Max Siegel does it again - Siegel was paid $3.8 million in 2021 to run USATF

Disgusting pay for an incompetent CEO. I used to think all of us ranting on a messageboard could help change the world, but then I noticed that an October 2016 thread on basically this exact same topic had 188 posts: Breaking: Max Siegel Expose in The Washington Post - It's going to be tough for him to survive this! Not only had Max Siegel survived, he has thrived.

I could see USATFNY doing this. They despise the wretch.

Rojo and letsrun should interview USATF board member designated for long distance running Jim Estes. Does anyone know Jim Estes? I wonder how much Jim and the other board members get paid to serve on the board and screw over athletes while supporting the CEOs life of luxury?

You could pay him "only" $600 THOUSAND, you know, the amount of money a skilled doctor might make and use the extra money to give EVERY top 8 finisher at the outdoor US championships an EXTRA $10k. Roughly 20 events * 2 genders * 8 * 10,000 = $3.2M.

That would make each athlete go from making $8k down to ZERO for 8th place now make $18k down to $10k for 8th. That would go a long ways in allowing athletes to spend more time trying to compete better and a little less time having to work a regular job.

Most of the other positions are volunteer or very little money. Which makes it extra ridiculous that Siegel made $3.8 MILLION

Here is the RW article on his salary:

runnersworld.com

USATF CEO Siegel Made $3.8 Million in 2021

A recent tax filing shows lavish salaries atop the nonprofit organization.

Open link

Make your voices heard. Send letters, emails, make phone calls, etc. If enough people call and start asking questions, you never know what could happen.

usatf.org

USA Track & Field | Contact Us

Open link

sigma grindset rule #376: become CEO and get money off the fruits of others labor

...or better yet, go to Orlando where the USATF national convention is happening this Friday-Sunday!

I hope he gets whats coming to him. Big ol piggy.

It's call capitalism Rojo. You should try it sometime.

Why are you so certain that Virginia law applies? Is that specified in a "governing law" contractual clause? I would have guessed Indiana law would apply, and I know a few lawyers there who seem to make a nice living suing NGBs operating out of Indianapolis. Also, I'm not sure why you assume that any right to file a class action would be based on Virginia law.

As far as I recall, I've never been involved in a shareholder's derivative action, but I've known plenty of lawyers who have made huge money from them, and not necessarily based on the individual shareholder's assets in the company. As you have suggested, even the possibility of attorney fees (it doesn't have to be based on a "prevailing party" clause) could make this a financially worthwhile derivative suit.

A number of other possibilities remain. A federal (or state) whistleblower suit seems reasonable against a statutory NGB and its executives. Floyd Landis did very well in his whistleblower suit against Lance Armstrong based on alleged fraud against the Postal Service. Also, turning back to USATF, I know that the feds (DoJ and IRS) independently intervened to investigate Vin Lananna's possible conflict of interest that led to his resignation as USATF president. This case also seems potentially criminal under federal law.

Finally, a bit of perspective on how outrageous this is. In his best years as CEO of the USOC (ending 2021), Scott Blackman made about $1 million. That was considered a lot. The compensation package for Max Siegel seems totally insane, and I suspect that the evidence will show that a few people are going out of their way to grease one another's hands. (Remember the outrageous 11-1 Board decision to replace Bob Hersh with Stephanie Hightower when the delegates members had voted overwhelmingly to keep Hersh? I'm guessing that there's an easily identifiable cabal here.

Yes. I don't know about this board in particular, but on our board of a company of roughly the same annual revenue, board members are paid a $150 stipend per monthly meeting, provided dinner at the meetings, and take an educational cruise with their spouses once a year. It's not glamorous, it's just something to do for clout. They bring in consultants to inform them what proper CEO compensation should be, and generally just check a box. This consultant firm may very well be selected by the CEO depending on how "helpful" he is and how lazy the board is. The board's compensation may be public knowledge.

Scott Blackmun, not Scott Blackman.

One more thing. USOC (or whatever it's called now) has the power to decertify an NGB and allow another NGB to take its place. I believe it's done that in both gymnastics and taekwondo. I believe that simple financial misfeasance (like a CEO taking too big a piece of the pie or leveraging his position into other financially favorable deals) is sufficient. I am curious how much USOC has been eyeing USATF.

It’s because USATF is incorporated under the Virginia Non-stock Corporation’s Act. Members of a Virginia Non-stock corporation essentially stand in the position of shareholders. So what I was suggesting is a members action against the board and management on behalf of the corporation, as you might commonly see under Delaware Law when shareholder’s bring a derivative suit on behalf of the corporation against a board or management for breach of fiduciary duty, corporate waste, etc. Without a fee shifting provision you’re looking at a lawyer working for free. Good luck. That was my point. An Indiana governing law provision in Max’s contract would only be relevant in a dispute between Max and USATF.

The “whistleblower” theories sound nice but under what statute is the whistle being blown in the scenario you imagine? Without that there is no legal theory. The facts have nothing in common even by analogy to a Landis framework.

And as to Lananna, you’ve got that all wrong. There was no evidence that the DOJ investigated his “conflicts of interest”. He got a witness subpoena from the EDNY, which was investigating economic fraud In international sports. There were FIFA indictments - nothing on track or WC bidding. It went nowhere on track. USATF suspended Lananna for getting a subpoena and cooperating - in violation of its own bylaws and installed Conley as President. Lananna sued (the complaint is public) and a CAS arbitrator ruled in his favor reinstating him as President and Chair in Fall ‘’19. The Board then changed its bylaws and prior to member approval put Conley in the chair. Members rejected the bylaw change and then the Board put it back in place, keeping Conley.

The “DOJ/IRS” investigation you reference was reported for the first time in fall of ‘19 while Lananna was still “suspended”. And that was initiated by the DC AUSA, that is, a different investigation from EDNY, which issued the 2017 witness subpoena. USATF was the target - it was subpoenaed directly - not Lananna. If he was the problem, don’t you think they would have won the arbitration with arguments that he was the reason for that. They lost - suggests to me they knew it was about non- Lananna facts. (He served 1 year before the Miller/Siegel/Conley cabal ram him out). There was a Runner’s World article early this year saying that DC AUSA investigation was ongoing. Look at the spending schedules in the 990s. Millions in defense costs.

The fact remains, there does not seem to be any economic incentive for anyone to develop any of this into a civil lawsuit, let alone for a lawyer to take it on contingency. It is an irrelevant $30 million business.

As far as I know, a "fee shifting" provision is absolutely not required for a plaintiff to recover attorney fees in a derivative action. A plaintiff in a derivative action is like a plaintiff in a class action. if you win, you generally get a "reasonable attorney fee," which does not necessary mean a simple hourly rate. True, if you win nothing, then your attorneys get nothing, but that's how contingent fees work. Offhand, I'd say that the richest lawyers I know work on contingent fees, whether those fees are awarded in class actions, derivative actions, mass torts, or the occasional high-publicity personal injury case. Admittedly, I don't know what Wachtell lawyers are getting paid, but I wouldn't work for such firms.) And those attorneys almost never get stuck with the attorney fees of successful defendants.

Whistleblower cases don't require especially fancy legal theories. There are private and public whistleblower cases, and they can be based on nothing more than misappropriation of funds. In this case, there would appear to be a misappropriation of government funds, which probably makes things much easier.

I still don't understand the relevance of what may be a Virginia law against class actions. Class actions get filed darn near everywhere, especially in districts where (1) juries award big damages, (2) judges award big plaintiffs attorney fees (which are often determined by lodestar fees multiplied by a number of factors), and (3) judges are willing to sign off on settlement agreements that are highly favorable to plaintiffs' attorneys and big corporate defendants while being highly unfavorable to the plaintiff class.

Again, the fact that the entity was formed in Virginia doesn't seem highly relevant to me. The governing law of the contract between Max and USATF is obviously extremely relevant to the purported justifications for his compensation. Whether the entity was formed in Virginia or Delaware seems substantially irrelevant.

Finally, you didn't respond to my later observation that USOC can decertify crooked NGBs. (Perhaps you missed it; I think it was in a separate message.)

Regarding the size of the case (a suit against a corporation with gross revenues under $50. million, you may consider this a small matter that no good plaintiffs attorney would take, because it wouldn't be worth much to the attorney. I don't share that view. My primary criteria for taking a case (in my case, an appeal) are whether my client has a good case and I have an opportunity to make important law. Financially, it has worked out well enough. I've told people that I've never taken a case for the money, and that's been fine. In this case, depending on the trial court record, I would happily take on the

. . . case if I were not limiting future work that is really important to me.

Let me be clear I’m not trying to be a jerk - chat boards aren’t great for tone management. These are all good questions. I don’t have answers for all of them but let me try.

USATF doesn’t issue stock and is not publicly traded. It is not subject to federal securities laws

It is a creature of state law - Virginia - and that state’s corporations law governs its relationship with and duty to members. Just as Delaware law governs the rights of shareholders vis a vis management in a Delaware corporation. I’m dwelling on VA law because if a member is going to enforce fiduciary duty and corporate waste principles against USATF, it’s going to be user that VA corporate law. I mention the idea of a member’s derivative suit because that doesn’t have to be a class action. Any member or group of members, class or no class could bring suit. But what’s the remedy for them - a refund of their membership fee and some injunctive relief? Getting to that remedy would be expensive- USATF (and its rich executives) are willing to spend on litigation. They nod think their knees would buckle under the scrutiny of document discovery and depositions. But that is a 7 figure attorney’s fee proposition done right, and knowing they’d hire an AmLaw 20 firm.

That’s where the question of fee shifting comes in. But the availability of that remedy is a state law question. You may be right that there would be fee shifting - that would be critical. But that is a matter of state law, and I say it’s a matter of VA state law. Happy to be wrong. That’s a point of research. If it’s there, the case could indeed be shopped to suitable counsel. All of my comments are aimed at the question of why things can look so wrong but nobody - no member or group of members - bothers to bring suit. I think it is an economic loser, even with a win, unless there is an avenue to fees. I hope you’re right that there is. But I’d want some case law from VA or a statute.

Why USOPC doesn’t react to all the criminal investigations and disproportionately large comp, you’d have to ask them. They have the power for sure to act against an NGB that is engaged in financial or other misconduct. My guess: some blend of politics, the medal haul by team USA track, their own scandal fatigue. Who knows.

Last thing - my comment about any choice of law provision in Max’s or any other executive’s employment agreement. I just don’t think it is a material issue when considering what rights a member may have to enforce against the company. That contract could be perfectly legal as between Max and USATF, the only parties to the contract, but it could also be a vehicle for corporate waste or breach of fiduciary duty against the board for lack of oversight or other failures of business judgment. (Remember that all those directors are covered by D&O insurance so there is plenty of money to defend. )

Anyway - my comments are in the same spirit as yours. It’s a frustrating situation.