IOC Comes In for a Hard Landing

First-class airline tickets that could be traded for cash were used as a form of currency by Salt Lake City Olympics organizers as they tried to win favor with members of the International Olympic Committee, according to officials familiar with investigations into the Olympic bribery scandal.

FBI agents and Olympic ethics investigators are examining evidence that the tickets were used to disguise illicit payments to several IOC members whose support was critical to Salt Lake City’s bid for the 2002 Olympics, the officials said.

Bought at premium prices by the Salt Lake City committee, the tickets in some instances were cashed in or traded for less-expensive fares, the officials said. Investigators are examining whether there was an understanding between some IOC members and the Salt Lake organizers that the tickets would serve as a form of payoff in return for support of the city’s Olympic bid, the officials said.

Investigators have homed in on nearly $4.6 million in travel expenses spent by the Salt Lake committee during its seven-year campaign to land the 2002 Winter Games. They are tracing airline ticket records to determine how they were ultimately used, a process that could take months, the officials said.

The tickets are one strand of much broader investigations of the Salt Lake committee’s finances that are proceeding on several fronts. Federal investigators in Salt Lake City are gathering documents and evidence from former officials of the Salt Lake City committee, while the U.S. Olympic Committee conducts an internal ethics probe of alleged bribery.

Cities around the globe that have competed for the Olympics in recent years have complained about IOC members’ demands for exorbitant or multiple airline tickets, perks that went far beyond what the cities were required to provide for IOC site inspections.

Norman M. Seagram, who headed the finance committee for Toronto’s unsuccessful bid for the 1996 Summer Games, said he helped draft a 1991 report to IOC headquarters in Switzerland alleging that at least 18 IOC members had engaged in practices designed to benefit financially from airline tickets.

“We warned them of a scandal that could tarnish the image of the entire Olympic movement, but they didn’t pay any heed,” Seagram said.

He said IOC members in some cases requested tickets but never made the trips, cashing in the tickets instead. When the Toronto committee tried using airline vouchers that could not be cashed in for IOC travel, some IOC members obtained their own discount tickets and demanded cash in exchange for returning the vouchers.

“There are all sorts of ways the game can be played, and in the IOC it seems that first-class airline tickets serve as a kind of universal currency,” Seagram said.

When IOC members inspect cities bidding for future games, Olympic protocol requires the bidders to provide round-trip, first-class airline tickets for the member and a guest. But organizers in various cities have complained that IOC members routinely abused the privilege. Some asked committees to pay for multiple trips or to foot the bill for an entourage.

First-class tickets typically cost many times more than regular economy fares.

Airline tickets paid for by check or cash can be cashed in almost anywhere in the world.

The dimensions of alleged travel abuse in Salt Lake City are slowly becoming apparent. An internal report presented to the IOC’s executive board Jan. 24 cited excess travel payments in its recommendation that two members be expelled. Four other members were also expelled last month. Three others remain under IOC investigation and three more have resigned.

The report alleged that Salt Lake City promoters paid Jean-Claude Ganga of Congo more than $115,000 in travel expenses and that Augustin Arroyo of Ecuador received $19,000.

In his defense, Ganga argued that “his frequent trips to Salt Lake City had been for health reasons,” the report said. But it concluded that Ganga took “largely excessive travel subsidies from SLOC.” Arroyo did not explain his actions. The report concluded that he “knowingly accepted payments from SLOC for the personal benefit of himself.”

The handling of travel expenses and other payments to IOC members is under scrutiny by federal investigators who are presenting evidence to a grand jury in Salt Lake City, officials said.

A key issue in the probe is whether there was an understanding between the Salt Lake City promoters and Olympic officials that the airline tickets were given in exchange for support for the city’s bid. Without such evidence, the tickets and other gifts such as scholarships, medical care and cash might be judged unethical rather than criminal.

Such evidence might be difficult to find in this case because the distribution of first-class airline tickets had become a routine aspect of the Olympic bid process by the time Salt Lake City’s abuses occurred.

In other developments:

* Utah Gov. Mike Leavitt, hinting at the nature of revelations in a forthcoming ethics report from the Salt Lake Organizing Committee for the 2002 Winter Games, said Thursday in Salt Lake City that some scholarships given relatives of IOC members were “not what you’d call traditional scholarships.”

Leavitt, speaking at a news conference called to tout a proposed expansion of the SLOC board of trustees, said he recently had reviewed financial documents that “amply demonstrated” that “these so-called scholarships”--inducements at the core of the scandal enveloping the Olympic movement--simply “were not scholarships.”

Pressed by reporters, he declined to provide further details.

Organizing committee officials previously have admitted that some bid boosters gave IOC members or their relatives cash, scholarships, jobs, free medical care and gifts--but have insisted the lavish outlay was not an attempt to buy votes for Salt Lake’s winning bid for the 2002 Games.

The revelations have sparked the biggest corruption scandal in the Olympic movement’s 105-year history.

The Salt Lake ethics report, which officials said will be released next week--as soon as Tuesday, no later than Thursday--is not expected to set forth broad new categories of misconduct. Officials have said, however, that it will detail how money was spent, and who knew what while the spending was going on.

* Although the IOC cleared Sydney Olympic officials earlier this week of breaking any rules in the bidding process, Olympics Minister Michael Knight said today he would seek approval from Sydney’s organizing committee for an independent review of records relating to the bid for the 2000 Games.

“The objective of this thorough independent examination is to clear the air on Sydney’s bid once and for all,” said Knight, who is also president of the organizing committee. “The 2000 Sydney Games are just too important to Australia for SOCOG to allow any doubts to linger.”

Knight expects to get approval at a board meeting on Wednesday. The examination, which will be led by a former auditor-general of South Australia, should be completed by March 11. Knight said bid records consist of more than 3,000 files.

Times staff writers Alan Abrahamson and Lisa Dillman contributed to this story.