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USA Gymnastics files for bankruptcy

US gymnasts Gabby Douglas, Madison Kocian and Simone Biles gather around to chalk up their hands while competing at the 2016 Olympics in Rio.

Used with permission/Wikimedia Commons

US gymnasts Gabby Douglas, Madison Kocian and Simone Biles gather around to chalk up their hands while competing at the 2016 Olympics in Rio.

Molly Parris, Reporter

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Dec. 7, 2017. This day marks the end of the sexual abuse scandal concerning Michigan State University osteopathic physician and national team doctor of USA Gymnastics, Larry Nassar. That’s what people thought. After being accused of sexually molesting 250 girls over the past 30 years, Nassar was sentenced to 60 years in federal prison with child pornography charges. His conviction continued on Jan. 18, 2018 when he was sentenced to 40 to 175 years in a Michigan state prison after pleading guilty to seven counts of sexual assault on minors. Some of the biggest names who spoke out about their abuse were Olympians Simone Biles, Jordyn Wieber, Gabby Douglas and Aly Raisman.

Almost a year later on Dec. 5, 2018, USA Gymnastics filed a voluntary petition for protection under Chapter 11 of the Bankruptcy Code Bankruptcy Court for the Southern District of Indiana. Cycling through three CEOs in less than two years, by filing for bankruptcy, USA Gymnastics hopes to continue to support its athletes while meeting their responsibilities and plans to resolve claims made by the survivors of the sexual abuse scandal.

Most of the accounts of sexual abuse happened in a time span dating back to 1992 all the way up until 2016. During this time, USA Gymnastics was under CEO Steve Penny. Penny began working for USA Gymnastics in 1999 as the senior vice president, overseeing areas focused mainly on business development. Then in 2005, Penny became president and CEO of the organization. His responsibilities expanded to oversee the marketing, sponsorship and event operations for USA Gymnastics, thus making no one suspect him of being involved with the Nassar cases. However, former Olympic gymnast Dominique Moceanu was at the forefront of accusing Penny of ignoring the abuse of gymnasts. Penny was questioned under oath and testified that USA Gymnastics rarely ever forwarded allegations of child abuse to the police or child protective services and would dismiss complaints unless they were signed by an alleged victim or victims parent. Penny resigned from his position in March of 2017 and was later arrested on Oct. 17, 2018 with charges of tampering with evidence during the investigation of Nassaar.

Since Penny resigned in 2017, USA Gymnastics hired Kerry Perry that November to be the new CEO of the organization. Perry was forced to resign from her position nine months later when the United States Olympic Committee threatened to de-sanction USA Gymnastics as the governing body. Senator Richard Blumenthal of Connecticut, who is a member of a subcommittee that oversees the USOC stated, “Throughout her disastrous nine-month tenure as president of USA Gymnastics, Perry demonstrated nothing but a willful and heartless blindness to the concerns of survivors who were abused by Larry Nassar.”

After Perry resigned, USA Gymnastics then hired former congresswoman Mary Bono. Her tenure lasted four short days as she immediately received criticism from both Raisman and Biles. John Manly, an attorney from California who represents over 100 women suing USA Gymnastics for its failure to stop Nassar, says selecting Bono as interim president was an insult to every survivor and shows their disregard for the safety of their athletes. He also comments, “USA Gymnastics should be decertified immediately as the governing body for gymnastics in the U.S. It should be replaced by a body with credible/competent leadership that includes survivors.” Since then, the entire board of USA Gymnastics was forced to resign by the USOC and almost every coach or coordinator on the elite national team departed.

Kathryn Carson, who was recently elected chair of the USA Gymnastics Board of Directors says, “We owe it to the survivors to resolve, fully and finally, claims based on the horrific acts of the past and, through this process, seek to expedite resolution and help them move forward.” She and the rest of USA Gymnastics believe the Chapter 11 filing and resolving these claims are the first steps in the right direction to gaining the trust of the gymnastics community. While this organization remains without a CEO, Carson continues to say, “We have made significant progress in implementing safety initiatives and are in the process of searching for a new CEO who has the experience to build a leadership team that will restore confidence in USA Gymnastics, and set and execute a clear vision for a successful future.”

In November, the USOC started to strip USA Gymnastics of their governing body status. Many people find this unsurprising, however this leaves over 200,000 athletes, coaches and judges with no other organization to administer the vast majority of competitions in the United States. Just as the USOC started to take action, USA Gymnastics filed for bankruptcy. The organization will not lose its power yet, as the bankruptcy claims put a pause on the decertification by the Olympic Committee. Estimating at about 75 to 100 million dollars just for USA Gymnastics to settle the lawsuits, Carson said the board decided it was best to have the bankruptcy board decide the claims regarding the money. USA Gymnastics is still negotiating with insurance companies on the coverage of some of these claims but the organization does not currently have the assets needed to pay for the lawsuits.

Recently making the news on Dec. 11, 2018, the law firm Ropes and Grap published a 233 page report that includes over 100 witness interviews over their 10-month investigation. This report stated that in 2015, Penny informed Alan Ashley, the USOC Chief of Sports Performance, and the USOC that national team members had presented a complaint of sexual abuse allegations against Nassar. Neither Ashley or his co-worker, Scott Blackmun shared this information with the other members of the USOC, specifically not informing any members of the Board of Directors or any members of the SafeSport team. Blackmun recently stepped down from his position in February due to health reasons and Ashley was fired based on the findings of this report.

An independent report includes that multiple law enforcements were involved in these cases regarding the sexual abuse scandal. Survivors began to publicly step forward and talk about their abuse but since these agencies failed to intervene, many women were shunned or shamed at first. The report concludes by saying, “The fact that so many different institutions and individuals failed the survivors does not excuse any of them, but instead reflects the collective failure to protect young athletes.” USA Gymnastics is now currently dealing with problems and further penalties to come as a consequence of the past.

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USA Gymnastics files for bankruptcy