[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
                            OLYMPIC FAMILY--
                      FUNCTIONAL OR DYSFUNCTIONAL?

=======================================================================

                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON IMMIGRATION,
                      BORDER SECURITY, AND CLAIMS

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 9, 2005

                               __________

                           Serial No. 109-81

                               __________

         Printed for the use of the Committee on the Judiciary


    Available via the World Wide Web: http://www.house.gov/judiciary



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                       COMMITTEE ON THE JUDICIARY

            F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois              JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina         HOWARD L. BERMAN, California
LAMAR SMITH, Texas                   RICK BOUCHER, Virginia
ELTON GALLEGLY, California           JERROLD NADLER, New York
BOB GOODLATTE, Virginia              ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California        ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee        SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah                   MAXINE WATERS, California
SPENCER BACHUS, Alabama              MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina           WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana          ROBERT WEXLER, Florida
MARK GREEN, Wisconsin                ANTHONY D. WEINER, New York
RIC KELLER, Florida                  ADAM B. SCHIFF, California
DARRELL ISSA, California             LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona                  CHRIS VAN HOLLEN, Maryland
MIKE PENCE, Indiana                  DEBBIE WASSERMAN SCHULTZ, Florida
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas

             Philip G. Kiko, General Counsel-Chief of Staff
               Perry H. Apelbaum, Minority Chief Counsel
                                 ------                                

        Subcommittee on Immigration, Border Security, and Claims

                 JOHN N. HOSTETTLER, Indiana, Chairman

STEVE KING, Iowa                     SHEILA JACKSON LEE, Texas
LOUIE GOHMERT, Texas                 HOWARD L. BERMAN, California
LAMAR SMITH, Texas                   ZOE LOFGREN, California
ELTON GALLEGLY, California           LINDA T. SANCHEZ, California
BOB GOODLATTE, Virginia              MAXINE WATERS, California
DANIEL E. LUNGREN, California        MARTIN T. MEEHAN, Massachusetts
JEFF FLAKE, Arizona
BOB INGLIS, South Carolina
DARRELL ISSA, California

                     George Fishman, Chief Counsel

                          Art Arthur, Counsel

                 Luke Bellocchi, Full Committee Counsel

                  Cindy Blackston, Professional Staff

                   Nolan Rappaport, Minority Counsel


                            C O N T E N T S

                              ----------                              

                              JUNE 9, 2005

                           OPENING STATEMENT

                                                                   Page
The Honorable F. James Sensenbrenner, Jr., a Representative in 
  Congress from the State of Wisconsin, and Chairman, Committee 
  on the Judiciary...............................................     1
The Honorable John N. Hostettler, a Representative in Congress 
  from the State of Indiana, and Chairman, Subcommittee on 
  Immigration, Border Security, and Claims.......................     2
The Honorable Sheila Jackson Lee, a Representative in Congress 
  from the State of Texas, and Ranking Member, Subcommittee on 
  Immigration, Border Security, and Claims.......................     3

                               WITNESSES

Mr. Jim Scherr, Chief Executive Officer, United States Olympic 
  Committee
  Oral Testimony.................................................     7
  Prepared Statement.............................................    10
Mr. Mark Henderson, Chair, Athletes' Advisory Council
  Oral Testimony.................................................    13
  Prepared Statement.............................................    15
Mr. Paul Hamm, 2004 Athens Olympics All-Around Champion
  Oral Testimony.................................................    17
  Prepared Statement.............................................    19
Mr. Thomas Burke, Vice Chair, Pan American Sports Council, USOC
  Oral Testimony.................................................    21
  Prepared Statement.............................................    23

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the Honorable F. James Sensenbrenner, Jr., 
  a Representative in Congress from the State of Wisconsin, and 
  Chairman, Committee on the Judiciary...........................    47
Prepared Statement of the Honorable Sheila Jackson Lee, a 
  Representative in Congress from the State of Texas, and Ranking 
  Member, Subcommittee on Immigration, Border Security, and 
  Claims.........................................................    47
Letter from John B. Langel, Law Offices of Ballard Spahr Andrews 
  & Ingersoll, LLP, to Jim Scherr, Acting Chief Executive Officer 
  & Chief of Sport Performance, United States Olympic Committee..    49
Prepared Statement of Michael T. Harrigan, former Executive 
  Director, President's Commission on Olympic Sports.............    57
Prepared Statement of Robert F. Kanaby, Executive Director, 
  National Federation of State High School Associations..........    65


                            OLYMPIC FAMILY--
                      FUNCTIONAL OR DYSFUNCTIONAL?

                              ----------                              


                         THURSDAY, JUNE 9, 2005

                  House of Representatives,
                       Subcommittee on Immigration,
                       Border Security, and Claims,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 11:35 a.m., in 
Room 2141, Rayburn House Office Building, the Honorable John N. 
Hostettler (Chair of the Subcommittee) presiding.
    Mr. Hostettler. The Subcommittee will come to order.
    At this time, the Chair recognizes the Chairman of the Full 
Committee, the gentleman from Wisconsin, for purposes of an 
opening statement.
    Chairman Sensenbrenner. Thank you very much, Mr. Chairman.
    I am here both to make a statement and to welcome my 
constituent, Paul Hamm, who is an Olympic Gold Medalist and who 
was a victim of the United States Olympic Committee's 
dysfunctionality after his splendid come-from-behind victory in 
the men's all around gymnastics competition in Athens.
    This unexpected comeback victory was the pride of America, 
and then this glorious victory turned into a horrible nightmare 
for Paul Hamm.
    Seeing him hung out to dry for days on the television 
compelled me to come to his defense, and in doing so, I got a 
personal view of the inner workings of the Olympic system and 
its faults and weaknesses. And one of the reasons I'm here 
today as an ex officio Member of this Subcommittee, and this is 
the first opening statement that I have made at a Subcommittee 
hearing since I became the Full Committee Chairman 4\1/2\ years 
ago is because I want to make sure that what happened to Paul 
Hamm at Athens, where he was hung out to dry and had to fend 
for himself for hours and days on end, never happens again to 
an American Olympic athlete who was sent by the U.S.O.C. to 
compete and excel in the Olympic Games.
    Paul Hamm is an Olympic champion who competed to the best 
of his ability. He followed all the rules of his sport, and he 
won his gold medal by doing all that is expected of an elite 
athlete.
    He is the perfect example of an American Olympian that 
makes our country proud not only through his athletic 
achievement, but also because Olympians represent this country 
with honor and dignity.
    And while understanding the need to handle controversies 
during the games quietly and in a uniform manner, the support 
system in place for an athlete should not be silent in the 
controversy that involves a competitor from an aggressive and 
vocal country.
    This is the situation Paul Hamm found himself in for far 
too long, and he was there alone.
    I hope today that we find changes have been made to address 
this type of situation in the future.
    While the U.S. Olympic Committee has made internal reforms 
to its governance structure, I strongly believe that reforms 
need to be made in the organization's priorities, both 
procedurally and monetarily with regard to Olympic athletes, as 
well as those who are up and coming within the Olympic 
Movement.
    My understanding is that some of the backroom negotiations 
and motives of officials that steered Mr. Hamm's experience are 
commonplace within the Olympic family, and that it should be 
stopped.
    It has been alleged that the head of the gymnastics 
national governing body, who was so absent in the defense of 
Mr. Hamm, was in the process of negotiating for a job within 
the Federation of International Gymnastics and was also 
affiliated with the gymnastics tour that Mr. Hamm had chosen 
not to join. There shouldn't even be a perception that the 
actions of individuals in positions of influence are being 
governed by pending job opportunities or an athlete's personal 
choices about participating in profit making non-Olympic 
endeavors.
    Additionally, allegations have been made that too much of 
the USOC's budget may be going to bonuses for high-level 
officials within the organization for travel and 
accommodations, for meetings of the Olympic governing structure 
and increasingly larger entourages accompanying athletes to 
Olympic events, rather than on Olympic athletic programs which 
need the funding and programs that are designed to produce 
future Olympians.
    This is certainly not what most people would perceive as 
representing appropriate prioritization by the Olympic 
Committee, and hopefully we can get some answers today, and if 
necessary address those concerns. Thank you, Mr. Chairman.
    Mr. Hostettler. I thank the gentleman.
    Today, the Subcommittee will hear testimony--excuse me--on 
how well the relationships between the U.S. Olympic Committee, 
Olympic athletes, and sports national governing bodies and 
organizations within the Olympic family are functioning, as 
well as how well the USOC itself is performing under its new, 
reorganized governing structure.
    There may be a need to make additional changes to the 
Federal charter with regard to USOC procedures and purposes so 
U.S. athletes and sports organizations are getting the support 
and guidance they need.
    The U.S. Olympic Committee has been a federally-chartered 
organization since 1950. The Ted Stevens Olympic and Amateur 
Sports Act, enacted in 1978, made the USOC the central 
coordinating organization for Olympic and Pan American Games 
sports and their athletes. The USOC's role under its charter is 
to provide financial, educational, training, and medical 
support systems for these athletes.
    Over the last several years, the USOC has been the subject 
of many scandals. There was widespread agreement that the 
unwieldy managerial structure and internal politics were, in 
large part, the key to these scandals.
    In June 2004, the USOC appointed a new board of directors 
and implemented several reforms. Today, we will be reviewing 
how well both the new board and the reforms are working.
    There are additional issues we will discuss today on other 
suggested reforms that may better serve the interests of the 
Olympic family and may have to be addressed in legislation.
    One of our witnesses today, Paul Hamm, will be testifying 
about his recent experience in Athens. That event brings up the 
question of what role the USOC plays in the support of U.S. 
Olympic athletes involved in a competitive controversy--whether 
it was appropriately administered in Mr. Hamm's situation and 
whether the roles should be defined differently.
    The Subcommittee will also be discussing concerns expressed 
about reduction of support of U.S. athletes involved in Pan 
American sports, as well as concerns about inadequate fostering 
of young talent through youth and school programs. These are 
areas that fall within the USOC's primary responsibilities 
under the Federal charter.
    Additionally, the Subcommittee wants to review the USOC 
international governing bodies for different sports 
interaction--differences of opinion on who is best suited to 
decide where recruitment funds are best spent and the ethical 
standards and procedures where individual governing bodies 
still exist. The USOC role with regard to these matters may 
need to be defined in the USOC Federal charter.
    Finally, we will be discussing USOC disbursement of funds 
and how well that process works for all the Olympic family 
members.
    At this time, I turn now--I yield to the gentlelady from 
Texas, the Ranking Member of the Subcommittee, for purposes of 
an opening statement.
    Ms. Jackson Lee. I thank the Chairman very much. I want to 
acknowledge Mr. Howard Berman, who is present and part of the 
Subcommittee, and I thank the Chairman of this Committee as 
well.
    Mr. Hamm, let me thank you for being a great America, for 
being a young person who obviously was trained well by his 
parents to understand that the modus operandi for the United 
States is that we never give up. And you obviously honored that 
and honored the tradition and the values of America and 
Americans by making us very, very proud.
    I am, I guess, welcoming of the fact that your 
Congressperson saw fit to get involved where others might have 
thought that we were beyond our boundaries. Many times Members 
of Congress are looked upon as having a narrow focus, but I 
believe that our work is at home, representing our 
constituents. And I'm gratified that your national issue is 
brought to the world's attention by Chairman Sensenbrenner's 
interest in pressing forward on your behalf.
    But might I say, though you are enjoying your profile here 
today, you've made a very good lawyer over there, and you won 
your case. And you deserve our applause and our recognition. 
Thank you very much for being here.
    This is an important question, and I thank the Chairman of 
the Subcommittee for holding this hearing. And I hope that we 
will find at the conclusion that the witnesses representing the 
Olympic Committee will stand against dysfunctionality and come 
up with a reasoned response to what happened to Paul Hamm and 
as well the fact that solutions are already in the mix.
    The U.S. Olympic Committee was established in 1896 to 
select American athletes to compete in the Olympics. The 
Amateur Sports Act of 1978 provided for the recognition by the 
USOC of national governing bodies and for dispute resolution. 
In 1998, the act was amended by the Ted Stevens Olympic and 
Amateur Sports Act, which provided for recognition of the 
Athletes' Advisory Council and the National Governing Bodies 
Council, NGBC, the creation of an athlete ombudsman and the 
responsibility for the Paralympics Games. I would almost argue 
that this is more complicated and more bureaucratic than any 
Federal Government agency could ever be.
    The USOC has experienced some embarrassing controversies. 
In 1991 USOC President, Robert Helmick, resigned amidst 
allegations of ethical misconduct. A few years later, in an 
effort to win the bid to host the 2002 Olympic Winter Games, 
the Salt Lake City Bid Committee was accused of offering bribes 
to IOC members who were responsible for selecting the host 
nation of the 2002 Games. I might imagine or might say to you 
that America turned its head. We wanted the best for our 
Olympians and for the Committee. And our hearts really continue 
to support the efforts of the Olympic Committee. But these were 
embarrassing moments.
    In 2002 and early 2003, ethical questions were raised in 
relation to an action by former USOC Chief Executive Officer 
Lloyd Ward. The USOC Ethics Committee investigation of Mr. Ward 
resulted in a ruling that Mr. Ward had committed two technical 
violations of the USOC's ethics code. Simultaneously, a public 
squabble between Mr. Ward and then USOC President Marty 
Mankamyer brought further embarrassment to the organization and 
ultimately both Ward and Mankamyer resigned.
    As a result of these incidents, USOC oversight hearings 
were held in 2003. This led to the establishment of the 
Independent Commission on Reform of the United States Olympic 
Committee.
    The Independent Commission issued a report in June 2003 in 
which it concluded that many of the USOC's past problems could 
be traced to its large board membership.
    According to the report, the size of the board of 
directors--124 members--made it impossible for the organization 
to operate in a coordinated way. Also nearly all USOC directors 
were elected to the board by constituent groups. As elected 
representatives, the directors would tend to look first to the 
interest of the organization that elected them rather than to 
the best interests of the Olympic--American Olympic Movement, 
which I think is extremely important and has the affection of 
the American people continuously.
    The Commission recommended a statutory overhaul of the 
USOC's governance structure. I hope, as was noted by remarks 
already stated that procedurally we can look to befriending and 
embracing these young athletes and providing them with the 
pathway of success that they deserve and that we'll look to 
building up-and-coming athletes as well, starting in early 
years, because we have taken to athletics in the United States. 
Girls are now playing soccer and basketball. Swimmers are 
renowned. Those who engage in gymnastics--we are truly 
committed. We need our Olympic Committee to be committed to us 
as well.
    In the 108th Congress, several bills were introduced which 
would have carried out the recommendation of the Independent 
Commission. In April 2004, however, the USOC implemented its 
own organizational reforms. The provisions in the bills were 
implemented with only minor modifications that were perceived 
by the USOC as being necessary to comply with the requirements 
of its charter.
    The board of 123 members voted themselves out of power and 
established a board of just 11 members. That's a great step in 
the right direction. Other than for some minor technical 
corrections and a few clarifications, the Board does not 
believe that legislation is still necessary.
    I will withhold my judgment on this issue. I'm looking 
forward to hearing the testimony, and I'd like to see that 
we've been able to sweep out our own closets and satisfy 
Congress' interest, but I think we must show without a doubt, 
that we will never leave our athletes abandoned as was so 
evident in the case of Paul Hamm.
    We will hear from Paul Hamm, the first American man to win 
the Olympic Gold Medal in the gymnastics all around 
competition. He scored 9.837 on the high bar to achieve an 
overall score of 57.823 points, beating his closest competitor, 
South Korea's Kim Tae Young, by .0123 points, the slimmest 
margin for the competition in Olympic history, but he did win.
    The third place bronze winner was a South Korean score by 
0.49, and won the bronze medal.
    A few days later, the South Korean delegation lodged a 
scoring error complaint with the governing board of the sport, 
the International Gymnastics Federation. They alleged that 
Young's routine had received a start value of 10 during his 
earlier identical performances in the team preliminaries and 
finals, but only a 9.9 during the all around competition, and 
that this difference of 0.1 points would have given him the 
gold medal.
    According to the rules for the gymnastic competition, 
challenges to scoring decisions must be made before the 
following rotation is complete, so the objection from the South 
Korean delegation was rejected.
    Mr. Hamm will testify that the USOC and the other American 
organizations left him alone to deal with this dispute until it 
was almost resolved.
    We need to know why. And I conclude by simply saying this: 
at the point where it was discovered that there was an 
erroneous filing by the objection--or the objection of the 
South Korean delegation, my question simply is: where was the 
American Committee? Where was the defense of this athlete, 
young man without counsel and without support? Where was the 
vigorous argument that utilization of due process, which we 
adhere to in a very strong way--what happened? And if it can be 
fixed, we need to hear how and when, and we need to know that 
it will never happen again. I yield back.
    Mr. Hostettler. I thank the gentlelady. Without objection, 
all Members' opening statements will be made a part of the 
record.
    At this time, I'd like to introduce the members of our 
panel, and thank you for appearing today. Jim Scherr was named 
Chief Executive Officer of the United States Olympic Committee, 
or USOC, in April 2005 after holding several leadership 
positions within the organization. He joined the USOC staff in 
November of 2000. Prior to that, Mr. Scherr served as Executive 
Director of USA Wrestling from 1990 to 2000. He is a three-time 
U.S. national champion and a two-time World Cup champion in 
wrestling. He is a former Olympian, and also the winner of 
multiple silver and bronze medals at world championship 
competitions from 1986 to 1989. Mr. Scherr attended the 
University of Nebraska and earned an M.B.A. degree at Northwest 
University's Kellogg Graduate School of Management.
    Mark Henderson is Chair of the USOC's Athletes' Advisory 
Council, which is composed of Olympic, Paralympic, and Pan 
American athletes elected by their peers to represent the 
interests and rights of athletes within the USOC. Mr. Henderson 
won an Olympic gold medal in 1996 in swimming, and he is a two-
time world champion. He won six national championships and is a 
former world, American, and U.S. Open record holder. Currently 
in San Francisco, Mr. Henderson designed and runs learn-to-swim 
programs for underprivileged children in the city. Mark 
Henderson is a vice president with J.P. Morgan Securities and 
works on the Japanese Equity Trading Floor in San Francisco. He 
graduated from the University of California, Berkeley, with a 
Bachelor's of Science in Psychology.
    Paul Hamm is the reigning Olympic All-Around Champion in 
gymnastics after winning the gold medal at the 2004 Athens 
Olympics. Paul was the first American male to win this honor as 
was stated earlier. Paul also became the All-Around Champion at 
the U.S. National Championships in 2002, 2003, 2004, and the 
World Championships in 2003.
    He first represented the United States at the 2000 Sydney 
Olympics when he was 17 years old, and he has won many all-
around, individual, and team awards during his many years of 
competing.
    Paul is a student at Ohio State University, where he is 
majoring in Finance.
    Thomas Burke is Vice Chair of the Pan American Sports 
Council, which represents seven competitive sports. He is also 
president of USA National Karate-do Federation. Mr. Burke has 
been very active in sports organizations nationally and 
internationally, including having served as delegate to the 
National Governing Body Council at the USOC.
    Currently an attorney in Washington State, he is also 
former General Counsel to the World Karate Federation, the Pan 
American Karate Federation, and the U.S.A. National Karate-do 
Federation.
    Mr. Burke received his Juris Doctor from the University of 
Puget Sound in Washington State.
    Once again, gentlemen, thank you for being here today. You 
will notice that there is a light system. Without objection, 
your full written statement will be made a part of the record, 
and if you can summarize within the 5-minute period, that would 
be very helpful today.
    Thank you once again. Mr. Scherr, you're recognized for 5 
minutes.

  TESTIMONY STATEMENT OF JIM SCHERR, CHIEF EXECUTIVE OFFICER, 
                UNITED STATES OLYMPIC COMMITTEE

    Mr. Scherr. Mr. Chairman, thank you. I appreciate the 
opportunity to be here this morning. Good morning to you and to 
Members of the Subcommittee.
    As you know, my name is Jim Scherr, and I am the Chief 
Executive Officer of the United States Olympic Committee. This 
is a position I came to after having been an Olympic athlete, 
the head of the National Governing Body, a member of the USOC's 
former Board of Directors for almost 20 years, its Executive 
Committee, and most recently, Chief of Sport Performance of the 
USOC.
    In short, I have considerable experience with and a multi-
dimensional perspective of the Olympic family about which you 
have asked the question, ``Is it functional or dysfunctional?''
    I submit to you that until recently an argument can be made 
that the U.S. Olympic Committee and family was clearly 
dysfunctional, but that is no longer the case; and with a 
unified effort it can become the entity that Congress 
originally intended it to be, what the American people expect 
it to be, and, most importantly, what our Olympic, Paralympic, 
and Pan American athletes need it to be.
    In order to achieve these goals, there will have to be 
considerable change at all levels, a process that is often 
difficult and painful to undertake. But this is something we at 
the USOC know first-hand because we have recently implemented 
some long-needed and substantial changes ourselves.
    As you know, and Ms. Jackson Lee alluded to, 2 years ago 
there was a series of comprehensive examinations of the USOC's 
governance and management structures conducted by Committees 
within both the United States Senate and the House of 
Representatives, and two separate task forces comprised of 
distinguished leaders of business, law, broadcasting, and 
sports reviewed those issues.
    Although each operated independently, their recommendations 
were, with a few minor variations, virtually identical. The 
major recommendations were pretty tough for the organization to 
swallow. Without hesitation, the leadership of the USOC began 
implementing them in November 2003.
    The major recommendation was to dissolve the unwieldy and 
often conflicted 125-person board of directors and substitute 
for it a streamlined, independent, and more accountable 11-
person board.
    We also reduced the more than 20 committees to four, and 
empowered management to make business decisions that were 
previously imbued with the politics of an oversized governance 
structure and one that was primarily driven by constituent 
group representation.
    All of this was done by the incumbents. More than 100 
people involved in our former governance structure courageously 
chose to vote themselves out of power in an effort to ensure a 
better future for the USOC, the U.S. Olympic family and most 
importantly, America's athletes.
    This new board is chaired by Mr. Peter Ueberroth, one of 
the most respected business, civic, and sports management 
leaders in America. The new board has established governance 
policies and created structures that demand accountability, 
transparency, and ethical behavior in all transactions, and 
they have redirected the mission of the organization back to 
that which puts the interests of athletes first, and demands 
the same level of excellence administrators and support 
personnel--by administrators and support personnel that is 
exhibited by aspiring Olympians and Paralympians we're all 
dedicated to serving.
    On the management side, 2 years ago, we knew we had a 
significant problem on our hands with public confidence and 
organizational inefficiencies. And we completed a sweeping 
reorganization that dealt with those issues. We eliminated more 
than 100 budgeted full-time positions, over 20 percent of the 
total workforce of the USOC. The senior management, 79 
directors and above, voluntarily voted to freeze their own 
salaries for 2 years, substantially reduce, except for a very 
small amount, any bonuses and incentive compensation available 
to themselves, and significantly reduced overhead expenses, 
restricted travel, and converted those savings to support for 
Olympic and Paralympic and Pan American athletes. In fact, we 
were able to put $3.5 million in additional support to our 
athletes in Athens.
    We voluntarily undertook those efforts to increase the 
effectiveness of the USOC, and to send a strong message to the 
public, our constituent groups, and others that we do indeed 
place athletes first and that is our priority.
    And I might add that--I mean it was a significant sacrifice 
by us as a staff, but it did work. It changed the day and how 
we were viewed by others and how our constituent groups 
responded in their own efforts to support our athletes.
    Our efforts during this quadrennium enabled the USOC to 
enjoy its most successful 4-year period ever by all the 
relevant measures, including medal counts and revenue 
generation.
    But we have a long ways to go. We can do better as an 
Olympic Committee, and we believe we are on the path to do so. 
And that's one of the reasons we're pleased to be here today.
    To succeed, however, we will need to ensure that the entire 
Olympic family, governing bodies, and others who affect our 
athletes on their path to the Olympic Games are more effective 
and more efficient and this Committee can assist us in that 
process.
    My comments will now move beyond the changes that have been 
implemented within the USOC and will focus on the process of 
working with our member National Governing Bodies, or NGBs, as 
they're called in the multi-sport organizations, to help them 
implement similar changes to their structures and standards.
    We understand that for some of these organizations, the 
process of embracing and implementing change is painful and 
difficult. Nevertheless, in order for us to become a fully 
functional Olympic family pulling together and servicing our 
athletes, these changes must be made.
    Twenty-six years ago, Congress put a system in place which 
identified the USOC as the central coordinating body for 
amateur sports in the United States, and they tasked--and the 
USOC delegated--much of the responsibility for developing 
athletes and supporting them to our national governing bodies. 
That system has worked well, but in many ways, we have failed 
our athletes, and our governing bodies and the USOC have to do 
a better job of more efficiently supporting our athletes.
    And one of our first and most important priorities we now 
have is to deliver effective support to those athletes, 
particularly financial support. For the USOC, our funding is 
generated entirely from private sources, which stands in stark 
contrast to almost every other major national Olympic 
Committee, of which there are more than 200 in the world, and I 
believe there are only two or three that receive no funding 
from their Federal Government.
    The allocation of our limited resources is our greatest 
challenge. We have demands from many different sectors ranging 
from our high-performance services and programs for athletes, 
elite athlete health insurance, anti-doping programs, and 
programs for the disabled. Our priority and our internal mantra 
is to put athletes first. Accordingly, we have just doubled the 
amount of financial assistance that we provided directly to 
Olympic and Paralympic athletes and hopefuls. That increase in 
financial support takes place July 1st.
    We've also doubled the amount we spend on Elite Athlete 
Health Insurance for athletes this quadrennium, increased the 
amount we spend on Olympic training centers and other high-
performance services we provide to athletes, substantially 
increased our funding for the fight against doping in sport to 
protect our athletes and to protect their reputations, and have 
substantially and more than doubled our support for elite 
Paralympic athletes and their development.
    We have discarded--and I think this is a very important 
point--we have discarded our previous policy of giving NGBs 
automatic entitlement to a certain level of annual funding. 
Instead, the award of a grant and its amount will be contingent 
and predicated upon a comprehensive evaluation of the NGB's 
performance, programs and capabilities to serve those athletes.
    In short, there will be accountability for the funds that 
we provide to the national governing bodies going forward. I 
believe that this process is quite similar to how this 
Subcommittee and other Committees of Congress evaluate various 
Executive Branch programs under their jurisdiction.
    Similarly, in an effort to allow the organization to more 
effectively fulfill its mission of winning Olympic and 
Paralympic medals, we have revisited its program for funding 
NGBs that govern sports that are only on the Pan American Games 
program.
    On the governance side, as a condition for affiliation 
with, recognition by, and other support from the USOC, we are 
also requiring that national governing bodies restructure their 
board in a manner that is reflective of good governance 
practices and principles contained in Sarbanes-Oxley as the 
USOC has done. That will not be a process without great----
    Mr. Hostettler. Mr. Scherr, could you summarize maybe for 
us, and a conclusion.
    Mr. Scherr. Thank you. Let me summarize on two points. One, 
as it relates to progress that we have made over the past 2\1/
2\ years to change the USOC and become more effective, we have 
made significant progress. We have a ways to go. We have 
reformed our board. We've reformed our management practices and 
our staff and how we deal with others. We need to reform and 
push this reform through the national governing bodies.
    As it relates to I believe what is a primary concern before 
the Committee today how we supported Mr. Hamm in his attempts 
to retain his medal, I believe we made mistakes in that 
process. We have already admitted those mistakes. I think we 
made two principal mistakes.
    One, we did not communicate more clearly and more directly 
with Paul Hamm early in the process.
    Second, we did not support and come out publicly soon 
enough in support of, or strongly enough when we did, in 
support of Paul Hamm. And there was a period of 4 or 5 days 
where I think both of those things could have been done more 
quickly.
    As it relates to Ms. Jackson Lee's remarks, there was not 
an opportunity nor venue to support the retention of Paul's 
medal until the Koreans actually filed their arbitrage in 
accordance with arbitrage for sport; filed their grievance. And 
once we did, we defended it vigorously and spent over $400,000 
to defend his medal before that tribunal and were successful in 
doing so.
    But there was a public venue and there was a private venue 
directly with Paul that was available to us that we relied on 
the national governing body and the person, Bob Colorossi to 
communicate directly with Paul, and we understand now that 
those communications were not effective and not to the 
satisfaction of Mr. Hamm, and we would have done those things 
differently in hindsight.
    But in the end, Paul Hamm is the Olympic champion. He has 
retained his medal. And for that, we are very proud of Mr. Hamm 
and his struggle, and what he has accomplished as an athlete.
    [The prepared statement of Mr. Scherr follows:]

                    Prepared Statement of Jim Scherr

    Good morning Mr. Chairman and members of the Subcommittee. My name 
is Jim Scherr and I am the Chief Executive Officer of the United States 
Olympic Committee. This is a position I came to after having been an 
Olympic athlete, the head of a National Governing Body, a member of the 
USOC's former Board of Directors and its Executive Committee, and most 
recently, Chief of Sport Performance of the USOC. In short, I have 
considerable experience with and a multi-dimensional perspective of the 
Olympic Family about which you have asked the question, ``Is it 
functional or dysfunctional?''
    I submit to you that until recently an argument can be made that 
the US Olympic family was clearly dysfunctional, but that is no longer 
the case, and with a unified effort it can become the entity that 
Congress originally intended it to be, what the American people expect 
it to be, and, most importantly, what our Olympic, Paralympic, and Pan 
American athletes need it to be. In order to achieve these goals there 
will have to be considerable change at all levels, a process that is 
often difficult and painful to undertake. But this is something we at 
the USOC know first-hand because we have recently implemented some 
long-needed and substantial changes.
    As you probably know, two years ago there was a series of 
comprehensive examinations of the USOC's governance and management 
structures conducted by committees within both the United States Senate 
and the House of Representatives, and two separate task forces 
comprised of distinguished leaders of business, law, broadcasting, and 
sports. Although each operated independently their recommendations 
were, with a few minor variations, virtually identical. The major 
recommendations were pretty tough, but without hesitation the 
leadership of the USOC began implementing them in November 2003.
    The major recommendation was to dissolve the unwieldy and often 
conflicted 125-person board of directors and substitute for it a 
streamlined, independent, and more accountable 11-person board. We also 
reduced the more than 20 committees to 4, and empowered management to 
make business decisions that were previously imbued with the politics 
of the oversized governance structure. All of this was done by the 
incumbents--the more than one hundred people involved in our former 
governance structure chose to vote themselves out of power in an effort 
to ensure a better future for the USOC, the US Olympic family and most 
importantly, America's athletes.
    The new board is chaired by Mr. Peter Ueberroth, one of the most 
respected business, civic, and sports management leaders in America. 
This new board has established governance policies and created 
structures that demand accountability, transparency, and ethical 
behavior in all transactions, and they have redirected the mission of 
the organization back to that which puts the interests of athletes 
first, and demands the same level of excellence of administrators and 
support personnel that is exhibited by the aspiring Olympians and 
Paralympians we are all dedicated to serving.
    On the management side, to regain the confidence of the public and 
deal with the organization's inefficiencies, we have recently completed 
a sweeping reorganization that involved the elimination of more than 
100 budgeted full-time positions, representing more than 20% of the 
total USOC workforce. The USOC's senior management voluntarily decided 
two years ago to freeze the salaries of all senior positions, 
substantially reduce the incentive compensation program, reduce 
overhead expenses, restrict travel, and convert to cash certain assets, 
all to generate more funds for the support of our Olympic, Paralympic, 
and Pan American athletes. We voluntarily undertook these efforts to 
increase the overall efficiency and effectiveness of the USOC, and to 
send a strong message to our constituents that the USOC does in fact 
place Athletes First. These efforts allowed us to make available an 
additional $3.5 million in support for our athletes training for the 
Athens Olympic Games, and to pursue our fight against athlete doping 
which has become the world standard that other sports organizations 
have been encouraged by Members of this Congress to emulate.
    Our efforts during the 2001 through 2004 quadrennium enabled the 
USOC to enjoy its most successful quadrennium ever by all relevant 
measures, including medal counts and revenue generation. But we know we 
can do even better and we believe we are on a path to do so. To 
succeed, however, we will need to ensure that the entire Olympic family 
is more effective and efficient.
    My comments will now move beyond the changes that have been 
implemented within the USOC and will focus on the process of working 
with our member National Governing Bodies, or ``NGBs,'' and the multi-
sport organizations, to help them implement similar changes to their 
structures and standards. We fully understand that for some 
organizations, the process of embracing and implementing change is 
painful. Nevertheless, in order for us to become a fully functional 
Olympic family pulling together for the same goal, that is, service to 
our athletes, these changes must be made.
    One of the first and most important priorities we now have is to 
deliver effective support to our athletes, particularly financial 
support. For the USOC, our funding is generated entirely from private 
sources, which stands in stark contrast to almost every other major 
National Olympic Committee, the majority of which receive funding from 
their respective governments. The allocation of our limited resources 
is one of the greatest challenges we face, with demands from so many 
sectors ranging from high performance services and programs, elite 
athlete health insurance, anti-doping programs, and programs for the 
disabled. Our priority, and our internal mantra, is to put ``Athletes 
First.'' Accordingly, we have doubled the amount of financial 
assistance that will be provided directly to Olympic and Paralympic 
athletes and hopefuls. We have also doubled the amount we spend on 
Elite Athlete Health Insurance for athletes, increased the amount we 
spend on training centers and other high performance services we 
provide to athletes, substantially increased our funding for the fight 
against doping to protect athletes, and substantially increased our 
support of Paralympic athletes.
    We have discarded our previous policy of giving NGBs automatic 
entitlement to a certain level of annual funding. Instead, the award of 
a grant and its amount will be contingent upon a comprehensive USOC 
evaluation of an NGB's performance and programs. I believe that this 
process is quite similar to how this Subcommittee and other committees 
of Congress evaluate various Executive Branch programs under their 
jurisdiction. Similarly, in an effort to allow the organization to more 
effectively fulfill its mission of winning Olympic and Paralympic 
medals, the USOC has revisited its program for funding NGBs that govern 
sports which are only on the program of the Pan American Games.
    On the governance side, as a condition for affiliation with, 
recognition by, and other support from the USOC, we are requiring that 
NGBs restructure their board in a manner that is reflective of good 
governance and Sarbanes/Oxley principles as the USOC has done. Further, 
we are requiring that they adopt procedures and practices that ensure 
the same level of accountability, transparency, and ethical conduct 
that the USOC is demanding of itself.
    When the USOC dissolved its large board nearly two years age there 
was some resistance because it meant that many people, indeed, more 
than one hundred, would lose their seats at the table. I believe that 
some of the NGBs may be experiencing similar resistance to our efforts 
to require accountability, good governance and increased support for 
elite and developing athletes in their sports. I submit, however, that 
these and other changes should be accepted and implemented just as the 
USOC did in response to recommendations of two Congressional Committees 
and the task forces that had carefully considered what would best serve 
America's Olympic interests. These efforts to assist NGBs should be 
applauded, not attacked, because they are in the best interests of our 
athletes and the entire nation.
    There is still important work that must be done before the USOC can 
function with maximum efficiency and effectiveness. However, we have 
come a long way in a very short period of time, and there is much about 
which we are proud. We have just completed a quadrennial period that 
was the most successful in the history of the USOC. America's Olympic 
athletes captured 137 medals, 34 of them at the 2002 Olympic Winter 
Games in Salt Lake City and 103 at the Summer Games last summer in 
Athens. And matching their level of achievement were our Paralympians 
who finished among the top five nations in the medal count in both Salt 
Lake City and Athens. We have reformed the way the world views us in 
the fight against doping in sport. We have accomplished the highest 
levels of revenue generation ever. The viewership of the Athens Olympic 
Games was the largest ever for a Games not based in North America and 
the highest ever worldwide.
    Just as important as the medal count, however, was the manner by 
which America's athletes represented our country--with pride, honor and 
in a manner consistent with the Olympic Ideals, which includes honest, 
fair, and drug-free competition. We went to great lengths to address 
with athletes negative conduct issues that had occurred in the past in 
an effort to ensure they did not occur again, and they did not occur.
    All of the measures we have implemented--and are now asking our 
family partners in the Olympic Movement to implement--are designed to 
provide more tools and resources to fulfill our newly-articulated 
mission, developed in consultation with and approved by an overwhelming 
majority of all of our constituent organizations, which is ``to support 
U.S. Olympic and Paralympic athletes in achieving sustained competitive 
excellence and preserve the Olympic ideals, and thereby inspire all 
Americans.'' To achieve this we are doing old things in new ways and 
new things in better ways. We are trying to be more creative, and more 
relevant to society as a whole, consistent with our obligations as 
annunciated in the Amateur Sports Act, and in the spirit of what we 
refer to as ``Olympism.'' For example, we have launched a program to 
bring Paralympic sport to disabled active duty and veteran American 
servicemen wounded in the Middle East and elsewhere. We have been 
conducting demonstrations at Walter Reed Army Medical Center and, 
working closely with the House Veterans Affairs Committee, are in the 
process of establishing a more formal partnership with the Department 
of Veterans Affairs so as to better serve these men and women. Since 
all funds that the USOC receives come entirely from finite private 
sources rather than government sources, to conduct new programs such as 
this we must operate in an even more efficient manner than ever before.
    Let me briefly address an issue with which Chairman Sensenbrenner 
had direct involvement, specifically the challenge leveled by a Korean 
gymnast to Paul Hamm's Olympic gold medal. I cannot express to you how 
proud we are of what Paul was able to accomplish in Athens, and how 
committed we were to defending his medal against the attacks of the 
international gymnastics federation and the Korean Olympic Committee. 
In the effort to get Paul to the podium in Athens, through 2004, the 
USOC and USA Gymnastics provided Paul and his coaches with more than 
$200,000 in direct athlete support and access to programs that cost the 
USOC and USA Gymnastics more than $200,000 to deliver. This is 
consistent with the type of support the USOC, in partnership with our 
National Governing Bodies, provides a successful aspiring Olympian.
    We were as supportive of the effort to preserve his gold medal as 
we were in the effort for him to earn it. In the preservation of Paul's 
medal, we expended over $400,000 and additionally committed the staff 
time and attention of our legal division and other employees for over a 
month. While there were issues with communications in Athens between 
the USOC, the international gymnastics federation, USA Gymnastics, and 
Paul that appear clearer now in the light of hindsight than they did at 
the time, I can tell you we have learned a great deal from our 
experience. We have implemented internal policies and practices to 
address these issues in the future. To sum those up, going forward, we 
are not going to rely upon others to be conduits in our communication 
with athletes about issues affecting them at the Olympic Games--we are 
going to involve them in a direct discussion as we attempt to manage 
these issues to their benefit.
    I can also tell you that the USOC has been very active in the 
preservation of athletes' rights. In particular, I am a former athlete 
and approach these issues from that perspective, and a number of our 
management team and Board members are former athletes and have the same 
perspective. In addition, since the 1998 revisions to our statute, the 
USOC has had a full-time, statutorily-mandated athlete ombudsman who is 
an Olympian himself and acts as a resource to athletes who bring these 
matters to his attention. We have invested considerable efforts in 
ensuring that all athletes are aware and able to take advantage of the 
athlete ombudsman system. In addition, we have invested USOC employees 
other than the athlete ombudsman in the effort to protect athlete 
opportunities to compete in Olympic-related competition without undue 
interference from commercial considerations or considerations other 
than athlete performance. While athlete's rights issues develop and 
change over time, we have made every effort to be responsive to and 
communicate those changes to ensure that the rules governing athlete 
participation in the events leading up to the Olympic Games are being 
followed by the NGBs and other sports governing bodies. We believe that 
athletes' rights are adequately protected by the existing statute, the 
USOC Bylaws, and internal policy, such that no legislative change is 
needed at this time.
    The vision of the USOC is to `enable America's athletes to realize 
their Olympic and Paralympic dreams.'' Through the achievement of these 
dreams by our athletes, we can inspire our country and make important 
contributions to our country, our society, and indeed, the world. I 
appreciate your interest in an institution and a movement that has 
meant so much to me for over 25 years first as an athlete, then as a 
volunteer, and finally as an NGB and then USOC executive. I welcome 
your involvement in helping us to make the Olympic Family the best it 
can be.

    Mr. Hostettler. Thank you, Mr. Scherr. Mr. Henderson.

              TESTIMONY OF MARK HENDERSON, CHAIR, 
                   ATHLETES' ADVISORY COUNCIL

    Mr. Henderson. Good afternoon, Chairman Hostettler, and 
Members of the Subcommittee. Thank you for the opportunity to 
speak to you from an athlete's perspective on the current 
status of the Olympic Movement in the United States.
    As the chairperson of the AAC and an athlete in the Olympic 
Movement, I offer this testimony to provide an athlete's 
perspective on the progress of governance reform at the USOC 
and the current status of the Olympic Committee, as well as, to 
express the needs of the athletes over the next quadrennium and 
discuss whether Congress should revise the Ted Stevens Olympic 
Amateur Sports Act for the sake of the athletes in the 
movement.
    First, I want to acknowledge and thank the United States 
Olympic Committee Governance and Ethics Task Force and the 
Senate-appointed Independent Commission, whose efforts helped 
to provide both guidance and momentum to the reform process, of 
which the AAC has been a strong advocate. The separate 
recommendations of the USOC's task force and of the Independent 
Commission to reform USOC governance shared several important 
similarities which enabled the Olympic family to swiftly set 
into action the governance reform process.
    In April of 2004, the USOC Board voted unanimously to 
approve the sweeping reforms recommended by the USOC's 
Governance and Ethics Task Force, including cutting the Board 
down to just 11 members from 125, as Jim mentioned.
    It is only a short time since its enactment, but I believe 
that the current governance reform has truly changed the USOC 
from a constituent-based brand to an athlete-focused entity. 
The new structure did not come without certain concerns to the 
AAC in the early stages. These concerns focused on the 
communication with the newly seated Board. At issue was whether 
athletes' concerns would be heard in this indirect 
representative structure.
    In accordance with the current governance, communication 
from the AAC to the USOC Board is directed through the Olympic 
Liaison to the USOC Board. Reflecting the importance of 
athletes in the Olympic Movement outside of competition, a 
former Vice-Chair of the AAC, Chris Duplanty, was selected by 
the Nominating and Governance Committee as the initial Board 
Liaison. To date, this communication pipeline has functioned 
effectively; the AAC has been kept informed of the Board's 
current objectives and goals.
    Conversely, communication from the AAC has been reliably 
forwarded to the Board so that it is aware of athlete issues 
and perspective. In my years of experience, this productive and 
effective exchange was difficult. The newly clarified roles of 
the Board members and staff and the clear communication 
channels which they have been acceptant of, has enabled the AAC 
to represent the athletes in the Olympic Movement in a more 
progressive manner.
    To that end, the AAC intends to direct its resources toward 
addressing a great number of athlete-specific issues. In 
addition to working to solidify the current role and maximize 
effectiveness of the AAC within USOC and NGB Governance reform, 
some of the relevant areas to address include: working to 
improve athlete support programs such as Olympic Job 
Opportunities Program and Elite Athlete Health Insurance; 
advocating approval of a USOC Commercial Terms policy; 
increasing awareness of Olympism and international good will 
through sport; addressing the growing problem of doping in 
sport through participation in anti-doping efforts; 
communicating with, and considering issues related to, the 
National Collegiate Athletic Association; and enhancing our own 
awareness through effective communication and direct 
involvement in the Olympic athlete experience and most 
importantly conception of an Athletes' Bill of Rights.
    A priority of the AAC is to have a leadership member 
present at every Olympic and Paralympic Games to assist and 
advise our athletes.
    This agenda is very ambitious, but the continued success of 
the Olympic Movement hinges on it. Its realization will require 
input from all members of the Olympic family.
    At this stage in the reform process, I strongly suggest 
that the Congress not re-open the Ted Stevens Olympic Amateur 
Sports Act. The governance reform has thus far proceeded 
smoothly. Consideration of opening the act at such a fragile 
stage of the reform process invites constituent-based debate 
that has proven so damaging to this organization in the past 
and can only slow progress. With an Olympic and Paralympic 
Games every 2 years, such a delay can mean disaster to those 
athletes currently in the system.
    It is my hope that we can continue the momentum made since 
the inception of our new Board and ultimately realize the 
potential of the USOC to fulfill the goals of athletes and 
inspire Americans.
    In closing, I would like to thank Paul Hamm and his family 
for taking the time to be here today. I do not have first-hand 
knowledge of the events that occurred in Athens regarding Paul, 
but I support his concerns and applaud his passion to see that 
this does not affect another U.S. elite athlete. I extend an 
open invitation to him to attend an AAC meeting and encourage 
him to run for the next quad's AAC representative position. 
Obviously, he would bring a lot of invaluable experience and 
enthusiasm to our Council. Paul's testimony today validates the 
direction the AAC is heading and the amount of time and travel 
we sacrifice as volunteers. As many elite athletes understand, 
learning from one's mistakes enables success.
    It is my responsibility as the newly elected chair to take 
the testimony heard here today, present it to the AAC, and use 
the available channels to ensure this type of situation does 
not happen again. Thank you for your time and I look forward to 
answering any questions you may have.
    [The prepared statement of Mr. Henderson follows:]

                  Prepared Statement of Mark Henderson

    Chairman Hostettler, Ranking Member Jackson Lee, and other members 
of the Subcommittee on Immigration, Border Security and Claims, thank 
you for the opportunity to speak to you today from an athlete's 
perspective on the current status of the Olympic Movement in the United 
States. My name is Mark Henderson. I am a 1996 Olympian and Gold 
Medallist in the sport of swimming, and serve as the elected 
chairperson of the United States Olympic Committee Athletes' Advisory 
Council (AAC). The AAC is composed of Olympic, Paralympic, and Pan-
American athletes elected by their peers to communicate the interests 
and protect the rights of athletes, in cooperative support of the USOC 
achieving its mission. It is truly an honor to represent and lead such 
a prominent group.
    As brief background, let me remind the members of the subcommittee 
of the nature of the AAC, the group of which I serve as chair. The AAC 
is codified in the 1998 Amendments to the Ted Stevens Olympic and 
Amateur Sports Act, and is composed of one democratically elected 
athlete representative from each Olympic and Pan-American Games Sport, 
two Paralympic athlete representatives, one from summer sports and one 
from winter sports, and six at-large members. In order to be eligible 
to vote and/or serve as a representative, athletes must have 
represented the U.S. at an Olympic Games, Pan American Games, or 
qualifying events within the last ten years.
    As the chairperson of the AAC and an athlete in the Olympic 
Movement, I offer this testimony to provide an athlete's perspective on 
the progress of governance reform at the USOC and the current status of 
the Olympic Committee, as well as to express the needs of the athletes 
over the next quadrennial and discuss whether Congress should revise 
the Ted Stevens Olympic Amateur Sports Act for the sake of athletes in 
the Movement.
    First, I want to acknowledge the United States Olympic Committee 
Governance and Ethics Task Force (USOC Task Force) and the Senate 
appointed Independent Commission (Independent Commission), whose 
efforts helped to provide both guidance and momentum to the reform 
process, of which the AAC has been a strong advocate. Additionally, I 
would like to specifically thank the former leadership of the Athletes 
Advisory Council: Cameron Myler, Mary McCagg, Chris Duplanty, Rob Stull 
and particularly former chairperson, Rachel Godino. You may have heard 
from some of these individuals previously; their tremendous volunteer 
commitment to advocating for fellow athletes and work toward improving 
the health of the US Olympic Committee has been inspiring. It was an 
honor to serve under them and a reassurance to know that most of them 
are still involved in the Olympic Movement.
    The separate recommendations of the USOC Task Force and of the 
Independent Commission to reform USOC governance shared several 
important similarities. Both groups recommended that the organization's 
mission shift its focus to the athletes and athletic performance. Both 
groups recommended that the USOC Board of Directors (USOC Board) size 
be reduced dramatically to come into line with the current best 
practices of good governance for organizations the size and stature of 
the USOC. Both groups also recommended that the USOC take substantial 
steps toward breaking down the culture of quid pro quo that had 
heretofore existed at the USOC. Finally, both groups agreed that there 
was a need to clarify the roles of the governance and staff functions 
within the organization. Although important differences between the two 
groups' recommendations exist, the major governance changes that needed 
to occur were fairly evident and not disputed. In April of 2004, the 
USOC board voted to approve and implement the sweeping reforms 
recommended by the USOC's Governance and Ethics Task Force, cutting 
itself down to just 11 members from 124.
    It is only a short time since its enactment, but I believe that the 
current governance reform that resulted from that April 2004 USOC Board 
vote has truly changed the USOC from a constituent based brand to an 
athlete-focused entity. The new structure did not come without certain 
concerns to the AAC in the early stages, as any drastic change may. 
These concerns focused on the communication with the newly seated 
Board. Specifically at issue was whether athletes' concerns, problems, 
and suggestions would be heard in an indirect representative structure, 
and if the athletes' voice would be filtered, misrepresented, or 
misconstrued. In accordance with the current governance, communication 
from the AAC (as well as from the National Governing Bodies' and Multi-
Sport Councils) to the USOC Board is directed through the Liaison from 
the Olympic Assembly to the USOC Board (Board Liaison). Reflecting the 
importance of athletes in the Olympic Movement outside of competition, 
a former Vice-Chair of the AAC, Chris Duplanty, was selected by the 
Nominating and Governance Committee as the initial Board Liaison. To 
date, this communication pipeline has functioned effectively; the AAC 
has been kept informed of the Board's current objectives and goals. 
Conversely, communication from the AAC has been reliably forwarded to 
the Board so that it is aware of athlete issues and the athlete 
perspective. In my years of experience, this productive and effective 
exchange was difficult, if not impossible. In summary, the current 
organization of the USOC, specifically the clear roles of the Board 
members and the Staff and the clear communication channels of which 
they have been acceptant, has enabled the AAC to represent the athletes 
in the Olympic Movement in a more progressive manner.
    This change has allowed the AAC to address its own organizational 
structure toward the goal of improving efficiency and effectiveness, 
and align itself with the mission of the USOC--to support the United 
States Olympic and Paralympic athletes in achieving sustained 
competitive excellence and preserve the Olympic ideals, and thereby 
inspire all Americans. Eliminating the direct role of the AAC in USOC 
Board activity has allowed for increased attention internally. It is my 
hope, and that of the current AAC, that this will allow us to better 
represent the athletes we serve, and to be more effective advocates on 
their behalf.
    To that end, the AAC intends to direct its resources towards 
addressing a great number of athlete-specific issues. Thus, in addition 
to working to solidify the current role and maximize effectiveness of 
the AAC within USOC and NGB Governance reform, some of the relevant 
areas to address include: 1. Working to improve athlete support 
programs such as Olympic Job Opportunities Program and Elite Athlete 
Health Insurance; 2. Advocating approval of a USOC Commercial Terms 
policy; 3. Increasing awareness of Olympism and international good will 
through sport; 4. Addressing the growing problem of doping in sport 
through participation in anti-doping efforts; 5. Communicating with, 
and considering issues related to, the National Collegiate Athletic 
Association, and; 6. Enhancing our own awareness through effective 
communication and direct involvement in the Olympic Athlete experience.
    Although this agenda is an ambitious one, the demands of success in 
this arena are great and the concerns of athletes in the Olympic 
Movement are many, and, as a former athlete, I can truly say that all 
help is appreciated. These far-reaching goals should reflect our 
confidence that the work we do is not in vain. We believe the voice of 
the athletes will be heard so that we can help to maintain competitive 
excellence in international Olympic sports and represent the United 
States well. Although not enough time has passed since the beginning of 
the reform to guarantee long-term success, it is my opinion that at 
this point the state of the USOC is strong.
    In conclusion, I strongly suggest that Congress not re-open the Ted 
Stevens Olympic Amateur Sports Act (``the Act''). The Act has served 
the needs of the athletes effectively and, unchanged will continue to 
do so. Though the governance reform has thus far proceeded smoothly, 
consideration of opening the Act at such a fragile stage of the USOC 
Governance reform process invites constituent based debate that has 
proven so insidious to this organization in the past and can only slow 
progress. With an Olympic and Paralympic Games every two-years, such a 
delay can mean disaster to those athletes currently in the system. It 
is my hope that we can continue the momentum made since the inception 
of our new Board and ultimately realize the potential of the USOC to 
fulfill the dreams of athletes and inspire Americans.
    Thank you for your time.

    Mr. Hostettler. Thank you, Mr. Henderson. Mr. Hamm.

         STATEMENT OF PAUL HAMM, 2004 ATHENS OLYMPICS 
                      ALL-AROUND CHAMPION

    Mr. Hamm. Hello. I want to thank the Committee for inviting 
me to speak about my experiences at the 2004 Olympics, and the 
concerns I have about the three federations overseeing my 
sport: the United States Olympic Committee, the Federation of 
International Gymnastics, or FIG, and USA Gymnastics.
    It is interesting that this hearing is entitled the 
``Olympic Family--Functional or Dysfunctional?''
    The answer is both. But throughout the controversy 
surrounding my gold medal these three organizations acted in 
many ways that were dysfunctional. All three bear 
responsibility in the creation and continuation of the 
controversy.
    I went to Athens to compete in the sport of gymnastics for 
my country, for my team, for my family, and for myself. After a 
come-from-behind performance, I was awarded the gold medal in 
the all-around event.
    The next day one of my opponents protested the results. 
Months later the highest sports court in the world, the CAS, 
ruled that I was, in fact, the rightful champion.
    From the day the Koreans protested until I returned home 8 
days later, no one from FIG ever spoke to me about the 
situation. No one from the USOC ever met with me. Bob 
Colorossi, President of USAG, only spoke to me twice, to say 
that nothing could change the medal standings, according to the 
rules.
    During these same days and without my knowledge, the USOC 
and USAG entered into negotiations with the Koreans about the 
disposition of my medal. Without my knowledge or consent, the 
USOC and USAG spoke to the press about the notion of awarding a 
second gold medal. The USOC met with the International Olympic 
Committee to propose the double gold idea without discussing it 
with me. The IOC rejected their proposal.
    On the day I returned home, I was informed of an impending 
conference call from the USOC, described to my agent, Sheryl 
Shade, as a marketing call. My parents and my agent arranged to 
have Tom Schreibel, Congressman Sensenbrenner's chief of staff, 
participate in the call, along with my freshly hired attorney, 
Kelly Crabb.
    The call began by informing me of a letter from Bruno 
Grandi, the President of FIG. This letter was addressed to me, 
but delivered to the Korean delegation and the USOC by way of 
Mr. Colorossi. It was to be released to the press.
    Mr. Grandi had written that he would appreciate it if I 
would give back the gold medal.
    During the first part of this call I, and my complete team, 
firmly believed that the USOC's intent was to convince me to do 
just that. After listening to my position for the first time, 
we all agreed to take a break and reconvene in an hour.
    When the call resumed, the first words they said were they 
had had a change of heart. This change of heart meant that 
they, now, would aggressively support me, and my medal.
    In Athens, the Koreans had scheduled a press conference for 
the next day. Even though their other gymnasts had returned to 
Korea, Yang Tae Young remained behind. It seems clear that they 
fully expected to announce a change in the medal standings. 
Now, actively supporting me, the USOC scheduled its own press 
conference in advance of the Koreans. They denounced Grandi's 
letter in the strongest terms and came out for the first time 
absolutely in defense of my medal. The Koreans cancelled their 
press conference.
    Two days later the Koreans filed an appeal with CAS.
    Originally the USOC made no offer of either legal or 
financial support to defend my medal. My family was told to 
start building a defense fund. It was the efforts of 
Representative Sensenbrenner and others that persuaded them to 
agree to pay for and mount a vigorous defense of my medal.
    To this day, I cannot think of any honorable reason why the 
USOC failed to support me and my medal flat out; and why they 
did support the idea of double golds. Their own athlete had won 
the Olympic competition fair and square, by the rules on the 
field of play.
    I believe that if the USOC had stepped in to vigorously 
support me from the beginning of the controversy much of the 
succeeding pain, expense, damage and embarrassment to sport 
could have been avoided.
    The same thing can be said about USA Gymnastics. I can only 
speculate why USAG didn't consistently and vigorously support 
me. I do know that USAG and its President, Mr. Colorossi, were 
not happy that I had decided not to participate in the USAG 
tour after the Olympics. At the time, Mr. Colorossi was also 
seeking a position on the FIG Executive Committee.
    These three groups failed to defend the basic principle of 
sport: play by the rules. They also showed a disregard for the 
interests of athletes. No one bothered to talk to me, but many 
tried to speak for me. I believe that no one should negotiate 
or represent an athlete without their prior agreement and 
expressed consent. That is exactly the type of thing that 
belongs in an Athlete's Bill of Rights.
    Thank you.
    [The prepared statement of Mr. Hamm follows:]

                    Prepared Statement of Paul Hamm



    Mr. Hostettler. Thank you, Mr. Hamm. Mr. Burke.

            STATEMENT OF THOMAS BURKE, VICE CHAIR, 
               PAN AMERICAN SPORTS COUNCIL, USOC

    Mr. Burke. Thank you, Mr. Chair. If it please the 
Committee, Mr. Hamm, you're a hard act to follow. You have my 
congratulations, sir.
    My name is Thomas Burke. I represent the Pan American 
Sports within the U.S. Olympic Committee. I'm here to talk to 
you about our concerns within the new Olympic structure, and I 
would point out that Mr. Scherr's remarks underscore those 
concerns. Throughout his entire statement, there was not a 
single mention of Pan Am sport, Pan Am athlete, or Pan American 
involvement as being a viable part of the movement.
    That is the bottom line for us. That's our concern.
    I appear before you today on behalf of all the Pan American 
sports. That's bowling and karate, racket ball, roller sports, 
men's softball, squash, and water skiing. The Pan American 
national governing body structure has been recognized by the 
U.S. Olympic Committee since the adoption of the 1978 Sports 
Act, and it is included within that act.
    Our athletes participate successfully in the Pan American 
Games, but can only dream of participation in the Olympic 
Games. We sincerely appreciate this opportunity to meet with 
this Committee to discuss the concerns affecting our sports, as 
well as other sport organizations within the new reorganized 
Olympic Committee.
    Participation of United States athletes in Olympic and 
other related competitions is governed exclusively by Federal 
statute. The 1978 Amateur Sports Act revised the Ted Stevens 
Amateur Sports Act and established the USOC. It gives it a 
monopoly for amateur sport related to Olympic competition. It 
defines its role, its authorities, its responsibilities, and 
its internal organization.
    A non-profit amateur sport organization, which Pan American 
Sports are, may be recognized by the USOC as the national 
governing body. A national governing body functions as the 
basic building block of the greater USOC organization. It's 
what connects the grassroots programs to the elite levels of 
Olympic competition.
    The NGB administers its sport to be sure that its 
competitions are fair, non-discriminatory, and ensures equal 
participation and opportunity for participation of athletes, 
coaches, and others.
    As I say, the NGB is who is conducting the grassroots 
level. Importantly, in the language of the Sports Act, Congress 
has mandated equal treatment for all Olympic, Pan American, and 
Paralympic athletes and NGB organizations. The language 
functions on participation in the games--all these games. 
There's no single sport in the Amateur Sports Act where 
Olympic, Paralympic and Pan American are not mentioned 
together.
    In addition, the Congress clearly defined the purposes for 
which the USOC was established. These purposes include equality 
of relationship and responsibility of the USOC to athletes 
competing in all of those competitions--Olympics, Paralympics, 
and Pan American Games.
    Whether or not the current governance structure and 
internal culture of the USOC are in compliance with the Sports 
Act on this and other issues is subject to question. For the 
Pan American Sport NGBs and their 7.7 million active 
participants it's all about an Olympic dream, and for the Pan 
American sport athletes who attain elite competitive levels, 
it's about fulfillment of that Olympic dream through the Pan 
American Games.
    For these athletes the dream is an inspirational goal not 
only for themselves, but for their kids, and generations to 
come.
    Each athlete in the Pan American sports hopes that their 
sport will be the next one moved on to the Olympic program, and 
that just maybe they will be part of a future Olympics Game.
    While the former Olympic Committee governance structure was 
not a model of efficiency--it was burdensome--it was still 
diverse and democratic. The involvement of seasoned volunteers 
was a positive influence on the work of the USOC. It provided 
continuity and grassroots anchoring. For all of this discussion 
about how dysfunctional this big board was, and I was a part of 
it for 15 years, when it got down to getting athletes on the 
field and taking care of business, it was together. The 
athletes, the USOC staff, the board members, everybody pulled 
together for that goal.
    The new governance structure of the USOC is intentionally 
different. It is dedicated to efficient production of Olympic 
sports heroes and medal production. It's a business model. It's 
not a family one.
    Diversity and compromise are not efficient. Debate is not 
efficient. It involves listening to people. These are not seen 
as part of the new mission of the USOC. In fact, USOC staff has 
recently directed the NGB Council that it should be composed of 
professionals or stakeholders in their respective sports, 
limited to the executive director or presidents. Volunteer 
participation is not only discouraged at this point, it's to be 
eliminated from the process.
    Now, we'd like to be very clear to the Committee that our 
concerns are based upon current USOC policy and priority and 
not personalities. The staff and officers of the USOC have 
dedicated themselves in good faith to doing their mission as 
they see it to be done. We believe the view is too narrow. We 
believe that Congress needs to clarify the intention of the 
statute and its purpose for the USOC, reminding it of its 
greater responsibilities.
    For us, inclusion in the Pan American Games is crucial to 
the existence of our NGBs. By definition, if the sport is not 
included on a Pan American Games, they lose their membership 
status. Since 1995, the PASO, the regional organization, has 
never excluded an Olympic sport from their play program, but 
has been historically reluctant to include Pan American sports.
    Our sports have lobbied vigorously and successfully for 
inclusion in the 1995, '99, and 2003 Pan American Games. 
Unfortunately, the program for the 2007 games in Brazil does 
not include any of our Pan American sports. The Pan American 
Sports Council has requested the assistance of the USOC in 
changing this situation, but given the remarks I make later, we 
have serious concerns about the priority which is going to be 
assigned to that.
    For Pan American sport athletes, inclusion in the Pan 
American Games is the closest they get to the American dream. 
We believe that the Amateur Sports Act honors the dreams of the 
Pan American athletes as well as those who participate in 
Olympic and Paralympic sport.
    A source of concern to the Pan American Sport NGBs is the 
new USOC mission statement contained in their recently adopted 
bylaws. Section 2.1 of the USOC Bylaws state the mission shall 
be to support United States Olympic and Paralympic athletes in 
achieving sustained competitive excellence.
    The omission from the Pan American Sport Athletes from this 
mission statement is deliberate, the intention obvious.
    The self-defined USOC mission does not place a priority on 
anything but Olympic and Paralympic athletes and thus Pan 
American sports can be slowly prioritized into extinction.
    We believe this is clearly against the original 
congressional intent as found in the Sports Act.
    Further, section 2.2 of the current USOC bylaws provide 
that the USOC Board of Directors will review and prioritize the 
statutory purposes for which Congress created the USOC and will 
oversee the business of the corporation to advance the mission.
    The current bylaws assume an authority in the USOC Board to 
replace the mandates of Congress with a self-directed system of 
priorities about statutory purposes--which ones, if any, will 
be followed and how they fit into the new USOC mission.
    Clearly, compliance with congressional statute is optional 
under the bylaws. As noted by Mr. Scherr and announced at the 
recent Olympic Assembly, the USOC staff has announced that all 
base funding for NGBs will be eliminated in 2006, with future 
funding to be based on performance. Well and good.
    If this is a reality, and the ``performance'' is based on 
Olympic and Paralympic success, then the Pan American sports 
are going to be excluded. And if they use any other formula for 
establishing the priorities, by the terms of their mission 
statement and bylaws, we're lower down the pole, and priority 
has to be given to Olympic and Paralympic organizations.
    Mr. Hostettler. Mr. Burke?
    Mr. Burke. Yes.
    Mr. Hostettler. Mr. Burke, could you summarize in 
conclusion.
    Mr. Burke. Absolutely.
    Mr. Hostettler. Thank you.
    Mr. Burke. All this being said, the Pan American Sports are 
grateful and proud to be part of the U.S. Olympic Committee. It 
is a fantastic organization.
    We want to be a full partner. We don't want to be the 
afterthought, the ignored. We want to be there. We do our part. 
I can tell you for the kids in our programs, it's as good and 
as strong a dream as any Olympic sport.
    Thank you very much for your consideration.
    [The prepared statement of Mr. Burke follows:]

                   Prepared Statement of Thomas Burke

                              INTRODUCTION

    My name is Thomas Burke. I am currently the Vice Chair of the Pan 
American Sports Council. I am also the President of the United States 
of America National Karate-do Federation, the National Governing Body 
(``NGB'') for the sport of Karate. In my capacity as an officer of the 
National Karate-do Federation, and as the Vice-Chair of the Pan 
American Sports Council, I have been involved in the recent reforms of 
the United States Olympic Committee. I have attended the general 
meetings of the Olympic Committee and NGB Council regarding the 
reorganization of the USOC, as well as the recent Olympic Assembly in 
Phoenix, AZ.
    I appear before you today on behalf of the following Pan American 
sports and their athletes: Bowling, Karate, Racquetball, Roller Sports, 
Men's Softball, Squash and Water Skiing. The Pan American National 
Governing Body (NGB) structure has been recognized by the United States 
Olympic Committee (USOC) since the adoption of the 1978 Amateur Sports 
Act. Their athletes participate successfully in the Pan American Games 
and dream of future participation in the Olympic Games.
    We sincerely appreciate this opportunity to meet with the 
Subcommittee to discuss the serious concerns affecting our sports, as 
well as the other sport organizations within the ``new'' Olympic 
Committee.

            FRAMEWORK OF THE INTERNATIONAL OLYMPIC COMMUNITY

    A sport's participation in the ``Olympic'' movement is based upon 
membership in a hierarchy of related international organizations. The 
International Olympic Committee (``IOC'') is the highest sport 
authority for the Olympic Games and other sanctioned international 
sporting competitions. The IOC is composed, in part, of the National 
Olympic Committees (``NOC'') from over 190 participating countries on 
all Continents. The role and definition of an NOC is contained in the 
IOC Charter, and includes the duty to ``promote the fundamental 
principles of Olympism'' at the national level. The United States 
Olympic Committee is the NOC for this country.
    The various NOCs are organized into continental associations. For 
the Americas and the Caribbean countries, the regional organization is 
the Pan American Sports Organization (``PASO''). The PASO conducts a 
continental athletic competition every 4 years, the Pan American Games. 
The Continental Games, including the Pan American Games, are conducted 
in the year before the Summer Olympic Games and are also used as an 
``Olympic Qualifier'' event for several Olympic sports. The United 
States consistently participates in the Pan American Games.

   UNITES STATES SPORT ORGANIZATIONS: ``THE NATIONAL GOVERNING BODY''

    The participation of United States athletes in Olympic and other 
related competitions is governed exclusively by federal statute. The 
1978 Amateur Sports Act and the more recent Ted Stevens Amateur Sports 
Act established the United States Olympic Committee, its role, 
authority, responsibilities and internal organization. A non-profit 
amateur sport organization which meets the requirements of the statute 
may be recognized by the USOC as the NGB for a particular sport.
    The NGB functions as the basic ``building block'' of the greater 
USOC organization. The NGB administers its sport to be sure that its 
competitions are fair, non-discriminatory, and insures equal 
opportunity for participation of athletes, coaches, and others. The NGB 
conducts the ``grass roots'' developmental programs, and nurtures these 
athletes to the elite levels of competition.
    NGB's are autonomous organizations having IRC 501(c)(3) nonprofit 
status. Their responsibilities and expectations are enormous. Each NGB 
controls and regulates all matters related to the governance, 
development, and conduct of its sport.
    Importantly, in the language of the Sport Acts, Congress has 
mandated equal treatment for all Olympic, Pan American, and Paralympic 
athletes and NGB organizations. The Sport Act does not create a 
preference or priority of one set of sports over another. In addition, 
Congress has clearly defined the purposes for which the USOC was 
established. These purposes clearly provide for equality in the 
relationship and responsibility of the USOC to athletes competing for 
the United States in the Olympics, Paralympics, and Pan American Games. 
Whether or not the current governance structure and internal culture of 
the USOC are in compliance with the Act, on this and other issues, is 
subject to question.

         THE PAN AMERICAN SPORTS ORGANIZATIONS: WHERE THEY FIT

    The ``Pan American Sports'' are a specific group of NGB 
organizations within the USOC. They represent sports which have an 
International Federation recognized by the IOC, evaluated by the USOC 
and granted NGB status for their respective sports. In order to 
maintain this NGB status a Pan American Sport must have been included 
in actual competition on the program of the two past Pan American Games 
and the sport must also be included on the program for the current Pan 
American Games.
    For the Pan American Sport NGB's and their 7.7 million active 
members, it's all about the Olympic dream. And for the Pan American 
Sport athletes who attain the elite competitive level, it's about the 
fulfillment of the Olympic dream realized through the Pan American 
Games. For these athletes, the dream is an inspirational goal not just 
for themselves but also for their children and future generations. Each 
athlete hopes that their sport will be the next one moved onto the 
Olympic program, and that maybe, just once, they could be a part of a 
future Olympic Games.
    Inclusion in the Pan American Games is crucial to the existence of 
the NGBs involved. By definition, if the sport is not included on the 
Pan American Games program, they lose their membership status. Since 
1995, the PASO has never excluded any Olympic sport, but has been 
reluctant to include Pan American Sports. Our sports have lobbied 
vigorously and successfully for inclusion in the 1995, 1999, and 2003 
Pan American Games. Unfortunately, the program for the 2007 Games in 
Brazil does not include any Pan American Sports. The Pan American 
Sports Council has requested the assistance of the USOC in changing 
this situation, but has serious concerns about the priority which the 
USOC will assign to our request.
    For Pan American Sport athletes, inclusion in the continental Games 
is the closest they can get to the ``Olympic Dream.'' We believe that 
the Sport Act honors the dreams of these athletes, as well as those who 
participate in Olympic or Paralympic sport.

         THE USOC REVISED GOVERNANCE FOCUSES ON OLYMPIC SUCCESS

    While the former Olympic Committee governance structure was 
burdensome, and not a model of efficiency, it was diverse and 
democratic. The involvement of seasoned volunteers was a positive 
influence upon the work of the USOC, providing continuity and a ``grass 
roots'' anchor. When it got down to core value, there was absolute 
commitment to the success of United States Olympic, Paralympic and Pan 
American teams.
    The new governance structure of the USOC is intentionally 
different. It is dedicated to efficient production of Olympic sports 
heroes and medal production. It is a ``business'' model, and not a 
``family'' one. Diversity and compromise are not particularly 
efficient, and are not seen as a part of the ``Mission'' of the new 
USOC.
    In fact, the USOC staff has directed the NGB Council that it should 
only be composed of ``professionals'' in the respective sports: the 
Executive Directors or Presidents. Volunteer participation is not only 
discouraged, it is to be eliminated from the process.

                      PAN AMERICAN SPORT CONCERNS

    We want to be very clear that our concerns are based upon USOC 
policy and priorities, not personalities. The staff and officers of the 
USOC have dedicated themselves in good faith to their ``Mission'' as 
they see it. However, we believe that their views are too narrow. 
Congress needs to clarify its intention and purpose for the USOC, 
reminding it of its greater responsibilities.
    An obvious source of concern to the Pan American Sports NGB's is 
the new USOC ``Mission Statement'' contained in the new recently 
adopted internal USOC bylaws. Section 2.1 of the USOC bylaws clearly 
state: ``The mission of the corporation shall be: To support United 
States Olympic and Paralympic athletes in achieving sustained 
competitive excellence and preserve the Olympic ideals, and thereby 
inspire all Americans.'' The omission of Pan American Sport athletes 
from the USOC mission statement is deliberate; the intention obvious. 
The self-defined USOC ``mission'' does not place a priority on anything 
but Olympic and Paralympic athletes, and thus the Pan American Sports 
will be slowly prioritized into extinction. This is consistent with the 
practice of the USOC over the past 15 years, with the Pan American 
Sports being slowly reduced from equality with Olympic Sports to 
approximately 15% of the level of support.
    Further, Section 2.2 of the Bylaws provides that USOC Board of 
Directors will ``review and prioritize'' the statutory purposes for 
which Congress created the USOC, and ``oversees the business of the 
corporation to advance and achieve the corporation's mission.'' The 
current Bylaws assume an authority to replace the mandates of Congress 
with a self-directed system of ``priorities'' about which statutory 
purposes, if any, will be followed only if they ``fit'' into the new 
USOC mission. Compliance with the Congressional statute is clearly 
optional under the current USOC bylaws.
    The USOC staff has recently announced that all ``base funding'' for 
NGBs will be eliminated in 2006, with all future funding to be based on 
``performance.'' If this becomes a reality and ``performance'' is based 
upon Olympic or Paralympic success then the Pan American Sports will be 
completely excluded from any future funding. If any other formula is 
established, the USOC mission and bylaws require that priority be given 
to Olympic sports and athletes.
    The Pan American Sports primary concern is not just funding; it is 
our continued survival as participants in the Olympic movement. The Pan 
American Sports have received minimal funding in the past, and low 
priority for use of USOC Training Centers, grant opportunities, and 
performance grants to our successful athletes. But we've made the 
relationship work, understood our role and worked hard to develop world 
class athletes. However, if the focus of the new USOC is only on 
successful Olympic and Paralympic athletes then the little structure we 
had will evaporate and the Pan American athletes will be easily 
forgotten.

                               CONCLUSION

    All this being said the Pan American Sports are grateful for and 
proud of our relationship with the USOC. Without financial, consulting 
and related resource support from the USOC, many NGBs could not 
survive, including some NGB's currently on the Olympic schedule. For 
the fortunate few sports that might be considered financially 
independent, the related USOC resources are still invaluable. Consider 
the world-class training centers, cutting edge sports science and 
medical research, access to the highest levels of potential corporate 
support, as well as administrative, logistical, legal and financial 
guidance that can been provided by the USOC to all sports. These are 
the programs that enable NGBs to focus on their mission--offering a 
dream to all Americans.
    We want our relationship to develop and return to full partnership 
with the other sport members of the USOC. We believe that unequivocal 
USOC support for inclusion of all Pan American Sports is necessary to 
convince PASO to include our athletes in the 2007 Pan American Games, 
to continue their dreams of success.
    We respectfully request that the Committee and the Congress clarify 
in legislation the status of Pan American Sports as full partners in 
the United States Olympic Movement, along with Olympic and Paralympic 
sport.
    We are pleased and grateful for your efforts and we applaud your 
commitment. Thank you again for the opportunity to share our thoughts 
and concerns!

    Mr. Hostettler. Thank you, Mr. Burke. At this time, the 
Committee will move to questions, and my first question is to 
you, Mr. Scherr.
    It is the Subcommittee's understanding that some national 
governing bodies have recently threatened to end their 
relationship with the USOC because they feel that the USOC is 
inappropriately exerting control over the policies and 
practices of their individual organization. I guess first of 
all, are you familiar with this notion and then do you disagree 
with that sentiment, and, if so, why?
    Mr. Scherr. Let me say I'm familiar with two cases. One is 
the sport of triathlon and USA Triathlon, which had a vote 
brought before their board by one board member, and any board 
member can introduce a resolution and that resolution was to 
sever its relationship with the USOC. Its board voted with only 
one to remain with the USOC with only one person voting to 
leave the USOC and that was the person who brought the motion.
    That motion was brought because the USOC, in its review of 
the governance practices of USA Triathlon, found a practice to 
which we had an objection, which was that I believe it is any 
100 members of the organization can--who sign a petition--can 
stop the business of the organization and have the entire 
membership of the organization, which I believe is roughly 
35,000, vote on that resolution, so that included any action 
the board took--hiring an executive director, making any 
actions. So we asked them to change that in their provisions 
because 100 people in their organization could stop the entire 
activity of the governing body. This brought the one individual 
of the board to tender that motion.
    But their board reaffirmed at a recent meeting that I was 
present in Colorado Springs that they are very happy to be part 
of the Olympic Movement and voted to remain as a part of it.
    The other is Modern Pentathlon, which did not vote to leave 
the organization, but voted to dissolve because they had become 
bankrupt, and the USOC is currently exercising directly the 
responsibilities of that national governing body until we can 
form a new one. And we're working closely with the 
international federation to do so.
    Mr. Hostettler. Thank you. Mr. Hamm, since the events in 
Athens, have you and your brother's relationship with the USA 
Gymnastics and the USOC changed? And if so, how?
    Mr. Hamm. Well, they haven't changed a great deal just 
because my relationship in the past with them didn't include 
that much communication, especially the USOC. Typically, if I 
wasn't competing in a world or Olympic Games or an event that 
involves the USOC, I would not be in contact with them.
    But, for the most part, I just feel more worried about 
whether or not I can trust these organizations in the future. 
That's the way that I feel like our relationship has changed. I 
feel that I have to be kind of on guard when I talk to them or 
tell them anything in confidentiality.
    Mr. Hostettler. Well, let me ask you something. And not 
only yourself, but for all future athletes, is this a sentiment 
that you had before Athens?
    Mr. Hamm. I don't understand the question. I'm sorry.
    Mr. Hostettler. Is this--did you feel that you had to be 
independent of these two governing bodies in order to win a 
gold medal? I mean aside from your training and what you had to 
put in, what did you feel that, as an athlete, and what do you 
think most athletes in your situation--what do you think most 
of them believe should be the responsibility of the governing 
body and the USOC to their pursuit of a medal?
    Mr. Hamm. Well, as far as when athletes go over to Athens 
and this is the way I felt myself is that you basically give 
over complete control to these governing bodies. And you are--
and staying in the Olympic Village with USA Gymnastics 
representatives, and they are the people that are taking care 
of you for that time. And they are the people that are supposed 
to be defending you and protecting you. There's no one else 
there. You don't have contact or easy contact with outside 
sources when you're in the Village. It's very difficult to even 
to get in contact with family members or see family members.
    So I think a lot of athletes feel that these governing 
bodies are supposed to be there to protect them when they're in 
the Village at the Olympics.
    Mr. Hostettler. Very good. In your statement, you indicate 
that your attorney was told that you needed to build a defense 
fund. Were you told what the rationale for that was?
    Mr. Hamm. Well, the reason to build a defense fund was told 
to my attorney, Kelly Crabb, and the rationale for that was 
that if I wanted to defend my medal in court, I would need 
legal representation. And if I didn't have legal 
representation, the possibility of losing the medal would be a 
lot higher.
    Mr. Hostettler. How do you relate that to the previous 
statement that you made that when you give over control of your 
life essentially to these governing bodies and then you're told 
that you need to create a legal defense fund. How do you 
resolve--it seems to be a conflict to me.
    Mr. Hamm. Yes. Well, I feel that if the organizations are 
there to support you and they know that you personally have won 
the medal fair and square that they should legally support you 
through the time in order to maintain that medal.
    Mr. Hostettler. Thank you. Mr. Scherr, do you feel that 
that is the--it seems to me that that is the purpose of the 
USOC is to represent the athlete's best interests and the USOC 
today, do you believe, is understanding that mission? It seems 
somewhat strange to me and as my family and I watched on TV 
this episode unfold, we were very surprised that it took so 
long for what we thought was the United States Olympic 
Committee to say at the very outset, well, of course. Our 
athlete has won the medal. Is that the case today? Is there 
some culture within the USOC in its relationship to the 
International Olympic Committee and governing bodies to say we 
don't want to ruffle any feathers before the time has come and 
so we're going to take a while to digest this or do you feel 
that the sole purpose of the existence of the U.S. Olympic 
Committee is to at the time of the delivery of the medal or at 
the time of the announcement of the results that that is what, 
as Mr. Hamm suggested, it's the field of play. That's where it 
is and regardless of what another foreign country or even the 
International Olympic Committee would suggest, we are going to 
defend immediately the rights of our athlete? Do you feel that 
that's the way it is today?
    Mr. Scherr. I do feel that's the way it is, both today and 
in past practice. The USOC I think in terms of our involvement 
here--it's when we have an opportunity and an appropriate venue 
for involvement.
    The international federation runs and conducts the Olympic 
competition for that sport. The national governing body has a 
direct relationship and is a member organization of that 
international federation. We, as a National Olympic Committee, 
are a member of the IOC. We do not have a relationship, 
directly or indirectly, with the international federation.
    Now, there may be some politics from time to time between 
the IF and its member entity, but we do not have a relationship 
nor any political concerns within that IF other than in this 
case, in gymnastics, for us to come out and strongly denounce 
the international federation publicly prior to the conclusion 
to the competition. It could have had repercussions in the 
competition for Mr. Hamm and other athletes who still had an 
opportunity to compete, because it is a very subjective and 
judged sport. And the international federation can exert 
influence.
    But for us--and I'll give two examples--you know, Apollo 
Ono during the Salt Lake Olympic Games and with an equestrian 
we had a similar dispute over the application of the rules 
during the competition. In one case, Mr. Ono was declared the 
gold medal winner. The Koreans immediately filed a complaint 
with the Court of Arbitration for Sport, which gave us a venue 
with which to defend the medal.
    During the Games themselves, we had a hearing and the Court 
of Arbitration for Sport, or Mr. Ono did. We supported him, 
paid his legal fees for that hearing, and he prevailed.
    During the Olympic Games in Athens, an equestrian, there 
was a similar situation, but another country--I believe it was 
Germany--was awarded the gold medal. Our athletes weren't. it 
was a clear technical violation of rules. We supported our 
athletes, filed an arbitration with the Court of Arbitration 
for Sport, and prevailed, and were able to earn our athletes 
the medal. That was a bronze medal.
    In Mr. Hamm's case, the Koreans waited until after the 
conclusion of the Games to file with the Court of Arbitration 
for Sport, so the hearing was not held until 2 months later. 
Had they filed during the Games, we would have defended it at 
the Games.
    I'm sorry for the misinformation or confusion on--whomever 
told Mr. Hamm that he needed to raise a defense fund was 
incorrect. There was never any question in our minds in this 
case that we would provide and pay for all the legal expenses 
associated with the defense of Mr. Hamm's medal.
    Mr. Hostettler. The protest was filed after the conclusion 
of the all-around?
    Mr. Scherr. The protest with the Court of Arbitration for 
Sport. The protest internally in the international federation 
was filed----
    Mr. Hostettler. The next day?
    Mr. Scherr. The next. I'm not sure exactly when that was 
filed, but there were two actions at the international 
federation. The Korean--well, actually, it was the same--the 
Koreans filed a protest wanting to seek the results overturned. 
Because they did not do so within an allotted time period 
during the competition that protest the next day was denied by 
FIG.
    In addition, instead of just leaving it at that, the FIG 
also suspended three officials who made the decision or made 
the mistake during the competition that they believed to be a 
mistake, and they suspended and penalized those officials for 
that action.
    So those two--so that set off what became a public furor 
over the medal at that point in time, because the FIG admitted 
publicly that they believed the officials made a mistake. 
Obviously, there was--and I'm not an expert in the rules of 
gymnastics--and have since been educated in that regard in how 
this turned out--obviously, we believed and the Court of 
Arbitration for Sport believed that the rules were applied 
correctly and that Paul was the winner. But it wasn't until it 
was decided in that venue that there was an opportunity for 
defense other than a public defense in the press or otherwise.
    Mr. Hostettler. Very good. I had just one more question. It 
was mentioned in Mr. Burke's testimony, but why does the 
mission statement of the USOC remove the reference to the Pan 
American Sports and do you view that the mission statement has 
precedence over the Federal charter for the USOC?
    Mr. Scherr. I don't think it has precedence over the 
Federal charter, but I think it is in concurrence and not in 
conflict with the Federal charter. The existing mission 
statement prior to its most current revision did not contain a 
reference to Pan Am Games or Pan Am-only sports. I think it's 
important to clarify for the Committee that there are 37 
national governing bodies that participate in the Pan American 
Games. Thirty-one of those go on and participate in the Olympic 
Games and 6 are Pan Am-only sports and those are the sports 
that Mr. Burke is referring to.
    Those are treated exactly the same as the national 
governing bodies in terms of recognition and rights within the 
U.S. Olympic Committee. They are treated differently in terms 
of--they are subject to the same criteria of resource 
allocation, but some of those outcomes might be different than 
for other national governing bodies.
    Mr. Hostettler. Did I hear that there might be a new 
mission statement that does include the Pan Am?
    Mr. Scherr. No. The mission statement prior to its 
revision, which was almost 2 years ago now, did not include Pan 
Am-onlys of Pan Am Games. The new one does not either. But in 
the deliberations of our Board and the vote of the Board, they 
viewed the Pan American Games as a stepping stone and a 
precursor to the Olympic Games and that our support with the 
Pan Am Games would be subject to its role as a supporting 
mechanism and training ground for the Olympic Games, and that's 
why it wasn't specifically cited in the mission statement.
    Mr. Hostettler. All right. Thank you. The Chair will now 
recognize the gentlelady from Texas, Ms. Jackson Lee, for 
questions.
    Ms. Jackson Lee. Let me apologize that we have a vote 
pending on the Floor, which doesn't give us much time. So I 
will try to capture the gist of what I think this important 
hearing has offered to us this morning.
    First of all, let me also applaud you, Mr. Henderson, both 
for your athletic prowess, but certainly for what you have 
created after the fact, which is the embracing of opportunities 
for young Americans who would have a number of different 
obstacles maybe in front of them to be exposed to the joy, the 
absolute infusion of energy that athletic participation 
engenders. And so I want to thank you for that.
    Let me just pose to you the first question. Is it my 
understanding that you would not like to see the Ted Stevens 
Act reopened? Is that my understanding?
    Mr. Henderson. At this moment in time, no. I would not like 
to see it reopened. I have a couple of concerns.
    First of all, I'm representing a wide array of athletes, 
coming from different size NGBs, with different needs. I feel 
it's very important for the athletes to voice concern for me to 
hear and understand all of the athletes' concern and then build 
a consensus and bring that forward.
    Ms. Jackson Lee. So you have not--you don't close the door 
specifically, but you'd like to poll your constituency and get 
a better understanding of where they'd like to go?
    Mr. Henderson. That, on top of a concern that if this is 
put in the legislation--what I'm concerned about is it might 
need a little bit of tweaking in regards to commercial terms. 
So if we're heading into the Olympics and there is something 
that an athlete comes to me and says, hey, I really feel that 
this is binding me from making a solid living for myself. I 
need to adjust this. It gives me the opportunity if I work with 
the USOC to set up an Athlete Bill of Rights. I can adjust it 
much quicker. It just takes a board meeting for that to be 
passed. Whereas, legislation, as you know, might be more time 
consuming.
    Ms. Jackson Lee. Well, what I would say to you is you make 
a very good point about the constant every 2-year participation 
in the Olympics. I'm not--I have not conceded whether or not 
legislation is needed or not needed. I do believe that an 
Athlete's Bill of Rights is an important document, and I would 
follow up with asking you--you've listed six points, 
particularly the ones that I'm interested in working to improve 
athlete support programs, and, of course, job opportunities, 
which I understand many athletes flounder even in between 
competition with no support, and then the Elite Athlete Health 
Insurance. Are you moving toward some of these interests being 
received by the USOC Committee and are you working toward some 
of these goals, including the six points that you're concerned 
about?
    Mr. Henderson. Actually, yes. We've made considerable 
movement toward achievement of a lot of those goals. I've been 
in office only 4 months at this point in time. But this is the 
first management that has actually showed concern--one of my 
own personal concerns, which is dealing with athletes after 
they retire from sport. A lot of--much more money is coming 
into sport athletics at this point in time, especially Olympic 
sports, and athletes are retiring at a later age, so we're 
having a problem with athletes retiring in their late 20's and 
30's, trying to find a job, competing with other people that 
have just done internships and are applying for jobs. There are 
23-, 24-year-olds used to getting a lot less income than 
someone who's coming off the Olympic Movement.
    The USOC family has actually worked toward the goal of 
bringing together a job placement firm, an international job 
placement firm, and announced that at the past Olympic Assembly 
about a month ago.
    Ms. Jackson Lee. Let me--Mr. Burke, I am not going to--I'm 
going to take your testimony under advisement because I do want 
to pose questions about the immediate incident. But I do 
believe that hopefully Mr. Scherr will answer--if he did not, 
if I did not hear him answer that in the Chairman's question--
answer again for me when there will be more cooperative 
relationships with Mr. Burke's organization and what pathways 
have you established. But let me just say, what I understand is 
that you came in after the incident with Mr. Hamm? Is that my 
understanding, Mr. Scherr?
    Mr. Scherr. I was the acting or interim chief executive 
officer during the Athens Olympic Games.
    Ms. Jackson Lee. And were you in Athens I assume?
    Mr. Scherr. I was.
    Ms. Jackson Lee. All right. Let me just say this that with 
all of the mea culpa, I still can't understand why Mr. Hamm 
suffered for 8 days, returned back to the United States, and 
there was no comment to the athlete, which says to me the same 
problem we've had--the athletes produce for us but we don't 
show them the respect they deserve. And even though he's a 
young man, in essence a youngster, if you will, I cannot 
imagine in that whole complexity that no one could find a way 
to get a communique to him.
    It also gives me concern, do we know anything about our 
athletes if they were in jeopardy if you can't even communicate 
to them by way of an incident that is happening, who is 
communicating with them if they're in jeopardy? Who is 
monitoring their comings and goings or relating to them from 
the national level in their comings and goings?
    The other thing is that I'd be concerned about however it 
got misconstrued for a FIG letter to be going without his 
notice to be asking for the medal to be given back or let's 
see--I had it on here what he was asked to do--that he would 
give back the medal and then some other commentary about two 
medals. Absolutely an outrage.
    And let me just say this: what we saw back home, that's 
really the crux of it. What we saw back home was a youngster 
floundering over a period of time, and the cameras were only on 
the youngster, the athlete. Forgive me, Mr. Hamm, for calling 
you a young person. I'm young as well.
    But only on him. That whole saga. We didn't get to see an 
adult-formed committee, spokesperson making a statement. Even 
if you had said, we will investigate this fully, but we are in 
strong support of Mr. Hamm.
    And let me say this: I understand that you have an 
international delicate situation. That was what your concern 
was more that than anything else. What do we do about Korea? We 
don't want to break both the relationship with Korea, but 
importantly the other athletes that are allegedly still 
participating. But I think that respect is given to those who 
give respect. And if we had respected our athlete and we 
respected ourselves, all the other nations would have respected 
us as well.
    Mr. Hostettler. The gentlelady's time has expired for now, 
but we will be returning for a second round of questions. We've 
got a vote on in the House----
    Ms. Jackson Lee. Mr. Chairman, can I indulge you for----
    Mr. Hostettler. No. I've got to go vote. So we are 
recessed.
    Ms. Jackson Lee. But you're not going go vote while we're 
listening to the answer.
    Mr. Hostettler. We are recessed.
    [Recess.]
    Mr. Hostettler. The Subcommittee will come to order. I 
thank the panel, the witnesses for your indulgence. One of the 
casualties of an early cessation of activities of the House is 
a loss of Members, but I appreciate your being willing to stick 
around for a while and answer a few more questions.
    Mr. Scherr, with regard to the funding of the USOC, what 
percentage of your funding goes to travel and bonuses, and what 
percentage goes to the support of athletes and the development 
of future athletes, and if I can probably be more generic, what 
is your--I would like to know about the funding level of travel 
and bonuses. But you might want to start out by giving an 
overhead cost--administration versus.
    Mr. Scherr. Yes. Let me start by saying this. About 2 years 
ago, prior to the internal reformation that we undertook to 
become more efficient, approximately 78 percent of our total 
budget was expended on athletic programs and direct support to 
national governing bodies and athletes and 22 percent on 
general and administrative expenses.
    Today, that number is 87 percent on athletic performance 
and programming and 13 percent on administrative expenses. Our 
budget, although it varies on a cycle, will be approximately 
$550 million over the 4-year period. So roughly a little over 
$125 million a year. And of that, looking at those percentages, 
it's probably less than $20 million on administrative expenses.
    Travel you'd have to separate between what is staff and 
administrative travel versus what we spend to send athletes and 
teams to the Olympic and Pan American Games, and I couldn't 
give you a specific number on that break out, but it is a small 
percentage.
    As it relates to bonuses, as I mentioned earlier, directors 
and above in the organization forfeited any incentive 
compensation and bonuses for the past 2 years. This year, we're 
instituting a very modest incentive compensation program, the 
total cost of which is under $1.5 million and in excess--in 
comparison to what goes on programming and athletes, it's 
probably about in excess of $105 million directly to athletes 
and national governing bodies and programming.
    Athlete funding. The amount we spend directly on athletes, 
where a check goes to an athlete from the U.S. Olympic 
Committee has recently doubled. That was about 6.5 million 
dollars, and will now be about $13 million, and we doubled that 
as of July 1st.
    Mr. Hostettler. And you've answered that question. Let me 
ask you. I don't know if you mentioned this in your opening 
statement, but what was the number of employees at the USOC 
prior to the reorganization as opposed to the number of USOC 
members on the payroll after? I know there's a lot of volunteer 
activity in the USOC, but how many do you have on the payroll 
today versus how many you had previously?
    Mr. Scherr. When I was named interim executive director, 
which was just on the heels of the resignation of Lloyd Ward 
and Marty Mankamyer as our president, just at the start of our 
governance reform process, there were 572 budgeted positions, 
and we always have some natural positions that aren't filled at 
any point in time--vacancies. And there were 550 full-time 
equivalent positions at that point in time.
    Today, we have 383 positions that are budgeted in full in 
addition to about 20 interns that are part-time employees that 
are not fully compensated.
    Mr. Hostettler. Very good. Thank you. Mr. Hamm, I have 
additional questions. Are you familiar with any other 
individuals who have been harmed by actions or the lack of 
actions by the USOC and the USAG as a matter of course, because 
they did not participate in tours associated with the USAG?
    Mr. Hamm. USOC wouldn't really be involved that much with 
the post-Olympic tours that I participated in and also other 
athletes. But I know that one of my teammates, Blaine Wilson, 
was upset with the way--it was his decision to not be a 
participant in the tour and actually consulted John Ruger in 
the Olympic Village, who is the Athletes' Ombudsman about USA 
Gymnastics' behavior regarding the tour situation.
    Also, another athlete that I remember was very upset with 
USA Gymnastics for the tour situation was Courtney McCool. She 
wanted to participate in a tour show at her home town, and USA 
Gymnastics would not allow her to do that because that was part 
of a different tour, the tour that I went on.
    I've had conversations with some people that have described 
the situation with USA Gymnastics, talking that they felt like 
they in a sense felt as if there was a gun pointed to their 
head, and they had to sign these agreements in order to compete 
in the Olympic Games.
    So many of the athletes felt pressured into signing these 
agreements even though they were not agreements that they felt 
were in their best interest. And in the 2003, prior to the 2003 
World Championships, many of the athletes on the men's side 
were very upset with the tour agreement, and we had the whole 
men's senior team sign a document that said that we were upset 
with that and that we propose a different type of agreement, 
and that was just shot down by USA Gymnastics.
    Mr. Hostettler. And once again, the statement with regard 
to analogizing it with a gun to the head was as a result of the 
sentiment toward the national governing body?
    Mr. Hamm. Yes.
    Mr. Hostettler. And not the USOC?
    Mr. Hamm. No.
    Mr. Hostettler. Okay.
    Mr. Scherr. Mr. Chair, can I----
    Mr. Hostettler. Yes.
    Mr. Scherr.--augment Mr. Hamm's answer. In general, our 
bylaws and the law protect athletes' eligibility rights and 
should any national governing body or any other entity threaten 
their eligibility over a commercial issue, such as this tour, 
we would be compelled to step in at that point in time. And in 
this particular incident, once Mr. Ruger notified us of the 
issues and concerns, we spoke with Mr. Colorossi, the executive 
director of Gymnastics personally and through written 
communication to cease any action to threaten or attempt to 
deny athletes' eligibility related to these tours.
    However, because of the nature of the relationship between 
the governing body and services provided, there can be a 
hostile situation created between athletes who go on other 
tours versus those that go on the NGB's tour, and those are 
something that we have great concerns about and take very 
seriously.
    Mr. Hostettler. Great. Thank you. Mr. Henderson, you and 
Mr. Hamm both spoke about an Athlete's Bill of Rights. Could 
you in broad stroke terms suggest to us what might be included 
in that?
    Mr. Henderson. Commercial terms would definitely be the 
center of that bill. The problem that we have is that when 
I'm--as I said earlier, I'm going to be representing several 
different athletes from several different types of sports. So 
what might be great for someone like Paul might not be so great 
for someone that is in a smaller sport. An example could be 
that an NGB requires an athlete to wear Nike up to the blocks 
to race, and the athlete thinks--is getting paid to do that. 
But in a larger sport, they're dependent more on their own 
sponsors. And so if I'm requiring an athlete to wear Nike and 
thinking that I'm helping him out, I'm actually not because I'm 
taking more money away from him than he might get from a 
competing sponsor.
    So as I said earlier, if this goes in the legislation, if 
an Athlete's Bill of Rights goes into legislation, I will not 
have the ability to adjust it on the fly, which I will need to 
do as athletes come to me and give me their concerns. What I 
need to do is work within the USOC, because the communication 
channels are now there for us to actually work with the new 
board and to work with the USOC staff to come up with a Bill of 
Rights that's fair for the athletes and then is easily 
adjustable. It's easy to--it's much easier to adjust this type 
of a bill by just bringing together a board meeting instead of 
its legislation. You understand how long it can take.
    Mr. Hostettler. Sure. Now let me get this straight. The 
situation, the scenario that you gave to us earlier would that 
be as result of the action of the NGB? Who would force them, 
for example, to--and this just is an example I know--who would 
require them to take Nike to the blocks as opposed to?
    Mr. Henderson. I can give you an example because it's 
intimate to me--I can give you an example in swimming. One of 
the biggest problems that we have in swimming right now, which 
does not affect a lot of the smaller sports is that we have an 
international federation who is telling our athletes that they 
have to wear the international federation sponsor on a bib over 
their sweats until their name is announced behind the blocks, 
and then they have to wear the sponsors on their swim caps as 
well. And they said if they don't wear it, they're disqualified 
from the meet and will not be allowed to swim the rest of the 
meet, and this is world championships.
    Mr. Hostettler. But that's not the IOC, the International 
Olympic Committee, or the USOC? That's the foundation that 
governs----
    Mr. Henderson. No one has----
    Mr. Hostettler.--international swimming?
    Mr. Henderson. No one can stop our international federation 
from doing this--FINA. So this is one of the athletes' concerns 
that we have to address. We have to work together with the USOC 
and the IOC in a political way to get them to take more 
responsibility--the IOC that is--to take more responsibility 
for the international federations that are governing a lot of 
the big meets that our athletes are going to.
    Now, the case with Paul right here is a prime example. You 
have an NGB who is trying to a little bit muscle the athletes 
to come on their tour to help them make money because they're 
raising money to fund the grassroots athletes as well, and the 
NGB. And the athletes have a competing tour that they're making 
great money on as well, and trying to make a living. The USOC 
stepped in and protected the athletes, and when we came--the 
knowledge came to us about what was going on. So we're in the 
loop. We're working together. But as Paul said, a lot of this 
is dealing with the NGBs and not the USOC.
    Mr. Hostettler. Mr. Hamm, could you comment on what you 
might see in an Athlete's Bill of Rights?
    Mr. Hamm. Some of the things that I think should be 
included is that an athlete should be allowed to compete in an 
unsanctioned event, which means that basically, for instance, 
the tour that I competed on--or participated in was an non-
sanctioned event, which I potentially could be kicked out of 
competition for.
    Mr. Hostettler. By whom?
    Mr. Hamm. By USA Gymnastics.
    Mr. Hostettler. Okay. Okay.
    Mr. Hamm. That's one thing that I think athletes should be 
allowed to do.
    Some of the other things that I have here that were written 
by my attorney, Kelly Crabb, that are good examples. The 
athlete will be directly consulted on all matters that affect 
the athlete's status or standing at any games. That would be 
something that would definitely need to be included. No athlete 
will be compelled to join or punished for failing to join any 
commercial event sponsored or promoted by any NGB. And an 
independent grievance channel for an athlete needs to be 
established. And what I guess that means is that, for instance, 
like John Ruger and Mr. Henderson are all funded in part 
through the USOC, which makes it very hard for them to have an 
unbiased opinion about the situation, because they do not want 
to have to put their job in jeopardy.
    Mr. Hostettler. Very good. And then I just want to make one 
more clarification. Mr. Burke, what were you told was the 
reason behind the Pan American--the lack of notation of the Pan 
Am athletes in the mission statement for the USOC?
    Mr. Burke. The mission statement as it was before the new 
revision or the one that was revised and included Paralympic?
    Mr. Hostettler. Well, either one. Well, my question has to 
do with Pan Am Games. I don't know what--I'm not concerned 
about what was or what is. My understanding is they both don't 
include the Pan Am, which I'm going to ask a question as to why 
Paralympic was included and not Olympic. But my question right 
now is Pan Am.
    Mr. Burke. Certainly. Pretty much what Mr. Scherr said that 
we are not considered part of--a real part of the Olympic 
Movement. We're kind of a preliminary precursor to Olympic 
sport, and, therefore, would not be included.
    Mr. Hostettler. Okay. All right. All right. I'm sorry if 
you could repeat that.
    Mr. Burke. That the Pan American Sports were a precursor to 
the Olympic Sport or Paralympic Sport and that we were not--our 
sports were not of that same level, and so we were not included 
as being part of the mission for the committee.
    Mr. Hostettler. Do you find that in contrast to the Federal 
charter?
    Mr. Burke. I do.
    Mr. Hostettler. Okay. You do. Mr. Scherr, once again, why 
was the Pan Am omission in the statement? Why is the Pan Am 
omission in the statement, sir?
    Mr. Scherr. Let me clarify what I said earlier because I 
did not say that the Pan Am Games nor the Pam Am Sports were 
not part of the Olympic family or the Olympic Movement. The Pan 
Am Games itself is not the competition it was 20 or 30 years 
ago.
    For most of the sports on the Olympic program and who 
participate in the Pan American Games, it is a development 
competition, where they send athletes who are not quite at the 
level of the--of participating in Olympic Games as a 
developmental competition.
    In some cases, it's a qualifier for the Olympic Games and 
they send their very best teams in order to qualify for the 
Games. But for most, it's a very easy competition, and they 
send developmental teams.
    So it is not the main focus of the mission of the United 
States Olympic Committee as decided by the membership of the 
Committee, not by my self. It was a vote of our membership.
    And the vote of the membership chose to prioritize our 
mission and focus on the Olympic Games as well as the 
Paralympic Games. The Pan American Games being in some cases a 
qualifying competition for the Olympic Games is viewed as a 
very important part of the business of our national governing 
bodies in preparation for the Olympic Games.
    There are six organizations who are on the program or who 
were on the program of the Pan American Games but not on the 
program for the Olympic Games. Those are the six organizations 
that Mr. Burke is representing here today, not the 31 Olympic 
sport organizations who participate in the Pan Am and the 
Olympic Games.
    Those six organizations are important to the Olympic 
Committee. We provide them recognition. We provide them support 
and access to our training centers, and we have provided them a 
guaranteed amount of funding. As with all of our 30, or 
actually our 45 if you count the winners, but on the summer 
side the 37 national governing bodies, none of them are 
entitled to guaranteed funding any longer. It will all be 
determined on our prioritized basis on a number of--set of 
complex criteria and that's the manner in which we will 
allocate our resources. So at the end of the day, they are part 
of the Olympic Movement. They are recognize by us. It is not in 
conflict with our charter to prioritize and allocate our 
resources in alignment with the purposes in the act and the 
goals of the Olympic Movement. They are important to us, and 
they are part of our Olympic family.
    Mr. Hostettler. I guess--I remember a little over 20 years 
ago going to Indianapolis and watching Carl Lewis in the Pan Am 
Games. Why are the Pan Am Games not what they were over 20 
years ago, as you mentioned? Could it be said that over the 
last few decades as part of the USOC's direction that maybe the 
USOC did not give it the preeminence that----
    Mr. Scherr. It really has nothing to do with our 
participation. We spend far more in participating in the Pan 
American Games and supporting our delegation there than we do 
the Olympic Games, just because of the size of the delegation.
    And we haven't reduced our support for sending a team and 
participating well in those games. But the market itself and 
the reality of the world's sport competition has changed.
    There are so many new sports and new sport competitions and 
different interests out there. The Pan American Games is not 
even televised in North America any longer, because television 
and the viewer don't find an interest in the competition.
    And on the field of play, it is just not an important 
competition for many of the athletes in terms of their 
development, and that's just a matter of the fact that teams 
travel around the world to other competitions now. World Cups, 
world championships are so much more predominant and important 
in the scheme of an athlete's development than the Pan American 
Games. And the media, television, and sponsors understand that 
because it's a market reality.
    Mr. Hostettler. All right. Great. Mr. Henderson, you wanted 
to respond?
    MR. Henderson. Point of clarification on Mr. Hamm's 
comment. The AAC is federally mandated entity within the USOC, 
as is the 20 percent representation on any committee, including 
the Board of Directors, for athletes. And so we hold three 
meetings a year that we are reimbursed for by the USOC. But I'm 
strictly a volunteer. I have not been paid one dime, even 
though I wish I had been. Mr. Scherr or anybody at the USOC do 
not have the power to fire, hire, or do anything with the AAC.
    The AAC members are elected by their NGBs.
    Mr. Hostettler. Elected by the NGBs?
    MR. Henderson. By their peers. By their peers within the 
NGB, yes.
    Mr. Hostettler. But not like--is his name Colorossi--or----
    Mr. Henderson. No. It has nothing to do----
    Mr. Hostettler. Okay. Yeah. Thank you. The Chair now 
recognizes the gentlelady from Texas for purposes of questions.
    Ms. Jackson Lee. As I indicated when I was in the midst of 
my questions, Mr. Scherr, I had some meetings that delayed me 
from coming back, but I want to go back to where I was and to 
allow you to answer the thrust of my questions and let me just 
summarize.
    I do realize that the USOC represents almost a foreign 
policy face for the United States, and it also represents an 
opportunity to engage internationally, and your standing in the 
world and your ability to represent athletes certainly comes 
about through the perceived or the world's perception of your 
willingness to cooperate, collaborate and join in a united way 
to present these outstanding efforts on behalf of athletes 
around the world.
    But it disturbed me, as I said, because it looked as if 
there was no representation of Mr. Hamm, but I use him as an 
example of any athlete. Certainly, during the course of that 
time, there were a number of upsets, if you will. Steroid use 
was being alleged. Other athletes were engaged in those 
difficulties, and so I would not suggest a broad brush of 
representation or involvement or engagement because there are 
rules that have to be adhered to.
    Now, I want to know from the time of the incident with Mr. 
Hamm, have there been other than the corrective measures of 
changing the board from 123, 124 to 11, what internal 
procedures have been put in place in order to provide that kind 
of direct response to a crisis or an incident such as that? It 
had a direct relationship to the performance of the athlete 
after performing in competition. It had direct relationship to 
an issue that had to do with the receiving of medals and 
certainly, there was not an allegation of impropriety on the 
part of the athlete. So the appropriate entity, organization 
should have felt very comfortable in fighting on behalf of an 
American athlete.
    What procedures have you put in place to totally correct 
the mishandling of this incident that would give us comfort 
that the reopening of the Ted Stevens Act at this point may not 
be the correct approach to take, or we should be open minded.
    And what approach have you taken to embrace Mr. Burke's 
organization and move along some of the issues that he is 
desirous of, and do you have interest or support for an 
Athlete's Bill of Rights, which the USOC would adhere to in 
working with the AAC?
    Mr. Scherr. Just let me--I appreciate the opportunity to 
respond to your question and statement of earlier, as well as 
your questions now. And I believe there are three parts and 
we'll take the matter with Paul Hamm and what measures we've 
taken to provide corrective action.
    At the onset of the issue or the controversy surrounding 
his medal, we met immediately, the following day, with USA 
Gymnastics. And I believe we've admitted this as a mistake and 
recognize it as one. We were asked by them not to interfere and 
meet directly with their athlete, because he was still in 
competition and still had to compete several days later.
    Ms. Jackson Lee. I'm sorry. Who asked you not to interfere?
    Mr. Scherr. Mr. Colorossi and USA Gymnastics.
    Ms. Jackson Lee. Okay.
    Mr. Scherr. We asked them to convey our support for Paul in 
his situation to Paul, and we kept them informed almost on an 
hourly basis during the next several days as to what we were 
doing and what we were hearing, both Mr. Colorossi and his 
federation.
    They assured us they were communicating with Paul on our 
behalf. So the for the period of the 20th, 21st, and 22nd, we 
assumed they were doing so.
    On the 23rd and probably a little earlier, it became 
apparent to us that there were issues of communication and we 
had tried to meet directly with Paul on the 23rd and failed, 
and were unable to track him down. And it was a chaotic 
atmosphere, and I believe he was off on some appearances.
    But on the 24th, we did communicate directly with Mr. Hamm 
through Herman Frasier, who's our team leader for the Olympic 
Team and a USOC representative to the athletes in the Village.
    Ms. Jackson Lee. Is that August 24?
    Mr. Scherr. Yes. Yes.
    But I think the appearance that was given to the American 
public because of a lack of strong public statements until the 
international federation involved us and sent the letter 
directly to us gave the appearance that Paul was alone, and 
certainly from Paul's perspective--and we have great empathy 
for what he went through, he in effect was by himself in not 
understanding what USOC was doing nor what his federation was 
doing.
    We did not negotiate in any way with the Koreans regarding 
a second gold medal. They came to us, asked for a meeting. We 
took a courtesy meeting with them as another national Olympic 
committee. They asked Peter Ueberroth and myself if we would go 
and meet with the International Gymnastics Federation and the 
IOC and request a second gold medal.
    We said no we would not do that, and we did not go to a 
meeting with the FIG or the IOC, either separately or with the 
Korean Olympic Committee to request a second gold medal.
    They also asked us if they could represent on our behalf 
that we would be in favor of a second gold medal in either of 
those two meetings, with the IAF or the IOC. We said no, they 
cannot make any representation on our behalf.
    And then they asked us what our response would be if one of 
those bodies were to award a second gold medal, and we said at 
that time, well, we'll take it under consideration at that 
point in time if anyone awards a second gold medal.
    We also subsequent to that meeting informed Mr. Colorossi 
that we had met with the Korean Olympic Committee, that the 
notion of a second gold medal was floated, that there might be 
some action by FIG or the IOC in that regard. If there were any 
requests of the USOC to consider a second gold medal, we wanted 
Mr. Colorossi to assure Mr. Hamm that we would definitely speak 
with him and his wishes would be taken into account prior to 
any consideration of a second gold medal. But that occurrence 
never happened, because, as we know, FIG and the IOC refused to 
award a gold medal. Instead FIG took the action, which we 
believe was a cowardly one, and they requested directly--not 
directly--they requested the USOC to deliver a letter to Mr. 
Hamm asking him to voluntarily return his medal, which to put 
any athlete in that position is absolutely ridiculous. We, at 
that point in time, contacted Paul and his family through John 
Ruger, who was discussing marketing issues at that time with 
Cheryl Shade, Paul's agent, and we knew could get a hold of 
Paul whom we believed had returned to----
    Ms. Jackson Lee. Wasn't there a conference call where the--
Mr. Hamm was given the impression that he was being asked to 
give the medal back?
    Mr. Scherr. I don't believe we ever gave that impression in 
the call because we had--our games administrative board had met 
prior to the conference call. Mr. Ueberroth and myself, the 
chef de mission, and assistant chef de missions for the team 
had met and decided the disposition of what we wanted to do 
with the letter, which was not deliver that to Paul Hamm.
    The conference call, I will say, was confusing and very 
emotional in the beginning. We then reconvened and collectively 
arrive at the course of action we undertook, which was to hold 
a press conference, refuse to deliver the letter to Paul, 
denounce the action of the FIG, and publicly declare very 
strongly that Paul was indeed the rightful Olympic champion.
    Ms. Jackson Lee. Well, let me. We could--this is a very 
long recounting, and I appreciate the detail in which you're 
doing so, but now focus on whether there are structures in 
place to fix what was obviously broken. What, and the very fact 
that we had a conference call that started off emotionally, 
with the idea that you perceived or someone perceived that he 
was going to be asked to give a medal back was already an 
egregious, I think, breach.
    But what do we have now that can interact with his chapter 
or his particular association--was the athletic--or the--
sorry--the Gymnastic Association. It seems like there's a lot 
of bureaucracy there.
    But what is in place to have an orderly process for 
athlete, for association, and for USOC if something--these 
kinds of things occur on a regular basis?
    Mr. Scherr. We have changed our past practice and adopted a 
policy. We name a team leader for each of the teams that is our 
principal liaison and communication aspect to each team. That 
team leader is nominated by the national governing body. In 
this case, it would be USA Gymnastics. We are informing and by 
policy telling the national governing body and the team leader 
that the team is responsible to the U.S. Olympic Committee. 
Should there be any incidents, we expect access to the athlete 
directly by a representative of the U.S. Olympic Committee, 
either paid staff or volunteer representative, and we will not 
rely on the national governing body for those communications in 
the future. And that is now part of our policy in selecting and 
directing the team leaders who are responsible for each of the 
delegations in the Games.
    Ms. Jackson Lee. All right. So that team leader now--is 
that a by-law or a sort of--a structure change that's written 
somewhere that we now have team leaders that associate with----
    Mr. Scherr. The team leaders existed in the past, but the 
policy change is different in that the team leader is 
responsible to the U.S. Olympic Committee for providing access 
directly to the athlete.
    Ms. Jackson Lee. All right. Is that a written--when you say 
it was before, so have their duties been reformed? Do you have 
something in writing on that?
    Mr. Scherr. Yes, we can deliver that to you in terms of the 
policy----
    Ms. Jackson Lee. I'd appreciate----
    Mr. Scherr.--procedures for team leaders.
    Ms. Jackson Lee. So that means that that team leader is 
speaking to athletes and their coaches or and the head of the 
association and obviously I'm not an expert on the structure, 
but they would be speaking to the head of the gymnastic 
association; is that who they're speaking to?
    Mr. Scherr. The team leader is appointed by the national 
governing body, approved by us, and they're the primary 
communication vehicle to the coaches, the team directors, and 
the athletes for all conditions of participation in the Games, 
their housing in the Village, their entry into the competition, 
and so on. We have in the past communicated through the team 
leader. What we are doing by policy now is communicating to the 
team leader that we will no longer communicate through them, 
but we will communicate directly with the athlete. And they 
will be responsible for making that communication possible.
    Ms. Jackson Lee. Okay. Let me say that that is an 
improvement, and I know the good intentions and good faith with 
which you offer that, and I thank the Chairman for his 
indulgence on this. But understand that I still don't hear a 
change, a structural change in policy that would address where 
Mr. Hamm found himself, and I don't want to use him as the only 
example. There could be a number of other incidences that would 
occur that require your swift intervention, you knowing what 
you should be doing for the many obligations that you have--
one, the world arena and your relationship with the 
international committee. But I'm not hearing any structure in 
place that doesn't wind up with families thinking they have to 
have defense funds and conference calls with misinformation. 
That team leader--what is then in place that is a trouble 
shooter or structure to respond to a troubled situation that 
requires the U.S. AOC's involvement? I don't hear that.
    Mr. Scherr. Well, there is an athlete ombudsman, who 
resides in the Village, who is responsible to the Athletes 
Advisory Committee. His salary is paid by the U.S. Olympic 
Committee, but the athlete ombudsman is responsible to the 
Athletes Advisory Committee for protecting the rights of the 
athletes in eligibility issues, commercial rights issues, and 
any issues regarding--in which an athlete feels aggrieved. 
Athletes have access to that person. They have their phone 
number in the Village. They have complete access to them.
    And so, at any point in time, if an athlete feels there's 
an issue, they have that avenue to go through.
    As it relates to defending the athlete's medal and 
eligibility, that is already I believe well protected 
statutorily, and we do provide, if it's a meritorious case, we 
provide--and not frivolous--we provide full funding for an 
athlete's----
    Ms. Jackson Lee. So what happened is just that that 
communication just didn't get to this----
    Mr. Scherr. It was a communication issue, and it was an 
issue with timely and effective communication.
    Ms. Jackson Lee. But you say you have rules in place?
    Mr. Scherr. There are rules in place.
    Ms. Jackson Lee. Can you just quickly answer my last two 
points, which is working with the Pan American group and then 
AAC in terms of the work that they're doing, particularly 
focusing on an Athlete's Bill of Rights?
    Mr. Scherr. As it relates to the AAC and Athlete's Bill of 
Rights, I think there were three issues that were mentioned. 
Athletes' eligibility rights are protected expressly in our by-
laws and the act, and any athlete who feels that they've been 
improperly denied that opportunity has the ability to have that 
overturned and protected legally.
    So I think that is well protected.
    The athletes do have their own ombudsman. It is funded by 
us, but he reports to the Athletes Advisory Committee and is 
responsible to the athletes, and I do not think it's conflicted 
in his duties in representing the athletes. And they have an 
opportunity to lodge grievances through that person.
    And I think the third issue regarding commercial rights and 
what they wear and whether or not there is punitive or other 
measures taken at the NGB level, I think that the ombudsman and 
the USOC has adequately protected in that in the past, and as 
has the AAC.
    I believe the last issue was in this circumstance, is there 
opportunity for protection for athletes in the Games and the 
communication channels. And we have approximately 700, 600 to 
700 athletes in any Olympic Games, and those communication 
channels are open. It would be difficult to mandate through I 
think Federal legislation how and when you communicate with 
each of those athletes.
    But it's an issue that we take very seriously. We're very 
concerned about. We know we made an error in this case, and I 
think we've adequately addressed through policy and practice 
how we will deal with it in the future.
    As it relates to the Pan Am onlys--those seven governing 
bodies--this has been an issue that we've worked on diligently 
for over 4 years, obviously not to their satisfaction. And it 
may not be to the satisfaction of any or all of them at the end 
of this, but for us and our organization, it does come down to 
a question of priority of allocation of resources and where 
those resources are best spent. Can we provide complete funding 
to every national governing body and still have $400,000 left 
to pay for a defense fund for Mr. Hamm in defending his medal? 
Maybe. Maybe not.
    And it comes down to us as a very difficult decision that 
you face on a daily basis. But we do take their 7 million 
members and what they do very seriously, and we will work with 
the Chair of the Pan Am Sports Council, Mr. Baggiano, and Mr. 
Burke to resolve those differences.
    They recently requested yesterday an opportunity for the 
USOC to support their efforts in the Pan Am Games and Mr. 
Ueberroth will take that under advisement.
    So it is they are important to us. But it does boil down to 
an overall resource allocation question and decision for our 
organization. But we do treat them exactly in the same manner 
as any other national governing body in terms of recognition 
and support.
    Ms. Jackson Lee. Thank you very much. Thank you, Mr. 
Chairman.
    Mr. Hostettler. The Chair has simply one more question or 
maybe set of questions for Mr. Hamm.
    Mr. Hamm, it's come to the Subcommittee's attention that 
you have been drug tested over the past several quarters, 
potentially an inordinate number of times. Can you testify as 
to your experience with the drug testing prior to the Olympic 
Games of Athens and afterwards with regard to the number of 
times, the frequency of testing?
    Mr. Hamm. Before the Olympics, I was probably being 
tested--it depended. If it's an out-of-competition test, I 
would have been tested maybe three or four times in the year by 
USADA in out-of-competition test. And since the Olympics, I've 
been tested I think four times and I've actually had a missed 
test one time due to the fact that I wasn't around, which seems 
like a lot.
    And also what was interesting recently is that it doesn't 
seem that these tests are being done randomly, which we are all 
under the impression that they are supposed to be done 
randomly. For instance, myself, my brother and a team mate of 
mine that lives upstairs from me all got tested on the same 
day.
    So there--I don't know whether or not they're picking 
people for specific reasons. My father actually was upset about 
this. He called USADA, and they told him that the public 
understands that it's supposed to be a random thing, but it's 
not; that it's something that they have certain criteria for 
and that criteria can change from period to period.
    Mr. Hostettler. Now, when you said--you said out of 
competition, you might be tested three or four times, and since 
the Olympics, you've been tested four times. Since the 
Olympics--it's been less than a year--you've been tested four 
times. What would be the frequency? Would it be once a quarter 
before the Olympics or once--are you out of competition--let me 
ask you that. Are you out of competition now? Are you in that 
timeframe?
    Mr. Hamm. Yes.
    Mr. Hostettler. Okay. So what would be the timeframe prior 
to the Olympics that you would be out of competition?
    Mr. Hamm. Well, it's any time that you're not actually 
competing.
    Mr. Hostettler. Not actually competing. So World 
Championships in 2003.
    Mr. Hamm. If you haven't just competed in a competition, 
everything is considered out of competition in a sense.
    Mr. Hostettler. So the frequency is significantly higher 
since the Olympic Games?
    Mr. Hamm. Yes, which seems sort of strange because you 
would expect it to be higher prior to the Olympics.
    Mr. Hostettler. Right. Exactly. It seems to me. But what 
were these criteria? Were they suggested to you as to why you 
were being tested not so randomly--you and your brother?
    Mr. Hamm. I have no idea. My father spoke with a 
representative from USADA, and they would not admit what the 
criteria were.
    Mr. Hostettler. Who governs USADA?
    Mr. Hamm. To my best understanding, I think they are 
underneath the USOC.
    Mr. Hostettler. Is that true, Mr. Scherr?
    Mr. Scherr. USADA is an independent agency from the U.S. 
Olympic Committee. They're funded roughly two-thirds by the 
Federal Government and one-third by the USOC. But they operate 
with an independent board and completely independent from the 
USOC, and I believe are subject to the ONDCP for oversight. 
USADA's testing protocols are completely separate, and the USOC 
itself has no input into their testing protocols. They are 
random. They do and can within sports profile sports, not 
individuals, but sports that might be more subject to doping 
than other sports. But within that, it's completely random.
    There is an increase in their budget and an increase in the 
total amount of tests from 2004 to 2005. But the testing is 
completely random.
    Mr. Hostettler. How often have gymnasts been found to have 
doped?
    Mr. Scherr. Well, relative to other sports, gymnasts have a 
very low frequency of positive tests.
    Mr. Hostettler. So given that gymnasts generally don't dope 
as much, why would Mr. Hamm--why would a gymnast--why would two 
gymnasts be--why would that frequency have elevated to the 
extent that it has over the last few months? And I understand 
they're completely independent. There's no direction at all by 
USOC or who do they answer to? Who do they give that 
information to?
    Mr. Scherr. We sign a 4-year contract with them, and at 
that point in time, their overall administration of how they 
work is done contractually with the USOC. But in practice of 
how they administer their tests, how they adjudicate their 
tests, and how they operate is completely independent.
    We have no ongoing input or communication channel into 
their activities, and I think their oversight on an ongoing 
basis is the board that is appointed, in part, by them and, in 
part, I think by the Federal Government.
    Mr. Hostettler. I want to thank all of the--thank you, Mr. 
Scherr. I want to thank all the members of the panel for your 
testimony today, and your help in this very important issue. It 
is not only important to the Congress, but quite honestly is 
important to all the American people because of our love for 
the Olympics and our love for the Olympians.
    Ms. Jackson Lee. Mr. Chairman, might I just make an inquiry 
please?
    Mr. Hostettler. Yes.
    Ms. Jackson Lee. I think Mr. Scherr indicated that you will 
provide me with some specifics of the policy in writing?
    Mr. Scherr. Yes.
    Ms. Jackson Lee. And I would greatly appreciate it. I 
assume for the whole Committee, Mr. Chairman?
    Mr. Hostettler. Right.
    Ms. Jackson Lee. And I'd also like to, as I understand it, 
we haven't closed the door for possibly looking at what 
potential legislative need--we haven't closed the door. We 
haven't opened the door. We're remaining open and the more 
information that the individual witnesses may have I would 
welcome to help us to consider this very, very important issue, 
and I want to thank all the witnesses, and I yield back.
    Mr. Hostettler. The gentlelady is correct, and I want the 
record to reflect that submissions for today's hearing will be 
accepted for 2 weeks from today's date. The Subcommittee has 
received many inquiries from groups and individuals interested 
in submitting items for the record, and we want to ensure that 
all interested parties have the opportunity to make these 
submissions to the record.
    The Subcommittee will be sending any additional questions 
that we may have, and we would thank the members of the panel 
for your timely response to those questions.
    The business before the Subcommittee being complete, we are 
adjourned.
    [Whereupon, at 1:55 p.m., the Subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

  Prepared Statement of the Honorable F. James Sensenbrenner, Jr., a 
 Representative in Congress from the State of Wisconsin, and Chairman, 
                       Committee on the Judiciary

    Like many, I sat enthralled watching Paul Hamm's come from behind 
victory. This unexpected comeback victory was the pride of America. 
Then this glorious victory turned into a horrible nightmare for Paul 
Hamm. Seeing Paul Hamm hung out to dry for days on the television 
compelled me to come to his defense. In doing so, I gained a personal 
view of the inner workings of the Olympic system and its faults and 
weaknesses.
    Paul Hamm is an Olympic champion who competed to the best of his 
ability, followed all the rules of his sport, and won his gold medal by 
doing all that is expected of an elite athlete. He is a perfect example 
of an U.S. Olympiad that makes America proud not only through their 
athletic achievement but also because they represent this country with 
honor and dignity. While understanding the need to handle controversies 
during the Games quietly, and in a uniform manner, the support system 
in place for an athlete should not be silent in a controversy that 
involves an competitor from an aggressive and vocal country. This is 
the situation Mr. Hamm found himself in and for far too long he was 
there alone. I hope today we find that changes have been made to 
address this type of situation in the future.
    While the U.S. Olympic Committee has made internal reforms to its 
governing structure, I think reforms need to be made in the 
organization's priorities both procedurally and monetarily with regard 
to Olympic athletes as well as up and coming athletes within the 
Olympic family.
    My understanding is that some of the backroom negotiations and the 
motives of officials that steered Mr. Hamm's experience are common 
place within the Olympic family, and that should be stopped. It has 
been alleged that the head of the Gymnastics National Governing body, 
who was so absent in defense of Mr. Hamm, was in the process of 
negotiating for a job with the Federation of International Gymnastics 
and also was affiliated with a gymnastic tour that Mr. Hamm had chosen 
not to join. There shouldn't be even a perception that the actions of 
individuals in positions of influence are being governed by pending job 
opportunities or an athlete's personal choices about participating in 
profit making non-Olympic endeavors.
    Additionally, allegations have been made that too much of the 
Olympic Committee's budget may be going to bonuses for high level 
officials within the organization, for travel and accommodations for 
meetings of the Olympic governing structure, and increasing larger 
entourages accompanying athletes to Olympic events, rather than Olympic 
athletic programs who need the funding and programs producing our 
future Olympiads. This is certainly not what most people would perceive 
as representing appropriate prioritization by the Olympic Committee. 
Hopefully, we can get some answers today and if necessary address these 
concerns.
                               __________

       Prepared Statement of the Honorable Sheila Jackson Lee, a 
Representative in Congress from the State of Texas, and Ranking Member, 
        Subcommittee on Immigration, Border Security, and Claims

    The United States Olympic Committee (USOC) was established in 1896, 
to select American athletes to compete in the Olympics. The Amateur 
Sports Act of 1978 (the Act), provided for the recognition by the USOC 
of National Governing Bodies (NGBs) and for dispute resolution. In 
1998, the Act was amended by the Ted Steven's Olympic and Amateur 
Sports Act, which provided for recognition of the Athletes' Advisory 
Council (AAC) and the National Governing Bodies' Council (NGBC), the 
creation of an Athlete Ombudsman, and responsibility for the 
Paralympics Games.
    The USOC has experienced some embarrassing controversies. In 1991, 
USOC President Robert Helmick resigned amidst allegations of ethical 
misconduct. A few years later, in an effort to win the bid to host the 
2002 Olympic Winter Games, the Salt Lake City Bid Committee was accused 
of offering bribes to IOC members who were responsible for selecting 
the host nation of the 2002 Games. In 2002 and early 2003, ethical 
questions were raised in relation to an action by former USOC Chief 
Executive Officer Lloyd Ward. The USOC Ethics Committee investigation 
of Mr. Ward resulted in a ruling that Mr. Ward had committed two 
technical violations of the USOC's ethics code. Simultaneously, a 
public squabble between Mr. Ward and then-USOC President Marty 
Mankamyer brought further embarrassment to the organization, and 
ultimately both Ward and Mankamyer resigned.
    As a result of these incidents, USOC oversight hearings were held 
in 2003. This led to the establishment of the Independent Commission on 
Reform of the United States Olympic Committee. The Independent 
Commission issued a report in June 2003, in which it concluded that 
many of the USOC's past problems could be traced to its large Board 
membership.
    According to the report, the size of the USOC Board of Directors 
(124 members) made it impossible for the organization to operate in a 
coordinated way. Also, nearly all USOC directors were elected to the 
Board by constituent groups. As elected representatives, the directors 
would tend to look first to the interests of the organization that 
elected them rather than to the best interests of the American Olympic 
Movement. The Commission recommended a statutory overhaul of the USOC's 
governance structure.
    In the 108th Congress, several bills were introduced which would 
have carried out the recommendations of the Independent Commission. In 
April 2004, however, the USOC implemented its own organizational 
reforms. The provisions in the bills were implemented with only minor 
modifications that were perceived by USOC as being necessary to comply 
with the requirements of its charter. The USOC Board of 123 members 
voted themselves out of power and established a Board of just 11 
members.
    Other than for some minor technical corrections and a few 
clarifications, the USOC does not believe that legislation is still 
necessary. I will withhold my judgment on this issue until I have had a 
chance to listen to the testimony and question the witnesses.
    We also will be hearing testimony from Paul Hamm, the first 
American man to win the Olympic gold medal in the gymnastics all-around 
competition. He scored a 9.837 on the high bar, to achieve an overall 
score of 57.823 points, beating his closest competitor, South Korea's 
Kim Dea-Eun, by .012 points, the slimmest margin for the competition in 
Olympic history. South Korea's Yang Tae-Young trailed Hamm's score by 
.049 and won the bronze medal.
    A few days later, the South Korean delegation lodged a scoring 
error complaint with the governing body of the sport, the International 
Gymnastics Federation. They alleged that Yang's routine had receive a 
start value of 10 during his earlier identical performances in the team 
preliminaries and finals but only a 9.9 during the all-around 
competition, and that this difference of .1 points would have given him 
the gold medal.
    According to the rules for the gymnastic competition, challenges to 
scoring decisions must be made before the following rotation is 
complete, so the objection from the South Korean delegation was 
rejected. Mr. Hamm will testify that the USOC and the other American 
organizations left him alone to deal with this dispute until it was 
almost resolved. I would like to know why they did not support him 
sooner.
    Thank you.
  Letter from John B. Langel, Law Offices of Ballard Spahr Andrews & 
 Ingersoll, LLP, to Jim Scherr, Acting Chief Executive Officer & Chief 
         of Sport Performance, United States Olympic Committee




 Prepared Statement of Michael T. Harrigan, former Executive Director, 
                President's Commission on Olympic Sports



      Prepared Statement of Robert F. Kanaby, Executive Director, 
         National Federation of State High School Associations

    I am Robert F. Kanaby, executive director of the National 
Federation of State High School Associations (``NFHS''). The NFHS is 
the national service and administrative organization for high school 
athletics and fine arts programs in speech, debate and music. From its 
office in Indianapolis, Indiana, the NFHS serves its 50 member state 
high school athletic/activity associations, plus the District of 
Columbia.
    The NFHS has a strong interest in the Ted Stevens Olympic and 
Amateur Sports Act and we feel compelled to provide comments of current 
pertinence.
    As Executive Director of the NFHS, I write to address three issues:

        1.  National Governing Bodies (``NGBs'') Governance

        2.  NGBs deference to the ``exclusive jurisdiction'' of other 
        organizations; and

        3.  United States Olympic Committee (``USOC'') Board of 
        Directors composition.

    The underlying organization and operational philosophy for NGBs as 
embodied in the Ted Stevens Olympic and Amateur Sports Act is the 
``vertical structure doctrine,'' as reflected through NGB criteria, 
duties and authorities in the Act. While the ``vertical structure'' 
phrase is not found in the Act itself, it is prominently mentioned in 
the Report of the President's Commission on Olympic Sports on which the 
Act is entirely based and in the legislative history of the Act itself.
    In its simplest terms, ``vertical structure'' means 
organizationally that every NGB is comprised of all of the constituent 
individuals and organizations that play a role in the sport. The 
purpose is that the NGB should exercise a coordinating--but not an 
interfering role in the case of independent organizations not 
qualifying as an NGB (such as NFHS). That would include all 
constituents involved in its sport.
    Operationally, ``vertical structure'' means that an NGB should 
coordinate the allocation of scarce resources (i.e. funds, programs, 
use of facilities, personnel, etc.) among the constituents of a sport 
so that a sport may advance at the levels most needed, whether those be 
elite sport, intermediate sport or beginner sport development or some 
combination of all. An NGB must have all constituents represented in 
its governance structure in order for the NGB to accomplish these 
allocations in an equitable manner.
    Statutory criteria for the NGBs as embodied in the Act require an 
NGB to be open in its membership to any organization involved in its 
sport. And, if the organization is national in character and conducts a 
national program in a sport (e.g. NFHS, NCAA, Little League, AAU, 
etc.), it is entitled to DIRECT representation on the board of the 
relevant NGB.
    As for DIRECT representation on the NGB's Board of qualifying 
independent organizations, some NGBs, with the USOC's support, have 
taken the position that all such eligible organizations shall elect but 
ONE of its representatives to represent all such organizations on the 
NGB Board! This action is inconsistent with the letter and purpose of 
the Act as found in the NGB criteria section, and makes it more 
difficult for an NGB to work cooperatively with such eligible 
organizations.
    It is unnecessarily difficult for an NGB to achieve the intent of 
accomplishment of ``vertical structure'' operationally or 
organizationally by these practices. Moreover, such practices sustain 
the insularity of NGBs to focus solely on elite athletes and not to 
consider the allocation of resources to other serious needs of a sport 
which, in the long run, will benefit the sport more.
    The USOC has either been acquiescent to these practices or has 
encouraged them.
    Legislation is not needed to fix these problems. The principles 
enumerated are already in the Act. But an Oversight Report from 
Congress that clarifies Congressional intent in this and other issues 
is sorely needed.
    And then there is the other side of the equation: how NGBs 
interfere with the internal working of independent organizations, 
including members of the NFHS.
    Section 220526 of the Act grants the NFHS and other similar groups 
and categories ``exclusive jurisdiction'' over competitions it conducts 
if participation is restricted to high school athletes or the members 
of another independent organization. This position is sustained in 
Section 220523 (5), Authorities of NGBs, which empowers NGBs to set 
``eligibility standards for participation in competition except for 
amateur athletic competition specified in Section 220526'' (underlining 
added). Section 220523 (3) authorizes an NGB to ``serve as the 
coordinating body for amateur athletic activity in the United States'' 
in that sport. Legislative history spells out clearly that in 
fulfilling its coordination role, an NGB is ``not given the authority 
to interfere with the internal affairs'' of organizations covered in 
Section 220526. The NFHS has faced and continues to face such 
``interferences'' by NGBs who wish to allow high school athletes to 
train and compete on outside teams during the regularly and reasonably 
scheduled high school season in a sport. Such ``interferences'' have 
extended to attempts by NGB constituents in certain states to ``lobby'' 
their state legislatures to pass blanket legislation that would allow 
high school athletes to train and compete on outside teams during the 
reasonably defined high school season. Such a result would create chaos 
in high school sports and, in most cases, endanger the educational 
welfare of the student athlete. This is not to say that state high 
school associations do not grant some exemptions to allow a student 
athlete to compete ``outside'' during the high school season depending 
on the athlete and the sport. The NFHS also will always grant 
exemptions for ``protected competitions'' as referenced in Section 
220505 (c)(5) of the Act.
    It is my view that such ``blanket'' legislative initiatives violate 
the ``exclusive jurisdiction'' provision of the Act and the provision 
should be amended or at least clarified by Congress to eliminate such 
intrusions.
    Finally, to take a broader view of the ``reorganization of the 
USOC'' in recent years, I would offer some words of caution. While I am 
in favor of a small Board with major representation of ``independents'' 
on that Board, I am concerned that the Board will become too insular 
from the constituents it represents, notably the athletes, NGBs, multi-
sport organizations and the other organizations that comprise the 
Olympic ``family.'' Representation on the USOC Board by at least one 
member of the nation's education-based sports community would be a very 
good thing. That is not now true, and causes us to request 
consideration of such representation.
    Moreover, there is a tremendous need right now among USOC 
constituents

        a)  they be kept informed on a much more regular basis with 
        changes that are taking place;

        b)  they be provided the opportunity for input beyond a once a 
        year meeting;

        c)  they be included in decision making when those decisions 
        impact their operations or organizations

    Surely, the original intent of Congress in passing the 1978 Act was 
to have the USOC lead in many areas; however, an equal intent was to 
make the USOC accountable to Congress, the American people and the 
constituents the USOC represents. Congress should look at this issue to 
determine how the constituents can remain involved and informed in an 
appropriate way without the need for costly face-to-face meetings by 
such a large constituency. I believe the present time of reorganization 
provides an excellent opportunity to seek procedures that will meet 
that intent.
    Thank you for this opportunity to provide these comments for the 
record.

                                 
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