Walker County will subpoena USA Gymnastics documents

USA Gymnastics acknowledged Thursday that documents sought by Walker County officials investigating the Larry Nassar sexual abuse scandal might be present at its offices in Indianapolis, and Walker County prosecutors said they would subpoena the documents.

The documents sought by Walker County, when delivered to investigators in Huntsville, could have an impact on the pending felony case against former USA Gymnastics president Steve Penny, who was indicted in September for tampering with evidence.

They also could enable Walker County prosecutors to determine if further charges are warranted regarding crimes committed at the Karolyi Ranch, the former national women’s training center for USA Gymnastics, by Nassar or others.

Thursday’s acknowledgement is the latest in an unpredictable, fast-moving chain of events involving the troubled sports federation. The U.S. Olympic Committee said Monday it will seek to remove USA Gymnastics as a national governing body, and USOC officials said Thursday that the discovery of potential evidence in Indianapolis led to that decision.

In a statement Thursday, USA Gymnastics said it sent a letter last week informing Walker County officials that it “possesses documents that might have come from the ranch that might be applicable to the investigation, though none of these documents contain Nassar’s name.”

USAG Financial Statement by Houston Chronicle on Scribd

Federation officials said they do not know if the documents are relevant or if they originated at the ranch. They said the documents would be provided if subpoenaed, and Stephanie Stroud, first assistant to District Attorney David Weeks, said a subpoena would be issued.

Houston attorney Rusty Hardin, who represents Penny, said the acknowledgment by USA Gymnastics that it possesses documents that could be relevant to the case “is just one more example of how this (case against Penny) should never have been filed.”

“It’s one more step along the way to everyone concluding that Steve did not do anything wrong, that he never had possession of documents and never tried to hide them,” Hardin said.

The impact of the documents on the Penny case remains to be seen, but they might have been the final straw for USOC officials in their efforts to seek management changes at USA Gymnastics.

“It played a role,” USOC spokesman Mark Jones said.

The New York Times was first to report on the USA Gymnastics document discovery and to report on its significance in the USOC decision to seek revocation of USA Gymnastics’ governing body status.

Walker County officials have been seeking evidence of potential crimes committed by Nassar or others at the Karolyi Ranch, owned by former longtime coaches Bela and Martha Karolyi and leased by USA Gymnastics as a training center, since January.

Several Olympic gold medalists, including Simone Biles, Aly Raisman and others, have said Nassar abused them at several locations, including the Karolyi Ranch, under the guise of medical care.

Indictments were returned in June against Nassar, who is serving the equivalent of a life sentence for federal child pornography possession charges and multiple charges of sexual assault in Michigan, and longtime USA Gymnastics athletic trailer Debbie Van Horn.

Prosecutors said they learned from congressional testimony that Penny in 2016 instructed that documents involving Nassar should be removed from the ranch and sent to headquarters in Indianapolis.

When the documents could not be located, they said, a grand jury in late September indicted Penny, who was dismissed from his job in 2017, for tampering with evidence, a third-degree felony.

Meanwhile Thursday, as first reported by Sports Business Daily, the extent of the Nassar scandal’s impact on USA Gymnastics was revealed in the federation’s 2017 tax return and its financial statement posted on the USA Gymnastics website.

USA Gymnastics, according to its financial statement, says its potential liability regarding potential Nassar-related litigation in Michigan, California and Texas could range from $75 million to $150 million.

Those estimates were based on lawsuits filed through last August. Attorneys in the Michigan and California lawsuits are working in mediation toward a potential settlement, but additional cases have been filed since August, including a California case last week filed by 2000 Olympic bronze medalist Tasha Schwikert and her sister, former national team member Jordan Schwikert.

“The fact that key documents were removed from the Karolyi Ranch by USAG is abhorrent and speaks to a much larger problem within the organization that extends beyond one single individual,” Waco attorney Michelle Simpson Tuegel, who along with Houston attorney Mo Aziz represents the Schwikert sisters, said Thursday.

USA Gymnastics said in its financial statement that it has “substantial amounts” of insurance coverage and that most of its legal fees are covered by insurance providers.

But the extent of USA Gymnastics’ financial woes in the wake of the Nassar scandal, which includes the loss of most of its major sponsors, was reflected in a $10 million drop in revenue to $24.6 million in 2017 from $34.3 million in 2016, which was an Olympic year. Most of that loss was covered under the marketing and events category on the balance sheet.

david.barron@chron.com
twitter.com/dfbarron

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