[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.

                                  
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