CEO was full of praise on verge of cri­sis

USA Gym­nas­tics leader lauded prac­tices be­fore scan­dal broke

USA TODAY International Edition - - SPORTS - Rachel Axon

In the spring of 2015, shortly be­fore USA Gym­nas­tics would learn its long­time team physi­cian was sex­u­ally abus­ing gym­nasts in what would be­come one of the big­gest sports scan­dals in his­tory, now former chief ex­ec­u­tive of­fi­cer Steve Penny praised the na­tional gov­ern­ing body as an ex­em­plar of best prac­tices.

USA Gym­nas­tics, Penny said in an in­ter­view, “has been on the front of de­vel­op­ing poli­cies re­lated to (safe sport and sex­ual mis­con­duct) for many, many years, and that threat as you de­scribe it has a lot of im­pli­ca­tions that can take you down if you don’t han­dle things cor­rectly.”

Penny has not spo­ken about USA Gym­nas­tics’ han­dling of sex­ual abuse com­plaints or his role in the process since he was forced out in March 2017. Fac­ing sev­eral law­suits, he in­voked his Fifth Amend­ment right against self-in­crim­i­na­tion at a Se­nate hear­ing last week.

But au­dio of that 2015 in­ter­view, which was ob­tained by USA TO­DAY, re­veals Penny’s mind-set on his job even as the or­ga­ni­za­tion was on the verge of the big­gest cri­sis the U.S. Olympic move­ment has faced.

“I mean, we feel like we’re pretty good right now,” he said.

Penny’s at­tor­ney, Edith Matthai, did not re­spond to ques­tions pro­vided by USA TO­DAY on Mon­day.

Since the 2015 in­ter­view, USA Gym­nas­tics has been mired in scan­dal af­ter rev­e­la­tions from hun­dreds of women and girls that long­time team doc­tor Larry Nas­sar sex­u­ally abused them un­der the guise of med­i­cal treat­ment. An in­ves­ti­ga­tion by The In­di­anapo­lis Star, which is part of the USA TO­DAY Net­work, in the sum­mer of 2016 re­vealed USA Gym­nas­tics poli­cies that al­lowed preda­tory coaches to re­main in the sport de­spite warn­ings to the or­ga­ni­za­tion.

USA Gym­nas­tics’ han­dling of sex­ual abuse com­plaints has spawned five con­gres­sional hear­ings in 14 months. The U.S. Olympic Com­mit­tee has hired Bos­ton-based law firm Ropes & Gray to in­ves­ti­gate what it and USA Gym­nas­tics knew about Nas­sar and when.

Shortly be­fore USA Gym­nas­tics learned about Nas­sar in June 2015, Penny lauded the or­ga­ni­za­tion and him­self for ful­fill­ing its mis­sion state­ment: “win medals, grow the sport, in­crease vis­i­bil­ity and pro­vide out­stand­ing cus­tomer ser­vice.”

“You want to take a pic­ture of a pro­to­typ­i­cal NGB, you take a pic­ture of us,” Penny said. “We’re win­ning medals. We’re the No. 1 coun­try in the world in the medals count. We have prob­a­bly one of the strong­est so­cial me­dia fol­low­ings in the Olympic move­ment, and the value of our so­cial me­dia ac­tions are as great as any­thing. Our spon­sor re­la­tion­ships are very solid. We do a great job of pro­mot­ing our events, our ticket sales. Every met­ric that I could pro­vide you is go­ing up. We have money in the bank. We have a pretty de­cent nest egg.”

‘Best prac­tice for the in­dus­try’

USA Gym­nas­tics and Penny faced ques­tions and le­gal threats about how they han­dled sex­ual abuse cases well be­fore Penny spoke in the spring of 2015 of the or­ga­ni­za­tion’s strong record on child pro­tec­tion.

In 2013, a former gym­nast filed a law­suit in Ge­or­gia af­ter her coach, Wil­liam McCabe, se­cretly video­taped her in states of un­dress.

USA Gym­nas­tics had re­ceived at least four warn­ings about McCabe but had not banned him, the plain­tiff ar­gued in the law­suit. McCabe is serv­ing a 30-year sen­tence af­ter plead­ing to fed­eral charges of sex­ual ex­ploita­tion of chil­dren and mak­ing false state­ments.

The law­suit re­vealed that USA Gym­nas­tics kept sex­ual abuse com­plaint files on at least 54 coaches dur­ing a 10year pe­riod end­ing in 2006. As part of the law­suit, Penny was de­posed in Novem­ber 2014. USA Gym­nas­tics reached a con­fi­den­tial set­tle­ment in the law­suit this year and did not ad­mit to wrong­do­ing or li­a­bil­ity.

His de­po­si­tion and oth­ers taken in the case, which were re­leased af­ter an Indy Star law­suit last year, re­vealed that USA Gym­nas­tics’ pol­icy dur­ing that pe­riod was not to for­ward al­le­ga­tions of child sex abuse to au­thor­i­ties un­less a vic­tim or vic­tim’s par­ent sub­mit­ted a writ­ten and signed com­plaint.

But Penny was con­fi­dent in the 2015 in­ter­view that USA Gym­nas­tics was ac­tu­ally a leader han­dling sex­ual abuse al­le­ga­tions.

“Since I’ve been CEO, one of our big­gest pri­or­i­ties has been to con­tinue to evolve that pol­icy and those pro­ce­dures about how we deal with those is­sues, to be as much a best prac­tice for the in­dus­try as a whole as it can pos­si­bly be, be­cause the ar­eas that you know you’re vul­ner­a­ble, you need to have poli­cies and pro­ce­dures that al­low it to work, so that you have a text­book that you can fol­low to guide you through some of the more dif­fi­cult top­ics that you may have to deal with,” Penny said in 2015.

“I think that’s the best ex­am­ple, so that when we find some­thing that’s re­ally, re­ally chal­leng­ing like that, we have poli­cies and pro­ce­dures that I rely on every step of the way, so that I can go back and say ‘What’s the next step?’ And if you’re ask­ing your­self ‘What’s the right thing to do?’ you go back to the pol­icy and say you fol­lowed the pol­icy.”

‘Big­ger and bet­ter’

Penny was right in that USA Gym­nas­tics was once con­sid­ered a leader in the U.S. Olympic move­ment in pre­vent­ing and re­spond­ing to sex­ual abuse.

In the 1990s, it was the first to cre­ate a list of per­ma­nently in­el­i­gi­ble mem­bers, some­thing many NGBs still don’t have to­day. It be­gan in­clud­ing pre­sen­ta­tions on sex­ual mis­con­duct aware­ness at its an­nual re­gional and na­tional con­fer­ence in 2005.

And in 2009, it cre­ated a par­tic­i­pant wel­fare pol­icy that de­fined sex­ual abuse and in­cluded rec­om­men­da­tions to help clubs cre­ate poli­cies to try to pre­vent abuse.

Penny, who joined USA Gym­nas­tics in 1999 and took over as CEO in 2005, was part of a USOC-cre­ated work­ing group that in 2013 rec­om­mended cre­at­ing an in­de­pen­dent en­tity to han­dle re­ports of sex­ual abuse for the NGBs.

The U.S. Cen­ter for SafeS­port opened last year and has re­ceived more than 800 re­ports in its first 15 months.

At the USOC’s open­ing news con­fer­ence for the Rio Olympics, then-CEO Scott Black­mun praised USA Gym­nas­tics as “one of the most vo­cal pro­po­nents of cre­at­ing very strong poli­cies, pro­ce­dures and in­ves­tiga­tive re­sources to take a look at this.”

Those com­ments came one day af­ter The In­di­anapo­lis Star’s in­ves­ti­ga­tion re­vealed four cases in which USA Gym­nas­tics failed to re­port al­le­ga­tions of child sex­ual abuse to au­thor­i­ties.

That led to the first pub­lic claims against Nas­sar in Septem­ber 2016, with Rachael Den­hol­lan­der con­tact­ing The In­di­anapo­lis Star.

By then, USA Gym­nas­tics was aware of is­sues with the doc­tor.

Ath­letes first ex­pressed con­cern about him to USA Gym­nas­tics in June 2015, though af­fi­davits sub­mit­ted to the Se­nate com­mit­tee show it was not im­me­di­ately clear sex­ual abuse was in­volved. Al­though USA Gym­nas­tics main­tained for months that it “im­me­di­ately” re­ported the con­cerns about Nas­sar to the FBI, it re­vealed in Fe­bru­ary 2017 that it waited more than five weeks while it hired a pri­vate con­sul­tant to con­duct an in­ves­ti­ga­tion.

Nas­sar, 54, is serv­ing a 60-year fed­eral sen­tence for child pornog­ra­phy charges. He was con­victed of 10 counts of sex­ual as­sault in Michi­gan and faces a min­i­mum of 40 years in prison af­ter his fed­eral sen­tence is over.

Olympic cham­pi­ons Si­mone Biles, Gabby Dou­glas, McKayla Maroney, Aly Rais­man and Jor­dyn Wieber are among more than 300 women and girls who have said Nas­sar abused them un­der the guise of med­i­cal treat­ment.

In law­suits against USA Gym­nas­tics and Penny, dozens of vic­tims have ac­cused the or­ga­ni­za­tion of valu­ing money and medals over ath­lete safety. The NGB and Penny have de­nied the claims.

A USA Gym­nas­tics-com­mis­sioned in­ves­ti­ga­tion led by former fed­eral pros­e­cu­tor Deb­o­rah Daniels re­leased in June 2017 found the NGB had failed to keep up with the kinds of poli­cies Penny had touted more than two years ear­lier.

By the time of the re­port’s re­lease, Penny was gone. In 2015, there were no ob­vi­ous out­ward signs of the scan­dal that would come to en­gulf the sport.

Penny touted the suc­cess of the or­ga­ni­za­tion.

“I’m not say­ing I’m re­spon­si­ble for ev­ery­thing, but I’m just say­ing that — I had a great pre­de­ces­sor that did a great job for the few years he was here. But my re­sults as CEO in the last 10 years are ar­guably and eas­ily, big­ger and bet­ter than any­body else that’s ever had this job.”

“Every met­ric that I could pro­vide you is go­ing up. We have money in the bank. We have a pretty de­cent nest egg.”

Steve Penny Former USA Gym­nas­tics CEO, speak­ing in 2015

MATTHEW DAE SMITH/USA TO­DAY NET­WORK

Larry Nas­sar was sen­tenced to 60 years on child pornog­ra­phy charges.

JACK GRU­BER/USA TO­DAY

Former USA Gym­nas­tics CEO Steve Penny in­voked his Fifth Amend­ment right against self-in­crim­i­na­tion at a Se­nate hear­ing.

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