Profile: The Olympic Bribery Scandal – by Bill Mallon – ISOH Vice-President – Part 2
by Bill Mallon, Vice-President of the International Society of Olympic Historians
As 1999 wore on, news about the investigations and the scandal was less common. But on 3 August the first criminal indictment related to the scandal occurred when David Simmons, former chief executive of Keystone Communications, pleaded guilty to a federal misdemeanor tax charge, admitting in a statement that he had employed John Kim, son of Kim Un-Yong, as part of a scheme to help him obtain permanent resident status in the United States. He also admitted that he had entered into false agreements to conceal that Kim’s salary was actually funded by the Salt Lake City Olympic Bid Committee.
The U.S. Justice Department’s criminal information noted that ‘the payments were made under a sham employment arrangement designed to enable the IOC relative to attain lawful permanent resident status,’ and ‘for the purpose of influencing his father’s vote in favor of awarding the Olympic Winter Games to Salt Lake City.’
On a related note, in early September John Kim was indicted on 17 felony charges of fraudulently obtaining a permanent U.S. Visa, or Green Card, and using it to travel frequently to the United States. Kim had returned to Korea prior to the indictments. The FBI investigation is ongoing.
During the year, the United States Congress also began hearings into the conduct of the IOC, although it is difficult to understand how they have oversight power on an international sports organization headquartered in Switzerland.
On 14 April 1999, the Senate Commerce Committee held a hearing to focus on the Salt Lake City bid and the actions taken by both the IOC and the USOC in an effort to prevent a recurrence. The two IOC Members to the United States, Anita DeFrantz and James Easton, both appeared before the Congressional hearing, as did USOC representatives and members of the Mitchell Commission were also called upon to testify.
The House Commerce Subcommittee on Oversight and Investigation requested an investigation into the Atlanta Bid for the 1996 Olympic Games.3 This was assigned to the Atlanta law firm of King & Spaulding, and was headed by former U.S. Attorney General Griffin B. Bell.
This committee issued a preliminary report in June 1999, but its final document, termed the Bell Report, was released on 15 September 1999.3 The Bell Report listed detailed and factual accounting of all gifts worth more than $100 given to IOC Members from Atlanta officials. The June report noted that 38 gifts exceeded the IOC guidelines of a $200 limit on gifts by bid committees, but the September report turned up further evidence.
Bell noted, ‘This is not a corrupt system, but it is subject to abuse. We had a couple of cases where we gave gifts of $1,000 and given all the people fighting for the same thing, I’m amazed it didn’t go higher.’
Two scholarship offers were made to relatives of IOC Members. Former Atlanta Mayor Andrew Young, who co-chaired the bid committee, offered a Georgia Tech scholarship to the daughter of Major General Henry Edmund Olufemi Adefope, IOC Member to Nigeria. The other offer was a tennis scholarship to the University of Georgia made to the daughter of Pál Schmitt, IOC Member to Hungary. Both scholarship offers were declined.
In the report, Bell noted that three favors to IOC Members may have been illegal. Gifts to IOC Members to Cuba and Libya may have violated a United States embargo on trade with both countries. In addition, two Atlanta officials carried cash into the country for a Jamaican member, and the cash was split between them to avoid having to declare it at customs. The money was later returned to the delegate’s American business in the form of a cashier’s check.
The most salacious revelation of the Bell Report was that of the series of dossiers that the Atlanta Bid Committee kept on IOC Members. These dossiers purported to document various preferences of IOC Members, which would allow Atlanta officials to make the proper enticements to help win their vote.
One report said, ‘… gifts are OK. Gift of female OK.’ Another noted, ‘… will sell his vote, and will do so openly.’ Other examples are as follows: ‘… Likes pretty women. Likes to talk about Nigeria and going on safari.’ ‘Does accept gifts. His wife is influential with him. Gift for his wife may be useful.…’ and ‘Lives in a palace. Did accept two ladies from Barcelona.’
On 14 October 1999, the House Commerce Subcommittee on Oversight and Investigations held a hearing to focus on the revelations documented by the Bell Report. Again, both DeFrantz and Easton testified before the Congressional Committee, as did IOC Director François Carrard, representatives of both the USOC and the Atlanta Olympic Committee, Dr. Henry Kissinger, a member of the IOC 2000 Commission, and Kenneth Duberstein, a member of the Mitchell Commission.
The IOC met in Extraordinary Session in Lausanne on 11-12 December, to vote on the recommendations made by the IOC 2000 Commission. At this historic session, the IOC voted to enact all the recommendations made by the commission.
The most important changes implemented were: 1) an age limit of 70 for IOC Members, 2) term limits of eight-years for most IOC Members, 3) creation of four categories of IOC Members – a) athletes, b) NOC Presidents, c) IF Presidents, and d) individual members; 4) eliminating visits by IOC Members to the bid cities, 5) a complete change in the process of selecting host cities, 6) opening IOC Sessions to the media via closed-circuit television, and 7) much more transparency in the financial transactions of the IOC, the bid cities, and the OCOGs.
The IOC 2000 Commission made 50 recommendations to the IOC in its Final Report, with recommendations made by each of the working groups. At the IOC Session in December 1999, the IOC approved all 50 of the recommendations, which has led to a major re-writing of the Olympic Charter.
In the end, all 50 recommendations of the IOC 2000 Commission were approved, most of them unanimously. The main points of contention were the age limit, which had eight dissenting votes, and Recommendation 50.7, which eliminated IOC Members’ visits to candidate cities, but even these passed with over 90% of the vote.
After the implementation of the numerous IOC reforms, IOC President Juan Antonio Samaranch testified before the House Commerce Subcommittee on Oversight and Investigations on 15 December 1999. It was a somewhat contentious appearance as the members of the Subcommittee were underwhelmed by the IOC’s reform process.
Rep. Joe Barton (R-Texas) asked him to resign on the spot, ‘I would like for you to announce today that you will resign. I think you have done many good things, but I don’t think the good things you’ve done overwhelm the bad practices that have developed. And I think it’s time for some new blood and some new leadership. And this would be a great venue for you to be a true statesman of sport and announce that.’
The Subcommittee also questioned the power and independence of the IOC Ethics Commission. After the December IOC Session, the media questioned the Ethics Commission structure when it was announced that they would not be pursuing further investigations relating to the scandal, unless new related evidence appeared.
Congressmen and the media also voiced concerns about the Ethics Commission’s independence since three of its eight members were also IOC Members. However, in a classic example of the pot calling the kettle black, it should be noted that the Senate Select Committee on Ethics has only six members, all Senators, and at Samaranch’s December testimony, both Congresswoman Diana DeGette (D-Colorado) and Rep. Fred Upton (R-Michigan) did note, ‘The U.S. Congress has a self-policing ethics Committee.’
Perhaps the tenor of the hearing can be found in the opening statement of Upton, Chairman of the Subcommittee, prior to any statements by the witnesses, including Samaranch. His rather inflammatory remarks included, ‘The record is riddled with evidence of over a decade’s worth of blatant abuse which was ignored by those who consistently, arrogantly, unbelievably turned a blind eye to the ugly truth … I fear that these reforms will be cosmetic and purely mask the aristocratic aura that has formed around the organization … But I’m afraid that the enforcement program around the reforms enacted this weekend will show that what the IOC passed will simply be window-dressing and business will go on as usual.’
However, former U.S. Senator Howard Baker, a member of the Ethics Commission, testified that the group would hire an ethics officer with a staff that would be free ‘to investigate anything that comes to their attention or they suspect,’ and Samaranch reiterated that the Ethics Commission could investigate complaints from ‘everyone.’
Baker stated under oath, ‘While I was initially skeptical about whether the IOC would undertake serious ethical and structural reforms in a fairly short period of time, it is now my distinct impression that the IOC – its leaders and its members – fully recognize the need to restore the Movement’s credibility.’
Former Senator George Mitchell did not testify before the House Subcommittee in December, but basically supported the IOC efforts in a statement he submitted, ‘[The Mitchell Commission] made 15 recommendations to the IOC.
They largely fell into three categories: financial transparency, site selection, and IOC structure and accountability. The actions taken by the IOC last weekend represent progress in all three categories. … In the first two categories – financial transparency and site selection – the IOC’s actions were significant. They generally were consistent with the recommendations of our commission.
In one important respect, on the matter which sparked this controversy – visits to bidding cities by IOC members – the ban adopted by the IOC goes even further than we recommended. In the third category, structure and accountability, the actions taken by the IOC, while positive, fell short of our recommendations.’
Mitchell also applauded the IOC for its efforts to have the IOC designated by OECD as a public international organization, as his commission had recommended.
In the United States press, reviews of the IOC reforms were decidedly mixed. It was felt that too many of the current IOC Members were grandfathered in under the old rules. In addition, the re-election process, which will be done by the IOC Session, was questioned, as the members are effectively voting for themselves.
Further, gifts to IOC Members by bid cities were not completely banned, although at the House Subcommittee hearing, Samaranch stated, after being pressed on this matter, ‘we will ban them.’
As of February 2000, this is the basic status and a timeline of what has occurred. Reforms are ongoing, as implementing all of the IOC 2000 Commission recommendations will take several years (this was one of the complaints concerning the recommendations).
The FBI investigation into the Salt Lake City Bid Committee continues as of this writing, and it was recently announced that Samaranch will travel to the United States to testify before the FBI committee investigating Salt Lake City.
A number of questions remain, and although I cannot delve into these in detail herein, I will broach them and discuss them briefly. Why did the Olympic Scandal occur and why did these problems seemingly hit all at once? Did the IOC know about and turn its head to its members and its bid cities breaching their guidelines? Will the new reforms undertaken by the IOC at its December 1999 session adequate to address the problems?
Why did the Olympic Scandal occur and why did these problems seemingly hit all at once? As has been well documented elsewhere, the IOC was once broke, and it was only in the 1980s that it began to achieve financial independence. But all this happened quickly, too quickly for the IOC to adjust. And it is unlikely that the problems described here began only with the Salt Lake City bid. There were similar allegations going back to the mid-1980s.
During his testimony before the United States House of Representatives on 14 October 1999, the IOC Director-General, François Carrard, said, ‘Unfortunately, while the Games evolved, our organizational structure did not keep up with the pace of change. In effect, we did not realize we were going through a growth crisis.
The result of an old-fashioned structure managing modern Games was not corruption, but a situation in which some of the less responsible members – a small minority – showed poor judgment and abused the system. Our problems were caused by weak people, structures, and procedures.’
Did the IOC know about and turn its head to its members and its bid cities breaching their guidelines? Certainly the 1991 report produced by the Toronto Bid Committee for the 1996 Olympic Games and sent to the IOC, would imply that the IOC had knowledge of these problems well before 1999.
That report noted, ’26 [IOC] Members broke established rules [concerning visits to Toronto]’ and that ‘… at least 18 [IOC] Members and their companions materially benefited from [abuses related to their trips to Toronto].’ The report notes that these abuses may have cost the Toronto Bid Committee $700,000-800,000.
The IOC and Samaranch have replied that Toronto did not name names, which is true, and would not give the IOC enough specifics for them to investigate further. It has been noted by IOC Members that the problem faced by the IOC in this regard is that they do not have policing status and cannot require all bid committees to fully open their records. While this may be true to an extent, the IOC should be able to police its own members.
Although it now appears to be doing so in response to the scandal, it seems that the IOC was not aggressive in responding to the allegations in the past. As regards policing their own bid committees, the new recommendations requiring greater financial transparency by the IOC and other members of the Olympic Movement, should obviate this problem.
Will the new reforms undertaken by the IOC at its December 1999 session be adequate to address the problems? The media have been critical of these reforms and skeptical that they will truly solve these problems. They note, among other things, that the IOC may not truly change for 20 years because current members will be grandfathered and not subject to re-election. They have also noted that the re-election procedure will allow the IOC Members to effectively ‘re-elect themselves.’
The ethics commission has been criticized because it contains several IOC Members, but this seems a specious argument, as initially greater than 50% of the commissions consisted of independent members. The election of Charmaine Crooks (CAN) as an Athletes’ Member of the IOC brings this number to exactly 50%.
Some of these criticisms are valid, but as George Mitchell noted, in many ways the IOC has either enacted all of his Commission’s recommendations, and in some cases, gone even further than they recommended. The IOC seems willing to change and they are doing so. When they were broke, Juan Antonio Samaranch and Dick Pound took steps to alleviate that problem, and the IOC is not blind to the necessity to change in order to adjust and survive.
Samaranch recently commented, ‘The world has changed a great deal in the past two decades and the expectations of the public – especially as the Olympic Movement has become so important in the lives of so many people – [are] to be more open and accessible. We have taken and will continue to take action in order to meet this demand.’
The actions taken by the IOC in late 1999, implementing the many recommendations of the IOC 2000 Commission, though probably not the final answer, are at least a step in the right direction to ensure that many of these problems will never occur again.
And the IOC knows it must make these efforts if it is to overcome the Olympic Scandal and survive and prosper into the next millennium. Perhaps Juan Antonio Samaranch summed it up best when he said, ‘No revolution has been possible without scandal.’
Source: ISOH