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Ward Defends USOC Spending to Top Sponsor

February 15, 2003

DENVER (AP) _ U.S. Olympic Committee chief executive Lloyd Ward defended his troubled organization’s spending to a top sponsor and vowed to make it more efficient.

In a letter to David D’Alessandro, chief executive of John Hancock Financial Services, Ward said the USOC was working on a plan to reshape its operations to help sponsors get a better return on their investments.

The letter was accompanied by a report that summarized the USOC’s structure and financial status.

``We are focused on delivering our mission: ’to help U.S. Olympic athletes achieve sustained competitive excellence while inspiring all Americans and preserving the Olympic ideal,‴ the letter read. ``In this pursuit, we will become more efficient.″

After the latest USOC flap, which began with an ethics charges against Ward, D’Alessandro threatened to invoke a morals clause to negate a sponsorship deal worth about $10 million. He sent a letter to the USOC last month demanding a full account of the organization’s finances.

The USOC had until Saturday to respond. Early Reese, the USOC’s chief financial officer, said the full report arrived at D’Alessandro’s Boston office Friday morning.

John Hancock spokeswoman Becky Collet said D’Alessandro was in New York on business and probably wouldn’t see the report until Tuesday.

An executive summary of the report showed that 77 percent of the money the USOC spends goes toward athletes and programs. It said 11 percent goes to marketing and fund raising, 9 percent to administration and 3 percent to underwriting the USOC’s governance.

The summary stated that a report in Forbes magazine, which claimed the USOC had too much overhead, understated the organization’s fund raising because sponsor and broadcast revenue were excluded, while total fund-raising expenses were included.

In addition, the report showed that direct support to athletes has grown 13.2 percent in 20 years, while overall expenses grew at a 6.4 percent compound annual growth rate. It also said that the USOC uses compensation consultants to ensure that executive and staff salaries remain level with comparative positions.

``We believe our sponsor dollars are well invested with the USOC,″ Ward’s letter said.

D’Alessandro read part of the letter Thursday at a Senate hearing in Washington, saying afterward that the USOC has not reported its revenue in a way that ``provides clarity and transparency.″

Reese said Friday that accounts of USOC’s revenue in tax returns over the past five years were completely accurate, but reporting of sponsor donations were not filed in a consistent manner.

The scandal started in December when Ward was accused of trying to steer Olympic business to a company with ties to his brother.

Since then, six USOC members have resigned, including president Marty Mankamyer, sponsors have become rattled and Congress has called for a major overhaul of the world’s most powerful Olympic organization.

During Thursday’s Senate hearing, the USOC’s second in two weeks, Arizona Sen. John McCain said he wants a task force of outside experts and USOC members to recommend changes to the 1978 Amateur Sports Act.

Colorado Sen. Ben Nighthorse Campbell said during the hearing that three USOC employees told him that chief marketing officer Toby Wong was going to file a sexual harassment lawsuit against a high-ranking USOC official.

Wong resigned Monday and received a hefty severance, but her attorney said no harassment suit is pending.

``No sexual harassment suit was contemplated,″ said Houston attorney Philip Hilder. ``Due to the severance agreement, I am not at liberty to discuss the details, but no sexual harassment lawsuit will be filed.″

Also during the hearing, California Sen. Barbara Boxer said she believes there were conflicts of interest involved in the selection of New York as the American candidate to host the 2012 Summer Olympics. New York beat out San Francisco last November.

During the bidding process, San Francisco organizers charged that USOC bid evaluation team member Roland Betts had a conflict of interest because he was involved in the redevelopment of the World Trade Center.

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