LANE ONE: USA Gymnastics proposes $215 million settlement, while Russia may be kicked out of World Athletics

The U.S. Bankruptcy Court for the Southern District of Indiana

The Larry Nassar abuse scandal and the Russian doping saga have been enduring nightmares in Olympic sport over the last several years, but both took potentially significant turns this week.

Gymnastics: The attorneys for USA Gymnastics filed a plan with the U.S. Bankruptcy Court for the Southern District of Indiana that would potentially settle its claims with victims abused by former team physician Larry Nassar.

It’s only a plan, which the court will have to rule on, but it offers a lot more money that has previously been expected to be available to the survivors: $215 million.

Said USA Gymnastics chief executive Li Li Leung, “While we do not yet have an agreement with the Committee representing the survivors, we still hope to reach an agreement. USA Gymnastics filed its proposed plan to communicate to the survivor class the two options that are currently available based on the amount of money USA Gymnastics’ insurers are willing to pay into a settlement fund.”

The federation had filed several financial statements showing a $75 million receivable from insurance, and has won a round in court obligating one group of insurers to pay claims in the Nassar case. But the $215 settlement amount is almost three times what had been shown as available previously.

How does this compare with what Michigan State did?

MSU created a total fund of $500 million to deal with the claims, with $425 million being paid an estimated 354 claimants in the first round of settlements, an average of about $1.2 million each. There is $75 million remaining to deal with more than 160 additional claims, which would each be worth a lot less.

The USAG plan offers $215 million, and if the survivor committee agrees to it, an additional $2.125 million will be added by the insurers for the Twistars USA Gymnastics Club, also sued for abuse. With 359 registered claimants, the settlements would average a little more than $574,000, or about 48% of what MSU – a much larger entity that was Nassar’s full-time employer – paid on a per-claims average.

(The USAG plan includes an allocation of $10.9 million – 5% – to be held in reserve for future claims, which could be filed up to five years after the effective date of the Plan, if approved.)

The proposal also includes a commitment by USA Gymnastics to hire a director of safe sport and, importantly, to audit its member clubs for compliance with the Safe Sport policies.

What now?

This is only a proposal, and as Leung noted, could be superseded by a comprehensive settlement with the entire survivor class. But this forces the issue: if the court approves the program, then there will be a vote of the survivors to either accept the plan or reject it. If rejected, the survivors will be able to sue USAG individually in a court of their choice, with the action to be defended by attorneys for the insurers, not USA Gymnastics. That will take a while, making the survivors choose between a settlement that can be wrapped up fairly quickly, or the filing of new cases, to be handled individually over (a long) time.

Athletics: The Russians might have done it this time. The Russian Athletic Federation might be on the road to expulsion from World Athletics.

The Athletics Integrity Unit, the independent arm of World Athletics that oversees doping, gambling issues and related subjects, issued a statement on Wednesday:

“[T]he AIU Board has made recommendations to the World Athletics Council to maintain the suspension of the Authorised Neutral Athlete (ANA) process until the charges are finally determined and, if the charges are upheld, to consider imposing the severest possible consequences, including considering the expulsion of RusAF from the membership of World Athletics.”

The last straw came in 2019. In addition to the massive doping scandal in which Russian track & field athletes had been major players in the national doping scheme from 2011-15 and the manipulation of lab data provided to the World Anti-Doping Agency a year ago, the AIU found that officials made “submission of forged documents and false explanations to the AIU in connection with the Whereabouts Failures case of Russian athlete [and 2018 World Indoor Champion in the high jump], Danil Lysenko.”

The statement noted that the Russian federation had been given eight weeks to respond to the charges – including three time extensions – but had submitted nothing. So:

“In the AIU Board’s view, a responsible member federation in the circumstances would have admitted the charges and shown contrition for its conduct, but RusAF has chosen to do neither. Instead, RusAF has gone to great lengths to deny any involvement in the matter, blame others and attack the process. This approach is deeply concerning for the AIU Board as it seems to indicate that the current leadership of the Federation is merely a continuation of the former.”

The recommendations of the AIU are to (1) continue the suspension of the Authorized Neutral Athlete program, with the effect that no Russian athletes can compete internationally, and (2) if the Lysenko case allegations are shown to be true, “the World Athletics Council should consider imposing on RusAF the severest possible consequences under the World Athletics Constitution, including (without limitation) the payment of indemnity costs and a significant fine; and that it should further consider recommending to the World Athletics Congress that RusAF be expelled from membership.”

This tracks with the report of the World Athletics Task Force on Russia, which also noted the severity of the Lysenko matter, demonstrating a willingness to cheat even after the 2011-15 doping scandal was exposed.

With the World Anti-Doping Agency’s four-year sanction against Russia to be heard in the Court of Arbitration for Sport, there could be a new case brewing if the World Athletics Congress agrees to with the AIU suggestion for expulsion this summer in Tokyo.

First, however, the Lysenko case has to be reviewed and a determination made of the facts. That will take some time, but unlike the situation with all of the other sports, World Athletics already has a mechanism in place to control the appearance of Russian athletes in international events. That’s the Authorized Neutral Athlete procedure and it’s already on hold. World Athletics could maintain it right through the Tokyo Games, eliminating Russian participation in track & field … although one wonders if the International Olympic Committee might intervene to request re-starting the Authorized Neutral Athlete program just for the Games. Only one Russian athlete – long jumper Darya Klishina – competed in Rio in 2016.

The Russian reaction was as expected: “RusAF disagrees with the accusations against it, brought forward by the AIU Council, as they are baseless and lack evidence” and claimed “violations of the RusAF procedural rights, including by giving RusAF a very short period of time to respond to the charges that took AIU months to prepare.”

The Lysenko affair is a serious problem for Russia well beyond track & field, and could impact the Court of Arbitration for Sport review of the WADA sanctions. That case is awaiting the formation of the arbitration panel and a timetable for the proceedings.

In an unrelated matter, World Athletics announced the postponement of the 2020 World Indoor Championships, scheduled to be held in Nanjing, China in mid-March. The Coronavirus outbreak, which has been declared a global emergency by the World Health Organization, has impacted many events in China. World Athletics issued a statement noting “We have chosen not to cancel the championships as many of our athletes would like this event to take place so we will now work with our athletes, our partners and the Nanjing organising committee to secure a date in 2021 to stage this event.”

Rich Perelman

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