Olympic Panel Purges Leaders Amid Scandal

Reeling from allegations of bribery and facing mounting financial pressure from sponsors, the Salt Lake Organizing Committee for the 2002 Winter Olympics purged its top leadership Friday.

G. Frank Joklik, president and chief executive of the committee, resigned, while Dave Johnson, the committee’s No. 2 official, was asked to quit. Two other senior executives were put on paid leave and officials terminated a $10,000-per-month consulting contract with the former director of the committee, Tom Welch.

Joklik said he was “shocked and dismayed at new revelations” that had been dribbling out in the nation’s media in recent days--disclosures that he confirmed Friday at a crowded press conference here.

“As a man who sought donations from his friends to fund this effort, and as a man who has complete faith in the values of the Olympic movement and the nobility of this pursuit, the acts during the Olympic bidding process that besmirch our reputation break my heart,” Joklik added.

Even as Joklik confirmed revelations that Salt Lake boosters had given members of the International Olympic Committee or their relatives expensive gifts, free health care, scholarships and cash payments, a senior IOC official predicted Friday that the scandal will soon prompt further housecleaning.

The resignations of Joklik and Johnson capped a week of disclosures of just how far boosters had gone in a bid to win the Games. Joklik said a “number of IOC members and their families” had gotten cash payments--in one case more than $70,000. He also confirmed a news report that one IOC member from Africa turned a profitable land deal with the help of a Salt Lake booster.

Late Friday night, Utah Gov. Mike Leavitt’s spokeswoman, Vicki Varela, dropped another bombshell: “I can confirm there are allegations of prostitution involving IOC members and those allegations are being investigated.” She declined to be more specific.

The week’s events sparked deep concern among corporate sponsors, making them wary in the midst of what a key Olympic official called a “critical stage” in fund-raising, with hundreds of millions of dollars yet to be raised.

The disclosures were making it “extremely difficult and perhaps not possible to raise the funds necessary for these Games,” said John Krimsky, the U.S. Olympic Committee’s marketing expert.

US West Communications Inc. has already delayed a $5-million payment to the Salt Lake Organizing Committee while seeking explanations and assurances of no more “surprises,” as the phone company put it in a letter. “We still have some questions,” company spokesman Michael Frandsen said Friday.

It was agreed Thursday night--after three days of virtually nonstop meetings at Utah’s governor’s mansion involving state, city and U.S. Olympic officials--that a major housecleaning was necessary. There are four investigations into allegations of wrongdoing, including one by the U.S. Department of Justice, though none has yet to draw any conclusions.

The IOC has stressed that Salt Lake will not be stripped of the Games. But Leavitt said Friday, “We cannot avoid the fact that we are injured by these events” by a “sinister and dark corner of corruption” which has tarnished the “shining light” of the Olympics.

“It must be made absolutely clear that the actions of a few do not reflect the values, moral expectations or standards of behavior of this community and state,” Leavitt added at the news conference. “We deplore it, and we revolt at being associated with them.”

The Olympics and the process by which the Games are awarded have been marked over the years by unsubstantiated complaints of unfair competition or unsavory dealings. But the allegations involving Utah boosters may turn out to be a turning point in the Olympic selection process, one that may change the way the cities bid for future Games.

Anita DeFrantz, president of the Amateur Athletic Foundation in Los Angeles and an IOC vice president, pointed out that this is the first time that officials have been provided with “specific information on which we can act.”

The scandal began in early December after a Salt Lake City television station obtained a copy of a draft letter regarding a scholarship for the daughter of an IOC member.

Thereafter, the Salt Lake Organizing Committee acknowledged that its predecessor, the committee bidding for the 2002 Games, had given about $400,000 in scholarship funds to 13 people, six of them relatives of IOC members, primarily from Africa.

Organizers also acknowledged that the bid committee had provided free health care to three people with IOC affiliations through Salt Lake City’s Intermountain Health Care, the state’s largest provider of medical services. And they said the bid committee had handed out expensive gifts, including guns and skis.

The IOC promptly launched an inquiry. So too did the USOC, the organizing committee’s ethics panel and the Justice Department.

The ethics panel has been instructed to detail all payments and gifts by the bid committee and to make recommendations that will allow the SLOC to “go forward with the highest level of integrity.” A preliminary report is due Thursday, the final report Feb. 11.

The USOC investigation, chaired by former Maine Democratic Sen. George J. Mitchell, is due to issue a report by Feb. 28. A possibility: new rules for U.S. cities bidding for Olympics.

The IOC investigation is expected to focus on alleged wrongdoing by IOC members as well as on the bidding process for the Games. A preliminary report is due Jan. 24 at a meeting in Switzerland, and one result could be the centralization of power in the IOC’s executive board.

Currently, the 115-member IOC awards the Games after secret-ballot voting by all members seven years before the Games are to be held. A simple majority is enough to win. IOC President Juan Antonio Samaranch does not vote, saying he reserves his ballot to break a tie.

A Salt Lake City newspaper reported this week that Samaranch accepted gifts from Utah boosters, including expensive firearms. In a follow-up story, the Salt Lake Tribune then quoted Samaranch as saying that the IOC’s basic rule--no gifts over $150--doesn’t apply to him because he doesn’t vote.

Even so, Samaranch exerts tremendous influence over the IOC. New members members, who are typically influential business executives or longtime sports figures in their own countries, come aboard only with his blessing.

If the IOC inquiry determines that individual members have asked for or accepted bribes, they could be expelled. “If we have to clean, we will clean,” Samaranch has said.

DeFrantz suggested that as many as a dozen of the 115 members may be dropped, but he added Samaranch is unlikely to be ousted. Nor, she said, should he be. “He’s been a good president. We have work to do. We have some members who have abused their privilege. And they should be gone.”

Leavitt said he had spoken Friday with Samaranch and urged him to form “an agenda of reform.” Samaranch, speaking from Barcelona, Spain, where he lives, told the Associated Press later Friday, “We all want things to return to normal as soon as possible.”

However, the Justice Department investigation may drag on for months or even years. Responding to the Justice Department inquiry, the organizing committee hired the Los Angeles law firm of Latham & Watkins. While conducting an “inventory” of facts, one source said, Latham attorneys learned of the cash payments from Salt Lake boosters to IOC members or relatives.

The payments were discussed at a meeting in the middle of the week at the governor’s mansion that included Leavitt and several aides, Joklik, various members of the SLOC executive board, high-ranking USOC officials and the Latham attorneys.

Full details have not been made public. Joklik confirmed Friday that there were multiple payments, saying the bid committee gave “direct cash payments to a number of IOC members and their families.”

Even as the cash payments were being discussed, the Associated Press said, a prominent IOC member, Jean-Claude Ganga of the Republic of Congo, made $60,000 buying Utah property in a purchase arranged with help from a member of the bid committee, Bennie Smith, a businessman who spent eight years wooing the votes of African IOC members.

Smith could not be reached Friday for comment. Ganga could not be located.

The revelations this week intensified with each passing day, and by Thursday it was apparent that drastic leadership changes were in order. They included:

* Johnson’s forced resignation. The senior vice president of the organizing committee, he played a major fund-raising role on the bid committee.

* Welch, a senior executive on the bid committee who then headed the organizing committee until resigning in 1997 after being accused of assaulting his wife. He lost the $10,000-a-month consulting contract that he had negotiated two years ago.

* Two others involved in the bid process were put on administrative leave: Kelly Flint, the organizing committee’s senior vice president of marketing and legal affairs, and Rod Hamson, its licensing director.

* Joklik, who had succeeded Welch as president of the organizing committee, tendered his resignation. He also offered to stay on for a few weeks while a search for a successor is conducted. The resignation and offer were accepted.

Leavitt said he is certain Joklik is innocent of any wrongdoing. The governor called Joklik’s resignation a “selfless act of statesmanship.”

Leavitt also said, “This corner of Olympic corruption did not begin in Salt Lake City. But let it end here.”

Times staff writer Lisa Dillman contributed to this story.

* MORE FALLOUT EXPECTED: Resignations represent only the first wave of the damage-control tsunami. D1