Nonprofits devoted to sports are an important part of the philanthropic landscape. We probably should pay more attention to them, but although the athletes they represent make the news, most of the time the nonprofits associated with them are in the background.
Will Hobson and Steven Rich are Washington Post reporters whose beat is the business of sports. They previously produced many stories about the absurdly high salaries paid to college football coaches. Now they have done us a service with this informative article about USA Track and Field and the questionable financial arrangements of its CEO, Max Siegel.
Siegel has been CEO of USA Track and Field, a 501 (c) (3), since 2011. Under his leadership, the organization’s budget has risen from $17 million to $35 million. This year, every Olympic track and field athlete got a $10,000 bonus, and those who medalled received more. In Rio, the U.S. track and field team received more medals than in any year except for those when nations were boycotting the Olympics.
But apparently Siegel’s arrogant management style has caused many people he works with to be friendly with the press, because a great many people seem to want to stick it to their former employer.
When Siegel was hired, he was allowed to keep his NASCAR racing team and Max Siegel, Inc., a sports marketing company. Hobson and Rich report that the barriers between the three enterprises were quite low, if they exist at all. They charge that Siegel routinely flew to NASCAR events and had USA Track and Field pay his expenses. He claimed this was because at these trips he said he discussed “fan engagement strategies” with NASCAR officials as well as ways to improve USA Track and Field’s use of social media. Hobson and Rich interviewed Charity Watch president Daniel Borochoff, who noted that there were many people Siegel could have consulted on these topics who weren’t involved with one of Siegel’s businesses.
Siegel’s large salary—with salary and bonuses, he’s getting $1.7 million this year—is another issue. BBB Wise Giving Alliance chief operating officer Bennett Weiner said that in 30 years of being a charity watchdog, the only CEO’s that took in seven figures were the heads of large universities and giant nonprofit hospital chains. Siegel’s salary, he said, “is at the highest end I’ve seen for a nonprofit of that size.”
Siegel also likes giving jobs to his friends. He has steered a lot of business to Matchbook Creative, an Indianapolis-based firm whose offices used to be next door to Max Siegel Inc. and whose employees have used the email “@maxsiegelinc.com.” Matchbook Creative has called itself a “Max Siegel company.”
However, it is not clear if Max Siegel ever owned Matchbook Creative. If he did and USA Track and Field gave business to the company, that to me would be a violation of the self-dealing rules. But Hobson and Rich could not find any legal document filed in the state of Indiana that showed that Max Siegel owned all or part of Matchbook Creative. However, Matchbook Creative’s CEO, Donna Gray, said in an email that Matchbook’s extensive promotion of its relationship with Max Siegel Inc. was that the company was “doing creative work for Max” and not that Siegel was an owner.
Finally, Max Siegel offers valuable managerial advice to the CEOs of nonprofits—if you ever feel that you have to send a profanity-filled email to a subordinate, think twice and don’t do it.
Hobson and Rich obtained an email exchange between Siegel and “influential retired athlete” Jon Drummond from 2013. USA Track and Field was debating at their annual meeting whether or not the power to determine where the national track and field championships were held would be taken away from Siegel and given to volunteer committees. Siegel asked Drummond to lobby for him, and several sources told Hobson and Rich that Drummond declined. “Late one night that week,” Hobson and Rich say, “Drummond received several invective-filled texts from Siegel that shocked him so much he shared them with several friends. One of them provided a copy of the exchange to the Post.” (Drummond confirmed the authenticity of the emails but otherwise refused to comment.)
Here is what the emails say.
SIEGEL: “I personally feel at this moment you are full of (bleep) and a double agent. I have trusted you and you are (bleep) with fire. You are allowing me to be personally attacked. And this (bleep) Vail (sic) of ‘athletes rights’ is a crock of (bleep).”
DRUMMOND: “wow!...Dude…You are trippin’.”
SIEGEL: “I WILL (bleep) anyone up that goes after me personally.” (capitalization in text)
Surely one lesson we all can learn from the Wikileaks scandals is that one must assume that anything you write in an email will eventually become public. So it’s a wise idea for any CEO of a nonprofit who feels compelled to send out a profanity-laden email should think twice—or maybe three or four times. Hobson and Rich say that former employees told them that under the leadership of Siegel and chief operating officer Renee Washington, the office environment of USA Track and Field has become “authoritarian and tense.”
Hobson and Rich haven’t found any proof that Max Siegel has done anything illegal. But based on their fine reporting, I wouldn’t be surprised if there was an investigation by charitable regulators in Indiana of USA Track and Field.