It’s Difficult Building a Federal Case

Buried in the fine print of Internal Revenue Service Form 990, specifically at Question 3CQ of Part III of Schedule A, this question is asked: “Does the organization make grants for scholarships, fellowships, student loans, etc.?”

The answer provided by the Salt Lake Organizing Committee for the 2002 Winter Games and its predecessor, the bid committee, in their tax returns from 1990-97: No.

Organizers, however, have conceded in recent weeks that scholarships were provided to the relatives of some IOC members--as well as cash, free medical care, help with real estate deals and other amenities. Among the scholarships was one provided to Suhel Attarabulsi at Brigham Young and other Utah schools; his father, Bashir Mohamed Attarabulsi of Libya, resigned Friday from the IOC.

Does such aid mean organizers are guilty of criminal tax charges? Hardly. And the difficulty in proving why illustrates why federal prosecutors, who are now conducting one of four investigations into events in Salt Lake City, are likely to find it extraordinarily difficult to find any kind of charge that will stick.

“This is a tough, tough case,” said Laurie Levenson, a former federal prosecutor and now a dean at Loyola Law School.

One of the primary problems, according to Mark Werksman, another former federal prosecutor who is now one of Los Angeles’ prominent criminal defense lawyers: the statute of limitations for most federal crimes is five years. That means time is short for the U.S. Department of Justice inquiry.

A grand jury in Salt Lake City already has issued subpoenas. But the Justice inquiry is still likely to take months.

Lead prosecutor Richard N. Wiedis did not return calls seeking comment on the scope of the investigation.

But experienced lawyers said it’s likely prosecutors are looking at a variety of charges--among them fraud, bribery, conspiracy, obstruction of justice, tax crimes--and a specialized law called the Foreign Corrupt Practices Act.

That 1977 law, rarely invoked, makes it a crime to pay money or give a gift to a foreign official to induce any action “in violation of the lawful duty of such official.”

It’s unclear whether the law can be stretched to include IOC officials. In large part, that’s because it’s uncertain whether IOC members implicated in the scandal are representatives of another government. The IOC is not itself a foreign state.

Because of that plain fact, some legal scholars say the Foreign Corrupt Practices Act clearly does not apply to whatever happened between IOC members and Salt Lake City boosters. Even if the law could apply, experts noted, as a practical matter it’s not certain that the U.S. government can haul IOC members overseas into U.S. courts--or that it would want to do so. There are international treaties and global politics to consider.

The challenge with proving bribery is that the IOC awards the Games by secret ballot--so it would be problematic proving that a vote was exchanged for cash or some other benefit.

Dick Pound, the Canadian heading up the IOC inquiry into the Salt Lake City bid, has said that the IOC members under suspicion and Utah boosters have adamantly insisted there was no bribery.

That leaves a wide variety of crimes that would seem to apply more to Salt Lake City boosters than to IOC members--obstruction of justice, conspiracy and a wide range of fraud and tax crimes.

Salt Lake City organizers reportedly have opened their books to federal investigators.

But, Werksman said, prosecutors will want to know more: “Has anybody been told not to talk? That’s obstruction of justice.”

One tax issue certain to be considered, experts said, is whether the Salt Lake Organizing Committee violated its nonprofit status by giving hundreds of thousands of dollars in gifts to IOC members.

And as for those “no” boxes on the committee’s tax forms, it’s not enough that they were checked, Levenson said. Prosecutors must show they were checked on purpose, with an intent to deceive.

Added to the overall mix, she said, is that any case tried in Salt Lake City may end up with jurors who believe the locals involved with the bid are themselves victims, not criminals who ought to do time in a federal prison for trying to bring the Olympics to Utah .

“There are a lot more facts to know before we can say where this is headed,” she said.