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Details revealed of case vs. Salt Lake Olympics organizers

As they watched Nagano snare just enough support -- the city prevailed by four votes, out of 88 total -- from the International Olympic Committee (IOC) in bidding to select the host for the 1998 Winter Olympics the leaders of the Salt Lake City bid effort suspected something unusual was going on.

"We just knew Nagano wasn't playing it straight," said Kim Warren, international relations coordinator for the Salt Lake Olympic big committee in 1990 and '91, in 1999.

When they began their ultimately successful effort to host the 2002 Olympics, the leaders of the Salt Lake Olympic committee (SLOC) instructed their staff to be "squeaky clean" in the campaign for IOC votes, according to court documents reviewed by Sports Illustrated. The written directive from the SLOC executive committee will be a key piece of evidence in the trial on bribery and fraud charges federal prosecutors have brought against former SLOC organizers Thomas Welch and David Johnson. On Tuesday, the 10th U.S. Circuit Court of Appeals reinstated felony charges against Welch and Johnson, who had served president and vice president of the bid committee.

Prosecutors from the U.S. Department of Justice in Washington plan to present evidence that Welch and Johnson ignored the instructions from the executive committee and led a $1 million campaign of bribery and vote buying. More than 40 defense witnesses are expected to testify at the trial.

Shortly after the "squeaky clean" order came down, according to a prosecution brief, Johnson started making lists of IOC members who "could be bribed and what means might be employed to bribe them."

Prosecutors say Johnson, who is fluent in Dutch, spelled out IOC members he believed were candidates for bribery on one list under geld, the Dutch word for money. On another list Johnson allegedly catalogued IOC members whom he believed had influence on the voting process beyond their single votes, leaders of the Olympic movement who, according to Johnson, could deliver others' votes in return for bribes.

Government prosecutors say they will use both documents as they try to prove that Johnson and Welch are guilty of mail fraud and bribery.

In his listings, according to the court documents, Johnson used euphemisms such as "special attention" and "specific influence" and "specific help" to describe bribes.

As Welch and Johnson campaigned for votes, prosecutors say, they paid bribes to six of the eight IOC members on Johnson's geld list. Welch and Johnson "knew they would have to hide the bribes from the SLOC Board of Trustees and the executive committee," according to the court filing. Prosecutors also charge that the Welch-Johnson coverup efforts included false accounting, money laundering and large quantities of unreported cash. Welch and Johnson say they did nothing illegal.

According to the brief, two former SLOC staff members, Rod Hamson and Craig Peterson, will testify against Welch and Johnson, asserting that the pair ordered them to hide payments to IOC members and to omit other transactions from SLOC accounting records.

Prosecutors say Hamson will testify at the trial that Welch "instructed him to doctor the SLOC's records to describe certain payments as travel reimbursements when there was no travel" and that Welch directed him to pay for travel by relatives of IOC members.

According to court documents, Peterson will testify that both Welch and Johnson knew that the SLOC rules and IRS regulations required detailed reports of all transactions and that numerous payments cannot be found in SLOC records.

The government says another witness, David Simmons, will testify that Welch paid nearly $70,000 in SLOC funds for help in "fraudulently obtaining resident immigration status (a green card)" for the son of IOC member Un Young Kim of South Korea. A portion of the payment to Simmons, prosecutors say, was "laundered" through "the account of a New Jersey firm."

To avoid scrutiny from the SLOC board, Welch and Johnson "covertly raised money," taking cash donations, according to the court documents. Sead Dizdarevic, an Olympics ticket broker who specializes in high-end tour packages, will testify that Welch had him deliver $150,000 in cash-filled envelopes to Welch at hotels and airports.

It's highly unusual for Justice Department lawyers to reveal this level of evidentiary detail before a trial begins, but prosecutors indicate in the brief that they wanted to impress upon the U.S. Court of Appeals in Denver that the charges against Welch and Johnson are serious. On Nov. 15, 2001, U.S. district judge David Sam had dismissed the charges against Welch and Johnson.

The prosecutors' strategy worked. The 10th circuit panel reversed Sam's ruling and reinstated all charges against Welch and Johnson.

Barring further appeals or a plea agreement, a jury will be asked to decide whether Welch and Johnson used bribery and fraud to land the 2002 Winter Olympics.

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

 

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