begin in little more than a year. Our athletes
deserve nothing less than the best.
Finally, Senator McCain, Senator Campbell, I would like to
thank you personally for allowing me the privilege to serve on
this Commission. It was and is a labor of love.
[The prepared statement of Mr. Ebersol follows:]
Prepared Statement of Dick Ebersol, Chairman, NBC Sports and Olympics;
Member, U.S. Olympic Committee Independent Commission
At the age of 19, at the end of my sophomore year of college, I was
offered the opportunity of a lifetime to become the first-ever Olympic
researcher for American television. The sole purpose of that job was to
travel extensively through the United States and Europe to get to know
the elite Olympic athletes of the world and to write up their life
stories into mini-biographies, which would allow our announcers and
commentators to describe in detail their stories of hope and
inspiration to the millions and millions of American television viewers
who so passionately admire and love the Olympics and, above all,
Olympic athletes.
More than any movie or soap opera, these heroic stories of our
athletes overcoming some level of adversity to succeed against the odds
and their dogged tenacity to always push forward no matter how
difficult the struggle. These stories coupled with the unscripted drama
of Olympic competition have become the main method of passing the theme
of Olympic inspiration, the Olympic dream from one generation of young
Americans to another.
That is, until now. These last three or four years, when we
seemingly cannot open a newspaper without reading of Olympic scandals,
Olympic screw-ups, a U.S. Olympic Committee which has had three
volunteer presidents and four paid chief executive officers in the less
than three years since the Olympic flame was extinguished at the close
of the Sydney Games. In other words, the Olympic Movement in the United
States has too often moved from the sports pages to the front pages.
These stories have been about executive ego-tripping, mismanagement and
malfeasance. They sure have not been about the athletes and they
certainly have not been inspirational.
Today, in this room, I hope we will begin not a marathon, but a
sprint of deliberate speed toward giving our American Olympic athletes
an organization worthy of them, one which inspires their hope and their
trust, one which above all teaches and itself upholds the Olympic
ideals.
It can be done. Our Commission strongly believes that our
recommendations for a more streamlined and independent governance
structure plus a culture cleansed of as many conflicts of interest as
is humanly possible can and will succeed, but time is critical. The
Athens Olympic Games begin in a little more than one year. Our Athletes
deserve nothing less than the best.
Finally, Senator McCain, Senator Stevens, Senator Campbell, I would
like to thank you personally for allowing me the privilege to serve on
this Commission. It was and is a labor of love.
The Chairman. Thank you very much.
Dr. Schiller, I hope you're feeling better.
STATEMENT OF DR. HARVEY W. SCHILLER, PRESIDENT AND CEO, ASSANTE
U.S.; FORMER EXECUTIVE DIRECTOR OF U.S. OLYMPIC COMMITTEE;
MEMBER, U.S. OLYMPIC COMMITTEE INDEPENDENT COMMISSION
Dr. Schiller. I am sorry to miss the meetings last week.
The Chairman. Welcome.
Dr. Schiller. Senator McCain, Senator Campbell, thank you
very much for the opportunity to appear before you today, and I
thank you for recognizing the events that led to this task
force's recommendations for change and for Olympic
organization. I truly believe that the USOC is a national
treasure, and unfortunately those that had the responsibilities
and positions of leadership before have allowed that to
disappear. We have made some very, very specific
recommendations. Amongst those are that our assembly will be
charged with truly Olympic matters, that our board will do
their business in both an efficient and cost-saving manner.
Still, we understand that this process will need continuing
care and oversight. We are happy that the majority of the
leading national governing bodies have supported our positions.
We all have let this go too far, and we recommend that things
move as fast as possible. Thank you.
The Chairman. Thank you, Dr. Schiller. Ms. de Varona,
welcome back.
STATEMENT OF DONNA de VARONA, OLYMPIAN AND SPORTS
COMMENTATOR; MEMBER, U.S. OLYMPIC COMMITTEE INDEPENDENT
COMMISSION
Ms. de Varona. Thank you. Senators, Members of the U.S.
Senate Commerce Committee, the USOC Internal Task Force and
others who are interested in today's proceedings, good morning.
As a clean-up batter, my focus will be on the athletes'
perspective and, like Dick, the Olympics have been a lifetime
commitment for me, and not necessarily when I made the U.S.
Olympic team, but when basketball great Walt Bellamy lifted me
up and put me on his shoulders so I could see the Olympic
torchbearer enter the Rome Olympic Stadium. I was a complete
stranger to Walt, 13 years of age and so short I could not see
above my teammates' heads during the opening ceremonies.
Without a word, he simply reached down and gave me a much-
appreciated lift, establishing a connection that has lasted a
lifetime.
This is the language of international sports. These were
the 1960 Olympics, held during the time of the cold war.
Athletes from the Soviet Union were told Americans were off-
limits. The stand-off worked for a while, but soon the
atmosphere of the Olympic Village began to thaw this political
divide, and by the end of the Games, I had collected a complete
set of Russian trading pins, and they had learned to dance the
twist.
In those Olympics, the 1960 U.S. team was made up of
athletes who have become household names, such as Walt Bellamy
and Wilma Rudolph, and a guy named Cassius Clay. The world, of
course, would know him later as Muhammad Ali. Each one of these
Americans, after winning gold medals, continued to embrace what
international sport offers. Wilma worked in special inner-city
programs in the hot and volatile summers of the late 1960s,
indeed, with Senator Campbell and myself in a special program.
Walt would become a famous professional basketball player, and
Ali, he is simply one of a kind. All have made a difference in
millions of children's lives.
Undaunted by the racism they faced after wearing red,
white, and blue while representing their country in the Rome
games, they all came home from the games dedicated to change. I
would like to think that the Olympic experience had a lot to do
with their commitment. Indeed, there is no other world
gathering like the Olympics, where every 2 years the world's
athletes coaches, officials, volunteers, and fans participate
in an environment that embraces everyone regardless of race,
creed, religion, or politics. The Olympics offer hope to a
world in search of common ground.
I am here today because of this promise. I have experienced
first-hand what the Olympic movement offers to the world. I
have given my time to this most recent restructuring effort
because I believe in our Olympic movement and our athletes, and
those that care about it. They deserve from us what they give
every day on the training grounds. As they seek out the best
coaches and training methods and dedicate themselves to
excellence, so must those who represent them.
Like those athletes have had the courage to go back to the
drawing board after a failed or compromised effort and start
over again, our group was directed by you to do the same. Since
May, our Senate-appointed group has worked hard and diligently
to formulate what we feel is a new streamlined and balanced
structure to accommodate the Olympic movement in this country.
During our process, we had the benefit of hearing from and
studying the work of the USOC internal task force. We also held
hearings and received many letters, e-mails, and documents, and
in our own five-member Senate-appointed team we figured out we
collectively represent some 100 years of experience in dealing
with sports issues, corporate governance, law, government,
legislation, sports television, and sports legislation.
Roberta Ramo and Donald Fehr helped straighten out the
problems that led to the Salt Lake City bid scandal, Harvey
Schiller was simply the best ever USOC Executive Director, Dick
Ebersol has devoted most of his professional career to
television network coverage of the games, and of course I
competed in two Olympics, not to mention the many years I have
worked on Olympic governance issues.
From the very start of our deliberations, we realized the
devil in our U.S. Olympic Committee structure is in the
details. Therefore, we have called for a streamlined Olympic
Committee governance structure with very specific operating
principles. In this respect, because the Olympics are big
business, and the USOC has been compromised in large part by
constituent-based interests, we have taken the position that
the board should be dominated by independent directors.
In America, where corporate board mischief has led to the
Sarbanes-Oxley directives, which call for corporate boards to
be comprised of a majority of independent directors, we have
taken the position that the USOC should also follow these
mandates. We have taken care of our volunteers and constituent
groups through an assembly process, which will elect a speaker,
which will represent those issues that emerge that are pure
sport issues that should be brought to the board, and it is our
recommendation that Congress move with deliberate and
thoughtful speed in legislating changes to the Ted Stevens
Olympic and Amateur Sports Act.
Time is short. As we know, the Pan American Games take
place this summer, the Athens Games next summer. We offer our
support and our help so the USOC can best serve America's
athletes and our public. Thank you.
The Chairman. Thank you very much, and I want to thank the
panel again for devoting their very precious time and effort on
behalf of the greater good. It would be my intention to try to
mark up this legislation as soon as we get back from recess so
that we would have an opportunity to have these recommendations
and whatever changes that need to be made in the legislative
process before the August recess.
I think as you pointed out, Ms. de Varona, that we need to
have a new organization in place to prepare for the upcoming
Olympics, so I take your recommendation for us to act with
deliberate speed very seriously.
I don't think everybody has to answer each one of these
questions. Whoever wants to provide an answer, one or more,
maybe we could do it however you decide.
The first question is, what group will claim to be most
disenfranchised by your recommended changes, and how would you
respond to their claim?
Dr. Schiller. They're all looking in this direction, so,
having been part of the organization. My guess would be that it
might appear on the surface that it would be the community-
based, the collegiate, which would include disabled sports
organizations as well as the military. Our goal would be to
ensure that the volunteer leadership that would come through
the independent members of the board would adequately represent
those groups, and of course their positions within the assembly
would still be preserved.
The Chairman. Would you explain how your recommendations
comport with the IOC charter, and why a U.S. corporation
chartered by the U.S. Congress has to comply with the IOC?
Mr. Fehr. Let me just respond briefly on that. The IOC
charter has a number of provisions in it relating to the manner
in which national Olympic committees are composed and how they
relate to the International Olympic Committee. Those have been
a matter of interpretation. They have changed from time to
time. The USOC has gone through a series of changes through the
years. The IOC has gone through a series of changes through the
years.
We have had some preliminary conversations with
representatives of the IOC to make sure that we believe we have
met the IOC provisions in a satisfactory fashion. We think we
have. We expect that it will be necessary to continue those
discussions. The IOC charter has provisions relating to the
presence on the board of the National Olympic Committee of IOC
members and certain matters being relegated to the vote of
certain particular interest groups.
Interestingly enough, I think that it is fair to say that
for most of the last 25 years the governing statutes of the
United States Olympic Committee have been satisfactory to the
IOC, and we believe that by preserving the assembly in the form
that it's in, that it will eventually prove to be so here.
The Chairman. Can you explain why the Paralympics should be
part of the current USOC structure, and why the Deaf Olympics
remain excluded?
Dr. Schiller. Recognizing that this is a continuing
sensitive issue, it was our understanding that, based upon
previous competitive opportunities, that the organization that
represents the deaf athletes had adequate representation within
the organization as it stands.
The Paralympics itself is the organization that determines
which disabled sports are part of it or not, and as you know
there are continuing arguments as to the technical requirements
that could allow and have allowed in the past deaf athletes,
the hearing impaired, to perform and to compete in regular
competition, and we didn't see at this particular time any need
to specifically identify that group.
There are other competitive groups as well who have argued
for their position, and the organization itself could not take
on, we believe, any more of that.
Mr. Fehr. Just for my part, Senator, as I understand the
Amateur Sports Act and the provision we are not suggesting be
modified, member organizations, which are defined by category,
are up to the determination of the board as to whether they
will be part of the formal structure of the organization, and
that's quite frankly a policy and operating decision that has
to be made. It is not a structural decision from this
standpoint.
Second, if you are going to have a small Board, and if that
Board is going to operate in an efficient manner, you have to
rely on the members of that Board to represent all
constituencies, in the same way that any Senator or Member of
Congress does from the district from which or the State from
which he or she comes, and we believe that the independent
directors charged with representing all groups and that of the
American public will be able to satisfy that charge.
The Chairman. As I noted in my opening comments, your
recommendations and that of the USOC internal task force are
remarkably similar. Can you discuss some of the differences?
Ms. Ramo.
Ms. Ramo. Certainly, Senator McCain. Probably the major
difference is that we recommend a majority of independent
directors on the board, and in the case of the internal task
force, and they will testify themselves, the independent
directors do not occupy a majority position. Our unanimous view
is that in order to change both the culture and the behavior of
the United States Olympic Committee, an independent director
majority is required. That's one difference.
A second difference is that we had suggested actually that
the assembly, which is basically the current United States
Olympic Committee, with the addition, we suggest, of three
Olympic alumni and the elimination of former officers of the
USOC, we suggest that they elect their own speaker. The
internal task force suggests that a member of the board serve
as the chair of the assembly. I think those are the major
changes. There is some difference about how the IOC members are
treated, but I think that could probably be easily resolved.
The Chairman. Thank you. Senator Stevens.
STATEMENT OF HON. TED STEVENS,
U.S. SENATOR FROM ALASKA
Senator Stevens. I came in late. I would be happy to yield.
Senator Campbell. That's OK.
Senator Stevens. Thank you very much. I'm sorry to be late.
I was at the Rules Committee, Mr. Chairman. I welcome this
hearing and I congratulate you for the interest that you're
showing in Olympic sports in proceeding so rapidly with these
two series of recommendations we've received. I have reviewed
this report that the Independent Commission has filed, and I
personally thank them all for their good work.
It takes me back a lot of years, when Donna de Varona was
one of the assistants here on our Committee staff to help us
review the recommendations of President Ford's Commission on
Olympic Sports, but I do believe you have come up with good
recommendations, and I want to have you again emphasize what I
asked in my office. This does not affect the structure of the
working group, the president and the officers that are going to
be doing the daily work, is that correct?
Mr. Fehr. Senator, this would reconstitute the Board of
Directors. We make no recommendations whatsoever as to whether
there should be any personnel changes, and that would be
entirely up to a new board, just as it currently is up to the
current board on an ongoing basis.
Senator Stevens. And does this have an impact on the
document that is called the constitution of the USOC?
Mr. Fehr. It would have an impact in the following sense.
We believe that it is important that the Congress amend the
Olympic and Amateur Sports Act to require a governance
structure of the type that we recommend, and then it would be
up to the board to write and approve a constitution and bylaws
which conformed with that, yes.
Senator Stevens. Do your recommendations affect the Pan
American Games?
Dr. Schiller. Senator Sevens, no, it does not. Our
recommendations, as Mr. Fehr has described, really will be, the
organization will be governed by a board which will have
national governing body representation, as well as athletes, as
well as IOC members, but the majority of the board, the votes
will be from the independent members. We believe that the
participation in any international type competition will be up
to the board and up to the membership, and in addition it will
in the main be driven by the funds that are available for
participation.
Senator Stevens. Ms. Ramo.
Ms. Ramo. Also, Senator, in the composition that we have of
the assembly, we have left the Pan American Games
representation exactly as it is in the current USOC.
Senator Stevens. What protection is there, in this new
approach that you've outlined, against a new chief executive
officer deciding to take matters into his or her own hands and
proceed, as we have witnessed in the past, just to change
personnel and to change policies and to change emphasis of the
USOC? Is there anything we can say that would at least slow
down such a move by a new chief executive?
Ms. Ramo. Senator Stevens, what we have set out is a United
States Olympic Committee that is governed by a Board. That
Board is in charge of hiring the CEO and of setting policies
for the CEO, and the CEO serves at the pleasure of the board,
really, so were the CEO to try to do something like that, I
cannot imagine that the Board of the type that we're talking
about would be very sympathetic, and I don't think that CEO
would last.
But one of the things that I think we hope is that by
having very able people on our Board of Directors who can hire
a very able CEO, that they will work hand in hand, and we have
many examples in the United States in many universities, for
example, in which the Chair of the Board of regents or the
Board of Trustees of a university work hand-in-hand with the
President of the university, but the President of the
university serves at the pleasure of the Board.
Senator Stevens. Last, when I went with Senator Campbell to
visit in Colorado Springs with many of the people involved in
the last tragic series of incidents, one of the things that
shocked me was the degree to which there was financial
manipulation. By that, I mean items that were considered to be
expense which the permanent employees had declared were not
legitimately expenses of the USOC.
Do you feel that by reducing the Board and by having this
control for the Board over the CEO and his compatriots in their
sort of working structure, that the opportunity for that will
be minimized?
Ms. Ramo. Senator Stevens, one of the things that we call
out in some detail is the functioning of an audit committee of
the United States Olympic Board, which is much smaller. We
suggest, that any new board, including this one, should the
Senate decide to enact our recommendations, should have a fresh
audit of what the situation is.
As Don Fehr said, we didn't really investigate in any sense
any particular allocation, but it's perfectly clear to us that
a new Board, when seated, is going to want to have an
independent audit of what the situation is.
Senator Stevens. Do you have a feeling as to whether or not
there should be whistleblower protection specifically in this
act dealing with members of the USOC staff?
Mr. Fehr. We have not addressed whether or not
whistleblower protections ought to be a part of the statutory
scheme. We have suggested that the Board adopt such procedures
as a policy matter on an internal basis, and that it's
important to do so.
Senator Stevens. From a policy point of view, would you
object to it being a part of the law?
Mr. Fehr. Subject to looking at the language, no. Let me
just say, that on the financial issues, we take great care to
outline a series of procedures, which we think will achieve a
functional and ongoing transparency for the organization in a
fashion which would make financial manipulation in any way,
which would cause the finances to be in question much more
difficult to do. With the audit committee having the kind of
powers that current law suggests in for-profit corporations
would be needed to prevent those kinds of manipulations, I feel
quite comfortable those recommendations are sound.
Senator Stevens. Thank you, Mr. Chairman.
[The prepared statement of Senator Stevens follows:]
Prepared Statement of Hon. Ted Stevens, U.S. Senator from Alaska
I thank the Independent Commission on the United States Olympic
Committee for your hard work. I agree with much of what is said in your
report--and think many of your findings can be incorporated into the
frame work of the Ted Stevens Olympic and Amateur Sports Act.
The Commission held many meetings including extensive hearings in
New York City. Many of the major national governing bodies of sport
agreed that radical restructuring is needed within the USOC. While the
original Act took almost 3Congresses to pass I hope that we can move
swiftly to insure that these needed changes don't affect our athletes
and the Athens games.
The internal USOC Committee and this committee came to similar
conclusions on the size of the Board. Both reduce the number
significantly--a needed change.
I think that this Commission made an excellent recommendation
regarding weighted voting on the Board. This allows ex-officio members
to vote on necessary Board actions while at the same time keeping
actions, like the selection of the Chair of the Board to votes by full
Board members.
This Commission also addressed whistleblower protection, something
Senator Campbell and I heard about frequently during our trip to
Colorado Springs. I support the inclusion of language protecting those
who speak out on waste, fraud and abuse at the USOC.
I believe that we can craft a good Amendment that will strengthen
the Act and return the focus of the United States Olympic Committee to
our American athletes.
Thank you, Chairman McCain for holding these hearings. I look
forward to working with you, Senator Campbell, Senator Hollings,
Senator Breaux and others on a strong bill.
The Chairman. Senator Campbell.
Senator Campbell. Thank you, Mr. Chairman. I have just a
couple of questions, but hearing Donna de Varona speak kind of
took me back in the years too.
I'm glad you had success in teaching members of the Soviet
Union team how to twist. We tried that in 1964 with their
heavyweight wrestler, whose name was Medved as I remember, and
I'm sure Jim Scherr remembers him, and he told us through an
interpreter that his officials told him that the twist was a
dance of a decadent nation and therefore he was not allowed to
participate with us. The record will reflect we're still here
and they're not, so something could be said for our decadent
nation, but those stories were good stories.
In reading your report, I read the section where you
recommended some language about a whistleblower protection. I
think that is important whether it's in the law or in the
structure of how the USOC is managed internally, because an
awful lot of the things that we found out when Senator Stevens
and I went to Colorado Springs, simply, they wouldn't have
talked to us unless they thought they were not going to be in
jeopardy of losing their jobs, and there clearly was some
pressure and some manipulation, and some almost overt threats
made to some of the employees, and we just can't allow that to
happen.
Also, I thought the suggestion you made in your report that
sends a complete report to Congress every year was a good one,
too. Many nonprofits do that, but as I understand it now we
only get once every quadrennial. Every Member of Congress, if
you're going to have friends on your side here on the Hill,
every Member of Congress ought to get a report every year about
what you're doing. Whether they read it or not, they can't
accuse you of keeping them in the dark, so that's good.
Let me just ask maybe a couple of things. You might not
have taken this up at all. I didn't see it in the report, but
when we did the earlier hearing one gentleman recommended that
a certain amount of the funds that were raised for the USOC be
dedicated not--actually, let me rephrase that, not over a
certain amount be used for fundraising or management, and the
rest, I mean, mandated in the law, make sure it goes to the
athletes. What would your reaction to that be? Mr. Fehr.
Mr. Fehr. I don't know that you can mandate a specific
percentage of funds be used in each and all circumstances in a
given way, because you would need to be able to accurately
predict what the needs would be and what the revenues would be
at a given point in time, whether there would be investments
needed in revenue-producing items.
However, the general concept, which I think is inherent in
our suggestions that this is public service would be that the
overwhelming portion of all revenues should be used for athlete
support, and the development of athlete support programs, and
that the administrative costs, including licensing costs,
fundraising, and all of the other matters, should be only as
necessary to accomplish those goals and, given the financial
transparency, I would think that if people stray from that it
will be fairly obvious fairly quickly.
Ms. Ramo. I would just add one thing, Senator, and that is
that one of the important things that we think a new Board
should do is to, with the CEO, set about in a major fundraising
campaign. What has happened is, the USOC is funded primarily by
the amount that it gets from the International Olympic
Committee through television revenues, and in fact one would
have expected, after the unbelievable success in Salt Lake, an
enormous fundraising campaign, and in fact we even suggest in
our report that one of the obligations of the board is to do
that.
The reason I mention that in this context is that one could
see in a particular year or series of years, for example, that
the Board might have to lay the groundwork and invest in some
sort of an infrastructure, for example, for a particular
fundraising campaign, and so to tie them to some sort of
specific percentage in that particular year I think would be
difficult.
Senator Campbell. Thank you, and my only other question,
Mr. Chairman, you alluded to those NGBs that may feel
disenfranchised. When you were having your meetings, and now
that this report is out I'm sure everybody has had a chance to
read it, what kind of feedback are you getting from some of
those NGBs, and do you think under this new structure that you
suggest that they will be adequately represented?
Mr. Ebersol. I would like to offer that the five most
popular and perhaps most successful federations overwhelmingly
endorse this change, they being, in the winter sports, skating
and skiing, and in the summer sports track and field, swimming
and diving, and gymnastics. If there was any group that might
be looking for independence from us, you would think it would
be the larger ones. Quite to the contrary. They desperately
want change, and have supported our recommendations as well as
the task force.
Mr. Fehr. Just briefly, we held a full day of public
hearings on April 25, I believe. There is a transcript which we
have made available to the Committee. We received a voluminous
number of written comments in addition to that, and I think
those will speak for themselves.
What strikes me, and this was reflected in the USOC's
internal reaction to the outline of the internal task force
recommendations in April, was that there is no constituency
that we can identify that is in favor of maintaining the status
quo or anything remotely close to it. I think people have
essentially had it.
Senator Campbell. Thank you. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Campbell, and I want to
thank you and Senator Stevens again for the vital and critical
work you have done, and I look forward to both of you helping
getting this legislation done as quickly as possible, and I
thank you again.
Senator Sununu.
STATEMENT OF HON. JOHN E. SUNUNU,
U.S. SENATOR FROM NEW HAMPSHIRE
Senator Sununu. Thank you. Mrs. Ramo, were all of the
recommendations in the group's proposal unanimous? Were there
any areas where there was some division?
Ms. Ramo. No, and actually I'm a good person to ask in a
sense, because although many of the people here have known one
another for a very long time, I really had only seen Donna de
Varona and Dick and Harvey Schiller on television. I had worked
with Don on the Salt Lake City group.
What was, I think, enormously impressive to me, and I
appreciate having had this opportunity, was to see people from
very different backgrounds come to absolutely unanimous
conclusions, and the important part, Senator, is that the
unanimity was not just to the state of things now, but into
what the solution should be.
Senator Sununu. Were there any recommendations--I shouldn't
say recommendations, proposals that were not included because
there was some dissension?
Ms. Ramo. Not really. What we believe very strongly is that
the architecture which we have set out here needs to be set up,
and we believe if we get the right board in place that a number
of issues that came up were policy issues that were not for us
to decide, but rather for the board, once it gets in place, to
decide.
Senator Sununu. Could I ask each of the witnesses which of
the recommendations do you feel, each of you feel will have the
greatest long-term benefits, if and when implemented?
Ms. de Varona. If I may weigh in, as one who has been on
the battlefield of the governance question in Olympic sports
for a very long time, I think that the makeup of the board is
critical, and the majority of independent directors having a
presence on the operations of the Olympic movement and the U.S.
Olympic Committee is very, very important, because over the
past we've seen constituent-based politics or debates enter
into the good thinking and best practices of an Olympic
movement that takes the movement as a whole, takes the movement
as a whole as far as fundraising, and vision, but also focuses
its resources on developing the best athletes and programs in
our country.
Senator Sununu. Dr. Schiller.
Dr. Schiller. I would add to that, and having served as the
CEO, I think the specific recommendations made regarding the
Board and the elements that the CEO is specifically responsible
for I think are the most important elements of our
recommendations, specifically in areas such as fundraising and
international and so forth.
Senator Sununu. Are those areas where the CEO didn't have
responsibility before?
Dr. Schiller. Well, what we've had is disparate elements
that would take over for various reasons and use political
power and other things to take on responsibilities, and
probably a too extensive of a volunteer committee structure
that allowed other individuals that were not directly
responsible for taking on some of these tasks.
Senator Sununu. Mr. Ebersol?
Mr. Ebersol. I think it is clear that the dominance or the
majority of members of the smaller board be independent, and I
think that if you look at the independent members who are now
part of the USOC Board of Directors, there are some very
quality people there. There are, Senator, a great deal of
Americans who obviously love the Olympics, love sport, and I
think it will be very easy to find quality people who will want
to be involved if their votes count, and in the past, the
independent members, albeit of high quality, have been six out
of a very, very large body.
Senator Sununu. Mrs. Ramo.
Ms. Ramo. Well, I agree, the independence of the Board is
key, and the other part of making that happen in a way that I
know will make everybody effective is the idea that we have a
nominating committee that goes out to seek a balanced group of
people who are willing to serve the American people and the
Olympic movement by serving on this Board, rather than having
people decide themselves that they're going to use constituent-
based power to obtain that same position.
Senator Sununu. And who comprises the nominating committee?
Ms. Ramo. What we recommend is that at the beginning, in
fact, in this matter our Independent Commission and the task
force are exactly the same. They suggested, and we agree, that
the original nominating committee should be composed of one
person from our group, one person from the task force, one
person from the athletes, one person from the NGBs, and one
person from the public sector, and that they select the first
Board.
After that, the Board we suggest have a nominating and
governance committee that would replace those members, athletes
selected from a slate presented by the athletes, a national
governing board member selected from a slate produced by the
national governing boards.
Senator Sununu. Mr. Fehr.
Mr. Fehr. I guess from my standpoint, and I've been a
Public Sector Director for, I guess almost 7 years now, the
first comment I would make is that I think our recommendations
are pretty much an integrated whole. They all fit together. If
you start moving pieces around, I think you can affect the
nature of the machine you're trying to build. That is first.
Second, that you need a board which is small enough to
function and which has a majority of independent directors, as
I see it, for two reasons. First of all, to try and create a
USOC which is more than simply the representatives of
constituent groups, and second, to remember that the primary
purpose of the organization is not to serve the individual
groups, or to respond, although that is important. It is to
serve the movement, most importantly the athletes, and to
recognize, I think, as Senator McCain said in his opening
remarks, that this is the repository of the trust of the
American people in this movement.
If we do that, along with the conflict of interest rules,
the disclosure rules, the transparency provisions and all the
rest that is there, what we believe is that you will end up
with, in reasonably short order, a Board that people will not
only be happy to serve on, will be anxious to, will derive
great satisfaction from, and I, for one, would be astonished if
we could see the kind of shenanigans take place in this new
culture, determined by this structure, that we've seen in the
past. You can never tell how people are going to behave. All
you can do is try and create a structure which makes it more
likely they will behave in one way than another.
Senator Sununu. I have one final question, and that is, in
what way will this reorganization affect the relationship, or
the oversight between the USOC and the local organizing
committees of any prospective U.S. Games? Is it affected or
improved or weakened in any way?
Ms. Ramo. Well, I think it would be improved, but we
actually suggest in our report, Senator Sununu, that the rules
that were put in place by the Salt Lake City bid organizing--or
oversight committee--which Don and I both served on, remain.
The USOC adopted those. We think they're very good rules. We
think the odds of them being followed in the way that we would
all want will be improved by having a smaller, independent
board of very sophisticated people.
Senator Sununu. Does the USOC have the ability to enforce
those rules in any way?
Ms. Ramo. Yes, it does, it absolutely does.
Senator Sununu. Thank you very much.
Senator Stevens. Mr. Chairman, I must excuse myself, but if
you will allow me to just thank the other panel--I do have a
defense meeting--I ask consent that the statement I would have
made had I been on time appear at the beginning of the hearing.
The Chairman. Without objection.
Finally, you are in agreement that your recommendations for
the good of the future of the United States Olympic movement
requires legislation?
Ms. Ramo. Yes, Senator, we are.
The Chairman. We thank you again. We cannot thank you
enough for taking your valuable time and effort on behalf of
these young Americans, who may not understand, but some day
will appreciate what you've done for our country. I thank you.
Ms. Ramo. We appreciate the opportunity to serve, Senator
McCain.
The Chairman. Thank you. Our next panel is Mr. Robert Balk,
the Paralympic Representative, USOC Athletes' Advisory Council;
Ms. Rachel Godino, the Chairwoman of the USOC Athletes'
Advisory Council; Mr. Robert Marbut, Chairman, USOC National
Governing Bodies Council; Mr. Jim Scherr, the Acting CEO of the
United States Olympic Committee; and Mr. Bill Stapleton,
Principal of Capital Sports and Entertainment.
I welcome the witnesses, and we will begin with you, Mr.
Balk. Thank you for appearing. Thank all the witnesses for
being here, and Mr. Balk, please proceed.
STATEMENT OF ROBERT BALK, PARALYMPIC
REPRESENTATIVE, UNITED STATES OLYMPIC COMMITTEE'S ATHLETES'
ADVISORY COUNCIL
Mr. Balk. Senators, thank you for providing me with the
opportunity to appear and speak to you today. My name is Bob
Balk. I'm an athlete. I've earned six Paralympic medals as a
five-time Paralympic athlete competing in both summer and
winter games in the sports of pentathlon and cross-country
skiing. I'm the Winter Paralympic Athlete Representative to the
United States Olympic Committee's Athletes' Advisory Council. I
have most recently had the great privilege of serving as a
member of the USOC's Governance and Ethics Task Force.
As an athlete and someone involved in governance reform in
Olympic sports, I'd like to applaud the efforts of the
Independent Commission in their final report. Significant to me
is the recommendations of the Independent Commission and the
USOC's Governance and Ethics Task Force are remarkably similar,
considering the very different nature of these two groups.
Attention should be focused on reconciling difference in these
recommendations and gaining understanding into the reasoning
and justification behind those differences.
I could not be more pleased that both groups recommended
focusing their mission on athletes and athletic performance in
both Olympic and Paralympic sport. I'm also pleased that both
groups recommended that the size of the board and governance be
dramatically reduced.
There are areas of the Independent Commission's
recommendations that should be more fully considered before
implementation. My primary concern is the proposed Olympic
Assembly having voting power on Olympic matters, other matters,
and the voting process for speaker of the assembly. These
recommendations perpetuate constituency-based governance and
blurs lines of authority between the assembly, the Board of
Directors, and the CEO.
The assembly should be established in a nongovernance,
purely advisory role of the Board of Directors, fully utilizing
the considerable volunteer resources available to the USOC.
Imposing decision-making responsibility upon the assembly will
result in the creation of an organization nearly identical to
the 124-member board which currently exists at the USOC, with
all of its inherent challenges, which we are here to resolve.
The Commission recommends that the USOC missions be
narrowed, yet the Commission does not recommend that the broad
purposes set forth in the statute for the USOC be equally
narrowed. If the statutory purposes remain, then irrespective
of any narrow mission set forth in USOC's organic documents,
the various constituencies that have come to view their role in
the Olympic movement as one of entitlement will continue. This
will be exacerbated by a constituency-based Olympic Assembly
that will position itself to make decisions concerning issues
that will affect resource allocation.
However, I would like to see this Committee's support for
multisport organizations that will not be part of the proposed
focused mission statement. These organizations do outstanding
work in promoting health, fitness, and sport of the American
public, and should be supported and recognized for their
efforts. Their mission is to serve the greater American public,
and not the Olympic movement. However, through their efforts in
promoting sport, they are a welcome asset to the advisory
Olympic Assembly. Congress should consider other vehicles for
funding these organizations, or creating another statute
providing for them.
I am concerned with how the Commission has defined the
respective roles of governance and staff operations.
Distinctions between governance authority and operational
responsibility has not been made specific enough to completely
eliminate confusion and provide accountability to the
appropriate individuals. Clearly, for the most effective
governance and operational model, the board must set policy in
one individual. The CEO is absolutely accountable for the
organization's performance or lack of performance in relation
to this policy.
The momentum of change is with you, and it is important not
to stall and allow this great work not to be implemented.
However, improper actions will not improve the support required
for Olympic and Paralympic athletes. Please temper haste with
careful consideration.
The Congress should be careful about moving too quickly
into legislation in the area of governance of the USOC.
Although I have been a competitive athlete for the past 10
years, I've only recently been deeply exposed to the politics
of the USOC, and of international sport off the playing field.
There are dynamics of the movement and the representative
constituencies that are not easily understood at first glance
which require careful consideration. The needs of Olympic and
Paralympic athletes are of utmost importance, and are what
should drive this change process.
In closing, I would like to thank the Commission for the
time and attention they have provided to these important
issues. I hope that we can seize upon this opportunity to
fundamentally improve the USOC to benefit athletes. Thank you.
[The prepared statement of Mr. Balk follows:]
Prepared Statement of Robert Balk, Paralympic Representative, United
States Olympic Committee's Athletes' Advisory Council
Mr. Chairman, and members of the Committee, thank you for providing
me with the opportunity to appear and speak to you today.
My name is Bob Balk. I am an athlete. I have earned six Paralympic
medals as a five time Paralympic athlete competing in both the summer
and winter games in the sports of Pentathlon and Cross Country skiing.
I am the Winter Paralympic athlete representative to the United States
Olympic Committee's Athletes' Advisory Council. Professionally, I am
the Manager of venture capital investment for Phantom Works, the
advanced technology division of The Boeing Company. I have most
recently had the great privilege of serving as a member of the USOC's
Governance and Ethics Task Force.
As an athlete and someone involved in governance reform of Olympic
sports, I would like to applaud the efforts of the Independent
Commission and their final report. I am pleased that they worked
independently and they have carefully and thoughtfully considered their
analysis and recommendations, all while doing so on a volunteer basis.
Significant to me is that the recommendations of the Independent
Commission and the USOC's own Governance and Ethics Task Force are
remarkably similar considering the very different nature of these two
groups. One group holds itself out as independent of the USOC and the
other group recognizes that it consists of many individuals who have
been actively involved in the organization's governance for a long time
yet it sought independence from the past and the respective
constituencies of each member. Attention should be focused on
reconciling differences in these recommendations and gaining
understanding to the reasoning and justification behind those
differences.
I could not be more pleased that both groups recommended focusing
the mission on athletes and athletic performance, in both Olympic and
Paralympic sports. I am also pleased that both groups recommended that
the size of the board and governance be dramatically reduced.
There are areas of the Independent Commission's recommendations
that should be more fully considered before implementation. My primary
concern is of the proposed Olympic Assembly having voting power on
``Olympic Matters'' and on other matters and the voting process for a
``Speaker'' of the Assembly. These recommendations perpetuate
constituency based governance and petit politics, and blurs lines of
authority between the Assembly, Board of Directors and the CEO. The
Assembly should be established in a non-governance, purely advisory
role to the Board of Directors fully utilizing the considerable
volunteer resources available to the USOC. Imposing decision-making
responsibility upon the Assembly will result in the creation of an
organization nearly identical to the 124 member Board which currently
exists at the USOC with all of its inherent challenges which we are
here to resolve.
I note that though the Commission recommends that the USOC's
mission be narrowed, yet the Commission does not recommend that the
broad purposes set forth in the statute for the USOC be equally
narrowed. These positions are difficult to reconcile. If the statutory
purposes remain, then irrespective of any narrow mission set forth in
the USOC's organic documents, the various constituencies that have come
to view their role in the Olympic movement as one of entitlement to
scarce resources will continue. This will be exacerbated by a
constituent-based Olympic Assembly that will position itself to make
decisions concerning issues that will affect resource allocation. I
would like to see this Committee support or seek out support for the
``multi-sport'' organizations that will not be part of the proposed
focused mission statement. These organizations do outstanding work at
promoting health, fitness and sport to the American public and should
be supported and recognized for their efforts. Their mission is to
serve the greater American public and not the Olympic movement. However
through their efforts in promoting sport they are a welcome asset to an
advisory Olympic Assembly. Perhaps the Congress should provide other
vehicles for funding them or perhaps create another statute for
providing for them.
I am concerned with how the Commission has defined the respective
roles of governance and staff operations. Specifically the Commission's
report does not clearly address the issue of the CEO's control over all
aspects of USOC operations, including international relations. The
Commission Report does not clearly outline that the CEO should have
exclusive authority to hire and fire the CEO's senior staff, which I
find inconsistent with for profit and non-profit corporate operations.
Distinction between governance authority and operational responsibility
has not been made specific enough to eliminate confusion and provide
accountability to the appropriate individuals. Clearly for the most
effective governance and operational model the board must set policy
and one individual, the CEO, is absolutely accountable for the
organization's performance or lack of performance in relation to this
policy.
As an athlete, and a member of the Athletes' Advisory Council, I do
not see the necessity to alter the reporting structure of the athlete
ombudsman. This position was a product of the 1998 amendments to the
statute, and has worked well in its current form.
The momentum of change is with you and it is important not to stall
and allow this great work not to be implemented. However improper
actions will not improve the support required for our Olympic and
Paralympic athletes. Please temper haste with careful consideration.
The Congress should be careful about moving too quickly into
legislation in the area of governance of the USOC. Legislation has a
permanence that makes it difficult for the organization to adjust and
be responsive to changes in its business environment. In addition,
given the relatively conflated schedules and other constraints under
which both the Independent Commission and the Task Force operated,
there is a possibility that both groups have not drawn the perfect
conclusions to which we will want or have to correct in the future.
Although I have been a competitive athlete for the past 10 years I have
only recently been deeply exposed to the politics of the USOC and of
international sport off the playing field. There are dynamics of the
movement and the represented constituencies that are not easily
understood at first glance which require careful consideration. The
needs of Olympic and Paralympic athletes are of utmost importance and
are what should drive this change process.
In closing, I would like to thank the Commission and the Task Force
for the time and attention they provided to these important issues. I
would also like to thank the Commission for recommending, as did the
Task Force, the inclusion of Paralympic athletes with Olympic athletes
in the mission of the USOC. I hope that we can seize upon this
opportunity to fundamentally improve the USOC to benefit athletes.
The Chairman. Thank you very much, Mr. Balk.
Ms. Godino.
STATEMENT OF RACHEL MAYER GODINO, CHAIR, ATHLETES' ADVISORY
COUNCIL, UNITED STATES OLYMPIC COMMITTEE
Ms. Godino. Thank you, Mr. Chairman, Senator Campbell,
Senator Stevens. Thank you for the opportunity to appear before
you at a time when the USOC, an organization that helped me
fulfill my Olympic dreams in figure skating in 1992, is poised
for historic reform. My name is Rachel Mayer Godino, and I have
the honor to serve as the elected Chair of the Athletes'
Advisory Council, the AAC.
The AAC is comprised of athlete representatives from each
Olympic, Paralympic, and Pan American sport. Our purpose is to
represent the interests and protect the rights of America's
athletes. Having had the privilege of testifying before this
Committee in January, a mere 5 months ago, I find the
circumstances surrounding this morning's hearing decidedly more
positive and hopeful than just 5 months ago. The strides made
toward meaningful reform in those 5 months are truly
remarkable.
We owe a tremendous debt of gratitude to the Members of the
Senate Commerce Committee for your leadership, as well as the
individuals who gave of their time and energy to serve on the
Independent Review Commission and the USOC Governance and
Ethnics Task Force. The landmark work of these two groups has
created a solid framework for the USOC.
The AAC met this weekend, and the testimony I offer this
morning is reflective of their viewpoint. I will offer comments
in six areas. First, the concept of an Olympic Assembly is a
good one. Both the Commission and the task force proposed this
concept to ensure participation of volunteers.
The AAC has two specific concerns. First, both the
Commission and the task force agree on the need for a dramatic
change in the USOC culture. However, if the same people who
today participate on the Board of Directors in a politically
divisive manner tomorrow participate in an assembly that votes
on certain issues and elects a speaker, the AAC is concerned
that the culture will not change.
Second, if the assembly has the power to elect a speaker
who serves on the Board, the focus of the assembly may be
inappropriately placed on that election, rather than on sport.
There is likelihood for a continuation of lobbying and promise-
making, and extending the long history of politically divisive
elections. The benefit of the assembly voting and electing a
speaker should be weighed against these concerns.
Second, the Ted Stevens Olympic and Amateur Sports Act, the
Act and the USOC organic documents stipulate that athletes must
have no less than 20 percent of both membership and voting
power on all USOC and national governing bodies, NGB, boards,
committees, and task forces. This was a novel concept embraced
by Senator Stevens and Congress in 1978, when the Act was first
passed. This provision has been critical to ensure that
athletes have both a representative voice and vote.
The AAC fully recognizes that the recommended size of the
new USOC board, 11 members proposed by the task force and 13
proposed by the Commission, is founded on the principle that a
smaller board results in better governance. We also recognize
that both groups are faced with satisfying at least five
additional requirements, including two specific IOC provisions.
In both proposals, athletes would have less than 20 percent
voice.
While 20 percent voice is critically important, the
athletes also recognize that it's nearly mathematically
impossible to satisfy all of the requirements, given that there
are currently three U.S. members of the IOC. After much debate,
in an effort to serve the best interests of the entire
organization, if the recommendations proposed regarding the
size of membership of the USOC board are adopted, the AAC will
not oppose a very narrow exception to the requirement for 20
percent membership, while maintaining 20 percent of the vote.
It is our strong belief that the voice and vote requirement
must continue to apply to all other committees and task forces
of both the USOC and NGBs, since it's been effective in helping
the USOC and NGBs fulfill their respective missions.
We further encourage review of this change by this
Committee after 2004, since the number of IOC members may have
changed by that time, and the IOC requirements may have
changed, allowing for the 20 percent athlete membership to be
accomplished.
Third, the AAC supports the concept that the members of the
proposed nominating committee, the entity that will be charged
with the all-important responsibility of selecting the next
USOC Board, be independent. Absent independence, this process
has the very real potential to become politicized. We are
extremely close to implementing a governance structure in which
we can all take great pride. To compromise this opportunity by
instituting a politicized nomination process is a risk that in
the opinion of the AAC is not worth taking.
Fourth, the USOC's AAC supports a more focused list of
purposes in the Act that aligns with the mission statement
proposed by the Commission.
Fifth, the 1998 amendments to the Act included a provision
for an athlete ombudsman. This provision has been extremely
effective. The AAC recommends that the role and function not be
changed, and that references to the relationship between the
AAC and the ombudsman continue. I understand that the NGB
Council concurs with this recommendation.
Last, there is broad consensus that the proposed changes be
implemented quickly. However, the AAC also believes that it is
critical that changes to both the USOC organic documents and
the Act accurately reflect the intention of Congress. A few
misplaced words or inadvertent sentence structure can have an
enormous impact. Speed must be balanced with accuracy.
In sum, given the sweeping nature of the changes, potential
for unforeseen consequences and the certainty that the USOC's
business environment will continue to change, the AAC urges the
Senate Commerce Committee and your colleagues in the House to
ensure an appropriately deliberative process, and suggest that
it is more prudent to make many, if not most of the proposed
changes in the USOC organic documents.
In summary, the AAC, on behalf of America's athletes,
supports the elimination of political processes to the greatest
extent possible. Furthermore, we support the simplest, most
streamlined, and most ethical governance solution possible.
I would like to once again thank Senators McCain, Stevens,
and Campbell, along with the entire Senate Commerce Committee,
for your leadership on this issue. I would also like to thank
the members of both the Independent Review Commission and the
USOC Governance and Ethics Task Force for their courage and
vision.
Finally, we must all remember that, despite the challenges
faced by the USOC, America's athletes continue to train,
compete, and win. This past weekend, Olympic heroes and
hopefuls performed at the U.S. national track and field and
gymnastics championships, and the world team trials in
wrestling. I know we were all proud to see the comeback of the
Greco-Roman wrestler Rulon Gardner, who himself has testified
before Congress on this very issue, and has once again earned
the right to represent our country at the world championships
this fall.
These stories of hope, inspiration, and achievement would
not be possible were it not for the support of the USOC and
NGBs. For that, America's athletes say thank you.
[The prepared statement of Ms. Godino follows:]
Prepared Statement of Rachel Mayer Godino, Chair, Athletes' Advisory
Council, United States Olympic Committee
Good morning Mr. Chairman and members of the Committee. Thank you
for the opportunity to appear before you this morning at a time when
the United States Olympic Committee--an organization that helped me
fulfill my Olympic dreams--is poised for historic reform.
My name is Rachel Mayer Godino, and I am Chair of the Athletes'
Advisory Council, more commonly known as the AAC. The AAC is comprised
of athlete representatives from every Olympic, Paralympic and Pan
American sport, and our purpose is to represent the interests and
protect the rights of America's athletes. Inasmuch as the primary
mission of the USOC is to support America's athletes, ours is an
important responsibility, and one we take quite seriously. I am honored
to serve as the elected Chair of such a distinguished group of
athletes.
Having had the privilege of testifying before this Committee in
January--a mere five months ago--I find the circumstances and climate
surrounding this morning's hearing decidedly more positive and hopeful
than those of previous hearings. Indeed, this morning's hearing marks
the beginning of a bright new era for the United States Olympic
Committee and America's athletes. The strides made toward meaningful
reform during the past five months are remarkable.
We owe a tremendous debt of gratitude to the members of the Senate
Commerce Committee for your leadership, as well as the individuals who
selflessly gave of their valuable time and energy to serve as members
of the Independent Review Commission and the USOC Governance and Ethics
Task Force. The landmark work of these two groups is before us this
morning and, without question, they have created a framework that will
lead to a stronger, more efficient USOC--an organization in which all
Americans will be able to take a great deal of pride. On behalf of
America's athletes, I offer my sincere thanks to the members of the
Senate Commerce Committee, as well as the Independent Review Commission
(``the Commission'') and the USOC Governance and Ethics Task Force
(``the Task Force''), for their efforts.
The AAC met this past weekend in Colorado Springs, and the
testimony I offer this morning is reflective of the viewpoint of our
membership.
Olympic Assembly
The concept of an Olympic Assembly is a good one. It is notable
that both the Commission and the Task Force proposed this concept as a
means to ensure participation of volunteers. After discussion, the AAC
has two specific concerns about the function and role of the Assembly.
First, both the Commission and the Task Force agree on the need for
a dramatic change in the USOC culture. However, if the same people who
today participate on the Board of Directors in a politically divisive
manner, tomorrow participate in an Assembly that votes on certain
issues and elects a Speaker, the AAC is concerned that the culture will
not change.
Second, the AAC expressed concern that if the Assembly has the
power to elect a Speaker who serves on the Board, that the focus of the
Assembly will be inappropriately placed on that election, rather than
focusing on sport. Without a change in culture, the likelihood for
continuation of lobbying and promise-making by those interested in
serving as the Speaker, resulting in the Speaker being beholden to
those who are responsible for his/her election, is very high.
Furthermore, the potential exists that such an election will extend the
long history of politically divisive elections. The benefit of the
Assembly voting and electing a Speaker should be weighed against these
concerns.
Athlete Representation
The Ted Stevens Olympic and Amateur Sports Act (``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' (NGBs') 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. This provision was a novel
concept embraced by Senator Stevens and the Congress in 1978 when the
Amateur Sports Act was written and passed. We thank Congress for their
foresight and interest in providing for athletes both voice and vote in
governance.
The AAC membership 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
Commission is founded on the principle that a smaller board results in
better governance. We also recognize that both groups were also 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 governance principle that Boards be
composed of a majority of independent directors, (4) the provision in
the Act 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. We recognize that in both proposals, athletes would have less
than 20 percent voice.\1\ 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 said, the athletes also recognize that it is
nearly mathematically impossible to satisfy all five of the
requirements outlined above given the fact that there are currently
three U.S. members of the IOC.
---------------------------------------------------------------------------
\1\ In the Independent Commission report, 2 of 13 members would be
athletes (15.4 percent of the membership). In the Ethics & Governance
Committee report, 2 of the 11 members would be athletes (18.2 percent
of the membership).
---------------------------------------------------------------------------
After much debate, and in an effort to serve and protect the best
interests of the entire organization, if the recommendations proposed
by the Commission and/or the Task Force regarding the size and
membership of the USOC Board of Directors are adopted by the USOC and/
or codified in Federal legislation, the AAC will not oppose a very
narrow exception (the USOC Board of Directors only) to the requirement
for 20 percent membership, while maintaining 20 percent of the vote. It
is our strong belief that the voice and vote requirement must continue
to apply to all other committees and task forces of both the USOC and
NGBs since that voice and vote has been effective in representing
athletes' interests and in helping the USOC and NGBs fulfill their
respective missions. We further encourage review of this specific
change by the Senate Commerce Committee after 2004 since the number of
IOC members may have changed by that time, and the IOC requirements may
have changed allowing for 20 percent athlete membership to be
accomplished. Lastly, we encourage the Senate Commerce Committee 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 is always at
least 20 percent.
Nominating Committee Independence
The AAC supports the concept that the members of the proposed
Nominating Committee--the entity that will be charged with the all-
important responsibility of selecting the next USOC Board of
Directors--be completely independent. Absent the assurance of
independence, this process has the very real potential to become
politicized and, ultimately, undermine the work of this Committee and
the two review groups. We are extremely close to implementing a
governance structure that will create an organization in which we can
all take great pride. To compromise this opportunity by instituting a
politicized nomination process is a risk that, in the opinion of the
AAC, is not worth taking.
Streamlining the USOC Mission
The USOC's mission is set forth in 13 purposes in the Act. The
athletes are pleased that both groups came to the fundamental
conclusion that the USOC cannot continue to be all things to all people
and that it has to focus its operations on successful Olympic and
Paralympic athletic achievement. The USOC has suffered too long from
the interest group and entitlement politics that such a diffuse mission
has placed on it.
All of the purposes enumerated in the Act are noble and worthy
causes that should certainly be addressed by some organization, but
perhaps not the USOC. Either way, you cannot say that the mission of
the USOC should be focused and then not change the Act's list of
purposes, unless you are willing to accept the confusing message that
will send to the USOC. The USOC's AAC supports a more focused list of
purposes in the Act that aligns with the mission statement proposed by
the Commission.
Role of the Athlete Ombudsman
The 1998 Amendments to the Act included a provision for an Athlete
Ombudsman. This provision has been extremely effective in resolving
disputes resulting in significant financial savings (not to mention
time and energy) for athletes, NGBs, and the USOC that would have
otherwise been spent on litigation. Indeed, the appointment of an
independent Athlete Ombudsman has been one of the most significant
advancements in ensuring fair and equitable treatment for America's
athletes. It is the recommendation of the AAC that, through the
implementation of a new governance structure for the USOC, this role
and function not be changed, and that the references to the
relationship between the AAC and the Ombudsman continue. It is my
understanding that members of the USOC NOB Council concur with this
recommendation.
Implementation of Governance Changes
There is broad consensus that the proposed changes be implemented
``quickly.'' The AAC concurs with this consensus. However, the AAC also
believes that it is critical that changes to both the USOC organic
documents and the Act accurately reflect the intention of the Congress.
Given that a few misplaced words or inadvertent sentence structure can
have an enormous impact on the interpretation of legislation, and
therefore on the USOC and the athletes it serves, the AAC urges an
appropriately deliberative process to develop legislation. Speed must
be balanced with accuracy. That said, we fully support the effort to
make changes to the USOC organic documents at the next scheduled USOC
Board of Directors meeting in October. Of course, the USOC should also
respond appropriately to any statutory changes.
Furthermore, for two major reasons, it is our belief that many of
the details proposed are best codified in the USOC organic documents.
First, despite the best efforts to avoid it, there is no doubt that
there are some unforeseen ramifications--likely some positive and some
negative--to the proposed changes. Therefore, to the extent possible,
Federal legislation should provide the framework for the USOC, while
placing details in the USOC organic documents. Second, the USOC must be
able to respond to a changing business environment. To the extent that
Federal legislation is a typically lengthy process and that details are
placed in legislation, the USOC may effectively be prohibited from
responding to a changing business environment.
In sum, the blessing (and the curse) of Federal legislation is that
it is not easily changed. A balance must be struck between the need to
protect against such backsliding with the need for the organization to
be able to respond quickly to a changing environment, and the need to
mitigate unforeseen consequences. Therefore, given the sweeping nature
of the changes, the potential for unforeseen consequences, and the
certainty that the USOC's business environment will continue to change,
the AAC urges the Senate Commerce Committee and your colleagues in the
House to ensure an appropriately deliberative process, and suggest that
it is more prudent to make many, if not most, of the proposed changes
in the USOC organic documents.
Closing Remarks
In summary, the AAC, on behalf of America's athletes, supports the
elimination of political processes to the greatest extent possible.
Furthermore, we support the simplest and most streamlined governance
solution possible.
I would like to once again thank Senators McCain, Stevens and
Campbell--along with the entire Senate Commerce Committee--for your
leadership on this issue. I would also like to thank the members of
both the Independent Review Commission and the USOC Governance and
Ethics Task Force for their courage and vision.
Finally, I would like to reiterate that, despite the challenges
faced by the USOC during the past few months--and even years--this is
an organization that has always prided itself on providing unparalleled
support and service to America's athletes and NGBs. It was just 17
months ago that America cheered as our athletes won an historic 34
medals in the Olympic Winter Games and 43 medals in the Paralympic
Winter Games at the hugely successful Salt Lake Olympics.
This past weekend, Olympic heroes and Olympic hopefuls continued
their preparations for the 2004 Athens Games with stirring performances
at the U.S. National Championships in Track & Field and Gymnastics, and
the World Team Trials in Wrestling. I know we were all heartened to see
the dramatic comeback of Greco-Roman wrestler Rulon Gardner, who
himself has testified before Congress on this very issue, and has once
again earned the right to represent our country at the World
Championships this fall in France.
These stories of hope, inspiration and achievement would not be
possible were it not for the support of the USOC and NGBs. For that,
America's athletes say thank you.
The Chairman. Thank you very much, Ms. Godino.
Mr. Marbut.
STATEMENT OF ROBERT MARBUT, CHAIR, USOC NATIONAL GOVERNING
BODIES COUNCIL, UNITED STATES OLYMPIC COMMITTEE
Mr. Marbut. Good morning. My name is Robert Marbut. I'm
Chair of the NGB councils, and I come from the sport of
pentathlon and, unlike the AAC, we didn't have the benefit of
having a meeting over the weekend, but we have had a phone
conference and a large amount of e-mail traffic, so we have
been talking about it over the last 3 or 4 months.
As you look at the Independent Commission's report, I think
their assessment and analysis is right on. I think they just
hit it perfectly. It is accurate and quite insightful, and most
of the NGBs, as you heard earlier, share the same basic
concerns. Most NGBs feel there has been a loss of confidence in
the USOC, and that we need to restore this as soon as possible,
that the governance model we're currently using needs fixing,
and that the board is too large, that we need to revamp our
culture, that the roles between the volunteers and the paid
staff need to be clarified, especially between the top
volunteer and the top staff person, and that this reform is
long overdue.
I commend the internal task force. They got this all
started, especially Bill Stapleton and Frank Marshall. Their
leadership and vision is really what got the reform going, and
I commend the efforts of the Independent Commission for their
insightful report.
Both groups really at the 35,000 feet level say basically
the same things, we need to right-size, we need to streamline,
and we need to professionalize, and for the most part the
recommendations of the Independent Commission are improvements
or fine-tuning adjustments to the internal task force, and it
is my personal opinion that the Independent Commission has done
a really good job, and I think Don Fehr got it right, it's an
integrated plan. If you start messing with too much on one
side, you may have to make other adjustments somewhere else.
I think the clarity of their mission is outstanding. I
think how they develop and structure the proposal of the
assembly in my opinion is also a way to solve many of the IOC
issues that have been brought up. I think it addresses the
culture. I think it harmonizes between the IOC charter and the
need for Congress in the USOC. I think it addresses some of the
issues, tough issues, sticky issues like the Pan Am sports
only. I think it also addresses the transition issues very
well.
A few months ago, I spoke to the House Committee on this
very same issue, and I brought up 12 critical success factors
that I thought we needed to address. The Independent Commission
takes on eight of these directly, and four indirectly, and I
would encourage your Senate Committee, as you move forward, to
embrace the Independent Commission's recommendations, and for
the most part I think they got it right.
There are four issues that I'd like to bring up quickly in
terms of they might need some clarification or further
analysis. As you go through in the writing of the subtlety of
the details, or the devil in the details, as Donna spoke
earlier, I think you need to maintain, and work hard to
maintain the parity and equality between the NGBs and the AAC.
That equality has done us well over the last couple of years,
and has healed a lot of wounds of the past, and I would hate to
go through a restructuring process that reopens those wounds.
Second, as you look at the criteria of independence, we
need to make sure that you create independence, but not do it
so tightly or so complexly, with such complex nature that we
end up losing some quality candidates.
Third, and this is probably a hard one, that there are
really no simple answers, but it is really important for the
2012 Olympic bid, we need to deal with this paradox of
international representation. On one hand, we want to move up
in the international movement and get more representation. On
the other hand, we're creating term limits that are much
shorter than the traditional path of trajectory, and moving up
in the international. It's a very tough issue. I don't
necessarily have any answers on this one, but it may be you
allowing the new board some flexibility to come back with some
proposals in the future.
And finally, for almost all NGBs, one of the most critical
things that we need to look at is the streamlining and focus of
the purposes, or sometimes as people call it, the 13 purposes
underneath the mission. Specifically, we think the purposes
that don't directly relate to the new proposed mission should
be eliminated.
Finally, the NGBs want to do everything we can to be a part
of the solution and not part of the problem. We stand ready to
do whatever we can to help, and as you go through the markup,
stand as a resource for your Committee.
Thank you very much.
[The prepared statement of Mr. Marbut follows:]
Prepared Statement of Robert Marbut, Chair, USOC National Governing
Bodies Council, United States Olympic Committee
Good morning Mr. Chairman and ladies and gentlemen of the
Committee. My name is Robert Marbut and I am Chair of the United States
Olympic Committee's ``National Governing Bodies Council.'' I come from
the sport of Modern Pentathlon. By dint of my chairship of the NGB
Council I also serve on the USOC Executive Committee and have been an
ex-officio member of the Officer's Workgroup.
NGB's are the Workhorses of the USOC
A ``National Governing Body,'' or ``NGB,'' is an autonomous
organization responsible for all matters related to the governance,
development, and conduct of an individual sport. An NGB receives its
recognition from the United States Olympic Committee (USOC) after it
demonstrates that it is complying with numerous and specific
requirements enumerated in the Ted Stevens Olympic and Amateur Sports
Act. Currently there are forty-five NGB's for sports on the program of
the Olympic and/or Pan-American Games.
NGB's are the ultimate vehicles to America's sustained athletic
success.
The NGB's are the workhorses of the Olympic Movement, and we have a
great deal of work ahead of us to prepare our athletes for the major
international competitions for which Congress gave the USOC the
responsibility for ``obtaining for the United States the most competent
representation possible in each event of the Olympic Games, the
Paralympic Games, and the Pan American Games.'' These competitions are
right on our doorstep. We are just 6 weeks away from Opening Ceremonies
of the Pan American Games in Santo Domingo, and 12 months from Opening
Ceremonies for the next Olympic Games in Athens 13 months from the
Athens Paralympic Games.
For 47 of the 48 months between Olympic Games it is the NGB's that
recruit the athletes and provide the training, coaching, and
competition opportunities that help them achieve elite status. At the
end of the process each NGB, utilizing criteria prescribed by its
international federation, selects its athletes for the Olympic,
Paralympic, or Pan American Games and hands them off to the USOC, which
then takes the responsibility for entering, outfitting, and
transporting them to the competition in question, and while there
providing all the additional support designed to deliver them to the
medal podium following their respective competitions.
The USOC is an Invaluable Partner with each NGB
The USOC is an invaluable partner with each NGB. One of the most
important contributions the USOC makes is financial, and without this
support many NGB's could not exist. But beyond the financial support
are the myriad services the USOC provides ranging from access to world-
class training centers, modern sports science and sports medicine
programs, administrative assistance, logistical support, legal and
financial guidance, and assistance with a multitude of tasks and
programs that enable the NGB's to focus on their principal objective,
developing world-class athletes.
Over that last 8 months, much has been written about certain USOC
problems. While they may warrant public attention I regret that they
have distracted attention from many of the positive accomplishments of
the USOC and our NGB's, starting with unprecedented success at last
year's Olympic Winter Games and continuing through the preparation for
Athens.
The Sports Partnership and the International Games Preparation
divisions of the USOC have been doing an outstanding job in helping
NGB's and athletes achieve maximum sustained athletic performance.
These groups within the USOC continue to provide invaluable resources
to NGB's and athletes.
The Independent Commission's Situational Analysis & Assessment of the
USOC is Correct
The athletes, NGB's and the American public deserve much better
than what has been given to them by the USOC.
The situational analysis and assessment contained in the Report and
Recommendations of the Independent Commission on Reform of the United
States Olympic Committee is both accurate and highly perceptive . . .
in particular almost all of our NGB's--if not all--share the same basic
concerns of the Independent Commission. Most NGB's believe that:
there has been a widespread loss of confidence in the USOC
we must restore confidence in the USOC in order to achieve
our purposes
the current governance structure needs fixing
the current Board is too large
the culture needs revamping
the roles and responsibilities between volunteers and staff
need to be clarified, especially between the President/Chair
and CEO
the move to restructuring and reforming the USOC is long
overdue.
I would like to commend the members of the Internal USOC Governance
and Ethics Task Force for the time and efforts they put into this
reform effort. In particular I would like to thank the Task Force's two
Chairs Frank Marshall and Bill Stapleton for all their hard work. Their
vision, efforts and leadership have jump-started this reform process,
thus expediting the final solutions. Ultimately their efforts have
started us onto the road of reform and restructuring.
The five members of the Senate appointed Independent Commission
should especially be applauded for their hard work and insightful
wisdom. Their report is outstanding!
Both reports focus on the need to right-size, stream-line and
professionalize. At the 35,000 foot level, the work of both groups look
very similar. At the operational level, the recommendations proposed by
the Independent Commission are significant improvements to the initial
recommendations of the Internal Task Force.
The Independent Commission's Report does an especially good job in
dealing with the following very critical issues:
clarification of the Mission Statement
development of the structure and purpose of the Assembly
(the Commission's Assembly proposal is ingenious and I think is
one of the best improvements made by the Independent
Commission. . .it goes a long way in addressing many of the
outstanding sticky issues)
reformation of the culture
harmonization with the IOC Charter
inclusion of Pan American Only sports
transition issues and the transition Advisory Committee
Twelve Critical Success Factors
Early in this process, at a hearing of the House Subcommittee on
Commerce, Trade and Consumer Protection, I outlined 12 Critical Success
Factors, in my opinion, that we needed to focus in order to reform the
USOC:
1-Leadership is about people . . . in my opinion, the USOC Nominating
Committee got it right 3 years ago . . . had it not been for
the politics of the Board that overrode the Nominating
Committee's recommendation, most, if not all the problems we
have faced over the last 3 years would never had occurred . . .
we must strengthen our nominating process.
2-The roles between the CEO and the President are extremely murky and
turbid . . . even the best of leaders would have problems with
such excessive layers of role ambiguity between these 2
positions . . . we must clarify the roles between our top
volunteer and our top paid executive.
3-Our governance process is too complex and convoluted, and needs to
be streamlined . . . we must clarify and then codify the
overall operating structure . . .
the current Board of 120'ish has been really operating as
a board of stakeholders,
the current Executive Committee has been really operating
as the operating Board,
the officers group has been filling the role of an
executive committee.
4-The USOC must be successful at revenue generation through
coordinated funding and bundled marketing opportunities . . .
NGB's need stable, adequate and predicable funding streams to
support our coaches and athletes.
5-Interrelated to #4 would be to mandate a 4-year Budgeting process
in regards to USOC funding to NGB's and Athletes.
6-During the last re-write of the Sport Act, the USOC and NGB's were
tasked with the additional task of developing elite
Paralympians, but no funding was provided for this additional
mandate.
7-We need to search for savings through the optimization of economies
of scales within NGB's, within the USOC . . . and between the
USOC and NGB's.
8-We must have a structure that promotes positive working
relationships between the AAC and NGBC . . . the working
relationships between the AAC and the NGBC are at an all time
high, but that has not always been that way.
9-It is critical to bring the Olympics back to the USA . . . in order
to be successful in winning the NYC 2012 bid, we must strongly
position the USOC within the IOC . . . we must also support NGB
leaders in attaining leadership positions within their
respective International Federations (IF's).
10-Throughout this restructuring process and beyond, the NGBC and the
AAC must have a meaningful and active role within the USOC . .
. the NGB's produce the athletes who in turn produce athletic
performance . . . we are the experts in the creation of
athletic success.
11-As we work together to restructure the USA's Olympic Committee, we
must be vigilant to the law of unintended consequences . . . we
must move expeditiously, but more importantly, we must get this
restructuring right.
12-Finally, we must focus on athletic performance, not politics.
The Independent Commission report addresses 8 of these directly,
and 4 indirectly. For the most part, the recommendations of the
Independent Commission are important fine tuning adjustments to the
recommendations of the Internal Task Force. Generally speaking, they
are subtle, but very critical modifications in the development of the
reform process. I would encourage this Senate Committee to embrace the
recommendations of the Senate's Independent Commission
Issues in Need of Clarification and/or Further Consideration
The Independent Commission does a very good job laying out the big
picture reforms, but the following are a few minor issues that could
benefit from clarification and/or further analysis. In the whole scheme
of things, these are minor concerns that could be dealt with during the
initial drafting and/or mark-up phases of the legislative process. I am
available to provide more background information on the following
issues to anyone who would like it:
One of the most important improvements over the last 2 years
within the USOC, which has been masked by the widely publicized
problems, has been the tremendously improved relationship
between the Athletes Advisory Council (AAC) and the National
Governing Bodies Council (NGBC). With a lot of hard work from
many, the long running disputes between the AAC and the NGBC
have virtually disappeared over the last 2 years. One of the
reasons the long standing friction has gone away is the concept
of equality between the two groups. We have gone out of our way
to make things equal in all possible aspects. I plead that as
the new legislation is written, that the AAC and the NGBC
maintain equality. It is through this balance in equality that
many wounds have been healed. I would not want the
restructuring process to reopen old wounds. For example, if the
NGB has a funded meeting, the AAC should have a comparable
funded meeting . . . if the AAC has representation on a
committee or workgroup, the NGBC should have similar
representation . . . and so on.
As we write the criteria for independence, we need to make
sure it is not written so tight and/or so complicated that it
excludes quality candidates from being involved. Beyond out-
and-out exclusion, an individual who is beneficial to the USOC
but has a narrow conflict should be allowed to generally
participate. When it comes to the debate on the narrowly
conflicted issue, the person should be required to report the
conflict and then to recuse himself or herself from the debate,
discussion and resolution on this narrow issue.
In the area of International Relations, I think we still
need more discussion in terms of the paradox of international
representation. On one hand we want more meaningful
representation within the international sports community (e.g.,
IF's and IOC), yet we are imposing term limits that are shorter
than the time path of international penetration of influence.
This is a very difficult issue, what we want domestically is
not necessarily what will work internationally. The reality is
that for most people it takes 20+ years to penetrate the
international leadership ranks, yet, we are proposing term
limits that will impede the upward international mobility of
our best representatives. We may well be creating a situation
that we are going to perpetually be behind the international
power curve. My hope is that Congress will give the new Board
some flexibility and latitude in dealing with this very
difficult issue of international representation.
Congress has given the USOC a wide variety of purposes and
responsibilities that range from promoting physical fitness to
conducting sociological surveys to preparing elite athletes for
international competition. The proposed Mission Statement is
very clear and concise, yet there are several items in the long
list of purposes that do not fit concisely under the proposed
Mission Statement. It would be helpful to streamline and focus
the list purposes contained within the legislative Act.
NGB's Want to Be Part of the Solution
I would encourage this Senate Committee to embrace the
recommendations of the Senate's Independent Commission. Please know
that the NGB's want to be part of the solution, not part of the
problem. The NGB Council stands ready to assist the reform process in
anyway, including being a resource during the process of the actual
drafting of the legislative amendments.
I am optimistic that working together, we can all make USA's
Olympic Committee stronger and more effective. The sooner we get back
to our mission, the better off we all will be . . . thank you!
The Chairman. Thank you very much.
Mr. Scherr.
STATEMENT OF JIM SCHERR, CHIEF OF SPORT
PERFORMANCE, UNITED STATES OLYMPIC COMMITTEE
Mr. Scherr. Good morning, Mr. Chairman and Senator
Campbell. Thank you for providing me with the opportunity to
appear before you today and share my views of the United States
Olympic Committee's governance and operations situation.
As you know, my name is Jim Scherr. My official title is
Chief of Sport Performance for the USOC. However, since the
departure of our previous Chief Executive Officer, I've been
exercising the additional responsibilities of overseeing the
day-to-day operations of the organization.
My background is that of an athlete in the sport of
wrestling, having competed at the collegiate level, where I won
an NCAA championship and had the honor of representing the
United States in the Olympic Games in Seoul. I retired from
active participation in the sport and obtained my MBA from the
Kellogg Graduate School of Management at Northwestern
University, which prepared me well for the discharge of my
responsibilities when I became the Executive Director for the
sport of wrestling, the national governing body for the sport,
USA Wrestling.
During my time at USA Wrestling, I served in various
capacities with the U.S. Olympic Committee, ranging from
membership on its executive committee, to service on the audit
committee. Such service was often quite frustrating, if not
dismaying, because the emphasis and focus too frequently was on
everything but the welfare of the athletes.
I believe that the new structure proposed by the
Independent Commission and the USOC Task Force will serve to
change the focus and culture of the organization and reduce
most of the heretofore distracting influences presented by many
well-meaning members of the Olympic family who by necessity
often represent narrow and often competing interests.
Nevertheless, these people are an incredibly valuable asset and
the Olympic movement would lose an important resource were it
not for the benefit of their involvement in the appropriate
forum.
I'm most pleased by the Commission's and the Task Force's
recognition that the current mission statement is misdirected
because it directs the primary focus on the excellence of the
USOC as a bureaucratic organization, rather than the athlete,
which is the heart of the Olympic movement. Their revised
mission statement correctly places the sustained competitive
excellence of the Olympic and Paralympic athletes in the
dominant position.
The other recommendations establishing a new governance and
management structure, reducing numerous nonathlete-related
administrative expenditures, and creating certain protections
for limited assets, all serve to reinforce what I've been
attempting to establish during my brief stewardship of the
organization, which is to place the athletes first.
I would like to state my own macro views on governance from
the perspective of someone who has had a great deal of
experience in the Olympic movement and who currently serves as
the USOC's staff leader. From my vantage point, the new
organization cannot be successful unless its governance
structure is clear, and the roles of the board and the staff
are clearly delineated. The governance structure must he
simple, streamlined, and efficient.
The new structure must set the authority to govern, to be
distinguished from the authority to manage in a single body
that is free of the constituent-based politics that has
heretofore been a source of contention within the organization.
A system with two governing bodies or confusing lines of
authority between different governing entities should not be
imposed.
In addition, because both the Task Force and the Commission
have agreed that the USOC currently spends too much on its
governance process and uses funds for that purpose that could
be better spent for athletes and our national governing bodies,
the governance structure must ensure the most cost-effective
and cost-efficient structure possible. Having two governing
entities and a myriad of committees, as we do now, does not
achieve that goal.
In addition, continuing anything similar to the complex
governance structure from which the USOC now suffers will
divert attention from achieving the mission and reduce the
efficiency of the excellent staff with whom I have the
privilege to work at the USOC.
Whatever the outcome of this process, the respective roles
of the staff and the governance must be made clear. The CEO
must have authority to hire and fire all staff. All staff must
report to the CEO, absent other conflicting professional
duties, and the CEO must be in a position to be truly
accountable for the organization's performance in achieving the
mission.
The CEO cannot be accountable and ultimately successful if
the various aspects of the governance process are permitted to
stray from their role in governance and attempt to participate
in the operations of the organization. This situation would be
exacerbated by continuing to have several committees that could
attempt to compete with the authority of the CEO to achieve the
USOC's mission.
The area of the USOC's involvement in international
relations is one that has been discussed much in the past few
months, and is one that fundamentally led to the dispute
between the prior President and the prior CEO that became
public spectacle in January and February of this year.
The governance reforms must make clear that the CEO is
responsible and accountable for the conduct of all aspects of
the USOC's operations in the international arena, but as part
of that accountability, the CEO may choose to involve the
governance process, or others, to achieve the USOC's mission,
and the CEO will have the prerogative of choosing or not
choosing to involve governance or others in this process.
Similarly, the USOC's communications policy must be changed
to a one-voice strategy that focuses responsibility for stating
the organization's public position in an individual, the CEO,
who is accountable for that. The CEO, of course, would be able
to delegate this responsibility to a staff member or others,
permitting more than one USOC official to convey organizational
policy through comments to the media, or to serve as a
spokesperson for a particular constituency on USOC matters,
simply creates the potential for the confusion and ultimately
conflict that we have seen of late, which has eroded public
confidence in the organization.
Confusion about the role of governance will cause the USOC
staff to continue to suffer from having to serve multiple
masters, and having to negotiate what should be purely business
decisions with an overreaching and overbearing governance
structure.
I hope that the Congress will examine the policy issues
raised by both reports with an eye toward ensuring that the
high caliber staff of the USOC is able to perform in an
accountable manner without interference from the governance on
matters of operations, and also I hope that Congress will
consider the governance structure that makes governance most
efficient and minimizes unnecessary expense spent on that
process.
Precisely how these changes to the structure and focus of
the USOC are implemented I'd leave to the Committee. Certainly,
the major provisions may need to be memorialized in the Ted
Stevens Olympic and Amateur Sports Act so as to prevent them
from being easily changed back at some future time. However, I
would recommend against micromanaging the organization by
statutory language, leaving the more minute details of
management and governance to those who will be charged with
such responsibilities, and whose competence will be overseen
through new recommended procedures.
I am as anxious as anyone to move forward in this new
direction, as recommended by these governance reviews, and I am
pleased that both groups recommended a targeted implementation
date. Nevertheless, I think this is our last chance, at least
for the foreseeable future, to get it right.
Accordingly, I ask that all concerned with the
implementation process, particularly the Members of the Senate
Commerce Committee who may write the legislation that will
direct our activities for years to come, will move deliberately
and with caution. Completing their work by this coming New
Year's Day is a worthwhile goal, but as the task force has
pointed out, an ambitious one, and if there's a choice between
getting it done quickly, and getting it done right, I implore
you to choose the latter.
This is a great and historic opportunity for the Olympic
movement, perhaps second only to the day in 1978 when the
original sports act was enacted. I congratulate all who have
brought us to this point, and thank you for providing the
opportunity to create an organization that can truly better
serve America's Olympic interests by finally putting America's
Olympic and Paralympic athletes first.
[The prepared statement of Mr. Scherr follows:]
Prepared Statement of Jim Scherr, Chief of Sport Performance,
United States Olympic Committee
Good morning, Mr. Chairman and members of the Committee. Thank you
for providing me with the opportunity to appear before you today and
share my views of the United States Olympic Committee's (``USOC'')
governance and operations situation. I am pleased to be here, and under
these circumstances, because I see a bright new day dawning for the
USOC and, much more importantly, for America's Olympic and Paralympic
athletes.
My name is Jim Scherr and my official title is Chief of Sport
Performance for the USOC. However, since the departure of our previous
chief executive officer I have been exercising the additional
responsibilities of overseeing the day-to-day operations of the
organization.
My background is that of an athlete in the sport of wrestling,
having competed at the collegiate level where I won an NCAA
championship, and had the honor of representing the United States in
the Olympic Games in Seoul After winning three U.S. and two World Cup
championships, I retired from active participation in the sport and
obtained my MBA from the Kellogg Graduate School of Management at
Northwestern University, which prepared me well for the discharge of my
responsibilities when I became the Executive Director of USA Wrestling,
the governing body for that Olympic Sport.
During my time at USA Wrestling I served in various capacities with
the U.S. Olympic Committee, ranging from membership on its Executive
Committee to service on the Audit Committee. Such service was often
quite frustrating, if not dismaying, because the emphasis and focus too
frequently was on everything but the welfare of the athlete. I believe
that the new structure proposed by the Independent Commission and the
USOC Task Force will serve to change the focus and culture of the
organization and reduce most of the heretofore distracting influences
presented by many well-meaning members of the Olympic Family, who, by
necessity, often represent narrow and often competing interests.
Nevertheless, these people are an incredibly valuable asset and the
Olympic Movement would lose an important resource were in not for the
benefit of their involvement in the appropriate forum. Accordingly,
ensuring the continuation of their meaningful involvement is preserved,
indeed enhanced, by the creation of the Olympic Assembly mechanism
proposed by both the Commission and the Task Force.
I am most pleased by the Commission's and the Task Force's
recognition that the current mission statement is misdirected because
it directs the primary focus on the excellence of the USOC as a
bureaucratic organization rather than the athlete, which is the heart
of the Olympic Movement. Their revised mission statement correctly
places the ``sustained competitive excellence of the Olympic and
Paralympic athletes'' in the dominant position.
The other recommendations establishing a new governance and
management structure, reducing numerous non-athlete-related
administrative expenditures, and creating certain protections for
limited assets, all serve to reinforce what I have been attempting to
establish during my brief stewardship of the organization, which is to
place athletes first.
I suppose I could present arguments either way on a number of
proposed provisions such as whether the independent directors should
constitute an absolute majority on the board as recommended by the
Independent Commission, or a substantial but narrow minority, as the
USOC's Task Force recommended. However, I do not feel it my place to
get into a policy debate on these issues of detail, nor do I feel it my
prerogative because my principal responsibility has been sport
performance.
I would like, however, to state my own macro views on governance
from the perspective of someone who has had a great deal of experience
in the Olympic movement and who currently serves as the USOC's staff
leader. From my vantage point, the new organization cannot be
successful unless its governance structure is clear and the roles of
the Board and the staff are clearly delineated.
The governance structure must be simple, streamlined, and
efficient. The new structure must set the authority to govern, to be
distinguished from the authority to manage, in a single body that is
free of the constituent-based politics that have heretofore been a
source of contention within the organization. A system with two
governing bodies or confusing lines of authority between different
governing entities should not be imposed. In addition, because both the
Task Force and the Commission have agreed that the USOC currently
spends too much on its governance process and uses funds for that
purpose which could be more wisely spent for athletes and our national
governing bodies, the governance structure must ensure the most cost-
effective and cost-efficient structure possible. Having two governing
entities and a myriad of committees, as we do now, does not achieve
that goal. In addition, continuing anything similar to the complex
governance structure from which the USOC now suffers will divert
attention from achieving the mission and reduce the efficiency of the
excellent staff with whom I have the privilege to work at the USOC.
Whatever the outcome of this process, the respective roles of the
staff and governance must be made clear. The CEO must have authority to
hire and fire all staff, all staff must report to the CEO, absent other
conflicting professional duties, and the CEO must be in a position to
be truly accountable for the organization's performance in achieving
the mission. The CEO cannot be accountable, and ultimately successful,
if various aspects of the governance process are permitted to stray
from their role in governance and attempt to participate in the
operations of the organization. This situation would be exacerbated by
continuing to have several committees that could attempt to compete
with the authority of the CEO to achieve the USOC's mission.
The area of the USOC's involvement in international relations is
one that has been discussed much in the past few months and it is one
that fundamentally led to the dispute between the prior President and
the prior CEO that became the public spectacle in January and February
of this year. The governance reforms must make clear that the CEO is
responsible and accountable for the conduct of all aspects of the
USOC's operations in the international arena, but as part of that
accountability the CEO may choose to involve the governance process or
others to achieve the USOC's mission, and the CEO will have the
prerogative of choosing or not choosing to involve governance or others
in this process.
Similarly, the USOC's communications policy must be changed to a
one-voice strategy that focuses responsibility for stating the
organization's public position in an individual, the CEO, who is
accountable for that. The CEO, of course, would be able to delegate
this responsibility to a staff member. Permitting more than one USOC
official to convey organizational policy through comments to the media
or to serve as the spokesperson for a particular constituency on USOC
matters simply creates the potential for the confusion and, ultimately,
conflict that we have seen of late which has eroded public confidence
in the organization. Confusion about the role of governance will cause
the USOC's staff to continue to suffer from having to serve multiple
masters and having to negotiate what should be purely business
decisions with an overreaching and overbearing governance structure.
I hope that the Congress will examine the policy issues raised by
both reports with an eye toward ensuring that the high caliber staff of
the USOC is able to perform in an accountable manner without
interference from the governance on matters of operations. I also hope
that Congress will consider the governance structure that makes
governance most efficient and minimizes unnecessary expense spent on
governance. Absent a governance structure like that which I have
suggested, I cannot imagine that the USOC will be successful in finding
a highly qualified CEO to serve as its leader. Absent changes to the
elements I have discussed, the USOC will continue with business as
usual and it will only be a matter of time before the USOC is again
before this Committee to explain itself.
Precisely how these changes to the structure and focus of the USOC
are implemented I leave to the Committee. Certain of the major
provisions may need to be memorialized in the Ted Stevens Olympic and
Amateur Sports Act so as to prevent them from being easily changed back
again at some future time. However, I would recommend against
micromanaging the organization by statutory language, leaving the more
minute details of management and governance to those who will be
charged with such responsibilities and whose competence will be
overseen through new recommended procedures.
I am as anxious as anyone to move forward in this new direction as
recommended by these governance reviews. Indeed, since the beginning of
my association with the Olympic Movement I have hoped that this day
would arrive when we could overcome the inherent political obstacles to
reform, and create a more streamlined, responsive organization that
best utilizes the talents and experience of all members of the Olympic
Family, and deploy our assets more effectively in support of our
Olympic and Paralympic athletes. For this reason I was pleased that
both groups recommended a target implementation date. Nevertheless, I
think this is our last chance, at least for the foreseeable future, to
get it right. Accordingly I ask that all concerned with the
implementation process, particularly the members of the Senate Commerce
Committee who may write the legislation that will direct our activities
for years to come, will move deliberately and with caution. Completing
the work by this corning New Year's Day is a worthwhile goal, but, as
the Task Force has pointed out, an ambitious one, and if there is a
choice between getting it done quickly and getting it right I implore
you to choose the latter.
This is a great and historic opportunity for the Olympic Movement,
perhaps second only to the day in 1978 when the original Amateur Spots
Act was enacted. I congratulate all who have brought us to this point,
and thank you for providing the opportunity to create an organization
that can better serve America's Olympic interests by finally putting
America's Olympic and Paralympic athletes first.
The Chairman. Thank you, Mr. Scherr.
Mr. Stapleton, welcome.
STATEMENT OF WILLIAM STAPLETON, VICE PRESIDENT,
UNITED STATES OLYMPIC COMMITTEE
Mr. Stapleton. Thank you, Mr. Chairman, Senator Campbell.
Mr. Chairman and Members of the Committee, thank you for
providing me the chance to appear and speak to you today. My
name is Bill Stapleton. I am a vice president of the United
States Olympic Committee. I was a member of the 1988 United
States Olympic swimming team, and during the past 4 months I've
had the significant pleasure and privilege of serving as the
Co-Chair of the USOC's Governance and Ethics Task Force, along
with nine other distinguished Americans and three distinguished
outside experts.
The recommendations of the Independent Commission of the
USOC Task Force are, at 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 U.S. Olympic Committee.
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 U.S. Olympic Committee. Both groups
also recognize the need to clearly define the roles of
governance and staff functions in the organization.
Mr. Chairman, I would ask that my complete written
statement and a copy of our internal task force report be made
a part of the record of this proceeding.
The Chairman. Without objection.
Mr. Stapleton. Thank you. As you might expect, there are
some differences in what the two groups recommend. In our view,
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 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 cost of its meetings, that the Olympic Assembly
vote on substantial matters concerning the USOC's governance,
including amending the USOC's 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 Olympic Games, will select the U.S. bid
city, and 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 a smaller 11-member, 9-vote
Board.
The task force devoted substantial time and attention to
the question of whether the USOC should pay the cost for
representatives and 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 their attendance at the assembly is valuable to them, as
indicated by their willingness to pay the travel cost for their
representatives.
The task force has estimated that the implementation of its
governance recommendations could result in over $1 million a
year in governance, administrative cost savings. For the USOC
to continue to underwrite the cost of the annual Olympic
Assembly, as recommended by the Commission, that estimated
savings would have to be reduced by at least $250,000 per year,
but perhaps by more if the Olympic Assembly is called upon to
have more than one annual 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. In the words of our governance
consultant, John Carver, this would be a governance disaster.
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
they now will have a more meaningful vote that impacts the
shares held by others.
Second, if, as the Commission recommends, the Olympic
Assembly were called upon to vote on issues relating to the
governance of the USOC, those decisions would be subjected to
the constituent-based decisionmaking and the politics that have
plagued the USOC for the past 20 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.
Third, as we know from our current experience with the
USOC's current board of 124 individuals, the Olympic Assembly,
at 110 people, is simply too large a body for there to be any
meaningful education of the membership, or meaningful debate at
the meetings of that group.
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 the rights to speak on behalf of the U.S. Olympic family.
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.
Once again, I would like to thank you for allowing me to
testify today, and I thank you for your insistence that the
USOC clean up its act. The job is far from done, and the next
step is the implementation of the recommendations of these two
groups, and I thank you for being willing to see the process
through.
[The prepared statement of Mr. Stapleton follows:]
Prepared Statement of William Stapleton, Vice President,
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 Bill Stapleton. I am a Vice President of the United
States Olympic Committee. I was also a member of the 1988 United States
Olympic Swimming Team. I make my living as the founder of Capital
Sports & Entertainment, an Austin, Texas-based sports and music
management and event production company. During the past 4 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 3 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 Frank
Marshall, 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 began my involvement in USOC governance reform
skeptical of the likely success of such an effort. I was confronted
with examining an organization that I knew from personal experience had
subsisted for years on an organizational and governance culture based
on quid pro quo rather than on focusing on athletes and the success of
the overall institution. Though I was confident in the abilities of the
individuals appointed to the USOC task force of which I was a co-chair,
I was not so confident of the resolve of the organization to change
itself, even after it had undergone the dramatic and public governance
discord it achieved in January and February of this year. I was
pleasantly surprised when, after the task force initially recommended
dramatic and sweeping reform at the April 2003 USOC Board meeting, the
USOC Board voted to endorse the governance concepts contained in our
initial report. I am pleased that the organization, with few
exceptions, continues to demonstrate its commitment in this area. I
would like to place in the record along with this written statement the
report of the USOC Task Force and its response to the recommendations
of the Commission.
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 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 also have substantial governance and
transaction costs associated with them, with the Task Force's view
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 U.S. 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, and nothing in the
Olympic Charter requires the large governance body called for by the
Commission.
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 e-mail, 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.
Similarly, in all the areas of ``Olympic issues,'' where the
Commission recommended taking responsibility and authority away from
the Board and the full-time professional management of the USOC and
giving it to the 110+-member Olympic Assembly, we simply have a
fundamental difference of perspective, because the Task Force believes
that fundamental principles of good governance require that all
authority, responsibility, and accountability for governance should be
assigned to the Board in the first instance, with authority,
responsibility, and accountability to operate and manage the
organization delegated to the CEO, consistent with the policies and
subject to the oversight of the Board.
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 U.S. 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 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 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 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.
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,
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 NOB 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 the 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. The Task Force provided legislative language in
this general area as an appendix to its report. 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
my the mid-July deadline for making submissions for changing its
organic documents.
Once again, I would like to thank you for allowing me testify today
and I thank you for your insistence that the USOC clean up its act. The
job is far from done and the next step is the implementation of the
recommendations of these two groups and I thank you for being willing
to see this process through.
The Chairman. Thank you very much, Mr. Stapleton.
My office has been contacted on several occasions by deaf
Olympians. Do you think the USOC should fund the Deaf Olympics,
beginning with you, Ms. Godino?
Ms. Godino. I would give a similar answer as was given on
the previous panel. I think that, one, the Deaf Olympians would
certainly be part of the assembly, and second, that the
Paralympic organization chooses their membership and who meets
the definitions of participating in the Paralympics, and last,
that the IOC, there's no question that the two most important
competitions that all are striving toward is Olympics and
Paralympics, and I think that's appropriate, to keep the focus
on those.
The Chairman. Mr. Scherr.
Mr. Scherr. Well, I think their purposes are very
laudatory, and what they're trying to do for the athletes who
participate in those programs. I believe the current resources
that are available to the U.S. Olympic Committee and those
available for the foreseeable future would make it
exceptionally difficult for us to cover Olympic athletes,
Paralympic athletes as well as athletes participating in the
Deaf Olympics.
There are about a third of the numbers of the athletes
participating in the Deaf Olympics that cover the total
Paralympic number of athletes as well as the IOC's different
relationship with the Deaf Olympics and that entire group. They
have quite a different relationship with the International
Paralympic Committee. They have incorporated them in their
marketing programs, incorporated them as part of the host city
agreement with the Games.
We do not have a relationship with the Deaf Olympics as an
entity. We do with the International Paralympic Committee and
the IOC, which causes us to have certain obligations to those
athletes and those bodies. We do not as yet have one with the
Deaf Olympics.
The Chairman. Mr. Marbut.
Mr. Marbut. I think it almost needs to be broken down into
two issues. One is politics, or governance, if you will, and
the other is the actual sports side. On the sports side, I
think that ultimately becomes a resource issue of the new
board. In terms of governance, this is one of the reasons why I
like how the Independent Commission has suggested the assembly,
because that would be the appropriate striking point for them.
Mr. Stapleton. Mr. Chairman, I think all questions like
that go back to mission, and I think the Independent Commission
and the task force were very similar in making hard decisions
about the mission of the United States Olympic Committee and
what is, I think, a misunderstood mission has led us in part to
where we are today, so my answer would be, to the extent that
the Deaf Olympics support the mission to win Olympic gold
medals, Paralympic medals, and inspire Americans, yes, but I
don't think they fit strictly within that mission, and where
you have to make some hard decisions here about what we're
going to use our resources to do.
The Chairman. Mr. Balk.
Mr. Balk. It's my understanding that the International
Coordination Committee of Paralympic Athletes, or Paralympic
Organizations came together in the eighties and created the IPC
and the CISS, which governs Deaf Olympics, and those two groups
at that time chose to be separate, and it doesn't reflect upon
either group as being more athletic, or more capable, or one
event being more important than the other.
The IOC recognizes the Paralympics, and has put in their
bid request that the Olympics include a Paralympic bid, so they
are one event. It does not refer to the Deaf Olympics or a Deaf
Olympic event and, as Bill just mentioned, in the mission we're
focused on the Olympics and Paralympics, and to what end the
board would see the Deaf Olympics as supporting that mission is
fine, but I don't think it should be required of the USOC. It
should be determined by the board, and there are many Olympic-
style competitions for various groups, of which the deaf are
one, and they're certainly worthy competitions, but not
necessarily should be included in the USOC's mission.
The Chairman. Mr. Fehr, maybe we could give you a seat at
the table here. We need to have a dialogue on this, what has
obviously become the major difference between the internal
commission and the independent commission's role and mission,
so perhaps we can have a dialogue between you and Mr. Stapleton
in particular here, and any of the others who want to join in.
As you know, I don't run this Committee in a conventional
fashion, but the important thing I think is to have a dialogue
here so we can understand the differences, particularly on this
issue, and the other panel members are welcome to join in here
in this dialogue.
Mr. Fehr, do you want to respond a little bit to what--Mr.
Stapleton's very outstanding work, and we thank you for it, Mr.
Stapleton, comments are, concerning the role of the Olympic
Assembly?
Mr. Fehr. Let me perhaps just take a moment or two and try
and outline some of the considerations which went into our
thinking. I think we believe, as the internal task force
believes, that there is a role for the wide volunteer movement,
and that it's crucial. To us that means you actually have to
have something for them to do. That is part of it.
And then there's a fundamental question as to whether or
not you want to maintain some democracy in the movement, and
what do I mean by that? The assembly can't hire staff. It can't
make significant judgments except in some areas designated by
the IOC charter, and only then on recommendation from the
board. It can't spend any money. It can't vote on amendments to
governing structure, except on recommendations from the Board.
The question then becomes, is it appropriate for that group
to have a representative on the Board? That can be debated, and
you can debate it specifically in the context of whether or not
it would continue some of the political discussions which have
led us here.
It's not a voice on the board which is significant in our
structure, it is one-quarter of a vote out of 10 that that
individual would have, and our belief essentially was that when
you redo the structure with a majority of independence, and put
the responsibility for all decisions relating to business and
operations on a small 10-vote, 13-member board, complete with
the conflict of interest rules and all the rest of it, that it
did not harm the process to a significant degree to have an
elected representative of the assembly.
It is a debatable point, because the politics are what
drove us here. That is the thing which got, the analysis which
got us there.
With respect to the pay issues, we approached that in a
slightly different fashion, and that's simply that if you're
going to have an Olympic Assembly, and you have to have a place
for the volunteers to meet and exchange ideas and have their
voice heard and interchange with the board, there are a lot of
volunteers which simply can't afford on their own to go to
meetings, just plain and simple, and that we would expect,
although we didn't so state, that individuals who could afford
to attend on their own would not seek reimbursement.
The Chairman. Mr. Stapleton.
Mr. Stapleton. Thank you, Mr. Chairman. The thought of
sitting in front of a Senate panel and having to disagree with
Don Fehr is not something I cherish, but I think on this issue
there needs to be more discussion and more consideration,
because we have to remember that for the most part two
independent groups came up with about the same idea.
Having spent 12 years as a volunteer----
The Chairman. We agree that this is a primary difference.
Mr. Stapleton. Right, I agree. Having spent 12 years as a
volunteer in the U.S. Olympic Committee, and having quite a few
members of our task force who have been involved for a long
time, I think we were probably more sensitive to ridding
ourselves of any possibility of internal bickering, of
constituent-based decisionmaking, and my view and I think the
view of the task force was, let's create a starting point, and
if the starting point is that we went maybe too far, and maybe
there should be a larger group that has some voting rights,
it's easier, I think, to fix that on the annual basis that
they've suggested as a review than to create a system that in
our view from the outset is problematic.
Having lived in that culture, if the 124-member panel can
vote on constitutional change, that is a significant governance
power. If they can choose the bid city, imagine the political
issues that come with that.
The Chairman. We've seen that before.
Mr. Stapleton. Exactly, so we were just probably more
sensitive to that. I think it requires further discussion.
The Chairman. Mr. Marbut.
Mr. Marbut. I think Don's insights are very thoughtful, and
I think are largely correct, and I think it is important not to
lose sight, the ultimate power in the new structure is going to
be the Board and the CEO, it is not going to be the assembly,
and I think that is Don's integrated concept he had talked
about earlier, and I think there may be some issues inside what
you vote on, maybe some of the structuring of those, maybe
fine-tuning, but I think it is very critical that we keep a
forum that we deal with issues that don't necessarily need to
be going up to the Board level. There are a lot of things you
could address at a lower level that you don't want to burden
the new board with.
The Chairman. Mr. Scherr.
Mr. Scherr. Let me just speak very quickly to the cost
elements of that. As the person who currently is responsible
for allocating resources directly to athletes and governing
bodies, every single dollar that is spent on governance, and I
think currently it approaches $1.5 million a year, is a dollar
less that we can send an athlete or a team overseas and
compete, or support an athlete directly, and I think that is of
significant concern here.
The Chairman. Ms. Godino, do you have a comment?
Ms. Godino. I do, thank you, Mr. Chairman. I think one of
the fundamental issues here is the issue of culture change,
which I addressed in my testimony and has been raised here, and
I think one of the concerns, at least today, with the assembly
having that power, is that it's similar people, or the same
people in those chairs, and that it's harder to change the
culture from what it is today without sort of a break from that
type of behavior, and I think there is concern that there be
debate about what the assembly could vote on or what they
couldn't, and pressure put on the board to allow the assembly
to vote on more and more and more as time went on.
The Chairman. That is a reason for legislation, I think.
Ms. Godino. Perhaps, although that said, I think a smaller
board, and perhaps potentially without a speaker having a vote,
the speaker of the assembly having a vote on that board, would
be less subject to that pressure than a board or the executive
committee today, for example.
The Chairman. Thank you.
Mr. Balk. Most of what I've been thinking has been said,
and this issue of significant Olympic matters to be voted on
needs to be, if there is a vote it would have to be defined by
the board to be considered, because there's continuous
ambiguity over what would be Olympic and what wouldn't, and
there would be still the same political infighting and
bickering over what would be decided upon.
The Chairman. Well, it seems to me that we have an
outstanding set of recommendations that we should be able to
act on without controversy, except for two areas that I would
ask that you continue discussion on. One is the Olympic
Assembly, as we just described, and I'm not sure that you're
that far apart, and I'm not sure the travel expenses is that
huge of an issue, but hopefully it can be worked out. We means
test everything, but we would hate to do that to members of the
Olympic Assembly, and the other is this, make sure we're in
comportment with the rules and regulations of the IOC.
So I would like for all of you to look at that, and perhaps
within the next week to 2 weeks, maybe, communicate with us
again what your thoughts are. I would like to be able to move
this and be able to say that we have basically almost unanimous
agreement on all of this, and again I thank you all.
Senator Campbell.
Senator Campbell. Mr. Chairman, I understand we've already
had our first call to vote and only have another 10 or 12
minutes, so I won't ask any questions, but I did--while our
panel was testifying I was reading their comments, and I think
that you're right, they have agreement between the task force
and the Commission on most entities--I was interested
particularly in Mr. Stapleton's comments, and Mr. Fehr's.
Mr. Stapleton's comments about our mission, it seems to me
that when we tried as an Olympic Committee to be all things to
all people, that's when we began to really get in some trouble,
and I certainly agree that we ought to have fair, open
representation of everybody on a group, but by the same token,
as I understand Mr. Stapleton's comments, we may end up with
the same thing we had before, a big, clumsy, unwieldy group
with factions and cliques and expense accounts and all this
other stuff, so no matter what you call them, if we end up with
the same kind of a group under a different name, we haven't
really accomplished an awful lot.
Mr. Scherr, in his comments--and by the way, I won't ask
for your answers to questions, but I would like all of you to
think about this. Mr. Scherr's comments, as I understood the
Independent Commission, their belief was that the President
should have the voice on international matters, and Mr.
Scherr's, on page 3, he says the government reforms should make
clear the CEO is responsible and accountable for the conduct of
all aspects of the USOC's operations in the international
arena, so there's a little bit of a difference there, too, that
we might ask both groups to consider.
Mr. Balk mentioned that perhaps Congress should provide
other vehicles for funding multisport organizations, because
they obviously are important, but there are limited funds, and
I was interested in knowing where he would identify the funds,
since we can't fund half the things that we're supposed to
around here now.
And maybe just one question of Ms. Godino. Is the 20
percent vote for athletes now, they're practicing athletes, or
are these recently retired? That would be the only question I
would have for the panel.
Ms. Godino. Recently retired, competed at an elite level in
the last 10 years, and they're directly elected by other
athletes.
Senator Campbell. Well, Mr. Chairman, thank you very much
for convening this hearing. I think we're at least heading in
the right direction, and with some more dialogue between the
Commission and the task force, hopefully we will be able to
move a bill forward that will be, maybe not perfect for all
people, but certainly moves us a great deal forward from where
we have been.
Thank you.
The Chairman. Well, if we do, it will be because of your
zealous participation, Senator Campbell, thank you.
I want to thank the witnesses, and thank you very much. You
have been very helpful, and we intend to move, as you said,
deliberately but rapidly. Thank you very much.
This hearing is adjourned.
[Whereupon, at 11:10 a.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of Hon. Olympia J. Snowe, U.S. Senator from Maine
Thank you, Mr. Chairman, and I want to especially commend you,
Senator Hollings and certainly Senator Stevens for your dogged
determination to bring about much needed reform at the United States
Olympic Committee. I think we can all agree that time is of the essence
particularly with the 2004 Summer Olympics rapidly approaching.
This report from the Independent Commission only serves to
underscore what we've come to understand in the starkest terms over the
preceding months--that the USOC structure is broken and in need of
substantive overhaul. I want to applaud the members of the Independent
Commission who have worked so diligently to produce a report I believe
is an excellent blueprint for instituting changes to both the USOC
bylaws and Amateur Sports Act of 1978. I will look forward to the
testimony here today but I already know we have a document from which
positive change can be forged.
Mr. Chairman, the recent controversies surrounding the USOC have
taken the focus away from where it belongs--our athletes--and has
instead shined a spotlight on internal squabbles and accountability
questions that not only tarnish the Olympic image for the public, but
also endanger sponsorship of the games themselves. Edward Petry, who
resigned from the Ethics Committee, said in an interview that, ``I've
worked with hundreds of organizations, and I've never seen one so
confused or unwilling to enforce its own standards.'' John Hancock
Financial's Chairman has said, ``It's a dysfunctional family that keeps
electing the daft cousin or uncle to the top job. Their bureaucracy
must be blown up and restructured.''
Well, that is essentially what the Independent Commission's report
recommends and, tellingly, the USOC's own internal examination has
reached nearly identical conclusions about what must be done.
Personally, I can't imagine there's a corporation in America--at least
not one that is successful and makes money--that would have a 123-
member Board of Directors! I also know how hard it is to get anything
done around here, just imagine what it would be like with 23 more of
us! I can't imagine anyone would think that's a good idea!
So I am most encouraged both panels recognize the need to
drastically reduce that number, whether it's to nine as the Independent
Commission recommends, or to the 11 that the internal review ultimately
recommended. Not only does that allow the board to actually make
decisions rather than simply function as a debating society, but when
it costs $250,000 every time the board meets, I think there's no
question it addresses some fundamental problems.
I've also advocated for a change from the once-every-four-years
reporting to Congress that the USOC currently makes to once every year,
and I'm pleased the report echoes that conclusion. Moreover, a
requirement to provide audited financial statements to the public
certainly could not hurt in rebuilding the public's and USOC sponsors'
faith in the organization. And can there be any doubt there's
dysfunction under the current structure, when, as the report states,
since the 2000 Games there have been three volunteer Presidents and
four Chief Executive Officers? Thankfully, the report also considers
the roots causes as well as the solutions to that pattern that needs to
be broken.
Finally, I recognize the importance of keeping athletes at the
center of the decisions that are made, while at the same time ensuring
we don't set up a system that only puts the various sports in unhealthy
competition with each other. So I will be interested to hear
specifically how the Independent Commission believes their proposed
116-member assembly composed of the former members of the Board of
Directors will function, and serve as a suitable voice for athletes.
Mr. Chairman, as the Commission concluded, ``The American public is
the ultimate stakeholder in the performance of the USOC.'' As
representatives of the American public, we have a duty to ensure the
continued credibility and viability of that organization. I know you
and the Ranking Member and Senator Stevens will be moving forward in
that vein, and as we do so I'm certain this report--as well as the
findings and recommendations of the internal review at the USOC--will
serve as springboards from which we can institute those improvements
necessary for a strong and credible USOC.
Thank you, Mr. Chairman.