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Steve Penny Steps Down As USA Gymnastics President; Could Total Overhaul Be Coming?

USA Gymnastics President & CEO Steve Penny resigned on Thursday, one week after the USOC pressured the NGB to act amid growing criticism of Penny’s response to a sex abuse scandal. USAG Chair Paul Parilla said, “We have accepted Steve’s resignation and want to thank him for his contributions and dedication to USA Gymnastics over the years." Parilla will lead the NGB on an interim basis. Penny joined the organization in '99 and took on his current title in '05. He oversaw a major expansion in corporate sponsorship portfolio, event revenue and TV exposure as the team enjoyed unprecedented success at the Olympics. In recent months, Penny and the organization have come under fire for not responding forcefully enough to gymnasts’ allegations of sexual abuse by former women’s team doctor Larry Nassar, who now faces numerous criminal charges and civil suits, some of which name the NGB and Penny as co-defendants. USOC Chair Larry Probst said the announcement "will hopefully allow USA Gymnastics to shift its attention to the future with a secure environment for its athletes and continued success in competition." Penny on Thursday released his own statement, which read in part, “It has been heartbreaking to learn of instances of abuse and it sickens me that young athletes would be exploited in such a manner. ... My decision to step aside as CEO is solely to support the best interests of USA Gymnastics.” USAG will initiate a national search for a replacement. It is awaiting the findings of an investigation led by Indianapolis-based lawyer Deborah Daniels into its response to the allegations. One sponsor, Int’l Gymnastics Camp in Pennsylvania, terminated its contract with USAG. But others, including Procter & Gamble, Kellogg’s, Chobani and Under Armour, have been silent (Ben Fischer, Staff Writer). 

NOT RELATED TO PERFORMANCE
: The WALL STREET JOURNAL's O'Brien & Futterman note Penny "becomes the most high-profile casualty of a scandal that began last September." Penny has "overseen three resoundingly successful Olympic games with the U.S. National team." According to tax documents filed by USA Gymnastics, which is a non-profit, Penny "earned more than $557,000 in total compensation" in '14. But recently unsealed legal filings "suggest that the organization has struggled with how to respond" to the abuse accusations (WALL STREET JOURNAL, 3/17). USA TODAY's Armour & Axon note U.S. gymnasts have "won 100 medals at the Olympics and world championships" since Penny took over in '05, and the women have "emerged as the world’s dominant team." The U.S. has "won the last two team titles at the Olympics, as well as the last four all-around titles" (USA TODAY, 3/17). The AP's Graves & Pells wrote the "gregarious Penny -- whose booming voice and penchant for wearing eye-catching shoes during big events made him stand out in a sea of gymnasts," oversaw "one of the greatest runs in Olympic history" (AP, 3/16). 

STILL WORK TO BE DONE: In Indianapolis, Alesia, Evans & Kwiatkowski in a front-page piece note observers are hailing Penny's resignation as a "key step in changing a culture." California-based Bernstein Crisis Management President Jonathan Bernstein said that USAG had "little choice but to act." He said, “This could have destroyed the organization if it hadn't been handled correctly." But Dominique Moceanu, the youngest U.S. gymnast to win a Gold Medal, said that Penny's resignation is "not the solution to longstanding problems." She said, "There still is a lot more work that needs to be done. This is the first step of many that need to occur.” She said that USAG also "needs leadership that is open, transparent and puts the welfare of athletes ahead of everything else." Rachael Denhollander, one of Nassar's alleged victims, said she is "disheartened to see that there still has not been a recognition of the deep failures" of USAG. Denhollander: "USAG still has not taken responsibility for, or even admitted, those failures and the serious ramifications they have had" (INDIANAPOLIS STAR, 3/17). 

CHANGE IS GONNA COME? In California, Scott Reid reports instead of "celebrating Penny’s long-sought resignation, gymnasts and their supporters stepped up their demands for a complete overhaul of USA Gymnastics." Orange County-based attorney John Manly, who is representing several USAG accusers, said the organization is "rife with sleaze." Sources said that USAG also is "anticipating legislative action in California," and has "hired a Sacramento lobbying firm." Penny’s removal "isn’t likely to diminish scrutiny of USA Gymnastics’ handling of sexual abuse cases during a U.S. Senate hearing scheduled for March 28." Penny has been "described as an arrogant bully by his growing number of critics." Several former gymnasts and their supporters yesterday insisted that a "top-down purge of the USA Gymnastics board and administration is needed" (ORANGE COUNTY REGISTER, 3/17).

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