Two Are Indicted Over Salt Lake Bid 15 Counts Were Contained In The Federal Charges Against The Former Salt Lake City Olympic Officials.

Posted: July 21, 2000

A federal grand jury in Salt Lake City approved a 15-count Justice Department indictment yesterday against two men whose work brought the 2002 Winter Olympics to Salt Lake City, and very nearly brought down the entire Olympic movement in the process.

Tom Welch and Dave Johnson, the former president and vice president of the Salt Lake bid committee that landed the Games in 1995, have admitted they far exceeded the gift-giving and hospitality guidelines of the International Olympic Committee, whose members vote for the sites of upcoming Olympics. But they have long maintained that their actions were no different from those of bid committees in other countries and their motives were civic, not criminal, in nature.

"That's the game that was being played," Johnson's attorney, Max Wheeler, said this week. "We didn't invent the rules."

The Salt Lake excesses, however - a total of approximately $1.2 million in illicit gifts, travel, medical care and other inducements to IOC members - were the first to be exposed to public scrutiny. As a result of the scandal that erupted in December 1998, 10 IOC members either resigned or were expelled for their conduct. Several new ethics procedures were put in place, including the ban on visits by IOC members to prospective Olympic sites.

The Justice Department investigation into the bid committee has been going on for 17 months. Welch, 55, and Johnson, 41, turned down two plea-bargain offers brought by federal prosecutors in the last week. Both of the plea-bargain agreements called for a single felony charge of tax evasion, and the admission by the defendants of "criminal intent."

"We're just waiting for the kitchen sink to be thrown at us," Wheeler told the Deseret News in Salt Lake on Tuesday, after negotiations had broken down.

The indictments that followed - rubber-stamped by the 23-member grand jury in Salt Lake City on the recommendation of federal prosecutor Richard Wiedis - may not contain the entire sink, but there is plenty of plumbing to go around.

Welch and Johnson will each face one count of conspiracy, five counts of mail fraud, five counts of wire fraud, and four counts of interstate travel in aid of racketeering. Each individual count carries a maximum sentence of five years in prison and a $250,000 fine. No trial date has been set.

Among other things, apparently, the Justice Department will attempt to prove that the bid bosses pocketed some of the money that flowed through their offices like ripples across the Great Salt Lake. The Salt Lake Tribune reported this week that particular scrutiny has been given to payments totaling $130,000 made over a nine-month period ending in May 1995 by a New York-based travel-and-entertainment company, Jet Set Sports.

In a release that accompanied the indictment announcement, the Justice Department asserted that Welch and Johnson "personally diverted $130,000 in bid committee money and prepared and executed a series of bogus contracts and falsified.. . .books, records and other publicly available documents so as to conceal their activities."

Welch and Johnson have said since the scandal broke that they are merely handy scapegoats taking the fall for a corrupt system, one that former Senate Majority Leader George Mitchell, who headed one of the ethics investigations, called a "culture of illicit gift-giving."

The board of trustees of the Salt Lake bid, a group that includes Gov. Mike Leavitt, has indicated that Welch and Johnson's actions were undertaken without its knowledge or approval.

What Welch and Johnson did, essentially, was help buy an election. Their methods were far from revolutionary, however. When the two men got their first up-close look at the Olympic bidding process - in the race for the 1998 Winter Games that ended with a June 1991 IOC vote - they came away determined not to be out-schmoozed by anyone the next time.

Salt Lake City probably had the superior technical and financial bid in that first race, but the Olympics were awarded to Nagano, Japan, after a campaign that was excessive even by recent standards.

"We were giving away salt-water taffy and they were giving away Toyotas," Welch told co-workers after returning from the final vote in Manchester, England.

Four years later, Salt Lake City won the election, but only after a full-blown campaign in which some IOC members were given shopping trips, Super Bowl vacations, ski-resort packages, cosmetic surgery, jobs for their children and - in some instances - cash.

Unlike the Japanese organizers, however, who reportedly held a celebratory bonfire that used all bid-related documents as kindling, the Salt Lake City bid committee kept meticulous records of its expenditures. Perhaps, as Welch and Johnson have maintained, that's an indication that they thought nothing they were doing was wrong.

The Justice Department has said that the indictments against Welch and Johnson should be the final ones brought in relation to the scandal. Previously, three men, including one former executive of the U.S. Olympic Committee, have been charged or pleaded guilty to lesser offenses.

Bob Ford's e-mail address is bford@phillynews.com

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