USA Swimming’s Moguls Realize They’re Sitting on a Time Bomb With Sex Abuse Cases (International Insurance Scam, Part 4)

Published September 8th, 2013, Uncategorized

PREVIOUSLY:

* International Sex Abuse Insurance Scam (Introduction)

* USSIC Stands For ‘ka-ching! in Barbados’ (USA Swimming’s Multimillion-Dollar International Sex Abuse Insurance Scam, Part 2)

* 1999: Olympic Committee Forces USA Swimming’s Offshore Tax-Dodging Subsidiary to Change Coverage (International Sex Abuse Insurance Scam, Part 3)

 

 

by Irvin Muchnick and Tim Joyce

In previous installments we’ve set up the 1988 founding of USA Swimming’s dummy insurance subsidiary — the United States Sports Insurance Company, headquartered in sunny Barbados. And we’ve shown how in 1999 the parent U.S. Olympic Committee scolded swimming for its inadequate coverage for sexual abuse and molestation claims.

All this was taking place in the context of decades of cover-ups of rapes of mid-teen swimmers by some of the most prominent coaches in the sport. This year Rick Curl was sentenced to seven years in Maryland prison for his abuse of his Olympic hopeful, now named Kelley Davies Currin, in the 1980s. After Currin exhorted Congress to get involved following her statement at Curl’s sentencing hearing, Congressman George Miller of California and his minority-party staff of the House Committee on Education and the Workforce have begun to investigate this historical and ongoing national disgrace.

Back in 1999, it was apparent to the lords of swimming that they had a serious problem on their hands. Not a moral problem — they didn’t pay a stroke to that — but a business problem. Experts were beginning to warn the USA Swimming board that the number of potential abuse claims was large and growing, and that they could bankrupt the organization.

One of the first to say so was an Indiana lawyer named Jack Swarbrick, an adviser to USA Swimming. He has since become the athletic director at the University of Notre Dame — an institution that has had its own problems with rape allegations against football players (including one by a woman who subsequently committed suicide). Swarbrick said swimming should get a grip on its abuse liability issue before it was too late.

The existence of Swarbrick’s advice emerged in the deposition of John Leonard, the executive director of USA Swimming’s coach-credential gatekeeper, the American Swimming Coaches Association. Leonard is the guy who last year told Concussion Inc. that ASCA is not “an organization that deals directly with children, nor is that part of our purpose in any way, shape or form.”

Most of USA Swimming’s response to doomsday warnings was legalistic. The national group itself did not have specific abuse liability coverage — only a general liability policy that excluded abuse coverage to its 2,000 member clubs. The clubs were given USSIC-underwritten coverage for coach abuse and molest claims. And even that coverage was capped at $100,000.

Further, the team’s coverage was saddled with what is known as a “wasting” provision. This meant that every dollar spent on defending a claim would be correspondingly reduced from the coverage. So if investigators and lawyers for USA Swimming ran up a tab of $100,000 in a particular case, a victim stood to collect a maximum of $100,000 minus $100,000: zero dollars.

The club, too, had zero dollars to defend itself and its innocent coaches and club boards. This happened more often than not. In addition, the coverage was limited to two claims a year for all member clubs.

The idea was that a club could easily be sacrificed — its coaches tossed to bankruptcy and any parent board left holding the bag. The two larger goals were:

First, protect USA Swimming from claims made against member clubs.

Second, frustrate victims in trying to isolate deep enough pockets to provide settlements to cover their injuries and needed treatment.

Next in this series: Dale Neuburger, USA Swimming’s board president from 1996 to 2004 — the globetrotting insider-dealing Olympic tycoon who oversaw USSIC’s $750,000-a-year “safety rebate” to the parent organization.