The Department of Justice is investigating the relationship between USA Track & Field and its corporate puppeteer
Nike has been controlling the sport's governing body for the better part of ten years, while USATF principals have in turn demonstrated an impressive lack of control
In an exhaustive story for Runner’s World that hit the Web yesterday, Sarah Lorge Butler revealed that the financial relationship between U.S.A. Track & Field and Nike is under criminal investigation by the federal government.
As part of a grand jury subpoena, Lorge Butler reports, the U.S. Attorney’s Office for the District of Columbia has requested information from those two entities, along with Matchbook Creative and Bevilacqua Helfant Ventures LLC. Under specific scrutiny are three-year-old escrow funds belonging to USATF’s chief executive officer, Max Siegel—maybe the owner of Matchbook Creative, maybe not—and its chief operating officer, Renee Washington.
USATF told Runner’s World:
USATF is not able to confirm the existence of any investigation. However, the Organization stands ready to fully and transparently cooperate with any government inquiry. We are committed to our mission to drive competitive excellence and popular engagement in the sport.
Representatives of the other three entities reportedly under investigation declined to offer comment for the story. Lorge Butler reports that a “high-ranking” USATF official was interviewed by Federal Bureau of Investigation agents outside the man’s home, but the FBI wouldn’t confirm the targets of its inquiry and also refused to comment.
Lorge Butler’s story describes in detail the 2014 deal between Nike and USATF that handed the shoe giant de facto control over the U.S. for a startling twenty-four-year period (2017 through 2040). The agreement boosted Nike’s annual contribution to the organization from $10 million to $19 million. Considering that in 2017, USATF’s entire budget was around $35 million, that’s a solid, in fact obscene, share of the reins. And the assured obscenities have been splattering all over the national track scene for years, often in plain sight.
As soon as more Nike money began flowing into the coffers of USATF, including a “one-time commitment bonus” of a staggering $25 million, a lot of that money apparently started flowing right back out and into the private accounts of people such as Chris Bevilacqua and Adam Helfant—one-time Nike employees and now the owners of the eponymous firm— as well as Siegel and other USATF bigwigs. Most of this appears to be in the form of deferred compensation, making it easier to keep from the reach of the Internal Revenue Service.
As Lorge Butler describes, Siegel’s eye-popping level of remuneration has always represented a dubiously high fraction of USATFs revenue overall. Even many of the organization’s board members were evidently unaware of the details of Siegel’s compensation package and resigned last year shortly after learning of its improbably, almost defiantly lavish scope. Lorge Butler also goes on to detail some of USATF’s less glorious public moments in recent years, including its now-you’ll-see-her, now-you-won’t temporary placement of suspended distance runner Shelby Houlihan on the 2021 Olympic Trials start lists.
This of course comes eight months before Hayward Field, Nike’s shrine to its own uncontested dominance of practically everything, is scheduled to host the 2022 World Athletics Championships. As part of a 2018 peek by the U.S. Attorney for the Eastern District of New York into the selection process that landed Eugene those Championships, the president of USATF’s board of directors, Vin Lananna, was interviewed. Lananna, who will always remain a step or two ahead of the shit many others wind up stepping in, spent about 20 months in exile from his post before he was reinstated at the board’s president in October 2019.
How common is it for the federal government to become involved in criminal investigations involving the administrative bodies of professional sports, or whole leagues? While the Department of Justice routinely handles Title IX cases, it usually takes something significant to trigger the interest of the DoJ and the FBI.
In 2018, the government commenced an investigation into Major League Baseball over its recruiting of foreign players. In 2007, there was the Mitchell Report, the culmination of even U.S. Congress holding hearings over steroid use by Barry Bonds, Roger Clemens and a variety of others who, despite surreal statistical totals, will probably never be inducted into the Baseball Hall of Fame.
Less than two months ago, the DoJ announced that it was charging 18 former National Basketball Association players with benefit-plan fraud. Oh, and the NFL had some sort of a tiff with the government over broadcasting rights in closely spaced cities in 1953, but that wasn’t a criminal issue.
When money is diverted away from the interests of athletes in a cash-starved sport, that’s scandalous in itself. But as far as the specific reach of this investigation is concerned, it doesn’t appear intended or likely to cause headaches for any athletes or people who work directly with athletes. This looks instead like just the kind of thing that always gets Uncle Sam’s attention in the end—say, are you sure we’re getting our share of all that dough?
Siegel has been widely despised by practically everyone for a long time, often by people who themselves have few friends who don’t talk about them behind their backs. It’s obviously not clear if this investigation will wind up producing any convictions or even any charges, but it seems like that’s what it would take at this point to dislodge Siegel from his position. These days, it is not important to anyone within the sport to have someone at the helm who doesn’t self-deal with everyone looking on, because such is apparently his lifetime reward for being the man credited with bringing close to half a billion Nike dollars to the USATF party.