Breaking: Max Siegel Expose in The Washington Post - It's going to be tough for him to survive this!!

Examples of Unacceptable Compensation Practices

The Association of Fundraising Professional (AFP) gives 3 examples of unacceptable compensation practices.

If an organization lacks a sufficient development budget, offering a commission-based salary with the expectation that it will be converted to a salary or fee position when funds are available.

Disguising compensation as salary, fee or bonus when it is, in truth, a percentage of funds raised.

Accepting a compensation package that is part salary with the balance to be made up as a percentage of the funds to be raised

polevaultpower wrote: His salary is $500,000. The bigger issue for 2016 is that he earned $1.2 million in bonuses...

But I doubt anything illegal happened. The board wrote a contract that included bonuses if he hit certain criteria. It probably included stuff like increased memberships, increased sponsorships, etc. .

Fair point on salary vs bonuses. However, in the case of the excessive comp rules, the IRS don't focus too much on that distinction. I don't think his comp is criminal (other behaviors definitely push that line). I do think this comp is outrageous and not in the best interests of USATF and its mission. By most accounts, there has been little gained outside the Nike deal and we had to pay $20 million plus to make that happen.

I do stand by the position that there are several incredibly large problems here including some that cross the line of legality.

More importantly, the tone deaf defense by USATF leadership (Miller, Geer) is disheartening. Max chose to work for a charity - - one that enjoys great benefits of tax exemption and one that is supposed to serve its mission and not its executives.

A general comment directed at those who call USATF a charity.

A not for profit business is not by definition an altruistic charity tasked to tak from the rich and give to the needy..

I don't know JJK, nor do I have anything bad to say about her personally. But I think that those contemplating supporting her possible run for USATF President should make themselves aware of some questionable financial history.

"A financially troubled charitable foundation headed by Olympic star Jackie Joyner-Kersee paid at least $457,000 in consulting fees to her husband’s private foundation, which failed to file federal income statements as required by law.

"Apparently Robert is having some serious financial problems and is wanted by the law.

"Robert Kersee is wanted by the Cole County Sheriff’s Department in Jefferson City, Mo., for allegedly passing a bad check for $578 to pay his state income tax and failing to show up at an April 2007 court hearing . . .

"The Internal Revenue Service placed a $425,496 lien on their home in Ballwin, Mo."

http://mediatakeout.com/money-scandal-financially-strapped-charity-pays-olympian-jackie-joyner-kersees-husband-suspicious-fee-of-400k/

"by 2009, the Jackie Joyner-Kersee Foundation, which was formed to oversee the center, had laid off 32 people and closed its doors as questions surfaced about the foundation's finances. A major fundraiser was canceled that year after it was revealed the foundation paid more than $450,000 to an organization managed by the Olympian's coach and husband, Bob Kersee."

http://www.stltoday.com/news/local/illinois/troubled-jackie-joyner-kersee-center-reopens/article_b8e64c7e-3b1f-5f98-80c5-6d4ec363337e.html

"their personal finances have long been a mess and a youth center Joyner-Kersee built in her hometown of East St. Louis with big contributions from the likes of Nike, Anheuser-Busch and Monsanto has struggled.

"the couple currently has almost $1.3 million in IRS liens outstanding against them, public records show."

http://www.forbes.com/sites/janetnovack/2012/08/07/olympics-legends-jackie-joyner-kersee-and-bobby-kersee-face-new-tax-troubles/#2f0b50fd7ca3

"Jackie Joyner-Kersee and Bobby Kersee are facing even more financial troubles in addition to their rollercoaster in the past."

http://scltaxlaw.com/irs-tax-lien-lawyer-olympian/

Read the above, do your own Googling, and decide for yourselves, but to me the alleged financial problems and allegations seem even worse than what's being discussed here about USATF and Siegel.

I noticed that the $23 million commission was not on their original 2014 tax return, only the amended one...

http://www.usatf.org/usatf/files/a0/a0737689-6a71-4d24-ba89-5a47484bf352.pdf

business wrote:

A general comment directed at those who call USATF a charity.

A not for profit business is not by definition an altruistic charity tasked to tak from the rich and give to the needy..

Charity - more specifically "public charity" - is an IRS term. Tax exempt is a specific term. Public charity (or private foundation) is a specific term. Non for profit business is not a specific term. Moreover, USATF, by its 501c3 designation, is a charity. Call it is mission based organization. Call it altruistic. I doubt your attitude about give to the poor is sincere, but it is realistic to expect public charities that enjoy substantial benefits to focus 100% of their efforts on their mission.

In case you are wondering, a direct cut and paste from irs.gov:

A private foundation is any domestic or foreign organization described in section 501(c)(3) of the Internal Revenue Code except for an organization referred to in section 509(a)(1), (2), (3), or (4). In effect, the definition divides section 501(c)(3) organizations into two classes: private foundations and public charities.

Generally, organizations that are classified as public charities are those that

Are churches, hospitals, qualified medical research organizations affiliated with hospitals, schools, colleges and universities,

Have an active program of fundraising and receive contributions from many sources, including the general public, governmental agencies, corporations, private foundations or other public charities,

Receive income from the conduct of activities in furtherance of the organization’s exempt purposes, or

Actively function in a supporting relationship to one or more existing public charities.

Private foundations, in contrast, typically have a single major source of funding (usually gifts from one family or corporation rather than funding from many sources) and most have as their primary activity the making of grants to other charitable organizations and to individuals, rather than the direct operation of charitable programs.

Moreover, USATF, by its 501c3 designation, is a charity

PGA TOUR is also a charity. The rich like to deduct their golf donations.

polevaultpower wrote:

I noticed that the $23 million commission was not on their original 2014 tax return, only the amended one...

I looked at some board minutes and it appears they had a dispute with their CPA firm (auditors) about this. Ultimately they agreed to follow GAAP and fired the audit firm (who also worked on the 990). Class move.

I would to see a panel of former CFOs - with the non disclosure agreements waived.

dimpled wrote:

PGA TOUR is also a charity. The rich like to deduct their golf donations.

http://www.espn.com/espn/otl/story/_/id/10089803/pga-tour-tax-breaks-help-fuel-giving-which-falls-industry-standards

The NFL was a non-profit (supposedly) until 2015-

There are a lot of very profitable not-for-profits. Instead of taking out profits by issuing dividends, they just take out their profits by paying their officers, consulting contracts and the like.

USATF doesn't sound like it's close to the level of the worst charities, but the Post's allegations should be enough to raise some eyebrows with USATF members.

There are a lot of very profitable not-for-profits. Instead of taking out profits by issuing dividends, they just take out their profits by paying their officers, consulting contracts and the like.

http://www.tampabay.com/topics/specials/worst-charities1.page

Free enterprise at its finest! America really is a great country. In Europe, the government has a monopoly on such shadiness, and you have to lick many political boots to get anywhere.

Or even one. Can we get a statement from the CPA firm?

This alone is a huge red flag. Good find.

NFP-Atty/CPA wrote:

polevaultpower wrote:

I noticed that the $23 million commission was not on their original 2014 tax return, only the amended one...

I looked at some board minutes and it appears they had a dispute with their CPA firm (auditors) about this. Ultimately they agreed to follow GAAP and fired the audit firm (who also worked on the 990). Class move.

I would to see a panel of former CFOs - with the non disclosure agreements waived.

Proud_to_be_an_outsider_now wrote:

2. If you find the answers unacceptable, DON’T PARTICIPATE in USATF events and activities. They do fear some things and they spoke of them at the office often:

This is really the only option. USOC isn't going to decertify the federation. Best case scenario is the new federation is the old federation only with a couple of different people getting back to the same old scandalous behaviour.

eiiakaakallaal wrote:

The NFL was a non-profit (supposedly) until 2015-

.

Not a major point but the PGA and NFL are 501c6 organizations that don't pay federal income tax. They are not 501c3 charities (don't pay federal income tax and donations can be deducted by donor as charitable contributions).

(The PGA Tournaments are often managed by 501c3 organizations so confusion here is expected.)

No informed person would call the NFL a charity or try and compare the NFl to USATF. My point stands - the 501c3 USATF is required by law to serve its mission and not unduly enrich any private person.

pop_pop!_v2.2.1 wrote:

This is really the only option. USOC isn't going to decertify the federation. Best case scenario is the new federation is the old federation only with a couple of different people getting back to the same old scandalous behaviour.

Any hope the Board would mandate increased transparency with travel and other spending. It sounds ridiculous, but how about a travel report for senior execs at each Board meeting (then those minutes are made public)?

I suspect Max has written a back dated check for the sales tax fraud but will the corrupt spending on consultants continue?

Or maybe as someone on this board mentioned, a true forensic audit with public results.

I hate to see the athletes get bought off with some extra stipend money.

Nothing will happen. We can't even cast a vote unless we fly to the USATF natl convention and hand in the vote in person. No proxy voting. The fact is elites have their parents, spouses, and trust funds to cover 85% to 95% of their training expenses thus Max can skim as much money as he wants and get away with it.

USATF Status Update wrote:

Nothing will happen. We can't even cast a vote unless we fly to the USATF natl convention and hand in the vote in person. No proxy voting. The fact is elites have their parents, spouses, and trust funds to cover 85% to 95% of their training expenses thus Max can skim as much money as he wants and get away with it.

I wonder what percent of the general population has a trust fund and what that percentage is for T&F athletes.

Mr. S. Update do you have an idea on those figures? Thanks

While I see some troubling things here, I have a contradictory view.

First, I don't like the tone which basically says that an exec shouldn't make a significant salary. I disagree. If you want to take the USATF to new heights, you need someone who's excellent. Not an existing member who's willing to fly coach and stay in the Super 8. Now, I'm not saying that MS is the answer, but if you want performance, you need to pay for it.

The other issues re: self dealing and reimbursing USATF for a computer are troubling, but small potatoes in the grand scheme of things.

On the Nike contract, first, I find the opinion that the Nike contract wasn't a good deal, that they should have competitive bid it, etc. are naive. Nike locked in for 20 years. Do you think Oiselle is going to do that? Hell, they probably won't be around in 5 years. For all we know, USATF did try to drum up interest from Adidas, Puma, Under Armour, etc, but none of them bit. You don't need a formal RFP process to know where the $ is at. Nike has $ and an over-sized interest in Track and Field. It's unsurprising that they emerged as the primary sponsor.

Second, I'm neutral on the fact that USATF paying a significant commission to the two ex-Nike employees. It could be a bad thing. Or it could have been necessary to secure the deal. You'd need inside info to know.

I'm not a MS apologist. Never met the man. I could care less about him. I care a lot about T&F, though. And, if we want the sport we love to prosper, we need to attract and pay experienced leaders to drive it forward.

I personally would love to burn down USATF and start over. But I don't see how that's good for the sport in the short term.

My constructive suggestion would be to band together and boycott USATF events until the athletes are given more transparency and power. Have a specific set of demands. Make yourselves available for interviews with the media. Find a sponsor to setup an alternate federation. Keep the pressure on.

Siegal made it 20 years to get 20 years of commissions now for himself not to help us. That sucks.