by Irvin Muchnick and Tim Joyce
As we’ve been chronicling, USA Swimming has had a subsidiary since 1988, the United States Sports Insurance Company — a “captive reinsurance” operation designed to leverage the risks for its widespread problem of coach sexual abuse and other liabilities. And the beauty part is that USSIC is in Barbados, free of American taxes and regulations and record-keeping.
From here, we’re going to document three cases that helped “pierce the veil” of swimming’s strategy to frustrate plaintiffs by lowballing insurance claims limits, adding a “wasting” provision that made those limits negligible, and foisting the whole risk onto member clubs rather than USA Swimming. The wasting provision, in particular, made it impossible for victims to get recoveries substantial enough to pay for their treatment. And the entire system intentionally drove individual clubs into bankruptcy.
The first of those cases involved Venezuelan national Simon “Danny” Chocron, a coach at the famed Bowles club in Jacksonville, Florida, who raped both girls and boys. He is now a fugitive from justice back in his native country. See http://concussioninc.net/?p=5993. We’ll get to Chocron in the next installment.
But first let’s pause to observe that the generation-long story of swimming corruption and cover-up of sexual abuse is also about a coterie of profit-making potentates. One such figure is Dale Neuburger, whose term as USA Swimming board president, 1998-2002, coincided with the heyday of USSIC.
According to USA Swimming’s public accountings, it was on Neuburger’s watch that USSIC attained its peak of an annual $750,000 in “safety rebates” to USA Swimming. In recent years, as victims aggressively pursued civil action to recover from their abuse, the safety rebate has been slashed by two-thirds. We’ll explain safety rebates in a future post.
Dale Neuburger, one of those extraordinarily exploitive figures in the “Lords of the Rings” world, was the right man for presiding over all this legalistic misdirection. For one thing, he is endowed with immense chutzpah — like USA Swimming chief executive Chuck Wielgus, Neuburger has brazenly lied in sworn statements to courts.
In one deposition, Neuburger claimed to know little about predator coach Mitch Ivey and the allegations against him. Neuburger was a contemporary of this legendary figure, and Ivey was the subject of an investigation by ESPN’s Outside the Lines, which got Ivey fired as the women’s coach at the University of Florida. Yet under oath, Neuburger feigned complete unfamiliarity with all of this. He even played dumb about the sacking of his own son’s coach. See http://concussioninc.net/?p=6008 and http://concussioninc.net/?p=7525.
Most recently, through Neuburger’s affiliation with the TSE Consulting group, he helped Bob Bowman, Michael Phelps’ coach, consummate lucrative consulting deals with the British and Turkish national teams.
As the American representative to the FINA Bureau, the global swim governing body, Neuburger has had access to unique money-making ventures. His specialty is high-paid consulting for a city or country bidding to host an event. With his presence on the board, he had the capacity to make that role pay off for his clients by helping to get their bids approved.
The quintessential example of Neuburger’s handiwork was the 2010 FINA Open Water World Cup in Fujairah, south of Dubai. Neuburger consulted for the Dubai sheiks who landed that event, where the overly warm ocean waters would lead to the wholly preventable death of American open water swimmer Fran Crippen.
As USA Swimming board president, Neuburger had one important achievement for USSIC, besides maxing out on the safety rebate. He was also astute enough to realize that 100 percent overlap of the boards of USA Swimming and USSIC was a bad idea. The parent, USA Swimming, would need more of an arm’s-length relationship with its subsidiary should anyone start attacking USSIC’s assets (which during Neuburger’s term peaked at $27 million). On the advice of President Neuburger, USSIC began recruiting outsiders for the USSIC board. Of course, with the promise of little work and lavish Caribbean junkets for board meetings, this wasn’t hard.
There was one area where plaintiffs would locate deeper pockets and higher damage awards to get just recompense to pay for life-repairing treatment. That was by getting past the member clubs’ coverage for abuse-molest claims and all the way to USA Swimming’s general liability coverage.
As this series proceeds, we’ll discuss the new cases that will, indeed, continue to expose USA Swimming. They also highlight why this whole scandal is a subject that Congressman George Miller and the House Committee on Education and the Workforce will want to investigate wherever it leads — straight to the top of the executive leadership and board management of our national sport governing body.