New Gold Rush Looms Over Olympics Surplus : $100-Million Legacy for Youth Sports May Be Partially Diverted to Arts, Variety of Causes

Throughout the long buildup toward the 1984 Los Angeles Olympic Games, organizers promised repeatedly that Southern California’s share of any financial surplus would be spent on “youth sports” in the region.

Now, however, that commitment shows signs of erosion.

Although youngsters most likely will receive the bulk of the money, some members of the board that controls the $100-million fund say they can also conceive of spending on such items as the arts, programs for the elderly--even Ethiopian famine relief.

One of the first actions of the 17 trustees of the Los Angeles Organizing Committee’s Amateur Athletic Foundation was to alter its bylaws to allow for a $2-million grant for a cultural program patterned after the Olympic Arts Festival. State officials who oversee charity spending say the rewording legally clears the way for future cultural grants.

“Once you deviate,” Howard Allen, chairman of Southern California Edison Co. and one of three board members to vote against the cultural grant, said in an interview, “you leave the door wide open--not only for future requests of the same type, but for requests of other worthy types. Once you make that exception, I don’t know how you turn down another very worthy cause.”

Indecision Spurs Concern

The wavering has distressed former staff members of the Los Angeles Olympic Organizing Committee. They fear the foundation will fall short of its potential and become what one called “a check-writing campaign . . . to fulfill each board member’s own political agenda.”

Although an almost dictatorial management produced the Games, it appears certain that the happy dilemma of divvying up the region’s most tangible Olympic legacy will be addressed in a more democratic fashion, with plenty of potential for conflicts of politics and personality.

Already some directors and Olympic staff say they can define a board split that, the theory goes, pits those with government and political backgrounds against private enterprise types. The line became clearer when Los Angeles Mayor Tom Bradley asked to join the foundation board.

“I felt that once we put on one elected official from one political sector, we would have to put on others,” said Director John Argue, a Los Angeles attorney who in the 1970s played a key role in developing and promoting the concept of a privately funded Olympics. “Why not put on one from the Board of Supervisors, from the state government? Where do you draw the line? If you put on a Democrat, why not a Republican?

“I felt the private sector made the money, and the private sector could decide where to spend it.”

Argue lost. Bradley backers said he deserved the seat because of the political risks he took to help bring the Games to Southern California. A few stressed that they appointed Bradley the man, not the mayor.

‘Individual Basis’

Bradley declined to be interviewed for this story, saying through an aide that spending decisions should be made “on an individual basis.”

The foundation board consists mainly of members of the old LAOOC executive committee. There are entertainment moguls, corporate executives, a federal judge, big-name attorneys, a former Olympic great. They are people of influence.

During the Games, some members perceived they were undervalued or even ignored by LAOOC President Peter V. Ueberroth and staff. Now they find themselves in a position to exert great control over the profits. It is not a duty they are likely to delegate.

“There is a tremendous difference between the way the foundation is going to operate and the way the LAOOC operated,” said Paul Ziffren, who was LAOOC chairman and holds the same position on the foundation board. “The LAOOC was operated in a crisis atmosphere, a frantic atmosphere, with thousands of decisions to be made every month. And obviously we had to depend upon management to make these decisions. . . .

“The foundation is not under that kind of pressure. We have got the time to consider everything.”

Number of Factors

There is much to consider.

A survey of the directors and others with influence over the money found little agreement over how to spend the region’s estimated $100-million share of a surplus expected to reach $225 million. (The rest of the surplus will be divided among the U.S. Olympic Committee and national amateur sports federations.) A few said it was premature to discuss foundation direction, preferring to wait for proposals from a newly hired staff. Four declined to be interviewed.

Most were able to offer some vision of projects they would have the foundation pursue, although the board as a group has yet to field several important questions of function and philosophy.

Should, for example, the foundation set out to develop future Olympians or attack societal problems associated with misguided youngsters? Should it engage in research, construct facilities, buy balls and bats, train coaches? Should it distribute grants among existing youth groups or initiate programs of its own? Should it work on the interest drawn from the surplus--roughly $7 million a year--or spend the principal?

Trying to Make an Impact

Most important, can it, as some directors suggest, do a bit of all these things and still achieve the high impact they desire?

Already, the foundation has received--unsolicited--more than 300 grant requests totaling more than $160 million. They range, according to foundation officials, from $5-million requests from USC and UCLA to the petition for a hockey uniform from a boy who said his parents could not afford to equip both him and his twin brother.

In interviews, many board members stressed they would prefer to field proposals one at a time. “Flexibility” was a frequently heard word. A majority of the board appears to have discarded an ambitious proposal by former LAOOC staff members for a permanent youth sports institute, and half a dozen directors said they could foresee spending money outside youth sports.

For example, labor leader William R. Robertson said he “would hope that we would look at issues on their merits . . . and not necessarily be limited to sports. We just shouldn’t have a rigid policy. We should be flexible.”

He, for one, believes the foundation should be able to provide aid in times of “urgent need,” citing as examples “the plight of the starving people of Ethiopia . . . or the recent (cyclone) . . . off the Bay of Bengal.”

Yvonne Brathwaite Burke, attorney, former Los Angeles County supervisor and unsuccessful Democratic candidate for state attorney general, suggested that although the focus should be on youth, beneficiaries could include senior citizens. “Yes, I think also senior citizens,” she said. “I think it should be a real legacy. I think youth should be the emphasis, but not only youth. . . . I have no preconceived notion. I would like to just evaluate each thing as it comes along.”

And Gilbert R. Vasquez, an accountant, said he is “interested in sports, and I am interested in youth, but I think we could expand into senior citizens and perhaps other citizens who perhaps haven’t been serviced in this area.” He cited as an example older teen-agers prone to gang violence.

Other directors were adamant that the foundation not stray from youth sports. A weapon for them is the International Olympic Charter, which states: “Any surplus derived from the holding of the Olympic Games must be applied to the promotion of the Olympic movement or to the development of sport.”

So far, the directors have dipped into the surplus twice.

They approved $2 million to open 354 public schoolyards and gymnasiums this summer in four Southern California counties. The “Summer Games 1985” program will provide coaches and competitions in four sports for youngsters 10 through 18 years of age, culminating in a regional final event.

Film maker David Wolper, producer of the Games’ Opening and Closing ceremonies, came up with the idea. He was “horrified,” he explained, to learn schoolyards were locked shut in the summer. Other directors believed it important to initiate some sort of sports program this summer simply to show, as one put it, “we aren’t asleep at the switch.”

The second grant was to the Los Angeles Festival, a cultural production planned for 1987 and envisioned as a biennial event. It is expected to have a total budget of $8 million and be modeled after the Olympic Arts Festival.

The grant required changes in foundation documents filed with the state Registry of Charitable Trusts. It was approved by a 13-3 vote, with Ueberroth the only member absent. (He sent a letter of support.) In addition to Allen, Vasquez and former LAOOC General Manager Harry Usher opposed the proposal.

Usher said he did not think it wise to spend $2 million more before a staff president was in place. Nor did he want to change documents defining the foundation’s reason for existence “right out of the barrel.” He and Allen argued that however worthy a cultural festival might be, there were other community resources to pay for it. Vasquez would not explain his vote.

Both spending programs dismayed some former LAOOC staff members, who are concerned that a chance to create something special could be slipping away.

“It had such great potential,” Michael Mitchell, an LAOOC vice president, said of the foundation. “I think you see a choice to become a more public-sector kind of foundation, serving mass needs. . . . It will never become a world-famous nor world-contributory foundation if it gives its money away that way.”

Anita DeFrantz, a former Olympic athlete who ran the USC Olympic Village and was an unsuccessful candidate for the job of foundation president, said she used to rally her workers with the reminder that any surplus would benefit “not only this generation of athletes, but generations to come. . . .”

“It’s fine and dandy to have an arts festival,” she said, “and I also worry about what is happening in the world, but the intention was to do something special. . . . I hope the board is well-intentioned, the entire board, and that the directors appreciate what they can do. It is absolutely phenomenal what they can accomplish--or they can be just another foundation.”

Directors said any criticism is premature, and some said the two programs financed so far should not be considered indications of board direction.

Maureen Kindel, director of the Los Angeles Department of Public Works, was by her admission “the prime mover” behind the cultural grant. She will preside as chairman of the board for the Los Angeles Festival.

A strong Bradley ally, Kindel is said by some directors and Olympic staff to exert the most influence on the board.

In an interview, she argued that it was “an oversight” to exclude the arts as a surplus recipient in the first place. She said even the ancient Greek Olympics blended athletics with the arts, and she noted that host cities of modern Games are required to offer cultural programming.

Kindel envisions a foundation that would supply funds to “an exciting mix” of arts, sports and “esoteric aspects of social programs that would involve sports,” with a possible emphasis on steering youngsters away from crime.

“The question,” she said, “is whether you can put together that mix and still have an impact with what is a very modest amount of money. We might have to make some choices.”

One Time Only

Ziffren stressed that the arts grant was a one-time-only proposition, and many said they approved it only on that basis. Kindel, however, considers additional spending on culture “an open question.”

“I think,” she said, “it depends upon how successful the arts festival is, and how good this board feels about the festival, and what else they want to spend their money on.”

Carole Kornblum, assistant state attorney general for the Registry of Charitable Trusts, said the amended bylaws allow the board to give more to culture if it desires, but broader forms of charitable spending would require a court hearing. She said one argument foundations employ in such cases is that funds greatly exceed what was anticipated when charters were drafted.

Kindel contends this is the case with the Olympic surplus. She said no one anticipated a surplus of $225 million, leaving Southern California with a $100-million share. Before the Games, officials usually talked in terms of a $15-million surplus.

Unprepared for Windfall

“I really don’t think anybody thought that dividing up . . . deciding what to do with the profits was any big problem,” she said. “I don’t think anybody gave a lot of thought to it, and I think that is one of the reasons the arts were left out.”

Argue disagrees.

He drafted documents that established a formula for dividing profits. It designated 40% for the U.S. Olympic Committee, 20% for the national governing bodies of amateur sports and 40% for “amateur athletics in Southern California.”

Argue said it was a “slam dunk” that there would be a surplus. The formula was agreed upon in advance to avoid repetition of the “big fight” that occurred after the 1932 Los Angeles Olympics. With a $1.2-million surplus as the prize, local and national sports groups engaged in a protracted court battle. The locals won.

Although the actual wording declared that Southern California’s portion would go to “amateur athletics,” Argue said the intent “has always been on something for kids, activities for kids.” Indeed, whenever the LAOOC ticket prices or tough bargaining positions were attacked in advance of the Games, Ueberroth and Usher would remind critics that 40 cents of any leftover dollar would go to “youth sports.”

At that time, legacy was a much heard word, much as flexibility is now.

Use of Surplus Studied

After the Games, Usher and a small staff were kept on to study ways to spend the surplus. The staff produced a thick, two-volume report with a distinct point of view.

“The foundation,” the report began, “should not be satisfied with merely offering funds to help solve the needs of the community. Since hundreds of millions of dollars are spent on youth sports programs in Southern California every year, the foundation’s funds, in and of themselves, will have little impact.

”. . . As the LAOOC seized the opportunity to create a very successful world event, so is the foundation challenged not only to make a difference in youth sports in Southern California, but also to serve as a beacon of youth sport development nationally and, perhaps, internationally.”

Minor Olympic Sports

It prescribed concentration on six mostly minor Olympic sports, with an emphasis on youngsters at an age sometimes ignored by existing programs. There would be an institute, a place where youths would be taught and coaches trained. It would have a full-time staff, and 90% of its money would be spent on self-initiated programs. It would operate in perpetuity, spending only a portion of the interest generated by the surplus each year.

Behind the program was a concept of something staff members describe as “holistic sports” or a “sports renaissance.” They could conceive, for example, of using rowing to teach physics.

“Any sport can become a window to the entire world for a youngster,” the report stated. “From those challenged by learning to those that challenge it, each can find a means to become a thinking, caring, successful athlete through our comprehensive, integrated approach to sports.”

A few staff members now suspect they erred in attempting to sell directors a specific recipe before convincing them to bake a cake. Nonetheless, they were dismayed by the board’s reaction.

‘Left Me Cold’

“Some of the specific aspects left me cold,” said Director Stephen R. Reinhardt, a federal judge. “I think it was kind of a waste of time.”

Most board members now say they don’t want to concentrate on minor Olympic sports.

They want to lean more heavily toward making grants than hiring a staff to run programs.

They want to spend the money, as Argue put it, “sooner rather than later.”

Many directors admit these attitudes were shaped by Stanton Wheeler, a Yale law professor with a background in sports and foundations. He attended the same meeting at which Usher presented the staff report and, acting as a consultant, gave a lecture himself and presented a four-point program.

The foundation, Wheeler said, should make grants, create its own programs, bring corporate entities that sponsored the Games into the effort and examine the contributions of sports to knowledge and history.

The money, he said, should be “spent in this generation of youth.”

Call for a Leader

After Wheeler finished, Ziffren declared, “Why can’t we get someone like you to run our foundation?”

Before long, they did.

Wheeler moved into his office as foundation president two weeks ago.

A college friend of Reinhardt, Wheeler was, some directors suspect, the “hand-picked candidate” of the board’s public-sector faction, a suspicion others discount.

There were four finalists, but the selection process essentially came down to Wheeler and former football star and Rhodes scholar Pat Haden. No Olympic staff member--and two were in the running--made it to the final four.

Wheeler believes his mandate is to enact the program he outlined in his lecture. He wants a “creative and innovative and lasting effort.”

He sees himself running a sports foundation, although he also cited the association between Greek Olympics and the arts.

His first tasks have been to develop a budget and grant guidelines, which he intends to present at a board meeting Wednesday. (A motion to add a county supervisor to the board at the meeting was submitted, then withdrawn.)

Wheeler said he expects, given the nature of the job, to work closely with the directors.

But he also said this:

“I certainly did not take this job to be an errand person for a group of strong-willed people.”

Unheard through most of the post-Olympic debate has been Ueberroth, the man who arguably did the most to create a surplus.

He tried to persuade the directors to spend $3 million to reimburse foreign Olympic committees for housing costs, but was turned down.

He has yet to attend a board meeting--kept busy, he said, by his job as commissioner of major league baseball.

Like Usher, he acknowledged that his role has changed. “I think I am just a board member,” he said in an interview. “. . . I think I am no more than another vote, one way or another.”

He expressed confidence that most of the surplus eventually will go to youth sports.

“I don’t know how it will all work out,” he said, “but what I would hope is that they are creative--because we operated the Games in a very creative way. I would hope that they would spend the dollars for young people in Southern California, sports-oriented. That’s what it was set up for.

“And if they spend it creatively, the surplus can seem like a billion dollars rather than a hundred million.”

THE AMATEUR ATHLETIC FOUNDATION

Here is a list of the directors of the Los Angeles Olympic Organizing Committee’s Amateur Athletic Foundation:

Howard P. Allen, chairman of the board and chief executive officer of Southern California Edison John C. Argue, attorney and president of the Southern California Committee for the Olympics. Roy L. Ash, business executive and former Richard M. Nixon Administration budget director. Tom Bradley, Los Angeles mayor. Yvonne Brathwaite Burke, lawyer, former county supervisor, state legislator and U.S. representative. Rafer Johnson, telephone executive and Olympic gold medalist in 1960. Maureen Kindel, president of the Los Angeles Board of Public Works. Stephen R. Reinhardt, federal judge in Los Angeles. William R. Robertson, executive secretary of the Los Angeles County Federation of Labor, AFL-CIO. Rodney R. Rood, Atlantic Richfield executive. Peter V. Ueberroth, commissioner of Major League Baseball and former president of the LAOOC. Harry Usher, commissioner of the U.S. Football League. former LAOOC general manager. Gilbert R. Vasquez, accountant. Card Walker, former chairman of Walt Disney Productions. Lew Wasserman, chairman and chief executive of MCA Inc. David L. Wolper, television and movie producer. Paul Ziffren, attorney and LAOOC chairman.