Donna Shalala’s conflicted interest at US Soccer exposed as central point in lawsuit
Lawyers defending Donna Shalala and rest of the US Soccer Federation’s Board from a personal lawsuit just accidentally previewed their legal defenses in a New York court hearing, which exposed that they’re probably going to lose the case, badly.
Shalala and the US Soccer Board voted to kill the North American Soccer League (NASL), an emerging competitor to Major League Soccer (MLS), whom she and the rest of the board favor, while engaging in a tremendously conflicted business relationship that has sent a billion dollars in television money rolling towards the struggling league’s ownership group.
Donna Shalala was supposed to be an Independent Director, but instead she began doing public business with MLS, which included a stint as their illegally unregistered lobbyist when she sought public land for a stadium deal including her former employer’s football team, the University of Miami, and a Miami MLS team.
That created a major conflict of interest.
But Shalala was in charge of US Soccer’s Risk, Audit and Compliance committee, meaning that she would’ve had to report the conflict of interest to herself, then to the non-profit’s general counsel, and at that point to resign and seek re-appointment as a regular board member.
She didn’t.
Donna Shalala continued in office until earlier this year, right after US Soccer was sued for anti-trust violations in federal court by the NASL, but before she was personally sued for her role in shutting down their league.
Now, her attorneys made a legal error in arguing their affirmative defenses during a dismissal hearing in New York Supreme Court while defending Shalala and the rest of the board from the NASL’s lawsuit accusing them of breach of conflict of interest, duty of loyalty, breach of fiduciary duty and other grounds.
They said in court:
US Soccer’s lawyers are arguing that because they used independent directors, like Shalala, they should be insulated from the conflicted decisions that they made.
However, Donna Shalala’s illegally undisclosed lobbying will blow that argument clear out of the water once the case moves into the trial phase, which is expected any day once Judge Andrea Masley renders a decision on the dismissal hearing which took place last month in her New York City courtroom.
Donna Shalala literally slept through the key hearing where US Soccer decided to kill MLS’ competition.
Shalala’s tenure at US Soccer coincided with a nearly $15 million accounting error that could represent missing money or merely incompetence according to sports governance experts.
What makes Shalala’s tenure at US Soccer so unusual is her open admission that the organization failed miserably in the last ten years, from losing World Cup bids from Russia to Qatar, to missing the Men’s World Cup last year. She wrote about it in a Trump-like tweet last year, without admitting her own role in the debacle.
Donna Shalala is running for Congress in Miami today, but has refused over a half dozen invitations to give comment about her role in US Soccer, about destroying an endangered forest to give college scholarships to students at her university where she was an executive, or about the other personal lawsuit she’s fighting stemming from ignoring a billion dollar Medicare fraud while on the board of United Healthcare.
Shalala would not even speak off the record about these issues during her six months long run for Congress. Today is the primary election day.
Here is the complete transcript:
