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Salt Lake Awaits Ethics Panel Report

February 9, 1999

SALT LAKE CITY (AP) _ The top two officials of Salt Lake City’s Olympic bid are expected to be the focus of a lengthy report from an internal ethics investigation of the biggest corruption scandal in the history of the games.

The report, scheduled for release today, is expected to concentrate on the actions of Tom Welch, who directed the successful bid for the 2002 Winter Olympics, and Dave Johnson, his top lieutenant.

``We know what happened here wasn’t right, and we are setting it right,″ Gov. Mike Leavitt said just before the report was released. ``...Olympic corruption did not start here, but it must end here.″

Earlier, Leavitt said the report by the Salt Lake Organizing Committee’s ethics panel should not be looked at as complete, since the panel did not have subpoena powers and some people refused to be interviewed. The board spent much of its time examining documents.

The ethics panel probe is one of five investigations into the payments of cash and freebies to International Olympic Committee members.

Unlike the IOC commission report last month, which focused on international committee members, the report by the SLOC ethics panel concerned the role Utah Olympic boosters played in seeking the 2002 Winter Games.

The IOC investigation said $800,000 in cash payments, scholarships, medical care and travel expenses was paid to 14 IOC members. So far, nine have been expelled or have resigned.

Olympics officials said today they had not seen the report in advance of the briefing, but several newspapers quoted unidentified sources as providing some details.

The New York Times and USA Today said the report would primarily target Welch and Johnson, with the Times reporting that the two would be accused of hidden payments and deceptive practices that kept other members of the committee from knowing what was going on.

The Washington Post said that Welch’s dealings with Alfredo La Mont, the U.S. Olympic Committee’s former director of international relations, will be detailed in the report. The Post, citing an unidentified source, also said an investigative panel appointed by the USOC is focusing on La Mont.

La Mont resigned from the USOC in January after revealing a business arrangement with Welch. Welch’s lawyer, Thomas Schaffer, said Welch hired La Mont ``strictly as a lobbyist″ to influence IOC members from Latin America and South America and paid him from $2,500 to about $3,500 a month. The Post’s sources said the payments totaled about $30,000.

The Wall Street Journal said the report also would identify Craig Peterson as a central player. Peterson handled finances for the bid committee after he joined in 1990 and continued in that job after the city won its bid and formed SLOC.

Peterson has refused to discuss his role in the bid committee, in part because he signed a contract that demanded his silence about Olympic matters when he left SLOC in 1996.

In Japan, meanwhile, officials said today they found no wrongdoing in Nagano’s winning bid for the 1998 Winter Games.

Nagano Gov. Goro Yoshimura told Kyodo News service that the investigation showed that the bidders’ treatment of IOC members was ``within the scope of common sense.″

The Journal reported that people familiar with the probe said investigators had little, if any, access to Welch, Johnson and Peterson, and attorneys for the three refused to allow their clients to cooperate.

It quoted Schaffer as saying the ethics panel refused a confidentiality agreement and feared information would be turned over to the U.S. Justice Department.

Welch and Johnson have denied wrongdoing, and Welch last week said Leavitt and others knew what was going on. Leavitt and others named by Welch have repeatedly denied knowledge of detail of the gift plan.

Leavitt said last week that he had met about 50 IOC members and their families, posed for photographs and gave obligatory gifts of diplomacy, but, ``I did not ever personally see a gift of great value. I was doing everything I could to be charming. I was doing my diplomatic duty as the governor.″

He said he did not know that the international students he met were sons and daughters of IOC members, some supported by bid money.

Frank Joklik, the volunteer chairman of the bid committee who later became SLOC president, said he and other business leaders on the bid board had been screened from the details and that he was dismayed to learn about the excessive spending.

The Times said last week that it obtained copies of letters written by Joklik and bid committee member James Beardall, seeking a forestry job for the husband of a Finnish member of the IOC. The letters to Weyerhaeuser Company on behalf of Bjarne Haeggman were sent in 1993. The Wall Street Journal said the ethics committee report ``doesn’t completely exonerate″ Joklik and cites him for the Weyerhaeuser letters.

Joklik resigned as SLOC chief executive Jan. 8, the same day he demanded the resignation of Johnson, who had become senior vice president of SLOC. The SLOC board also stripped Welch of the $500,000 pension and $10,000-per-month consulting contract he was given when he resigned as president in mid-1997 amid a spousal abuse charge.

The Journal quoted an unidentified source familiar with the investigation as saying the report was adamant that the Welch, Johnson and Peterson did not inform board trustees about their work. The report concludes that ``they not only didn’t tell the board, they kept it from the board.″

However, SLOC board member Ken Bullock has long complained about not getting answers to questions about rumored scholarships and getting no support from other board members when he sought information.

Bullock said he asked about the scholarships each of the last three years during board meetings, and got vague answers. He said there was a ``don’t ask″ sentiment _ that others board members wanted him to ``leave it alone.″

The SLOC ethics committee also was expected to address the question of contracts awarded by the SLOC board to some of its members.

Besides the investigations by the SLOC ethics panel, the IOC and the USOC, the Justice Department is looking into violations of federal law, and Utah Attorney General Jan Graham _ who also was on the bid committee _ is examining potential violations of state laws.

IOC vice president Dick Pound, who heads the IOC investigation, said Monday the Salt Lake panel’s report might help advance that inquiry.

``They have seen a lot of documents we have not seen and talked with a lot of people we have not talked to, so it may be quite helpful,″ he said. ``If it concentrates on their end and gives the facts, that helps us on our end. I hope we can avoid endless finger-pointing.″

Olympics officials also may announce this week the selection of a new SLOC president. The front runner is believed to be Massachusetts venture capitalist Mitt Romney.

Also, Crown Prince Willem-Alexander of the Netherlands suspended his IOC work until after next month’s special meeting.

``The special sitting of the IOC will have to clarify whether the organization has the power to clean up its act and is therefore crucial for the question of whether the Prince of Orange will be able to continue his activities in the interests of international sport within the IOC,″ Dutch Prime Minister Wim Kok wrote in a letter to parliament.

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