Testimony

• Mr. Donald Fehr
  Read statement

  Testimony

  Mr. Donald Fehr

  My name is Donald M. Fehr, and I have been privileged to serve as a Co-Chair of the Independent Commission on Reform of the United States Olympic Committee (USOC), along with the other co-chair, Roberta Cooper Ramo, and Dick Ebersol, Dr. Harvey Schiller and Donna De Varona. The Independent Reform Commission, appointed on 3 March of this year at the suggestion of three members of this Committee, submitted its report last Thursday, 19 June. Only some 16 short months ago, all Americans celebrated a spectacularly successful Winter Olympic Games in Salt Lake City, during which US Olympic athletes achieved unprecedented success. Regrettably, since that time, and especially over this last winter, the performance of our athletes has been pushed to the side, and, instead the media has been full of stories about alleged wrongdoing and other questionable behavior by members of the volunteer leadership and professional staff of the USOC. To put it bluntly, the USOC has become an object of ridicule and satire; and members of its volunteer and staff leadership have become objects of scorn and derision. Within the last fourteen months alone, two USOC presidents and the CEO have resigned under pressure. Statement of Donald M. Fehr Senate Commerce Committee 24 June 2003, page 3 In the wake of these events, committees in both the Senate and the House held hearings in the exercise of their statutory responsibility to oversee the USOC. The statements made by the Senators and Members of Congress attending the hearings reflected the widespread view of the American people that the operations of the USOC had become a very bad joke, that the conduct of many in positions of responsibility was simply an embarrassment, and that changes had to be effected, and quickly. To that end, this Independent Commission was appointed to report to the USOC and to the Congress on the culture and structure of the USOC, and to make specific recommendations for change. The primary focus of the USOC should be the support and encouragement of our Olympic and Paralympic athletes, and the organizations and programs through which they are developed, to the very best of its ability. In so doing, the American people - who, after all, are the ultimate stakeholders in the U.S. Olympic movement - have a right to and do expect that the volunteer and staff leadership of the USOC will work together to conduct the business and operations of the USOC in a manner which will best achieve that result, and which will be fully consistent with the best standards of governance, the highest standards of ethics, and a commitment to public service. Moreover, the American people have a right to and do expect that the volunteer and staff leadership will bring to the tasks entrusted to them the same kind of effort and dedication that our athletes bring to their endeavors. Statement of Donald M. Fehr Senate Commerce Committee 24 June 2003, page 4 When we examined the USOC structure and culture, measured against these standards, we concluded that both the governing structure of the USOC, and its underlying culture which produced that structure, are, in a word, broken, and that a drastic overhaul is in order. For the reasons stated in our report, we unanimously recommend that the USOC be substantially restructured without delay, and that the Stevens Act be amended to require that the governance structure we recommend be implemented. Our recommendations to effect that overhaul are fully set out in our Report, which I incorporate by reference and ask be made a part of the record of this hearing. If these reforms are promptly implemented, we believe that the USOC can and will again earn the respect of the athletes it is its purpose to serve, and regain the trust and confidence of the American people. Respectfully Submitted, ____________________ Donald M. Fehr

• Mr. Dick Ebersol
  Read statement

  Testimony

  Mr. Dick Ebersol

  At the age of 19… at the end of my sophomore year of college… I was offered the opportunity of a lifetime… to become the first-ever Olympic researcher for American television. The sole purpose of that job was to travel extensively through the United States and Europe to get to know the elite Olympic athletes of the world and to write up their life stories into mini-biographies, which would allow our announcers and commentators to describe in detail their stories of hope and inspiration… to the millions and millions of American television viewers… who so passionately admire and love the Olympics and, above all, Olympic athletes. More than any movie or soap opera, these heroic stories of our athletes overcoming some level of adversity… to succeed against the odds… and their dogged tenacity to always push forward - - no matter how difficult the struggle … these stories coupled with the unscripted drama of Olympic competition have become the main method of passing the theme of Olympic inspiration … the Olympic dream… from one generation of young Americans to another. That is until now… these last three or four years… when we seemingly cannot open a newspaper without reading of Olympic scandals… Olympic screw-ups… a U.S. Olympic Committee which has had three volunteer Presidents and four paid chief executive officers in the less than three years since the Olympic flame was extinguished at the close of the Sydney Games. In other words, the Olympic Movement in the United States has too often moved from the sports pages… to the front pages. These stories have been about executive ego-tripping, mismanagement and malfeasance… they sure have not been about the athletes… and they certainly have not been inspirational. Today… in this room… I hope we will begin not a marathon but … a sprint of deliberate speed toward giving our American Olympic athletes… an organization worthy of them… one which inspires their hope and their trust… one which above all teaches… and itself upholds the Olympic ideals. It can be done… our commission strongly believes that our recommendations for a more streamlined and independent governance structure plus a culture cleansed of as many conflicts of interest as is humanly possible… can and will succeed… but time is critical… the Athens Olympic Games begin in a little more than one year. Our Athletes deserve nothing less than the best. Finally, Senator McCain, Senator Stevens, Senator Campbell… I would like to thank you personally for allowing me the privilege to serve on this Commission. It was and is a labor of love.

• Dr. Harvey W. Schiller
  Read statement

  Testimony

  Dr. Harvey W. Schiller

  Witness did not submit testimony to Committee.

• Ms. Donna de Varona
  Read statement

  Testimony

  Ms. Donna de Varona

  Witness did not submit testimony to Committee.

• Mrs. Roberta Cooper Ramo
  Read statement

  Testimony

  Mrs. Roberta Cooper Ramo

  Witness did not submit testimony to Committee.

Witness Panel 2

• Mr. Jim Scherr

  Chief Executive Officer

  U.S. Olympic Committee
  Read statement

  Witness Panel 2

  Mr. Jim Scherr

  Good morning Mr. Chairman and members of the Committee. Thank you for providing me with the opportunity to appear before you today and share my views of the United States Olympic Committee’s (“USOC”) governance and operations situation. I am pleased to be here, and under these circumstances, because I see a bright new day dawning for the USOC and, much more importantly, for America’s Olympic and Paralympic athletes. My name is Jim Scherr and my official title is Chief of Sport Performance for the USOC. However, since the departure of our previous chief executive officer I have been exercising the additional responsibilities of overseeing the day-to-day operations of the organization. My background is that of an athlete in the sport of wrestling, having competed at the collegiate level where I won an NCAA championship, and had the honor of representing the United States in the Olympic Games in Seoul After winning three U.S. and two World Cup championships, I retired from active participation in the sport and obtained my MBA from the Kellogg Graduate School of Management at Northwestern University, which prepared me well for the discharge of my responsibilities when I became the Executive Director of USA Wrestling, the governing body for that Olympic Sport. During my time at USA Wrestling I served in various capacities with the U.S. Olympic Committee, ranging from membership on its Executive Committee to service on the Audit Committee. Such service was often quite frustrating, if not dismaying, because the emphasis and focus too frequently was on everything but the welfare of the athlete. I believe that the new structure proposed by the Independent Commission and the USOC Task Force will serve to change the focus and culture of the organization and reduce most of the heretofore distracting influences presented by many well-meaning members of the Olympic Family, who, by necessity, often represent narrow and often competing interests. Nevertheless, these people are an incredibly valuable asset and the Olympic Movement would lose an important resource were in not for the benefit of their involvement in the appropriate forum. Accordingly, ensuring the continuation of their meaningful involvement is preserved, indeed enhanced, by the creation of the Olympic Assembly mechanism proposed by both the Commission and the Task Force. I am most pleased by the Commission’s and the Task Force’s recognition that the current mission statement is misdirected because it directs the primary focus on the excellence of the USOC as a bureaucratic organization rather than the athlete, which is the heart of the Olympic Movement. Their revised mission statement correctly places the “sustained competitive excellence of the Olympic and Paralympic athletes” in the dominant position. (2) The other recommendations establishing a new governance and management structure, reducing numerous non-athlete-related administrative expenditures, and creating certain protections for limited assets, all serve to reinforce what I have been attempting to establish during my brief stewardship of the organization, which is to place athletes first. I suppose I could present arguments either way on a number of proposed provisions such as whether the independent directors should constitute an absolute majority on the board as recommended by the Independent Commission, or a substantial but narrow minority, as the USOC’s Task Force recommended. However, I do not feel it my place to get into a policy debate on these issues of detail, nor do I feel it my prerogative because my principal responsibility has been sport performance. I would like, however, to state my own macro views on governance from the perspective of someone who has had a great deal of experience in the Olympic movement and who currently serves as the USOC’s staff leader. From my vantage point, the new organization cannot be successful unless its governance structure is clear and the roles of the Board and the staff are clearly delineated. The governance structure must be simple, streamlined, and efficient. The new structure must set the authority to govern, to be distinguished from the authority to manage, in a single body that is free of the constituent-based politics that have heretofore been a source of contention within the organization. A system with two governing bodies or confusing lines of authority between different governing entities should not be imposed. In addition, because both the Task Force and the Commission have agreed that the USOC currently spends too much on its governance process and uses funds for that purpose which could be more wisely spent for athletes and our national governing bodies, the governance structure must ensure the most cost-effective and cost-efficient structure possible. Having two governing entities and a myriad of committees, as we do now, does not achieve that goal. In addition, continuing anything similar to the complex governance structure from which the USOC now suffers will divert attention from achieving the mission and reduce the efficiency of the excellent staff with whom I have the privilege to work at the USOC. Whatever the outcome of this process, the respective roles of the staff and governance must be made clear. The CEO must have authority to hire and fire all staff, all staff must report to the CEO, absent other conflicting professional duties, and the CEO must be in a position to be truly accountable for the organization’s performance in achieving the mission. The CEO cannot be accountable, and ultimately successful, if various aspects of the governance process are permitted to stray from their role in governance and attempt to participate in the operations of the organization. This situation would be exacerbated by continuing to have several committees that could attempt to compete with the authority of the CEO to achieve the USOC’s mission. (3) The area of the USOC’s involvement in international relations is one that has been discussed much in the past few months and it is one that fundamentally led to the dispute between the prior President and the prior CEO that became the public spectacle in January and February of this year. The governance reforms must make clear that the CEO is responsible and accountable for the conduct of all aspects of the USOC’s operations in the international arena, but as part of that accountability the CEO may choose to involve the governance process or others to achieve the USOC’s mission, and the CEO will have the prerogative of choosing or not choosing to involve governance or others in this process. Similarly, the USOC’s communications policy must be changed to a one-voice strategy that focuses responsibility for stating the organization’s public position in an individual, the CEO, who is accountable for that. The CEO, of course, would be able to delegate this responsibility to a staff member. Permitting more than one USOC official to convey organizational policy through comments to the media or to serve as the spokesperson for a particular constituency on USOC matters simply creates the potential for the confusion and, ultimately, conflict that we have seen of late which has eroded public confidence in the organization. Confusion about the role of governance will cause the USOC’s staff to continue to suffer from having to serve multiple masters and having to negotiate what should be purely business decisions with an overreaching and overbearing governance structure. I hope that the Congress will examine the policy issues raised by both reports with an eye toward ensuring that the high caliber staff of the USOC is able to perform in an accountable manner without interference from the governance on matters of operations. I also hope that Congress will consider the governance structure that makes governance most efficient and minimizes unnecessary expense spent on governance. Absent a governance structure like that which I have suggested, I cannot imagine that the USOC will be successful in finding a highly qualified CEO to serve as its leader. Absent changes to the elements I have discussed, the USOC will continue with business as usual and it will only be a matter of time before the USOC is again before this Committee to explain itself. Precisely how these changes to the structure and focus of the USOC are implemented I leave to the Committee. Certain of the major provisions may need to be memorialized in the Ted Stevens Olympic and Amateur Sports Act so as to prevent them from being easily changed back again at some future time. However, I would recommend against micromanaging the organization by statutory language, leaving the more minute details of management and governance to those who will be charged with such responsibilities and whose competence will be overseen through new recommended procedures. I am as anxious as anyone to move forward in this new direction as recommended by these governance reviews. Indeed, since the beginning of my association with the (4) Olympic Movement I have hoped that this day would arrive when we could overcome the inherent political obstacles to reform, and create a more streamlined, responsive organization that best utilizes the talents and experience of all members of the Olympic Family, and deploy our assets more effectively in support of our Olympic and Paralympic athletes. For this reason I was pleased that both groups recommended a target implementation date. Nevertheless, I think this is our last chance, at least for the foreseeable future, to get it right. Accordingly I ask that all concerned with the implementation process, particularly the members of the Senate Commerce Committee who may write the legislation that will direct our activities for years to come, will move deliberately and with caution. Completing the work by this coming New Year’s Day is a worthwhile goal, but, as the Task Force has pointed out, an ambitious one, and if there is a choice between getting it done quickly and getting it right I implore you to choose the latter. This is a great and historic opportunity for the Olympic Movement, perhaps second only to the day in 1978 when the original Amateur Spots Act was enacted. I congratulate all who have brought us to this point, and thank you for providing the opportunity to create an organization that can better serve America’s Olympic interests by finally putting America’s Olympic and Paralympic athletes first.

• Ms. Rachel Godino
  Read statement

  Witness Panel 2

  Ms. Rachel Godino

  Good morning Mr. Chairman and members of the Committee. Thank you for the opportunity to appear before you this morning at a time when the United States Olympic Committee – an organization that helped me fulfill my Olympic dreams – is poised for historic reform. My name is Rachel Mayer Godino, and I am Chair of the Athletes’ Advisory Council, more commonly known as the AAC. The AAC is comprised of athlete representatives from every Olympic, Paralympic and Pan American sport, and our purpose is to represent the interests and protect the rights of America’s athletes. Inasmuch as the primary mission of the USOC is to support America’s athletes, ours’ is an important responsibility, and one we take quite seriously. I am honored to serve as the elected Chair of such a distinguished group of athletes. Having had the privilege of testifying before this Committee in January – a mere five months ago – I find the circumstances and climate surrounding this morning’s hearing decidedly more positive and hopeful than those of previous hearings. Indeed, this morning’s hearing marks the beginning of a bright new era for the United States Olympic Committee and America’s athletes. The strides made toward meaningful reform during the past five months are remarkable. We owe a tremendous debt of gratitude to the members of the Senate Commerce Committee for your leadership, as well as the individuals who selflessly gave of their valuable time and energy to serve as members of the Independent Review Commission and the USOC Governance and Ethics Task Force. The landmark work of these two groups is before us this morning and, without question, they have created a framework that will lead to a stronger, more efficient USOC – an organization in which all Americans will be able to take a great deal of pride. On behalf of America’s athletes, I offer my sincere thanks to the members of the Senate Commerce Committee, as well as the Independent Review Commission (“the Commission”) and the USOC Governance and Ethics Task Force (“the Task Force”), for their efforts. The AAC met this past weekend in Colorado Springs, and the testimony I offer this morning is reflective of the viewpoint of our membership. Olympic Assembly The concept of an Olympic Assembly is a good one. It is notable that both the Commission and the Task Force proposed this concept as a means to ensure participation of volunteers. After discussion, the AAC has two specific concerns about the function and role of the Assembly. First, both the Commission and the Task Force agree on the need for a dramatic change in the USOC culture. However, if the same people who today participate on the Board of Directors in a politically divisive manner, tomorrow participate in an Assembly that votes on certain issues and elects a Speaker, the AAC is concerned that the culture will not change. Second, the AAC expressed concern that if the Assembly has the power to elect a Speaker who serves on the Board, that the focus of the Assembly will be inappropriately placed on that election, rather than focusing on sport. Without a change in culture, the likelihood for continuation of lobbying and promise-making by those interested in serving as the Speaker, resulting in the Speaker being beholden to those who are responsible for his/her election, is very high. Furthermore, the potential exists that such an election will extend the long history of politically divisive elections. The benefit of the Assembly voting and electing a Speaker should be weighed against these concerns. Athlete Representation The Ted Stevens Olympic and Amateur Sports Act (“the Act”) and the USOC Constitution and Bylaws stipulate that athletes must have no less than 20 percent of both membership and voting power on all USOC and National Governing Bodies’ (NGBs’) Boards of Directors and all other committees and task forces. This provision has been critical to ensure that athletes have both representative voice and voting authority on all matters affecting athletes. This provision was a novel concept embraced by Senator Stevens and the Congress in 1978 when the Amateur Sports Act was written and passed. We thank Congress for their foresight and interest in providing for athletes both voice and vote in governance. The AAC membership fully recognizes that the recommended size of the new USOC Board of Directors – 11 members as proposed by the USOC Governance and Ethics Task Force and 13 members as recommended by the Commission – is founded on the principle that a smaller board results in better governance. We also recognize that both groups were also faced with satisfying at least five additional requirements: 1) the International Olympic Committee (IOC) provision that all members of the IOC from the United States serve on the “executive organ” of the USOC, 2) the IOC provision that Olympic sport representatives (which may include athlete representatives) have a majority of the vote on Olympic sport matters, 3) the governance principle that Boards be composed of a majority of independent directors, 4) the provision in the Act that athletes must have at least 20 percent of both membership and voting power, and 5) the prevailing wisdom that there should be an equal balance in membership between athletes and NGBs from Olympic sports. We recognize that in both proposals, athletes would have less than 20 percent voice . The concept of voice and vote is one that is critically important to athletes, and has been the foundation for athlete involvement in the Olympic Movement. I’m sure that each of you can relate from your personal experiences to the fact that having voice – and with it the opportunity to share meaningful input before a decision is made – is equally, if not more important, than the opportunity to vote. That said, the athletes also recognize that it is nearly mathematically impossible to satisfy all five of the requirements outlined above given the fact that there are currently three U.S. members of the IOC. After much debate, and in an effort to serve and protect the best interests of the entire organization, if the recommendations proposed by the Commission and/or the Task Force regarding the size and membership of the USOC Board of Directors are adopted by the USOC and/or codified in federal legislation, the AAC will not oppose a very narrow exception (the USOC Board of Directors only) to the requirement for 20 percent membership, while maintaining 20 percent of the vote. It is our strong belief that the voice and vote requirement must continue to apply to all other committees and task forces of both the USOC and NGBs since that voice and vote has been effective in representing athletes’ interests and in helping the USOC and NGBs fulfill their respective missions. We further encourage review of this specific change by the Senate Commerce Committee after 2004 since the number of IOC members may have changed by that time, and the IOC requirements may have changed allowing for 20 percent athlete membership to be accomplished. Lastly, we encourage the Senate Commerce Committee and the USOC to consider a Board size that will allow America’s athletes to retain as close to 20 percent membership on the USOC Board of Directors as possible with the assumption that the voting power is always at least 20 percent. Nominating Committee Independence The AAC supports the concept that the members of the proposed Nominating Committee – the entity that will be charged with the all-important responsibility of selecting the next USOC Board of Directors – be completely independent. Absent the assurance of independence, this process has the very real potential to become politicized and, ultimately, undermine the work of this Committee and the two review groups. We are extremely close to implementing a governance structure that will create an organization in which we can all take great pride. To compromise this opportunity by instituting a politicized nomination process is a risk that, in the opinion of the AAC, is not worth taking. Streamlining The USOC Mission The USOC's mission is set forth in 13 purposes in the Act. The athletes are pleased that both groups came to the fundamental conclusion that the USOC cannot continue to be all things to all people and that it has to focus its operations on successful Olympic and Paralympic athletic achievement. The USOC has suffered too long from the interest group and entitlement politics that such a diffuse mission has placed on it. All of the purposes enumerated in the Act are noble and worthy causes that should certainly be addressed by some organization, but perhaps not the USOC. Either way, you cannot say that the mission of the USOC should be focused and then not change the Act's list of purposes, unless you are willing to accept the confusing message that will send to the USOC. The USOC's AAC supports a more focused list of purposes in the Act that aligns with the mission statement proposed by the Commission. Role of the Athlete Ombudsman The 1998 Amendments to the Act included a provision for an Athlete Ombudsman. This provision has been extremely effective in resolving disputes resulting in significant financial savings (not to mention time and energy) for athletes, NGBs, and the USOC that would have otherwise been spent on litigation. Indeed, the appointment of an independent Athlete Ombudsman has been one of the most significant advancements in ensuring fair and equitable treatment for America’s athletes. It is the recommendation of the AAC that, through the implementation of a new governance structure for the USOC, this role and function not be changed, and that the references to the relationship between the AAC and the Ombudsman continue. It is my understanding that members of the USOC NGB Council concur with this recommendation. Implementation of Governance Changes There is broad consensus that the proposed changes be implemented “quickly.” The AAC concurs with this consensus. However, the AAC also believes that it is critical that changes to both the USOC organic documents and the Act accurately reflect the intention of the Congress. Given that a few misplaced words or inadvertent sentence structure can have an enormous impact on the interpretation of legislation, and therefore on the USOC and the athletes it serves, the AAC urges an appropriately deliberative process to develop legislation. Speed must be balanced with accuracy. That said, we fully support the effort to make changes to the USOC organic documents at the next scheduled USOC Board of Directors meeting in October. Of course, the USOC should also respond appropriately to any statutory changes. Furthermore, for two major reasons, it is our belief that many of the details proposed are best codified in the USOC organic documents. First, despite the best efforts to avoid it, there is no doubt that there are some unforeseen ramifications – likely some positive and some negative – to the proposed changes. Therefore, to the extent possible, federal legislation should provide the framework for the USOC, while placing details in the USOC organic documents. Second, the USOC must be able to respond to a changing business environment. To the extent that federal legislation is a typically lengthy process and that details are placed in legislation, the USOC may effectively be prohibited from responding to a changing business environment. In sum, the blessing (and the curse) of federal legislation is that it is not easily changed. A balance must be struck between the need to protect against such backsliding with the need for the organization to be able to respond quickly to a changing environment, and the need to mitigate unforeseen consequences. Therefore, given the sweeping nature of the changes, the potential for unforeseen consequences, and the certainty that the USOC’s business environment will continue to change, the AAC urges the Senate Commerce Committee and your colleagues in the House to ensure an appropriately deliberative process, and suggest that it is more prudent to make many, if not most, of the proposed changes in the USOC organic documents. Closing Remarks In summary, the AAC, on behalf of America’s athletes, supports the elimination of political processes to the greatest extent possible. Furthermore, we support the simplest and most streamlined governance solution possible. I would like to once again thank Senators McCain, Stevens and Campbell – along with the entire Senate Commerce Committee – for your leadership on this issue. I would also like to thank the members of both the Independent Review Commission and the USOC Governance and Ethics Task Force for their courage and vision. Finally, I would like to reiterate that, despite the challenges faced by the USOC during the past few months – and even years – this is an organization that has always prided itself on providing unparalleled support and service to America’s athletes and NGBs. It was just 17 months ago that America cheered as our athletes won an historic 34 medals in the Olympic Winter Games and 43 medals in the Parlaympic Winter Games at the hugely successful Salt Lake Olympics. This past weekend, Olympic heroes and Olympic hopefuls continued their preparations for the 2004 Athens Games with stirring performances at the U.S. National Championships in Track & Field and Gymnastics, and the World Team Trials in Wrestling. I know we were all heartened to see the dramatic comeback of Greco-Roman wrestler Rulon Gardner, who himself has testified before Congress on this very issue, and has once again earned the right to represent our country at the World Championships this fall in France. These stories of hope, inspiration and achievement would not be possible were it not for the support of the USOC and NGBs. For that, America’s athletes say thank you.

• Mr. Robert Marbut
  Read statement

  Witness Panel 2

  Mr. Robert Marbut

  Good morning Mr. Chairman and ladies and gentlemen of the Committee. My name is Robert Marbut and I am Chair of the United States Olympic Committee’s “National Governing Bodies Council.” I come from the sport of Modern Pentathlon. By dint of my chairship of the NGB Council I also serve on the USOC Executive Committee and have been an ex-officio member of the Officer’s Workgroup. NGB’s are the Workhorses of the USOC: A “National Governing Body,” or “NGB,” is an autonomous organization responsible for all matters related to the governance, development, and conduct of an individual sport. An NGB receives its recognition from the United States Olympic Committee (USOC) after it demonstrates that it is complying with numerous and specific requirements enumerated in the Ted Stevens Olympic and Amateur Sports Act. Currently there are forty-five NGB’s for sports on the program of the Olympic and/or Pan-American Games. NGB’s are the ultimate vehicles to America’s sustained athletic success. The NGB’s are the workhorses of the Olympic Movement, and we have a great deal of work ahead of us to prepare our athletes for the major international competitions for which Congress gave the USOC the responsibility for “obtaining for the United States the most competent representation possible in each event of the Olympic Games, the Paralympic Games, and the Pan American Games.” These competitions are right on our doorstep. We are just 6 weeks away from Opening Ceremonies of the Pan American Games in Santo Domingo, and 12 months from Opening Ceremonies for the next Olympic Games in Athens 13 months from the Athens Paralympic Games. For 47 of the 48 months between Olympic Games it is the NGB’s that recruit the athletes and provide the training, coaching, and competition opportunities that help them achieve elite status. At the end of the process each NGB, utilizing criteria prescribed by its international federation, selects its athletes for the Olympic, Paralympic, or Pan American Games and hands them off to the USOC, which then takes the responsibility for entering, outfitting, and transporting them to the competition in question, and while there providing all the additional support designed to deliver them to the medal podium following their respective competitions. The USOC is an Invaluable Partner with each NGB: The USOC is an invaluable partner with each NGB. One of the most important contributions the USOC makes is financial, and without this support many NGB’s could not exist. But beyond the financial support are the myriad services the USOC provides ranging from access to world-class training centers, modern sports science and sports medicine programs, administrative assistance, logistical support, legal and financial guidance, and assistance with a multitude of tasks and programs that enable the NGB’s to focus on their principal objective, developing world-class athletes. Over that last 8 months, much has been written about certain USOC problems. While they may warrant public attention I regret that they have distracted attention from many of the positive accomplishments of the USOC and our NGB’s, starting with unprecedented success at last year’s Olympic Winter Games and continuing through the preparation for Athens. The Sports Partnership and the International Games Preparation divisions of the USOC have been doing an outstanding job in helping NGB’s and athletes achieve maximum sustained athletic performance. These groups within the USOC continue to provide invaluable resources to NGB’s and athletes. The Independent Commission’s Situational Analysis & Assessment of the USOC is Correct: The athletes, NGB’s and the American public deserve much better than what has been given to them by the USOC. The situational analysis and assessment contained in the Report and Recommendations of the Independent Commission on Reform of the United States Olympic Committee is both accurate and highly perceptive . . . in particular almost all of our NGB’s – if not all – share the same basic concerns of the Independent Commission. Most NGB’s believe that: - there has been a widespread loss of confidence in the USOC - we must restore confidence in the USOC in order to achieve our purposes - the current governance structure needs fixing - the current Board is too large - the culture needs revamping - the roles and responsibilities between volunteers and staff need to be clarified, especially between the President/Chair and CEO - the move to restructuring and reforming the USOC is long overdue. I would like to commend the members of the Internal USOC Governance and Ethics Task Force for the time and efforts they put into this reform effort. In particular I would like to thank the Task Force’s two Chairs Frank Marshall and Bill Stapleton for all their hard work. Their vision, efforts and leadership have jump-started this reform process, thus expediting the final solutions. Ultimately their efforts have started us onto the road of reform and restructuring. The five members of the Senate appointed Independent Commission should especially be applauded for their hard work and insightful wisdom. Their report is outstanding! Both reports focus on the need to right-size, stream-line and professionalize. At the 35,000 foot level, the work of both groups look very similar. At the operational level, the recommendations proposed by the Independent Commission are significant improvements to the initial recommendations of the Internal Task Force. The Independent Commission’s Report does an especially good job in dealing with the following very critical issues: - clarification of the Mission Statement - development of the structure and purpose of the Assembly (the Commission’s Assembly proposal is ingenious and I think is one of the best improvements made by the Independent Commission . . . it goes a long way in addressing many of the outstanding sticky issues) - reformation of the culture - harmonization with the IOC Charter - inclusion of Pan American Only sports - transition issues and the transition Advisory Committee 12 Critical Success Factors: Early in this process, at a hearing of the House Subcommittee on Commerce, Trade and Consumer Protection, I outlined 12 Critical Success Factors, in my opinion, that we needed to focus in order to reform the USOC: 1- Leadership is about people . . . in my opinion, the USOC Nominating Committee got it right 3 years ago . . . had it not been for the politics of the Board that overrode the Nominating Committee’s recommendation, most, if not all the problems we have faced over the last 3 years would never had occurred . . . we must strengthen our nominating process. 2- The roles between the CEO and the President are extremely murky and turbid . . . even the best of leaders would have problems with such excessive layers of role ambiguity between these 2 positions . . . we must clarify the roles between our top volunteer and our top paid executive. 3- Our governance process is too complex and convoluted, and needs to be streamlined . . . we must clarify and then codify the overall operating structure . . . - the current Board of 120'ish has been really operating as a board of stakeholders, - the current Executive Committee has been really operating as the operating Board, - the officers group has been filling the role of an executive committee. 4- The USOC must be successful at revenue generation through coordinated funding and bundled marketing opportunities . . . NGB’s need stable, adequate and predicable funding streams to support our coaches and athletes. 5- Interrelated to #4 would be to mandate a 4-year Budgeting process in regards to USOC funding to NGB’s and Athletes. 6- During the last re-write of the Sport Act, the USOC and NGB’s were tasked with the additional task of developing elite Paralympians, but no funding was provided for this additional mandate. 7- We need to search for savings through the optimization of economies of scales within NGB’s, within the USOC . . . and between the USOC and NGB’s. 8- We must have a structure that promotes positive working relationships between the AAC and NGBC . . . the working relationships between the AAC and the NGBC are at an all time high, but that has not always been that way. 9- It is critical to bring the Olympics back to the USA . . . in order to be successful in winning the NYC 2012 bid, we must strongly position the USOC within the IOC . . . we must also support NGB leaders in attaining leadership positions within their respective International Federations (IF’s). 10- Throughout this restructuring process and beyond, the NGBC and the AAC must have a meaningful and active role within the USOC . . . the NGB’s produce the athletes who in turn produce athletic performance . . . we are the experts in the creation of athletic success. 11- As we work together to restructure the USA’s Olympic Committee, we must be vigilant to the law of unintended consequences . . . we must move expeditiously, but more importantly, we must get this restructuring right. 12- Finally, we must focus on athletic performance, not politics. The Independent Commission report addresses 8 of these directly, and 4 indirectly. For the most part, the recommendations of the Independent Commission are important fine tuning adjustments to the recommendations of the Internal Task Force. Generally speaking, they are subtle, but very critical modifications in the development of the reform process. I would encourage this Senate Committee to embrace the recommendations of the Senate’s Independent Commission Issues in Need of Clarification and/or Further Consideration: The Independent Commission does a very good job laying out the big picture reforms, but the following are a few minor issues that could benefit from clarification and/or further analysis. In the whole scheme of things, these are minor concerns that could be dealt with during the initial drafting and/or mark-up phases of the legislative process. I am available to provide more background information on the following issues to anyone who would like it: - One of the most important improvements over the last 2 years within the USOC, which has been masked by the widely publicized problems, has been the tremendously improved relationship between the Athletes Advisory Council (AAC) and the National Governing Bodies Council (NGBC). With a lot of hard work from many, the long running disputes between the AAC and the NGBC have virtually disappeared over the last 2 years. One of the reasons the long standing friction has gone away is the concept of equality between the two groups. We have gone out of our way to make things equal in all possible aspects. I plead that as the new legislation is written, that the AAC and the NGBC maintain equality. It is through this balance in equality that many wounds have been healed. I would not want the restructuring process to reopen old wounds. For example, if the NGB has a funded meeting, the AAC should have a comparable funded meeting . . . if the AAC has representation on a committee or workgroup, the NGBC should have similar representation . . . and so on. - As we write the criteria for independence, we need to make sure it is not written so tight and/or so complicated that it excludes quality candidates from being involved. Beyond out-and-out exclusion, an individual who is beneficial to the USOC but has a narrow conflict should be allowed to generally participate. When it comes to the debate on the narrowly conflicted issue, the person should be required to report the conflict and then to recuse himself or herself from the debate, discussion and resolution on this narrow issue. - In the area of International Relations, I think we still need more discussion in terms of the paradox of international representation. On one hand we want more meaningful representation within the international sports community (eg IF’s and IOC), yet we are imposing term limits that are shorter than the time path of international penetration of influence. This is a very difficult issue, what we want domestically is not necessarily what will work internationally. The reality is that for most people it takes 20+ years to penetrate the international leadership ranks, yet, we are proposing term limits that will impede the upward international mobility of our best representatives. We may well be creating a situation that we are going to perpetually be behind the international power curve. My hope is that Congress will give the new Board some flexibility and latitude in dealing with this very difficult issue of international representation. - Congress has given the USOC a wide variety of purposes and responsibilities that range from promoting physical fitness to conducting sociological surveys to preparing elite athletes for international competition. The proposed Mission Statement is very clear and concise, yet there are several items in the long list of purposes that do not fit concisely under the proposed Mission Statement. It would be helpful to streamline and focus the list purposes contained within the legislative Act. NGB’s Want to Be Part of the Solution: I would encourage this Senate Committee to embrace the recommendations of the Senate’s Independent Commission. Please know that the NGB’s want to be part of the solution, not part of the problem. The NGB Council stands ready to assist the reform process in anyway, including being a resource during the process of the actual drafting of the legislative amendments. I am optimistic that working together, we can all make USA’s Olympic Committee stronger and more effective. The sooner we get back to our mission, the better off we all will be . . . thank you!

• Mr. Robert Balk
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  Witness Panel 2

  Mr. Robert Balk

  Mr. Chairman, and members of the Committee, thank you for providing me with the opportunity to appear and speak to you today. My name is Bob Balk. I am an athlete. I have earned six Paralympic medals as a five-time Paralympic athlete competing in both the summer and winter games in the sports of Pentathlon and Cross Country skiing. I am the Winter Paralympic athlete representative to the United States Olympic Committee's Athletes' Advisory Council. Professionally, I am the Manager of venture capital investment for Phantom Works, the advanced technology division of The Boeing Company. I have most recently had the great privilege of serving as a member of the USOC's Governance and Ethics Task Force. As an athlete and someone involved in governance reform of Olympic sports, I would like to applaud the efforts of the Independent Commission and their final report. I am pleased that they worked independently and they have carefully and thoughtfully considered their analysis and recommendations, all while doing so on a volunteer basis. Significant to me is that the recommendations of the Independent Commission and the USOC's own Governance and Ethics Task Force are remarkably similar considering the very different nature of these two groups. One group holds itself out as independent of the USOC and the other group recognizes that it consists of many individuals who have been actively involved in the organization's governance for a long time yet it sought independence from the past and the respective constituencies of each member. Attention should be focused on reconciling differences in these recommendations and gaining understanding to the reasoning and justification behind those differences. I could not be more pleased that both groups recommended focusing the mission on athletes and athletic performance, in both Olympic and Paralympic sports. I am also pleased that both groups recommended that the size of the board and governance be dramatically reduced. There are areas of the Independent Commission's recommendations that should be more fully considered before implementation. My primary concern is of the proposed Olympic Assembly having voting power on “Olympic Matters” and on other matters and the voting process for a “Speaker” of the Assembly. These recommendations perpetuate constituency-based governance and petit politics, and blurs lines of authority between the Assembly, Board of Directors and the CEO. The Assembly should be established in a non-governance, purely advisory role to the Board of Directors fully utilizing the considerable volunteer resources available to the USOC. Imposing decision-making responsibility upon the Assembly will result in the creation of an organization nearly identical to the 124 member Board which currently exists at the USOC with all of its inherent challenges which we are here to resolve. I note that though the Commission recommends that the USOC’s mission be narrowed, yet the Commission does not recommend that the broad purposes set forth in the statute for the USOC be equally narrowed. These positions are difficult to reconcile. If the statutory purposes remain, then irrespective of any narrow mission set forth in the USOC’s organic documents, the various constituencies that have come to view their role in the Olympic movement as one of entitlement to scarce resources will continue. This will be exacerbated by a constituent-based Olympic Assembly that will position itself to make decisions concerning issues that will affect 2 resource allocation. I would like to see this Committee support or seek out support for the “multi-sport” organizations that will not be part of the proposed focused mission statement. These organizations do outstanding work at promoting health, fitness and sport to the American public and should be supported and recognized for their efforts. Their mission is to serve the greater American public and not the Olympic movement. However through their efforts in promoting sport they are a welcome asset to an advisory Olympic Assembly. Perhaps the Congress should provide other vehicles for funding them or perhaps create another statute for providing for them. I am concerned with how the Commission has defined the respective roles of governance and staff operations. Specifically the Commission’s report does not clearly address the issue of the CEO’s control over all aspects of USOC operations, including international relations. The Commission Report does not clearly outline that the CEO should have exclusive authority to hire and fire the CEO’s senior staff, which I find inconsistent with for profit and non-profit corporate operations. Distinction between governance authority and operational responsibility has not been made specific enough to eliminate confusion and provide accountability to the appropriate individuals. Clearly for the most effective governance and operational model the board must set policy and one individual, the CEO, is absolutely accountable for the organization’s performance or lack of performance in relation to this policy. As an athlete, and a member of the Athletes’ Advisory Council, I do not see the necessity to alter the reporting structure of the athlete ombudsman. This position was a product of the 1998 amendments to the statute, and has worked well in its current form. The momentum of change is with you and it is important not to stall and allow this great work not to be implemented. However improper actions will not improve the support required for our Olympic and Paralympic athletes. Please temper haste with careful consideration. The Congress should be careful about moving too quickly into legislation in the area of governance of the USOC. Legislation has a permanence that makes it difficult for the organization to adjust and be responsive to changes in its business environment. In addition, given the relatively conflated schedules and other constraints under which both the Independent Commission and the Task Force operated, there is a possibility that both groups have not drawn the perfect conclusions to which we will want or have to correct in the future. Although I have been a competitive athlete for the past 10 years I have only recently been deeply exposed to the politics of the USOC and of international sport off the playing field. There are dynamics of the movement and the represented constituencies that are not easily understood at first glance which require careful consideration. The needs of Olympic and Paralympic athletes are of utmost importance and are what should drive this change process. In closing, I would like to thank the Commission and the Task Force for the time and attention they provided to these important issues. I would also like to thank the Commission for recommending, as did the Task Force, the inclusion of Paralympic athletes with Olympic athletes in the mission of the USOC. I hope that we can seize upon this opportunity to fundamentally improve the USOC to benefit athletes.

• Mr. Bill Stapleton
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  Witness Panel 2

  Mr. Bill Stapleton

  Mr. Chairman, and members of the Committee, thank you for providing the chance for me to appear and speak to you today. My name is Bill Stapleton. I am a Vice President of the United States Olympic Committee. I was also a member of the 1988 United States Olympic Swimming Team. I make my living as the founder of Capital Sports & Entertainment, an Austin, Texas-based sports and music management and event production company. During the past 4 months, I have had the significant pleasure and privilege of serving as a co-chair of the USOC’s Governance and Ethics Task Force. USOC President Bill Martin had the tremendous foresight in early February 2003 to appoint a cross section of 10 USOC and outside persons and 3 outside consultants of substantial character to review the USOC’s governance process and recommend changes to improve the USOC’s governance. My fellow members of the task force were co-chair Frank Marshall, and members Gwendolyn Baker, Robert Balk, Fraser Bullock, Chris Duplanty, Gordon Gund, James McCarthy, Cameron Myler, and Lisa Voight, and outside consultants John and Miriam Carver, George Cohen, and Mal Wakin. I began my involvement in USOC governance reform skeptical of the likely success of such an effort. I was confronted with examining an organization that I knew from personal experience had subsisted for years on an organizational and governance culture based on quid pro quo rather than on focusing on athletes and the success of the overall institution. Though I was confident in the abilities of the individuals appointed to the USOC task force of which I was a co-chair, I was not so confident of the resolve of the organization to change itself, even after it had undergone the dramatic and public governance discord it achieved in January and February of this year. I was pleasantly surprised when, after the task force initially recommended dramatic and sweeping reform at the April 2003 USOC Board meeting, the USOC Board voted to endorse the governance concepts contained in our initial report. I am pleased that the organization, with few exceptions, continues to demonstrate its commitment in this area. I would like to place in the record along with this written statement the report of the USOC Task Force and its response to the recommendations of the Commission. The recommendations of the Independent Commission and the USOC Task Force are, at the top level, very similar. Both groups recommend that the organization’s mission become focused on athletes and athletic performance, first and foremost. Both groups recommend that the USOC’s governance must shrink dramatically to bring the USOC into line with modern best practices of good governance for organizations of the size and stature of the USOC. Both groups recommend dramatically reduced Board sizes, with the Commission recommending a new board with 10 votes and 13 members, and the Task Force recommending a new board with 9 votes and 11 members. Both groups recommend that the USOC must take substantial steps toward breaking down the structures and incentives for the culture of political quid pro quo that had heretofore existed at the USOC. Both groups also recognized the need to clearly define the roles of the governance and staff functions in the organization. I am pleased that two groups examining this organization were able to agree on so much, yet do so independently of each other. However, as you might expect, there are differences in what the two groups recommend, though I am pleased to say that those differences are generally in the details rather than in the top line recommendations. The most significant difference is in how the Olympic Assembly is treated. There has been general agreement that it is important for there to be a mechanism for USOC leadership, officers, and committee members, to communicate with the many diverse Olympic organizations that comprise the Olympic family in the United States and that these groups should be able to communicate once annually with the USOC through the creation of an Olympic Assembly. The Task Force has very strong feelings about the Commission’s view of the role of the Olympic Assembly, and those thoughts differ substantially from the Commission’s view. The differences are not merely theoretical; they also have substantial governance and transaction costs associated with them, with the Task Force’s view reducing both. The Commission has recommended that the Olympic Assembly be of nearly the same size as the current Board, that the USOC pay for all of the costs of its meetings, that the Olympic Assembly vote on substantial matters concerning the USOC’s governance, including amending the USOC Constitution, and that the Olympic Assembly elect a presiding officer who will be a voting member of the new Board and who will have a voice as a spokesperson for the USOC in communicating with the outside world. In effect, the Commission has recommended that the current 124 member USOC Board, with minor differences (such as eliminating the officers and changing the name), will remain a governing body, just with a somewhat reduced set of governance responsibilities. The Commission’s Olympic Assembly would remain, like the current Board, a body that elects a spokesperson (called the Speaker instead of the President), decides whether the USOC goes to the Olympic Games, whether the USOC will propose that one of our cities host the games, will select the US bid city, will approve all changes in the USOC Constitution, and decide all other Olympic matters. Those are all functions that the Task Force believes must not be functions performed by a body of more than 110 people, but rather must be functions of the smaller, 11-member, 9-vote Board. We believe the Commission may have retained this larger, governing Olympic Assembly because of concern that the IOC’s Olympic Charter might require it, but it is clear from our discussions with the IOC and from the text of the Olympic Charter that the Task Force’s proposal, to let the Olympic NGBs and athletes vote on certain, very limited Olympic-related issues is likely to be sufficient, and nothing in the Olympic Charter requires the large governance body called for by the Commission. The Task Force devoted substantial time and attention to the question of whether the USOC should pay the costs for representatives of member organizations to attend the annual Olympic Assembly. The Task Force believes that the Olympic Assembly should be valuable to the members of the Assembly and that those members should only attend if they share the view that attendance at the Assembly is valuable to them, as indicated by their willingness to pay the travel costs for their representatives. If the Olympic Assembly is not worth the travel costs to send a representative, perhaps the Olympic Assembly should be improved and enhanced, but the solution is not for the USOC to underwrite the costs of bringing people to attend an Olympic Assembly that they do not believe is worth the cost. However, the Task Force understands that there has not been an Olympic Assembly, so it may be difficult to assess its value without attending the first annual session. Therefore, the Task Force recommends that the USOC pay the members’ travel costs to the first annual Olympic Assembly, to be held in 2004, and in subsequent years the USOC should do whatever is possible to arrange group rates or discounted travel, but NGBs and PSOs and members of the Multi-Sport Organizations should be required to pay their own travel costs associated with the Olympic Assembly, starting in 2005. The Task Force has estimated that implementation of its governance recommendations could result in over $1 million per year in governance administrative costs savings. For the USOC to continue to underwrite the costs of the annual Olympic Assembly, as recommended by the Commission, that estimated savings figure would have to be reduced by at least $250,000 per year and the Commission has left its Assembly with so many governance responsibilities that the Commission’s report anticipates in several places that the more than 110-person Assembly may need more than one meeting each year, thereby causing additional expense for each meeting. It is the strongly held view of the Task Force that it would be the wrong direction for the Olympic Assembly to be an organization that votes on any issues relating to the governance of the USOC. First, for the Olympic Assembly to vote on anything will require the creation of complex rules and regulations concerning who can vote and the extent to which various constituents’ votes will be weighted. Similarly, there will have to be a much more formalized process to assess whether additional organizations associated with the Olympic movement in the United States will be permitted to become members of the Olympic Assembly because the Olympic Assembly members voting to add organizations to membership may suffer a reduced voting share as a result of voting to add those organizations. Second, if as the Commission recommends, the Olympic Assembly were to be called upon to vote on issues relating to the governance of the USOC, such as selection of bid cities or the participation of the USOC in the Olympic Games or the composition of the USOC Constitution, that would subject those decisions to the constituent-based decision making and the politics that have plagued the USOC for the past twenty years. Rather than be subject to a vote on the merits, or on the basis of what would serve the best interests of the USOC, using a process based on solid governance principles, those decisions could become once again the victim of block voting, votes exchanged for other benefits, and other distortions that have been the source of many of the problems identified in this Report. To allow the Olympic Assembly to vote on any issues will effectively leave the current 124-member Board in place with all of its problems and costs and with much of the same authority and responsibility. Third, the Olympic Assembly and the council meetings associated with that meeting should be an integral part of moving the USOC, the NGBs, the athletes, and the other organizations in the Olympic Assembly toward the Olympic Mission. The Olympic Assembly will be focused on cooperation between and among athletes, NGBs and the members of the Multisport Organization Council to advance the Mission. It will also be an important forum for the exchange of information and ideas between the Board and all the organizations and individuals involved in the Olympic Assembly. If the Olympic Assembly is also given governance responsibility or the power to vote and make decisions on limited issues, that will take time and focus away from the proper functioning of that group. It will also mean that the over 110members of the Olympic Assembly will spend months in advance of each meeting on the telephone and communicating by email, politicking and lobbying one another about the issues to be voted upon in the upcoming meeting of the Olympic Assembly, again distracting those individuals and their organizations from what they should be doing to advance the Olympic Mission. Fourth, as we know from current experience with the USOC’s current Board of 124 individuals, the Olympic Assembly is simply too large a body for there to be meaningful education of the membership or meaningful debate at the meetings of that group. And, many of the decisions the Commission would assign to the Assembly need to be made on a timely basis. The fact that the Assembly is only supposed to meet once a year means the proper functioning of the USOC would continue to be delayed while the organization waits for the annual meeting of the Olympic Assembly or spends an additional $250,000 on a special meeting of the Olympic Assembly (special meetings also place enormous administrative burdens on the USOC) or the decisions would have to be made pursuant to relatively meaningless mail ballots sent to the over 110 people on the Olympic Assembly. Fifth, the creation of an Olympic Assembly with legislative and other decision making authority would create an entity that might interfere or compete with the ability of the Board and CEO to focus on the USOC’s achievement of its mission. It will take issues that are central to the Mission away from the CEO and the Board, and leave the organization in a position where one part of the organization may make decisions or take actions that will be contradicted by other parts of the organization. That is precisely one of the problems that led to the commencement of the governance reform process in which we now find ourselves. Similarly, in all the areas of “Olympic issues,” where the Commission recommended taking responsibility and authority away from the Board and the full-time professional management of the USOC and giving it to the 110+-member Olympic Assembly, we simply have a fundamental difference of perspective, because the Task Force believes that fundamental principles of good governance require that all authority, responsibility, and accountability for governance should be assigned to the Board in the first instance, with authority, responsibility, and accountability to operate and manage the organization delegated to the CEO, consistent with the policies and subject to the oversight of the Board. The Task Force examined the creation of a role for an individual to oversee the functioning of the Olympic Assembly and determined that this individual should be drawn from the Board, and not be an individual who has a new position on the Board or otherwise has rights or obligations to speak on behalf of the USOC or the Olympic Assembly or any other group. The Commission’s recommendations set up a position for an individual which position will serve on the Board and will have rights to speak on behalf of the US Olympic family. The creation of the position of speaker of the Olympic Assembly with a visible, public role and a vote on the new Board of Directors is contrary to the view of the role of the Olympic Assembly. This threatens the success of a one voice public relations strategy at the USOC, creates a position that competes with the Chair and the CEO, unnecessarily creates an additional position on the Board, and otherwise potentially threatens the USOC’s achievement of its mission. The Task Force has recommended that one member of the Board, perhaps rotating among the Board membership as determined by the Board, shall serve as the Chair of the Olympic Assembly each year. It is the view of the Task Force that this individual should consult with the chairs of each of the three councils and should be responsible for the organization and conduct of the Assembly, but this individual shall have no separate or special functions as a result of this person serving as Chair of the Assembly. This individual would be answerable to the overall USOC Board, not to all the constituent groups of the Olympic Assembly. To do as the Commission suggests would invite a return to the many media and governance problems that the USOC saw during January and February of this year. In short, the Olympic Assembly should be a business meeting of the USOC, collecting all of the individuals involved in the Olympic business in the discussion and communication of issues that affect them; it should not be a new form of the bully pulpit or a political apparatus focused on things not related to the business of the U.S. Olympic family. The Task Force also disagrees fundamentally with the Commission that the Board’s officer, the Chair, should only be drawn from among directors considered “independent”. In effect, this creates a caste system among Board members if a substantial majority of them are not able to run for this office. The Task Force recommends that all members of the Board should be eligible to run for the office of Chair, except for the members of the Board who are also International Olympic Committee members. The reason for the Task Force distinction for the IOC members is that by the terms of the Olympic Charter they owe their loyalty to the IOC. As a result, they could not simultaneously serve as the organization’s leader without constantly running afoul of conflict of interest rules. The athlete and NGB nominated directors under the Task Force’s model would be independent in many ways since they would have had to have given up all of their ties to the organization nominating them upon taking office, so they should also be eligible to stand for election as Chair. There are other areas in which the Task Force has divergent views on the details of the Commission’s report, particularly on the subject of the Commission’s recommendation for the continuation of two sets of organic documents, a Constitution and Bylaws, with the Board being able to change one and the Olympic Assembly being able to approve changes to the other. The Task Force is recommending simplifying those complicated and often redundant documents into a single, clear, less complex document that is subject to amendment only by the Board. The Task Force and the Commission disagree on the composition of the new Ethics Committee, with the Task Force recommending that that committee consist completely of non-Board members and the Commission recommending that that committee consist of all Board members. Similarly, the Task Force recommends that the initial Nominating and Governance Committee, which selects the new directors, should be composed of independent members, while the Commission recommends that the current constituent groups should select the initial Board members, which in the view of the Task Force would create a bad political process not as likely to yield Board members who will best be able to govern the USOC. The Commission has also recommended that the subsequent Nominating and Governance Committee, which will select Board members in the future, consist of all Board members, while the Task Force has recommended that that committee consist of a majority of independent, non-Board members, to avoid the many concerns expressed about a self-perpetuating Board, with the Board members possibly selecting their friends and allies to fill the vacant seats and to succeed them. The Task Force proposes a stronger definition of independence for directors than does the Commission, with the Task Force definition excluding from service all current members of the USOC Board unless they are nominated by the NGBs or the AAC. In essence, the Task Force recommendations have caused all of the members of the Task Force to take themselves out of the ability to run for office as independent directors in the new Board, but the Commission recommendations would permit that. The Task Force believes that this is an important symbol of the organization’s commitment to the independence of the new Board, as the Commission’s recommendation would make it possible for all of the supposedly independent members of the new Board, along with the IOC members, and the members nominated by the AAC and the NGB Council to be individuals who have been serving on the current USOC Board during all the recent problems. The Task Force believes that would send the wrong message. The independent members of the new Board need to be independent of the old Board, as well. The Commission appears to have recommended a greater role for the Board in overseeing various aspects of USOC operations including the hiring and firing of certain USOC staff which would in a traditional corporation be the prerogative of the CEO, while the Task Force recommendations make a very clear and bright line distinction between what are operational concerns within the province of the CEO and what are governance concerns within the province of the Board. The Task Force also recommends that the international relations function of the USOC be managed completely by the CEO, consistent with policies set by the Board and oversight of the Board, while the Commission suggests that the Board may be directly involved, independent of the CEO, in various aspects of the international relations activities of the USOC. This conflict in roles as engendered in the USOC’s current organic documents is what led in part to the USOC’s current governance problems, so we do not recommend continuing this. There are a couple of other areas where the Commission has made recommendations that the Task Force considered as well, but rejected because the governance experts with whom we have consulted were clear with us that those types of recommendations are issues that should be left to the new Board. The Task Force generally supports the Commission’s recommendation on the creation of an advisory group to assist in the transition from the current governance structure to a new one, but the Task Force believes that the composition and role of that advisory group should be defined by the new Board. The Task Force recommends that the USOC’s mission be changed as it exists in the current statute but the Commission does not. The Task Force thinks it is important that the seeming entitlements for various groups and perspectives set forth in the statute must be changed to allow the USOC, and its NGBs, to focus on the overall mission. The purposes that would be removed, while generally good things for the United States, should not necessarily be given to the USOC or its NGBs to be responsible for them, unless the further the USOC’s mission. How should we resolve the differences between the two sets of recommendations? I think that answer is clear, but first I must emphasize that wer are sure we can work out any differences in a manner that will satisfy any timeline set by Congress for doing so. The Task Force did not recommend that substantial legislation about governance processes be put in the statute, because making those things the subject of legislation makes it difficult for the organization to respond should its operating environment change. However, the Congress could legislate very general principles on which the Commission and the Task Force agree as a way to express the will of Congress and protect against the organization backsliding. Those areas could include the size and general composition of the Board and the fundamental roles of the CEO and the Board. The Task Force provided legislative language in this general area as an appendix to its report. Congress could also legislate the organization’s mission statement, and basic parameters about “independence” as needed for directors serving on the USOC Board. However, Congress should stay away from becoming too detailed in its legislation, in part because that is where the two groups differ and in part because that is where the new Board should have some opportunity to determine its own direction. The USOC itself is able to change its own organic documents to address some of these detail issues, and the USOC intends to do so in a manner that is consistent with whatever the legislative process yields, and the USOC will do so my the mid-July deadline for making submissions for changing its organic documents. Once again, I would like to thank you for allowing me testify today and I thank you for your insistence that the USOC clean up its act. The job is far from done and the next step is the implementation of the recommendations of these two groups and I thank you for being willing to see this process through.