What's next for USA Gymnastics? A long, tough road at best

In the wake of a wide-ranging sex abuse scandal uncovered by IndyStar, and played out dramatically last week in a Michigan courtroom, USA Gymnastics is in a fight for its life.

Corporate sponsors are bailing. Athletes are demanding reforms. Olympic officials are applying pressure. Criminal charges are possible.

And the Indianapolis-based nonprofit — once a cash-rich darling of the Olympic movement — is now squeezed between a self-inflicted public relations nightmare and a host of lawsuits that could cripple it for years.

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The problem, experts say, is USA Gymnastics officials need to be transparent if they hope to regain the public’s trust, while the lawsuits prohibit them from saying anything that would amount to an admission of guilt.

"Often in a crisis communications situation you will have the public relations folks in conflict with the general counsel or the attorneys," said Michael Wyland, partner in Sumption & Wyland, and consulting editor of Nonprofit Quarterly. "Both are looking at the best interest of the corporation, but they see the best interest of the organization in very different ways."

So USA Gymnastics finds itself in something of a bind as it attempts to weather a week of searing criticism. The resounding public relations blows were delivered during the sentencing hearing of longtime Team USA doctor Larry Nassar, who was ordered to serve up to 175 years in prison Wednesday after pleading guilty to sexually assaulting seven young girls.

"One of the key things to do is to over communicate," Wyland said, including making officials available. But USA Gymnastics and officials did not respond to written questions submitted for this story and new CEO Kerry Perry has said only that she would "look forward to the opportunity to meet sometime in the future."

USA Gymnastics faces lawsuits in Georgia, California and Michigan alleging its leaders failed to stop coaches and other officials from sexually abusing young athletes. And the first of those suits is headed for trial in April unless a settlement is reached. Either way, it is likely to be costly.

In such situations, Wyland said, the communication is often driven by attorneys and legal concerns, which makes it difficult to persuade stakeholders, such as athletes and sponsors, that meaningful change is on the horizon.

In an apparent effort to speed the pace of change, the U.S. Olympic Committee issued what amounted to an ultimatum last week: All members of the board of directors must resign by Wednesday, or USA Gymnastics would be stripped of its role as the Olympic national governing body.

But even USOC was careful not to imply USA Gymnastics was guilty of putting children at risk.

“We do not base these requirements on any knowledge that any individual USAG staff or board members had a role in fostering or obscuring Nassar’s actions,” USOC CEO Scott Blackmun wrote Wednesday in his directive to USA Gymnastics. “Our position comes from a clear sense that USAG culture needs fundamental rebuilding.”

On Friday, USA Gymnastics said it would "comply with the USOC requirements," which will mean it has to weather the storm with an entirely new governing board.

The board's top three officials have already stepped down, resigning Jan. 21 in the midst of the Nassar hearing. And its previous president, Steve Penny, resigned last year under pressure from the USOC.

Despite the loss of institutional memory, Wyland said, the turnover could represent an opportunity for USA Gymnastics to remake itself and address the underlying problems that have led to the crisis.

"The board is responsible for identifying the mission, the vision, the values and the goals or strategic priorities for the organization," he said. 

And it's precisely that vision that has come under attack from athletes and child advocates who say USA Gymnastics puts gold medals ahead of athlete safety.

Nancy Hogshead-Makar, a three-time Olympic gold medalist and prominent advocate for women’s sports, is skeptical of Blackmun getting tough on USA Gymnastics.

“My take on Scott Blackmun coming down suddenly is a move to cover his own past inaction,” she said. “He’s finally doing something. But is that actually going to protect children?”

The USOC didn’t exert pressure until it felt pressure of its own, just as it had in early 2017 when it called for Penny's resignation as the Nassar story gained attention. When IndyStar first reported in 2016 about USA Gymnastics' handling of sexual abuse complaints, the USOC had said there was no need to investigate.

Hogshead-Makar said it doesn’t matter to her whether USA Gymnastics is decertified. What matters, she said, is what steps are implemented to protect athletes.

“Decertification or getting new people on the board, I don’t think that’s how you get to a healthier sport,” she said. “It’s about giving athletes a voice. It’s about enacting basic child protection rules that every other youth organization has.”

Hogshead-Makar also wants to reduce the power administrators and coaches have over athletes by making them less relevant to advancing in the sport.

Jon Little, an Indianapolis-based attorney whose practice is focused on representing abused athletes in Olympic sports, agreed that the threat of decertification is not enough. If USAG is decertified, he said, it could just re-organize under a new name, such as Gymnastics USA.

He said if you're really serious about cleaning up Olympic sports, two things should happen: a change in Olympic committee leadership; and unionization of athletes, a theme that is also making its way into college sports.

Athletes need a seat at the table, Little said, otherwise they are treated like actors in a drama. Or worse.

Olympic gold medalist Aly Raisman is among those demanding fundamental change, saying the organization is "rotting from the inside." 

Federal lawmakers, too, are calling for a probe and the results of the Texas Rangers' investigation involving Nassar at the Karolyi Ranch have been submitted to the FBI. The ranch served for years as the national training center for the top women's team.

David Weeks, criminal district attorney for Walker County, Texas, where the ranch is located, did not rule out the possibility that criminal charges could be filed over failures to immediately report suspected child sexual abuse in the Nassar case.

USA Gymnastics initially told IndyStar it contacted the FBI "immediately" after learning of athlete concerns about Nassar's treatment, but later acknowledged it waited five weeks while conducting its own investigation. Texas law requires "any person suspecting that a child has been abused or neglected must immediately make a report."

Weeks told IndyStar last week that he has not been presented yet with any information from law enforcement.

“I’d have to look at the facts,” he said.

Meanwhile, major sponsors, including AT&T, Hershey, Kellogg's and Proctor & Gamble, have cut ties.

“If there’s no funding, there’s no organization," said David Carter, executive director of the Sports Business Institute at the University of Southern California. "And there’s been a wholesale, abrupt, overnight lack of confidence in their ability get anything done properly.”

Even if changes are made fast, Carter said, potential sponsors will still want to see how things play out. And that will take time.

“There are a number of other things that could elongate the damage,” Carter said. As events play out at Michigan State University, where Nassar was employed, and as the NCAA gets involved, Carter said, the public will be reminded of the USA Gymnastics scandal and brand.

"Those will be interconnected," he said, "for a very long time.”

Companies considering a 2020 Olympics sponsorship will budget for it next year, Carter said. Any such sponsorship, he added, will have to include a public relations strategy to explain why the company is investing in USA Gymnastics.

That said, attorney Brian Cornwell, of Cornwell & Stevens, who is representing a Georgia family suing USA Gymnastics, said he doesn't believe the organization will be forced into bankruptcy.

Insurance will pay most of the sexual abuse claims, he said, up to a certain dollar amount. And the organization has a $15 million endowment, according to 2016 tax records.

But USA Gymnastics will have to find a way to do more with less.

"The difficulty for USA Gymnastics going forward is they're going to have to do everything at once," said Wyland, the consulting editor of Nonprofit Quarterly. "They're going to have to continue to do their crisis communication. They're going to have to rebuild their internal systems, and at the same time they've got to prepare and execute all the competitions they typically do."

How that will happen is unclear, but Wyland and others emphasized the importance of communication in an organization that has mumbled a tepid message repeatedly.

"USA Gymnastics needs to demonstrate a serious commitment to changing the culture of their organization," explained Karmina Zafiro, a crisis communications specialist with Fineman PR in San Francisco.

"The resignation of board members is a step in the right direction, but they need to implement changes at every level. The organization also needs to facilitate a thorough investigation into other potential cases of abuse and implement measures that will prevent future scenarios in which abuse is systemically ignored. USA Gymnastics has a long road ahead before it can regain trust of athletes, their families, the USOC and the global community." 

At the hearings last week, no one seemed to mumble. Woman after woman, 156 total, spoke loud and clear about the abuse they had suffered at Nassar's hands. 

And the last to speak was Rachael Denhollander, who had been the first to come forward publicly. Her stirring 36-minute speech received a standing ovation, something rarely seen in a courtroom.

Perry, the USA Gymnastics CEO who had eluded the media, approached Denhollander during a previous day of the hearing.

"She said she would like to be able to sit down with me and discuss how to move forward," said Denhollander, who told Perry she liked the idea.

"And I mean that," Denhollander said. "If there's a way to move forward with these organizations, together, that’s best for the organization and the survivors. For the survivors to feel like they’ve been heard and taken seriously, and then move forward with the organization towards change, that's the best solution for everybody."

Call IndyStar reporter Tim Evans at (317) 444-6204. Follow him on Twitter: @starwatchtim.

Call IndyStar reporter Marisa Kwiatkowski at (317) 444-6135. Follow her on Twitter: @IndyMarisaK.

Call IndyStar reporter Mark Alesia at (317) 444-6311. Follow him on Twitter: @markalesia

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