The article below was originally published at Salon on June 26, at https://www.salon.com/2021/06/26/troubled-waters-usa-swimmings-struggle-to-cover-up-its-sexual-abuse-crisis/.
This version reflects that, subsequent to original publication, Sean Hutchison contacted Concussion Inc. and said he was never in Brazil. He also claimed that the Department of Homeland Security investigation of him had been closed, with no criminal charges.
by Irvin Muchnick
At the annual United States Aquatic Sports Convention, one year in the late 1990s, a prominent Indianapolis sports lawyer named Jack Swarbrick first warned USA Swimming, the sport’s national governing body, that it had better prepare itself for the sexual abuse issue.
Today Swarbrick is best known as the athletic director at the University of Notre Dame, which has had to deal with its own problems surrounding sexual assaults by football players. He has also been an adviser to USA Gymnastics, whose various scandals — most notably the hundreds of molestations of young athletes by Dr. Larry Nassar, who landed in prison for life — have given it a somewhat higher profile on this issue than USA Swimming.
But if the challenges of swimming have come with fewer front-page headlines despite its much larger footprint on daily American life, swimming is nonetheless battling scores of claims in courts across the country that coaches preyed on underage athletes. USA Swimming also reportedly finds itself the subject of a federal grand jury investigation for allegations of insurance fraud, concealing its assets, and covering up abuse cases.
(Grand jury deliberations are secret. The office of Audrey Strauss, the U.S. attorney for the Southern District of New York, which is directing the probe, declined Salon’s request for comment.)
Critics such as lawyer and former swimming gold medalist Nancy Hogshead-Makar, who heads the advocacy group Champion Women, describe swimming’s legal problems as the inevitable fallout of a culture that took it for granted that competitive youth swimming should enable an unsafe and overly sexualized environment for young athletes. For generations prior to the pandemic, swimming’s after-school practices and year-round weekend meets, a largely recreational activity for many of its nearly half-million participants, has been a staple of Americana, while simultaneously serving as the country’s Olympic medal developmental system.
“Not every coach is a pedophile, but every pedophile wants to be a coach,” says Hogshead-Makar. “Why? Because you get to spend hour after hour in an authority position over athletes, unsupervised, with almost no oversight or consequences to really horrible behavior.”
Hogshead-Makar also co-chairs the reform group Team Integrity, whose theme, in her words, is that “sexual abuse is a symptom of athletes having no power” in the higher councils of the Olympic movement.
Swarbrick was at that aquatics convention more than 20 years ago because he then represented USA Swimming at the Indianapolis firm where he practiced law, then called Baker & Daniels. He was an old friend of the late Chuck Wielgus, at the time executive director of USA Swimming; they had gotten acquainted when Wielgus headed U.S. Canoe and Kayak. Swarbrick was also part of the Stanford Law School network of swimming’s top lawyer, Richard Young of the Denver office of Holmes Robert & Owen, a law firm since absorbed by Bryan Cave Leighton Paisner.
Finally, as chair of the Indiana Sports Corp, which promoted the placement of marquee events in the state, Swarbrick had a close business relationship with another board member, Indianapolis sports consultant Dale Neuburger, a longtime top official of both USA Swimming (for which he served a term as president) and FINA, the governing body of worldwide competitive swimming.
Swarbrick’s observation about the oncoming sexual abuse issue came to light years later, in a 2010 deposition in a civil lawsuit against USA Swimming by swimmer Jancy Thompson, who was abused across a period of years by her coach, Norm Havercroft. John Leonard, who was executive director of the American Swimming Coaches Association (ASCA) until his retirement last year, recalled the remark.
He also testified as to his own reaction.
“Show me the numbers,” Leonard said he told Swarbrick. “Show me where this [abuse] is an issue that is large.”
The crisis emerges
Leonard’s remark encapsulated swimming’s passive attitude toward widespread abuse. But perhaps on the basis of Swarbrick’s advice, USA Swimming in 1999 established its first Code of Conduct for coaches. Four years later, the group set up a task force to study the problem of sexual abuse after former Olympic gold medalist David Berkoff spoke out about rumored instances of top coaches having sex with their swimmers, many of them underage.
In an email to an activist in 2010, Berkoff recalled that he had been told “by several of Mitch Ivey’s swimmers that he was sleeping with Lisa Dorman in 1988. I heard the whole Suzette Moran story” from gold medalist Pablo Morales. (Morales denies the conversation.) “I was told that Rick Curl was molesting Kelley Davies for years starting when she was 12 by some of the Texas guys.”
(Ivey was a swimmer and coach whose career began at the legendary Santa Clara Swim Club in California and ended in a hail of abuse allegations at the University of Florida. Curl was a Maryland club coach whose statutory rapes of Davies came to the surface when she swam at the University of Texas.)
Berkoff’s former coach at the Germantown Academy outside Philadelphia, Dick Shoulberg, was also on the task force. During one of the panel’s email discussion chains, Shoulberg wrote: “I would hate to see our organization ever in the predicament of the current Roman Catholic Church — protecting child molesters!”
As leader of ASCA, the professional coaches’ body, Leonard was the task force’s most truculent voice. He felt any standard for coach discipline less rigorous than the proof “beyond a reasonable doubt” required in criminal cases would unfairly imperil careers and reputations. In 2012, Leonard emailed a journalist to claim: “We do not have an organization that deals directly with children, nor is that part of our purpose in any way, shape, or form.”
In 2006, USA Swimming instituted criminal background checks for its thousands of sanctioned coaches. (Around 11,000 are ASCA members.) They are spread out across the country at age-group clubs of all sizes and shapes, and with various business models. Some clubs are owned by their coaches; others are run by self-perpetuating parent nonprofit boards. Nearly all rent public facilities, such as park district pools or high school or community college aquatic centers, at subsidized rates. From there, a few of the young athletes become the Michael Phelpses and Katie Ledeckys who provide a fortnight of entertainment, and an upswell of national pride, during the quadrennial Olympics.
In 2010, Jack Swarbrick’s foreboding took shape when ABC’s 20/20 broadcast an investigative segment on swimming’s abuse problem. The report’s most sensational accusation was that Deena Deardurff, a gold medalist at the 1972 Summer Games in Munich, had been serially molested during her teen years in Cincinnati by her coach Paul Bergen, a member of the International Swimming Hall of Fame.
Asked on camera for comment, swimming chief executive Wielgus assumed a defensive posture. “You feel I need to apologize to them?” he said, apparently referring to victims of sexual abuse.
Amid mounting public criticism of his televised interview performances, both on 20/20 and in a similar report on ESPN’s Outside the Lines, Wielgus established a USA Swimming program called Safe Sport, which the parent Olympic Committee would expand in 2017 with a new agency, the U.S. Center for SafeSport. Scott Blackmun, president of the Olympic Committee until the gymnastics scandals exploded in 2018, frequently cited swimming as its model sport for addressing abuse issues.
Swimming began publishing the names of coaches banned for sexual misconduct. Today the banned list has grown to 191 names. However, it does not include figures like Bergen, the late Jack Nelson (a Hall of Fame coach who Diana Nyad, the celebrity open-water swimmer, has claimed molested her in the 1960s as a high school student in Fort Lauderdale), the quasi-fugitive Irish coach George Gibney, and others. USA Swimming insiders say many of them are likely on a separate, secret document known as the “flagged” list.
In 2014, Wielgus himself was scheduled for induction into the Hall of Fame, but stood down in the face of a public petition by victims of abuse, who charged him with presiding over a generation of cover-ups. Most infuriatingly for the petitioners, Wielgus had spoken misleadingly about his knowledge of an abusive coach, Andy King, who regularly hopped from one position to another across different states, and who was labeled “a monster” by the prosecutor who brought him to justice for raping and impregnating a 14-year-old girl, among other offenses. This victim confided in her pastor, setting in motion King’s long overdue arrest. (In 2009, King pleaded no contest to 20 counts of felony child molestation. Now 73, King remains in a California prison, serving a life sentence.)
Wielgus’ death from cancer in 2017, along with the deaths or retirements of other key figures going back four or more decades, is cited by some observers of the current grand jury investigation as an indication that it’s unlikely to produce criminal charges. Regardless, the accumulation and pattern of anecdotes portray a youth-serving sports organization that consistently appeared to put the safety of young swimmers below the quest for medals, profits and prestige.
Among the thousands of pages of documents before the grand jury, according to sources close to prosecutors, is a trove of internal USA Swimming memos, emails, and coach complaint dossiers, which the group previously attempted to withhold during California civil suits by former swimmers who claimed sexual abuse by their coaches. For its defiance of lower court discovery orders, the organization paid tens of thousands of dollars in sanctions before finally producing the documents, under seal, in 2012, on order of the California Supreme Court. This cache of materials, subsequently subpoenaed by the FBI field office in Campbell, California, is the basis for some of the reporting for this article.
At the top, USA Swimming’s revenue streams are significant. Its annual nonprofit Form 990 filings with the IRS show that the book value of the organization’s assets has been as high as $54 million in recent years. At the time of his death, Wielgus drew annual compensation of more than $1.2 million. In 2019, 13 executives, ranging up to Wielgus’s successor Timothy Hinchey at $792,207, made an average of more $300,000 a year. (Staff at the organization’s Colorado Springs headquarters totals around 100.)
By way of perspective, the PR and marketing budget lines of USA Swimming alone might very well exceed the combined expenditures for everything in all Olympic sports in a number of Third World countries.
According to filings, the St. Louis-based Bryan Cave law firm’s three Colorado offices, after many years and millions of dollars in billable hours, were supplanted three years ago by Atlanta’s King & Spalding LLP for the most legal billables.
USA Swimming’s “captive” insurance company — headquartered in Barbados
Belying their homegrown image, youth sports are big business. So is organization insurance for youth sports. The grand jury is scrutinizing swimming’s insurance structure as well the underlying activity of sexual abuse, which gave rise to the sport’s liability crisis. The two go hand in hand.
Around the same time of Jack Swarbrick’s warning, internal documents show, the parent U.S. Olympic Committee was telling swimming that it could no longer use the Olympic Training Center facilities in Colorado Springs. The reason was insurance: USA Swimming was the only sport body without what the USOC considered appropriate coverage; at the time, its general liability policy contained a clause excluding coverage for claims of abuse or molestation.
USOC’s risk manager explained all this bluntly, in writing, to USA Swimming’s consultant, Risk Management Services. In turn, on May 3, 1999, the senior vice president of RMS, Sandy Blumit, submitted notes to swimming executives detailing the problem.
“[USOC] mandates innocents should be protected by their [national governing body]. Therefore, can’t delete abuse and molestation,” Blumit wrote, adding that as a consequence USOC “would not allow any local members’ clubs, volunteers or members on premises (training center).”
This impasse was resolved two days later when swimming advised USOC that it would amend its insurance coverage to include claims of abuse and molestation. Swimmers and their coaches were allowed back to the training center.
What appears most significant about this from 22 years’ distance is that Blumit’s presentation of the controversy was made not to USA Swimming’s board but to its wholly owned subsidiary, United States Sports Insurance Company, Inc. The story of USSIC embodies some of the financial maneuvers of corporate insurance practices that are likely a focus of the current federal investigation, according to lawyers who have been involved in civil lawsuits and dissidents who formerly served in sport leadership positions.
USSIC had been incorporated in 1988, when USA Swimming’s main insurance carrier, AIG, was complaining that premiums were too low in multiple areas of liability, including abuse. Given the level of exposure, AIG would only discuss an annual premium in the range of $1 million. Previously, they had been closer to $200,000.
“We would have to pay a million dollars to get a million dollars of coverage,” explained Ronnie Lee Van Pool, USA Swimming board president from 2002 to 2006, in a 2010 deposition in a “Jane Doe” abuse lawsuit against swimming.
In that period, both for-profit and nonprofit entities faced the same problem of steeply rising liability premiums. Their collective response was a new industry wrinkle called “captive reinsurance.” With smart leveraging of tax breaks and regulatory gimmicks, corporations could save money through a combination of insuring themselves, managing claims themselves or underwriting the risks of their third-party commercial carriers. The Catholic Church, for example, has a captive, called National Catholic Risk Retention Group, Inc.
By the time USA Swimming got around to forming USSIC, the USOC already had its own captive, Panol Insurance. But foreshadowing the dispute over swimming’s access to the training center a decade later, Panol was just as reluctant to underwrite swimming’s risks at the established premiums as AIG had been. While other sport bodies saw their premiums reduced or coverages remain stable, underwriters for swimming considered it uniquely beset both with greater risks and with poor risk management.
USA Swimming had to figure out where to locate its own captive reinsurer. In the late 1980s, Caribbean countries competed to be the preferred home of captives. For USSIC, Barbados won the prize. The Caribbean island nation offered many years of tax abatement, as well as a structure so loose that all the operation really required was a dummy bank account and a set of books domiciled on the island. The clincher may have been the absence of a tax treaty between Barbados and the U.S. After all, the less exposure to American laws and their pesky inspectors and enforcers, the better.
USSIC set up shop on White Town Road in Bridgetown, the Barbadian capital. Local law mandated an annual board of directors meeting on site, which in practice became a beachfront bacchanal, below the radar of dues-paying families and their swimmers, and a favorite perk for officials in the know.
The phenomenon of offshore captives has receded in recent years as Delaware and other U.S. states have escalated their own inducements to become insurance regulatory havens. As the image of swimming suffered during the publicity of abuse scandals, officials also realized that an offshore subsidiary, although entirely legal, was a bad look for an organization that marketed patriotism as much as athletics. In 2013, USSIC was brought onshore and put into what is known as “runoff mode.” Three years later, London’s Randall & Quilter Investment Holdings Ltd purchased USSIC’s assets for $2.1 million, and swimming was out of the captive business.
Sacrifice local clubs — but protect the national brand
In its heyday, USSIC featured an unorthodox wrinkle in swimming’s insurance structure known as the “wasting” provision. This is believed to be one focus of the federal investigation.
Meanwhile, USA Swimming worked around USOC’s mandate to include specific abuse coverage in its umbrella liability coverage: That coverage did not extend to the 2,000 member clubs across the country. Instead, those clubs were given USSIC-underwritten coverage to cover claims of abuse or molestation by coaches — coverage capped at $100,000 per claim.
The wasting clause in insurance policies acted like the ultimate deductible: Every dollar spent on defending a claim was correspondingly reduced from the coverage. Thus, if investigators and lawyers for USA Swimming ran up a tab of $100,000 in a particular case, a victim-claimant stood to collect a maximum of $100,000 minus $100,000: zero dollars.
The club being sued, in such a case, would also have zero dollars remaining to defend itself, its coaches, and its board. Furthermore,, the coverage limited member clubs to two claims a year.
The working concept here was that an individual club could be thrown under the bus, with its coaches forced into bankruptcy and any parent board left holding the bag. The larger goals were twofold: protecting USA Swimming from claims made against its member clubs, and denying settlements to victims that would actually cover their injuries, therapy and treatment.
There was only one way, under this system, for plaintiffs to find effective relief: Get past the member clubs’ coverage and all the way to USA Swimming’s general liability coverage. Strategies meant to pierce the national organization’s financial veil are largely what have driven the lawsuits of recent years. These are also being studied by federal prosecutors.
This line of attack was emboldened in April, when the California Supreme Court ruled that USA Taekwondo — and not just an individual predator, the convicted coach Marc Gitelman — was liable under the principle of “duty of care” in the case of Yasmin Brown, Kendra Gatt and Brianna Bordon, who had won $60 million in a lawsuit against Gitelman. That decision potentially means that abuse survivors can go after the deeper pockets of national sport governing bodies (although the USOC remains excluded from liability).
Swimming’s insurance practices did more than just protect the people at the top. They also generated paper profits. In return for tamping down victims’ claims, USSIC formulated a “safety rebate,” reflecting successful years when premiums and underwriting costs were exceeded by savings.
As safety rebates flourished, USSIC’s assets reached as high as $27 million, according to IRS filings. In 2008, the company held a portfolio of U.S. government bonds totaling more than $12 million. Two years later the value of corporate bond holdings and other fixed income approached $15 million.
A congressional probe fizzles — but it’s not the end of the story
In 2012, Kelley Davies, the swimming abuse victim from the 1980s who had been identified by whistleblower David Berkoff, saw her old coach, Rick Curl, on the pool deck during televised coverage of the Olympic Trials in Omaha, and she was furious. Co-owner of the Curl-Burke Swim Club, a prominent age-group program in the Washington, D.C., area, Curl had lost his coaching position at the University of Maryland and relocated to Australia. But now Curl was back and had resumed his American coaching career, with no apparent resistance.
Davies told her story to a Washington Post reporter, and Curl was banned by USA Swimming and indicted in Maryland. After appearing at the 2013 sentencing hearing, which followed a plea deal, Davies advocated for a congressional investigation, and the Post editorial page echoed her. (Curl, now 71, was sentenced to seven years in state prison and paroled in 2016.)
Congressman George Miller, a California Democrat, heeded the call. With Republicans in the House majority at the time, he served as ranking minority member of the House Committee on Education and the Workforce. Though Miller did not control the committee or have the power to call hearings, he asked the Government Accountability Office to produce a study of laws relating to youth sports programs. And his staff investigated and fielded tips.
In a July 2, 2013, memo to the USA Swimming board of directors, Wielgus and then board president Bruce Stratton announced emergency measures in response.
“We recognize that some of the issues we face today are an increasing unfortunate fact of life for all youth-serving organizations and that our evolving role and responsibilities related to inappropriate conduct by our members is permanently with us,” Wielgus and Stratton wrote. “… [O]ur strategy moving forward will have the ultimate goal of improving the overall perceptions of USA Swimming’s Safe Sport Program efforts.”
At a cost Wielgus and Stratton estimated in the hundreds of thousands of dollars, to be drawn from “the Executive and Business Development budgets,” their steps included commissioning an “independent review” of the Safe Sport program, which would be carried out by the Wisconsin-based Gundersen Health System. This review would be “by far the most expensive piece” of swimming’s counter-measures.
In addition, Wielgus and the then director of Safe Sport, Susan Woessner, would undergo “intensive media training.” This training and other crisis communications services would be coordinated by GroundFloor Media, a Denver marketing and public relations firm. Other resources were targeted to local teams and regional governing affiliates for whenever “an issue of sexual misconduct arises [and] there is a flare-up of local media attention.”
(Woessner resigned in 2018 after she was accused of having had an undisclosed relationship with Sean Hutchison, one of the first subjects of an investigation by swimming’s newly formed Safe Sport program in 2010. This came about after Ariana Kukors, a gold medalist swimmer who had been groomed and abused by Hutchison over a period of years, filed suit against him and the organization. In her resignation statement, Woessner claimed she had only “kissed” Hutchison once and denied any sexual relationship. [Editor’s note: See the response by Hutchison at the top of this article.])
The Gundersen Health System review, publicly released in early 2014 without having been distributed beforehand to the board, concluded that USA Swimming was doing a good job of meeting the coach sexual abuse problem.
Miller retired from Congress at the end of 2014. Before leaving, he released an exchange of letters with the FBI. In his July 9, 2014, letter to then-director James Comey, Miller requested “that you fully investigate USA Swimming’s handling of both past and present cases of child sexual abuse.”
Miller’s 11-page letter did not elicit a response from Comey. Instead, Maxwell Marker, acting deputy assistant director of the bureau’s Criminal Investigation Division, delivered a pallid three-paragraph memo. “FBI representatives recently met with USA Swimming officials and discussed applicable federal violations associated with child exploitation matters, the vulnerabilities of those within USA Swimming, and provided information to assist in USA Swimming’s effort to educate their membership regarding the sexual exploitation of children,” he wrote.
The GAO report requested by Miller in 2013 was not published until 2015, after he left Congress. This report turned out to be a perfunctory rundown of sexual abuse statutes. USA Swimming’s investment in public relations initiatives seemed to have paid off.
It didn’t last. In 2018, the USA Gymnastics scandals made national headlines, and the federal grand jury investigation of USA Swimming began.
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