The international LGBT sports organization that chose Cleveland over D.C. and Boston for the 2014 Gay Games has taken steps to oust the non-profit foundation it selected last fall to organize the quadrennial sports competition.

The Federation of Gay Games’ decision to begin a process to revoke the license it awarded last year to the Synergy Foundation to organize and operate the 2014 Gay Games fueled speculation about whether Federation officials might seek to move the multi-million dollar athletic competition to D.C., which was deemed the runner-up city for hosting the event.

Cleveland city officials and an FGG spokesperson sought to dispel the speculation this week, saying they expect the Gay Games to take place in Cleveland as planned, although they would not comment on which entity would organize the event.

The Gay Games usually draws thousands of athlete participants and spectators from Europe, Latin America and all parts of the U.S. and Canada for two weeks, generating several million dollars in revenue for the host city. The Olympic-style competition includes sporting venues ranging from soccer and swimming to track and field events, among many others.

Last September, the FGG stunned officials with the Metropolitan Washington Gaymes, Inc., the group that organized D.C.’s bid for the Gay Games, when it announced its selection of Cleveland as the host city for the 2014 games.

The D.C. group, which had the full support of Mayor Adrian Fenty, the City Council and local business, tourist and sports groups, expected to win the bid, saying it had put together an unprecedented proposal for the games that included the use of the Washington Nationals Baseball Stadium.

FGG officials said D.C., Boston and Cleveland each submitted equally impressive and acceptable bids from a logistical and organizational standpoint. They noted that they chose Cleveland because it represented a region less advanced in LGBT rights and acceptance than D.C. and Boston and that holding the Gay Games there would have a greater impact on LGBT equality.

Recently, though, the LGBT sporting news blog, Out Sports, and the Cleveland-based LGBT news publication, Gay People’s Chronicle, have reported learning from inside sources that the FGG is dissatisfied with the work performance of Synergy Foundation, the Cleveland-based group it licensed last September to organize and operate the games.

A July 7 letter from Traci Nichols, director of Cleveland’s Department of Economic Development, which was leaked to the media, says the FGG was “exercising its right to terminate the license agreement with Synergy for the 2014 Gay Games in Cleveland.”

The letter says the FGG had also agreed to “pursue voluntary mediation within fourteen days to attempt to resolve the outstanding issues.” The letter does not disclose the issues.

However, it says that Synergy failed to submit to the city a required project report due June 1.

“In light of the notice given to Synergy by the FGG, the City hereby notifies Synergy that it is suspending any further payments to Synergy until the outstanding issues between the FGG and Synergy are resolved and Synergy continues to hold the license for the 2014 Gay Games,” Nichols says in the letter.

Andrea Taylor, a spokesperson for the city, said officials would have no further comment on the matter. She noted that any additional information would have to come either from the FGG or Synergy.

Spokespersons for the two groups did not immediately return calls this week seeking comment. In a statement released on its web site, Synergy said it was optimistic that the “issues” between itself and the FGG would soon be resolved and organizing for the 2014 Gay Games would proceed as scheduled.

With the selection of a host city made more than four years in advance, the organizers and representatives of the host city of the next Gay Games traditionally appear at the current year’s games to promote the future event.

But this tradition is expected to create an awkward situation for the FGG and Cleveland officials as the FGG grapples over whether to oust Synergy Foundation from its role as organizer of the 2014 games.

Gay People’s Chronicle reports that “financial irregularities and reporting issues” appear to be among the reasons the FGG has taken steps to revoke Synergy’s license to organize and run the 2014 Gay Games.

Vince Micone, president of Metropolitan Washington Gaymes, said a member of the FGG board informed him about a week ago that the Synergy Foundation’s license to operate the games was in “mediation.” According to Micone, the board member gave no further details, saying only that bidding organizations in D.C. and Boston were being notified of the matter as a “courtesy.”

“Our first priority right now is to make sure the 2010 Gay Games are successful,” said Micone, who noted that a contingent of LGBT athletes from D.C. will be participating in the games set for July 31 through Aug. 7 in Cologne.

“We continue to be very supportive of the FGG and the Cologne games,” he said. “We don’t know what the situation is in Cleveland. All I know is what I’m reading about this in the media.”

Asked if D.C. could put together all of the components of its bid for a D.C.-based Gay Games if the FGG should choose to move the event to D.C., Micone said that would be possible.

“But it’s a moot point since we have not been asked,” he said. “If we were asked, we would consider it.”