The FBI and IRS are investigating a $55 million loan the Washington Commanders received without board members’ approval, a violation of franchise shareholder rules.
In April 2020, Washington Commanders majority owner Dan Snyder sent a note revealing a $55 million credit line without knowledge nor approval from three other minority partners — Robert Rothman, Dwight Schar, and Frederick W. Smith — all of whom protested the loan to the NFL.
Another day, another Dan Snyder controversy. And it’s only getting uglier.
Per Don Van Natta of ESPN, federal prosecutors in Virginia will investigate allegations of financial misconduct by Snyder and the Commanders as a grand jury issued subpoenas for documents related to the franchise’s finances, which includes the loan among other documents. Bank of America officials reportedly asked Washington for proof of approval from the three now-former minority owners, but to no avail. A team lawyer even noted in a letter that the board approval never existed.
That means the NFL has some explaining to do, too.
Amid former partners’ plea to receive documentation regarding the $55 million, they had requested the league investigate specifics about Snyder’s loan — but neither Commissioner Roger Goodell nor the NFL’s arbitrator bothered looking into the case for possible proof of financial wrongdoing. Documents later showed that the NFL closed off arbitration proceedings, and when zero action was taken by the league, partners sold their shares. As ESPN notes via sources, that blanked all their hundreds of pages worth of complaints against Snyder.
“Three billionaires — not a few whistleblowers — alleged to the NFL arbitrator that their partner had possibly committed bank fraud,” an ESPN source said. “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.”
Rothman, Schar, and Smith looked into the team’s finances and found that Snyder used the team’s finances as his own personal bank, finding a $4.5 million charge for the Commanders’ logo to be placed on his own private jet. When mediation hit a head in 2021, Snyder paid out $875 million to the partners for their 40% stake. Fast forward to current day, the Commanders are on the market for $7 billion, which would put the former partners’ stake around $2.8 billion.
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In spring 2021, the mediation resulted in Snyder paying his partners $875 million for their 40% stake. Nearly two years later, Snyder is seeking to sell the team for up to $7 billion. At that price, the former partners’ stake in the team would be worth $2.8 billion.
Counsel for the Commanders and a spokeswoman for the team declined to answer questions regarding the $55 million credit line. Per counsel John Brownlee, “The team has been fully cooperating with the Eastern District of Virginia since it received a request for records last year. The requested records only relate to customer security deposits and the team’s ticket sales and revenue. The team will continue to cooperate with this investigation.”
As NFL spokesman Brian McCarthy said in a separate statement: “The parties had a series of disputes, which were certified to the Commissioner for arbitration as required by league rules. The Commissioner appointed a highly-respected attorney as the arbitrator and none of the parties objected to that appointment.”
File under this freakin guy pic.twitter.com/bj7htRwezj
— Mina Kimes (@minakimes) February 28, 2023
During the process, partners asked for Snyder to be suspended or removed but yet again to no avail. “His conduct has harmed not only Claimants and [the team], but also the Washington franchise as a whole (and thus both Washington … fans and supporters, and the NFL itself),” they wrote in a petition of arbitration to the league, per Van Natta.
That alone should have been more than enough for the league to raise red flags at the time. Based on what we’ve learned since then, it’s plainly arguable that the NFL knew of financial wrongdoing in Washington that violated franchise and league rules and simply ignored it.
On Nov. 2, Dan and Tanya Snyder acknowledged for the first time that they were taking the first steps toward a potential sale of some or all of the Washington Commanders since first purchasing the controlling stake in the team in 1999. Later that day, Don Van Natta reported for ESPN that the US Attorney’s Office for the Eastern District of Virginia was engaged in an investigation into alleged “financial improprieties” by the Commanders.
On Nov. 10, DC Attorney General Karl Racine announced a lawsuit alleging that four parties deceived the residents of the nation’s capital about the independent investigation into workplace misconduct within the Washington Commanders organization.
Suffice it to say that both Dan Snyder and the league now have even more to explain following the latest development in a saga that was already well past being deeply troubling on multiple fronts.
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