The fallout between Washington Commanders’ majority owner Daniel Snyder and a trio of former minority owners reportedly boiled down to an unapproved loan by Snyder that could be considered bank fraud.
On Tuesday morning, ESPN published a report detailing what led to the departure of minority partners Robert Rothman, Dwight Schar, and Frederick W. Smith from the Washington Commanders organization recently. And it seems things came to a head after Snyder reportedly took out a $55 million loan on behalf of the team without their approval.
As owners of 40% of the franchise at the time, receiving a line of credit of that size would legally require their approval, however, the report claims Daniel Snyder moved forward with the loan without speaking to the three minority owners. The unapproved loan is also now a focus of an ongoing investigation by prosecutors in Virginia after other evidence of financial misconduct by the organization was discovered by a congressional inquiry last year.
“A federal grand jury has issued subpoenas for a cache of documents related to the team’s finances, including the loan. Prosecutors acquired the partners’ NFL arbitration petition and other supporting materials, including emails and letters between team executives and bank lawyers, documents show. The criminal inquiry is being led by a team of FBI and IRS agents, sources said.”– ESPN report
One of the most alarming parts of the report is the fact that the NFL may have been purposefully looking to avoid investigating the accusations during arbitration hearings between the two sides.
NFL seemingly avoided investigating bank fraud claims against Washington Commanders
In the ESPN expose, details from arbitration documents suggest that the three minority owners of the Washington Commanders pushed the NFL to look into the unapproved $55 million dollar loan. However, “neither NFL commissioner Roger Goodell, whose signature granted league approval for the team to take on the new debt, nor the NFL arbitrator investigated the partners’ allegation of financial wrongdoing.”
Unapproved loans would violate the team’s shareholder agreement. Yet, four days after arbitration started, the league reportedly moved to shut down the proceedings. It was also revealed that Bank of America — who is currently overseeing the Washington Commanders sale — asked team executives for proof that the loan was fully approved, on multiple occasions, but the execs of course were never able to turn over the required documentation.
The arbitration hearings eventually resulted in the three partners selling their shares in the Washington Commanders, which silenced their complaints against Daniel Snyder, a source told the outlet.
“Three billionaires — not a few whistleblowers — alleged to the NFL arbitrator that their partner had possibly committed bank fraud. This is jail time type of fraud. The NFL owes them as much of a fair shake as it owes Snyder. And the league had no interest in finding out what happened. They buried it and didn’t investigate it and covered it up.”– ESPN report
The sale of the team has reportedly stalled with Snyder seemingly uninterested in selling the Commanders to Amazon founder and Washington Post owner Jeff Bezos — the man with the financial capability to meet his record-breaking asking price for the team.