April 1991, Birmingham, England. A stocky, white-haired Yugoslav businessman named Artur Takacs was quietly making his rounds at the limousine-encircled Hyatt Regency, site of the International Olympic Committee meeting that would determine the host city for the 1998 Winter Olympics. Takacs, 72 at the time, was well known to the delegates. One of IOC president Juan Antonio Samaranch's closest advisers, he sat beside Samaranch during most IOC meetings, a striking breach of protocol for a nonmember. Takacs even dressed like Samaranch, wearing a blue blazer of a specific cobalt shade, adorned by a single row of gold buttons. He was Samaranch's confidant, his sounding board, his friend.
Takacs had identified a handful of the 94 IOC members at the time (the number of members fluctuates, but their ranks have swelled to as many as 115 since 1991) who could swing the election between the bids of the two leading candidates, Nagano and Salt Lake City. All the members had been lavished with extravagant last-minute gifts from the various bid cities—expensive Italian luggage, Stetson hats, handblown glassware, laptop computers—enough stuff that the IOC had set up a parcel post station in the hotel to make it easier for delegates to send their booty home. At the gala reception the night before the big election, Takacs tracked down the swing voters one by one and discreetly told them, in more or less the same words, "It would be difficult for the Olympic movement and inconvenient to His Excellency to have the Games in North America once again." His Excellency is the title by which Samaranch chooses to be addressed.
Takacs didn't mention that his son, Goran, had been employed as a lobbyist for Nagano, commanding a fee of $363,000—plus a substantial bonus if Nagano's bid were to win. Nor did the elder Takacs divulge that one reason it would be "inconvenient for His Excellency" if Nagano lost was that a consortium of Japanese businessmen had pledged, but not yet delivered, some $20 million toward the construction of a new Olympic museum in Lausanne, Switzerland, Samaranch's pet project. Takacs didn't need to. If His Excellency (who doesn't vote on bid cities unless there's a tie) wanted the Games in Nagano, that was enough reason to support it.
Alerted to Takacs's movements, the Salt Lake City contingent, which included U.S. Senator Orrin Hatch, nervously watched as Takacs worked the room. They would demand, and later receive, a letter of apology in which Takacs conceded that his actions were improper: He should not have purported to speak for Samaranch. But the damage had been done. When the votes were cast, Salt Lake City's worst fears were realized. Nagano won by four votes.
Members of the Salt Lake City bid team knew why they had lost, and they were determined not to lose again. Thus were sown the seeds of the crisis in which the Olympic movement finds itself today: a maelstrom of embarrassing revelations that have brought into bold relief a culture of unchecked corruption and greed within the IOC.
Over the next four years the Salt Lake City bid committee, headed by businessman Tom Welch, gave close to $400,000 in inappropriate "material benefits" to 14 IOC members (one of whom has since died) to help secure the 2002 Games, according to an investigation by a six-member IOC commission whose findings were released on Sunday. The "benefits"—which commission chairman Richard Pound, a Montreal lawyer and IOC vice president, refused to call bribes—included cash payments, free housing, scholarships and jobs. Six of the members (from Chile, Congo, Ecuador, Kenya, Mali and Sudan) were asked to resign under threat of expulsion at a special IOC session scheduled for March 17 and 18 in Lausanne. Three others (from Finland, Libya and Swaziland) had already resigned. Samaranch said the IOC will continue to investigate three more, including two of its most prominent members, Kim Un Yong of South Korea and Vitaly Smirnov of Russia. A source close to the IOC probe told SI that the most damaging allegation against Smirnov is that on the eve of the vote for the 2002 Games, he offered his support to Salt Lake vice chairman Dave Johnson for $35,000. That offer was made through an intermediary: Goran Takacs. Johnson didn't accept, according to the source. Smirnov refused to comment on the charge. Takacs called it "preposterous."
"I am sincerely disappointed that IOC members were involved in the events revealed in this investigation and am deeply saddened by their conduct," Samaranch said on Sunday. He said that the IOC executive board had decided to form an ethics commission made up mostly of distinguished non-IOC members to "introduce globally accepted guidelines and procedures to ensure that the IOC conforms with the world's best practices in self-governance."
Samaranch also called for substantial reforms in the IOC's host-city selection procedures. The proposed changes, which must be passed by a two-thirds vote of the entire membership at the March session, would scrap the current system, in which all IOC members vote, and replace it with one in which a 15-person election committee would select Olympic cities. Five of the voters would come from outside the IOC; three would be athletes picked by the IOC's Athletes Commission. "We must use a simpler system to choose the city," said Samaranch. "To have 114 members voting is too much, and we will change."
But as significant as these proposals appeared to be, there's reason to question the IOC's commitment to cleaning up its mess. In a startling admission that calls into question the thoroughness of his panel's investigation, Pound said no one had talked to two lobbyists the Salt Lake Organizing Committee employed to help gain favor with IOC members. One is Mutaleb Ahmad, a Kuwaiti who was paid $57,600 as a consultant, according to SLOC records. The other is Mahmoud El-Farnawani, a former national volleyball coach from Egypt who lives near Toronto. El-Farnawani was paid $161,000 for helping provide access to northern African IOC members. His testimony would appear to be useful since in 1995, shortly after Salt Lake City easily won the 2002 Games on the first ballot, he told the Toronto Sun, "I signed a contract with Salt Lake City and assured [it] of all the Arab votes."
So why wasn't he questioned? "El-Farnawani has been out of the country [Canada] since mid-December," Pound said. "We haven't been able to get in touch with him." SI had no such difficulties, talking to El-Farnawani on three occasions by phone between Jan. 12 and 16 at his residence outside Toronto and then dining with him in Toronto on Jan. 18. "I was pleased but puzzled I never heard from Mr. Pound," says El-Farnawani. "The Salt Lake people, after what happened in Birmingham, wanted to take no chance. My relationship with the six North African IOC members is very valuable. That's why cities hire me. This is a kind of war, and you have to have all the weapons you can to win. I was just one weapon."