Monday, Jan. 25, 1999
How The Olympics Were Bought
By Robert Sullivan
June 16, 1995: It's announced that Salt Lake City has won the right to be host of the 2002 Olympic Winter Games. Grumbling from press row. "Trouble ahead," says a grizzled veteran of the Games with a sigh. "Mormon morals--that'll bring 'em down."
"Yeah," says his buddy. "I hear the bars close at 11!" How can you hold an Olympics in such circumstances?
What wasn't presaged by even the most knowing, most inside, most keen-nosed Olympics hound was that, more than three years before any torch lighting, the head of the Salt Lake Organizing Committee--a fine Mormon he was--would be brought down by a spousal-abuse charge, and his successor and others would fall in a huge, still widening bribery scandal. Salt Lake City wanted to hot up its image for the Olympics, and today it has no worries.
In that regard, at least. On other matters--whether it can put together an untainted administration to oversee the Games, whether it can raise enough money to support the Games, whether its reputation as an oasis of virtue in a desert of iniquity is forever forfeit--Salt Lake has nothing but woe. "We are stunned and bruised," said Utah Governor Mike Leavitt, who along with Salt Lake mayor Deedee Corradini controlled appointments to the S.L.O.C.'s board of trustees. "This does not represent the values of this community."
"People are saying, 'How could it happen here, with our high moral standards?'" echoed Corradini, who had lobbied hard and glamorously for the Olympics, and had joyously accepted the five-ring flag during closing ceremonies at last year's Games in Nagano, Japan. "It has tarnished our reputation." Hers, not least. Last week she announced that she would not run for a third term in 2000, though she had dearly wanted to preside over the Olympic festival.
After the instinct to lament passed, the instinct to point fingers took over. "We revolt at being associated with them," Leavitt said of a Salt Lake bid committee that had, in the years preceding the International Olympic Committee's vote on the 2002 site, crossed the palms of I.O.C. members with silver, scholarships for their kids, fancy guns, cowboy hats, skis and other booty that reportedly included call girls. While acknowledging bribery, Leavitt also implied extortion, by way of a "sinister and dark corner of corruption." Robert Garff, a local car dealer and now, gamely, third at bat as S.L.O.C. czar, said, "I can't say our hands are clean, but the system has been flawed for years. So in some sense we're victims." Of whom? Fingers pointed at an I.O.C. that allegedly demands favors for favoritism.
Who's to blame is being sorted out by five separate investigations--the S.L.O.C.'s own; the U.S. Olympic Committee's, chaired by gadfly troubleshooter George Mitchell; the Justice Department's; a U.S. House of Representatives inquiry into whether laws prohibiting the bribing of foreign officials have been broken; and the I.O.C.'s, which could result in the resignation or expulsion of as many as nine of the body's 114 members, plus sanctions for four others. These reports, due to be issued during the next several weeks, will depict a system so systematically corrupt that it might easily have blinded the good folk of Salt Lake to reality. Whether the disclosures will be enough to deprive Salt Lake of the Games or topple the autocratic--some say dictatorial--18-year regime of I.O.C. head Juan Antonio Samaranch is doubtful. But the investigations will reveal certain things: that the leaders of S.L.O.C. were not present-day saints, that Samaranch is either delusionary or hypocritical to a Clintonesque degree, and that the relationship between the Olympic movement and the U.S. involves good measures of fear and loathing--fear that the money will go away, loathing for the other guy's values.
All the problems began in America--not in Salt Lake, but in Los Angeles. The 1976 Montreal Games had dutifully lost millions of dollars, and the 1980 Moscow Games, boycotted by the U.S., didn't make a ruble. The Winter Games, always staged in nice little Currier & Ives villages, had seldom turned a profit. Therefore, naturally, no sane city wanted to play host to the Games. Then, in 1984, Peter Ueberroth and his Los Angeles organizing committee put on a splashy, TV-friendly, penny-squeezing Olympics that netted $220 million. Suddenly suitors were turning handsprings before the I.O.C., each performing citius, altius, fortius than the last. Two cities had asked for the '84 Games, but in 1985 a dozen came begging for the '92 Winter Games, and six vied for the summer events. What they were willing to do, and what it all might lead to, was evident from the get-go. Brisbane flew lobsters, kiwi fruit and its mayor from Australia to East Berlin for a 1985 I.O.C. meeting, then hired a hotel staff from across the Wall to cater. The lunch tab was $1.9 million. Sofia's bidders, who had put out a meager $50,000 buffet, trudged glumly back to Bulgaria. (As if even Brisbane had a chance! The competition that season included Barcelona, Samaranch's hometown. Guess who won.)
The great skier Jean-Claude Killy had earlier helped Albertville, France, secure the rights to the '88 Winter Games, and remembers how quickly things were evolving. "We didn't offer trips and lodging. We gave them little gifts, souvenirs like Savoyard knives and pens," he says. "Then the stakes became much more considerable."
Salt Lake City was already a player in this transitional era, and was learning, painfully, how the game was changing. In 1984 and '85, Mayor Ted Wilson oversaw Salt Lake's effort to become America's bid city (the U.S. Olympic Committee designates one town to be the U.S. contender before the I.O.C. picks a winner). The two finalists were Salt Lake and Anchorage, which frankly didn't have a snowball's chance of ultimately being chosen by the I.O.C. "We did very little entertaining because we had been told not even to contact U.S.O.C. members," Wilson recalls. "So we go to Indianapolis in June of 1985, and we lose." He was baffled. "Anchorage is dark, doesn't have any venues, doesn't have nearly the culture we did." Back in Salt Lake, Wilson started hearing about fishing trips to Alaska by U.S.O.C. delegates, hunting trips, helicopter rides. "Whether those were rumors or not, we said, 'We screwed up. Anchorage schmoozed and we lost. Next round, we're going to schmooze big time.'"
Anchorage, meanwhile, was learning that courtship with the U.S.O.C. was kiss-on-the-cheek stuff compared to a tango with the worldly, rouge-lipped, fire-breathing I.O.C. Rick Nerland, an advertising executive who served as the Anchorage bid's executive vice president, said last week that he was approached twice by agents who asked up to $30,000 for a bloc of I.O.C. votes. "I was disappointed that the person was intimating that that went on," he said. "We dismissed it on the spot." Also resistant were officials from Toronto and Amsterdam, who reported similar shakedowns in the 1980s, as well as a Swedish hospitality hostess who alleged that she had been asked to have sex with an I.O.C. member--for the good of her country.
Not everyone said no, and soon reports were rife in the Olympic community of five-star boondoggles and outright fraud. You just weren't a self-respecting I.O.C. member if you weren't demanding first-class travel. You were something of a boob if you weren't cashing in those tickets, buying coach and keeping the change. Where once Killy gave out pens, suitor cities now offered furs, jewelry and fine wines. Robert Helmick, a former I.O.C. member and U.S.O.C. president who resigned in 1991 when it was alleged that he had violated U.S.O.C. conflict-of-interest guidelines by representing clients linked to the Olympics (he later was cleared of any wrongdoing), remembered keepsakes suddenly escalating from "nice things to exorbitant things." At I.O.C. confabs, members were seen rolling dollies laden with gifts to their hotel rooms; at one meeting a makeshift parcel-post office was set up to wrap and ship "souvenirs" to delegates' homes. Helmick's wife surveyed the scene and termed it "legal bribery." Helmick told TIME that his wife saw I.O.C. delegates from the East bloc returning from shopping trips with bid officials, laden with Escada clothing and other $500 purchases. The I.O.C. could no longer claim such solicitation was "just rumor." In 1986 the committee put a $150 limit on gifts and insisted that travel tickets be nonrefundable.
Which slowed the flow of largesse not even a little. The situation reached its apex--or nadir, if you prefer--in the bidding for last year's Winter Games, won by Nagano. By 1991 Salt Lake City, always a suitable site and now represented by a savvy bid team, had grown to be an odds-on choice. But Yoshiaki Tsutsumi, then one of the world's richest men, had a dream: an Olympics in Nagano. "When I speak, 100 politicians jump" was his calling card. When he said he wanted to be president of Japan's Olympic committee, that group said sure. When he said he wanted to bring the Olympics to Nagano, many said, "But we've got no facilities. We've got lousy snow. Are you kidding?"
Tsutsumi doesn't kid. He met with Samaranch at a Tokyo hotel and discussed the I.O.C. head's pet project: an Olympic museum on the banks of Lake Geneva in Lausanne. Tsutsumi lined up 19 Japanese corporations, and together they contributed $20 million to build Samaranch's hall of fame. Tsutsumi was awarded the Gold Olympic Order, and Nagano was eventually awarded the Games, by four votes out of 88 total. On 60 Minutes, Helmick said of the Tsutsumi tsunami, "There's nothing wrong with Japanese industrialists donating millions of dollars to Samaranch's project. There is something wrong with Samaranch or someone else on the I.O.C.--and I'm not saying it happened--turning around and voting for Nagano because of it." Samaranch, as is his habit, said money spent to lure the Olympics had nothing to do with him: "Nobody's pushing them to spend this fortune or not to spend this fortune."
To which Salt Lake organizers would answer, Baloney. After they'd lost to Anchorage, they were ticked. Now they were seriously, seriously p.o.'d. It wasn't just the end-around with an Olympic museum; it was allegations that Nagano organizers had secured the services of agents who promised to deliver votes for huge fees. In 1994 a citizen's group in Japan filed a criminal complaint against Nagano's mayor and the prefecture's governor for allegedly destroying documents said to detail how $18 million in public and private funds were used in Nagano's bid. The case was thrown out, but last week a former Nagano committee official disclosed that a 90-volume financial record of the bid process had been destroyed in 1992 because it contained "secret information." And Nagano mayor Tasuku Tsukada reversed previous denials and admitted to TIME that Nagano's campaign had paid $363,000 to a Swiss-based agency run by Goran Takacs, son of Samaranch's friend Artur Takacs. Tsukada insisted the agent was retained only to act as liaison with I.O.C. officials, "not to collect votes, as people are saying happened in Salt Lake City."
"We just knew Nagano wasn't playing it straight," says Kim Warren, international relations coordinator for the Salt Lake Olympic bid committee in 1990 and '91. "You can't believe the crap they were pulling. We were giving out saltwater taffy and cowboy hats; they were giving out computers." She is harsh on Samaranch. "He had to fly in on a private jet. He had to stay in the presidential suite--it had to be the finest room in the city. There was a particular type of NordicTrak he works out on, so we had to get that piece of equipment. We had to have limousines for him--Lincoln Town Cars weren't good enough. That was the example he set."
As Warren implies, Salt Lake City played along. Maybe not happily, maybe grudgingly, but Salt Lake City played along. The bid committee found the limos and the NordicTrak. It arranged for the room.
And it lost out again. So it upped the ante once more. Past officials of Salt Lake's 2002 bid committee now admit that the munificence extended toward I.O.C. members in the form of contributions, scholarships and health care was worth hundreds of thousands of dollars. Furthermore, the Salt Lake Tribune reported that the committee spent nearly $10,000 on six shotguns and rifles that went to Olympic officials, including Samaranch. (The president said it's O.K., because he doesn't vote for the host city. But even his deputy, I.O.C. vice president Dick Pound, has said Samaranch possesses "the loudest nonvote anyone can imagine.") Governor Leavitt's office confirmed that an internal ethics panel of the S.L.O.C. was investigating allegations of prostitution, including whether some committee members' credit cards were used to pay for escort services for visiting I.O.C. members. And sources close to the S.L.O.C. probe say only about 2% of the bid committee's spending has been analyzed.
The former S.L.O.C. and bid-team members who have admitted to the payments have had a harder time admitting to wrongdoing. Their attitude is, "Quid pro quo? Nah--we're humanitarians." Thomas Welch, the leader of the bid and organizing committees who resigned after pleading no contest to a spousal-abuse charge in 1997, told the Salt Lake Tribune he and other boosters did nothing wrong in their pursuit of Olympic glory. "Never, not once in all that time, seven years, did an I.O.C. member offer a vote for money," he insisted. "I never offered anything to get anyone to vote for us... If you measure our conduct the way people in this city do business, it's no different. You support your friends and their causes, and that's what we tried to do."
David Johnson, former senior S.L.O.C. vice president, was more direct and equally eloquent in responding to the charges. When a TV crew showed up at his door last Monday to ask about his resignation from the committee, Johnson yelled at the woman reporter, grabbed her microphone, kicked the male cameraman and seized his camera. Which is to say, No comment.
City councilwoman Deeda Seed sees corruption, not humanitarianism, in the S.L.O.C.'s behavior. "They basically operated in secret, in executive sessions. Where were the tough questions that should have been asked? We're a very naive place," she says. "Things went wrong because in our cultural orientation, hard questions aren't asked about accountability. It's impolite."
Hard questions are being asked today by those who stand to lose almost as much as Salt Lake if this mess isn't cleaned up. "If I were a corporate sponsor, I'd want this resolved quickly," says Seed. Rest assured: the sponsors want it resolved more quickly than that. US West briefly withheld a payment of $5 million to the S.L.O.C., and if the committee is unable to raise $242 million more in the next year, it will face a shortfall on its $1.4 billion budget. The buzzards are circling. Innsbruck and Calgary, both former Winter Games sites, have cheerfully announced that they stand ready to be host of the '02 Games, should their dear friends in Salt Lake be unable.
The Olympic movement has a trillion minor and a dozen major sponsors worldwide. These big guns include Coca-Cola, Visa, IBM and Time Inc. Each sponsor kicks in approximately $50 million over a four-year period for the "festoon"--the right to use the Olympic rings in corporate promotions. Then there is NBC, which has paid $3.5 billion for the rights to all five Winter and Summer Games between 2000 and 2008. A spot poll by TIME indicates none of them are amused. David D'Allesandro, president of John Hancock Mutual Life Insurance, a company with festoon privileges, said the I.O.C. must do an earnest investigation of the malfeasance--and not just in Utah--followed by a thorough purge. "If they fail to do that and something else comes up, the rings won't be tarnished, they'll be broken," he said. "If they attempt to simply line up 12 I.O.C. members and shoot them and think they can go back to Switzerland, they're wrong. They can't come back a year from now and say, 'Oops, here's another one; there was a leak, and we happened to hear about it.' Boardrooms will shake if this is mishandled. That includes NBC's." He expects future sponsorship deals with the I.O.C. to contain some sort of morals clause, which will be particularly galling to an organization that has made a tough-cop reputation by busting teenagers for taking the wrong nasal spray before the 400-m backstroke.
While Salt Lake City seems to be subjecting itself to the lash with puritanical zeal, early signs are not good that the I.O.C. will be similarly contrite. Asked by TIME about his group's investigation, Samaranch said, "We heard some rumors and dispatched I.O.C. director Francois Carrard to investigate. When he got there, he was assured that everything was straightforward and above-board. Now that we have the facts, we intend to take action and rid the I.O.C. of all corruption. Let's not forget that it was just a handful of individuals who acted improperly."
This has ever been his approach. The I.O.C. under Samaranch avoids trouble until someone--often someone in the U.S.--says it is trouble. He doesn't much care for all the rules that maintain in the U.S. When U.S. track star Butch Reynolds, despite having failed a doping test, obtained a Supreme Court order allowing him to compete in the 1992 U.S. Olympic trials, Samaranch considered requiring athletes to sign an agreement waiving their right to sue the I.O.C. in doping cases. (The idea could never have worked in a democracy, and was abandoned.) When Samaranch wasn't happy with his own testimony in the 60 Minutes story on Nagano, particularly the part about being proud of past associations with Franco's Fascist regime, he sought, in vain, to have his interview retaped. And now this: four U.S. investigations, at least two of them criminal investigations, digging into the I.O.C.'s long-standing tradition of gift giving.
Certainly Samaranch wishes this never had happened. But whom does he blame?
--Reported by Cathy Booth and Anne Palmer Peterson/Salt Lake City, Donald Macintyre/Tokyo, Sylvester Monroe/Atlanta, Thomas Sancton/Paris, Robert Kroon/Geneva, with other bureaus
With reporting by Cathy Booth and Anne Palmer Peterson/Salt Lake City, Donald Macintyre/Tokyo, Sylvester Monroe/Atlanta, Thomas Sancton/Paris, Robert Kroon/Geneva, with other bureaus