USOC went too easy on Ward

CEO's conduct violation should not go unpunished

A few weeks after Lloyd Ward took over as CEO of the U.S. Olympic Committee, he helped his brother set up a business in the Dominican Republic -- which just happened to be the site of the 2003 Pan Am Games. In a letter dated Feb. 19, 2002, uncovered during an investigation of Ward, brother Rubert thanked Lloyd for his help with his "business plan," among other things, and asked for a $150,000 investment in the fledgling enterprise.

Lloyd Ward denies that he invested in his brother's business. But sources say Ward did admit to the USOC executive committee that, after helping his brother write a business plan, he passed all the paperwork on to the USOC staffer responsible for the Pan Am games. The staffer, Hernando Madronero, then paved the way for Rubert to meet with leaders of the Pan Am Games committee and allowed him to bid on $4 million contract.

Although Lloyd Ward's violation of USOC ethics rules is instantly and conclusively obvious, his misconduct goes well beyond the apparent. More discouraging is the response of the USOC leadership to Ward's improprieties.

When Ward intervened on behalf of his brother for the Pan Am Games, he was moving beyond his authority as the CEO of the USOC. According to the USOC constitution and bylaws, [judgment on] or [the handling of] international matters is the responsibility of the volunteer president of the organization. It's part of a long tradition of volunteer leadership on international issues among all nations participating in the Olympics. Ward had no official authority to to be involved in Pan Am Games preparations; his only leverage was his clout as CEO, yet another violation.

After he tried to help Ward's brother, what was Madronero's reward? Madronero says Ward asked him to report for duty at 7 a.m. one day in October 2002. He showed up and was summarily fired. On Ward's order, Madronero was escorted out of the building and not permitted to say goodbye to his staff. Although Madronero won't talk about the incident because of a confidentiality agreement he says signed per the USOC's demand, a witness says Madronero asked Ward, "How can you do this to me after all I've done for your brother?"

Unfortunately for Ward, according to sources Madronero kept documentation of his efforts on behalf of Ward's brother, even recording a voice mail from Rubert Ward expressing gratitude to Madronero for setting up the meeting with the Pan Am Games leadership in Santo Domingo.

Helping family, going beyond his authority, firing the official who could describe every thing that happened -- that isn't all Ward did. Under USOC protocol, if a commercial opportunity comes along the organization's first obligation is to help its sponsors and its suppliers. A chance at the contract for the Pan Am Games should have been offered to Agrekko, the company that performed the same service for the USOC at the Winter Games in Salt Lake City. Although officials of Agrekko have not commented on the record, sources say they are furious with Ward and the USOC.

In the face of these egregious violations, the suits who run the USOC should have been appalled. Were they? Perhaps, but for the wrong reason. USOC officials were upset once again that the organization's CEO was in hot water. Ward was supposed to be the answer, someone who could lead the USOC out of seemingly endless and humiliating turmoil. But rather than address the issues raised by Ward's behavior, USOC leaders worried instead about media and public perception. First they tried to explain that Ward should have been counseled on what is right and what is wrong. Then they admitted it was a "technical" violation of USOC rules. None of this worked. Finally last weekend they admitted that Ward "screwed up" and his conduct was a "violation." But they decided not to fire him. The loss of another CEO, the fourth in four years, would have been just too embarrassing.

Even those admissions were made only in an attempt to curtail media coverage. Acting president Bill Martin, athletic director at the University of Michigan, twice begged reporters to "help us support our athletes. We've got to work together."

Ward and Martin view themselves as victims. " We've been battered here. Lloyd's been pounded," Martin claims. Ward adds, "I've been hit with body blows. I've been hit with head shots."

Ward, who serves on the board of directors of General Motors, the "official domestic automotive partner of the U.S. Olympic Team," was asked whether there might be a potential conflict should the USOC approach another automaker as a sponsor. His reply: "I am able to serve both the Olympic movement and General Motors. The world is connected. This is the way things work. I feel privileged to be in this position."

Ward's actions echo those of Alan Eagleson, the disgraced founder of the NHL Players' Association. For years, Eagleson exploited certain angles for the benefit of himself and his family. Finally, after a series of investigations by Russ Conway of The (Lawrence, Mass.) Eagle-Tribune, Eagleson's conflicts of interest -- and ultimate admission of guilt to several charges of theft and fraud -- landed him in prison in Ontario.

Ward and the USOC leadership appear to be more worried about media coverage than they are about the genuine problems facing their organization. The obstacles are obvious, and Ward may be one of them. With the USOC more concerned about sweeping this controversy under the rug than initiating reform, it will be up to a Congressional committee headed by Senator John McCain to address the myriad problems and find solutions.

Sports Illustrated legal analyst Lester Munson regularly holds court on sports law and business matters on SI.com.

 

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