DENVER (AP) -- The U.S. Olympic Committee’s administrative costs more than doubled in 2018 over the previous year as it dealt with a $5.2 million investigation into its handling of the Larry Nassar sex-abuse cases and paid a $2.4 million severance to its former CEO.
The payments to the Ropes & Gray law firm, former CEO Scott Blackmun and the Covington & Burling law firm helped raise the USOC’s administrative and general costs to $31.2 million in 2018, compared with $14.9 million the previous year and $15.1 million in 2016.
According to data in the 2018 tax forms and annual report provided to The Associated Press before their public release Wednesday, the $31.2 million represented nearly 11.6% of the USOC’s expenses, compared with 7.1% in 2017 and 5.8% in 2016.
“At that time, based on the requirement for new leadership to guide the organization forward, as well as Blackmun’s serious health challenges, the board approved a separation agreement, as provided for in his contract,” said chairwoman Susanne Lyons, who took over for Blackmun after he stepped down in February 2018.
The USOC brought in nearly $323 million in 2018, compared with $272 million in 2014 — the same point in the previous Olympic cycle.
The amount spent on administrative duties is often portrayed, sometimes disingenuously, as money the USOC brings in that does not go toward helping athletes.
As it tries to remake itself — including changing its name to the U.S. Olympic and Paralympic Committee — the federation has emphasized increasing athlete support in all areas. A few measures of its success:
— Funding for the program that awards top finishers in key events has risen from $2.23 million in 2014 to $5.29 million in 2018.
— The line-item listed as “Athlete Performance-Support Training” rose from $12.2 million in 2014 to $14.3 million in 2018.
— The USOC contribution to the U.S. Ski and Snowboard Association — money directed toward athlete support at America’s largest Winter Games sports organization — rose nearly 33%, to $6.09 million, from 2014 to 2018.
“We’ve also instituted critical reforms that have helped to begin to regain the support of the public, our donors and partners, and that is reflected in the strength of our financial statements,” CEO Sarah Hirshland said.
The USOC’s fundraising arm, the U.S. Olympic and Paralympic Foundation, received $36.7 million from donors, the best in its five years of operation and a $6 million increase over 2017, which was before the full scope of Nassar’s crimes became widely known.
Nassar, the former national team doctor for USA Gymnastics, is now serving an effective life prison for child porn possession and molesting young women and girls under the guise of medical treatment.
Many of the women who say they were sexually abused by Nassar have sued the USOC, among other parties, in civil court.
Attorney John Manly, who represents dozens of the women in those lawsuits, slammed the severance payment.
"To this date USOC continues to deny responsibility for Nassar’s actions and compensation for his victims, yet they have seen fit to compensate Nassar’s enablers for covering up his crimes. USOC is a federally chartered corporation, so I call upon Congress to demand the resignation USOC CEO Sarah Hirshland and the USOC Board. USOC sponsors, including Coca Cola, Visa, General Electric, NBC-Comcast, Nike, Kellogg’s and United Airlines should suspend financial support until a new Board and executive team dedicated to transparency and athlete safety can be established," Manly said in a statement to News 10.
The USOC hired Ropes & Gray to look into the federation’s response to Nassar’s allegations. That report concluded that nobody at the USOC acted quickly or decisively enough once the concerns were related to them. Ten months before the report came out, Blackmun resigned to deal with prostate cancer.
The USOC also hired Covington & Burling for legal work that, in part, involved a number of trips to Congress to testify to various committees about its handling of the sex-abuse crisis. The Covington & Burling expense isn’t a line item in the tax report, but it contributed to the overall increase in administrative costs.