Ousted Olympics Official Tells His Side in Scandal

In this spring of his discontent, Agustin Arroyo of Ecuador finds his thoughts turning to the favors that cost him the beloved seat he held for 30 years on the International Olympic Committee. And to Tom Welch, who led Salt Lake City’s winning bid for the 2002 Winter Games.

“With Tom,” Arroyo said, “it was always an embrace.” And, not infrequently, there was something more: a retriever puppy for Arroyo, the dog fancier. Plane fare to a crucial IOC meeting in Europe for his wife. A job and living expenses for one of his stepdaughters.

The story of Arroyo, the first of the ousted IOC members to detail his side of the scandal for a U.S. newspaper, is a journey inside the “Olympic family,” where lines were blurred between business and personal favors, where gratuities worth thousands of dollars were treated as tokens of friendship.

The 75-year-old attorney and former diplomat says he believed such gifts were acts of personal generosity. Investigators say otherwise. According to a spreadsheet prepared by investigators and obtained by The Times, $33,569 in Arroyo-related expenses were billed to the Salt Lake bid committee.

In recounting the Salt Lake City episode, Arroyo described an IOC culture of gift-giving and lavish perks that led this year to his downfall along with five other IOC members. But he said he had no regrets.

The institutional breakdowns that precipitated the scandal are expected to play a prominent role this week in Seoul as the IOC issues various reports and selects the site for the 2006 Winter Games. The meetings begin today.

Arroyo, the son of a former president of Ecuador, contends that he and the other expelled members were offered up as scapegoats to save IOC President Juan Antonio Samaranch’s job and to make it seem that the committee was reacting forcefully to the Salt Lake City scandal.

To buttress his denials of wrongdoing, Arroyo said he never saw some of the payments from the bid committee that have been attributed to him and his family. One example, he said, is that he did not receive a $3,000 cashier’s check that IOC investigators said was made out to him.

Law enforcement investigators have not contacted Arroyo. But sources said U.S. and Utah prosecutors, as a routine matter, are exploring whether any money allegedly spent to woo IOC members may have been diverted to the personal use of people connected to the bid committee.

Arroyo’s allegations and protestations of innocence were dismissed by Montreal lawyer Dick Pound, the IOC vice president who headed the commission that recommended the expulsions. “The commission and the executive board [the IOC’s ruling panel] were collectively satisfied that [Arroyo’s] was a case that called for the action that was taken,” Pound said.

Arroyo’s explanation did not ring true to an ethics expert either. “If this is naivete, it’s willful blindness,” said Michael Josephson, who heads a Marina del Rey ethics institute and is helping to implement a U.S. Olympic Committee ethics code.

“He created the appearance of impropriety, and that’s why he’s gone,” Josephson said. “And unless bodies like the IOC understand the importance of making judgments that are impartial and independent, without personal interest involved, it [will go] from one scandal to the next.”

As Arroyo enters the living room of his stepdaughters’ townhouse in suburban Atlanta, it’s apparent that he can hardly believe he is no longer a member of the IOC.

He wears two watches, and across his barrel chest he sports a lapel pin, a striped tie and a pearl-and-gold tie clasp--most of the items, ironically, gifts from Olympic bidders.

“I say that I might be out of the Olympics but the Olympics will never be out of me,” said Arroyo, who was appointed to the IOC at the Mexico City Summer Games in 1968.

He said he met Welch in 1989 at an IOC convention in Puerto Rico, when Salt Lake City was bidding for the 1998 Games. The two men and their wives--even some of their grown children--became fast friends, he said.

In cultivating such a relationship, Welch was following a blueprint for success suggested by Samaranch, according to a report by the Salt Lake City bid committee’s ethics panel.

In 1989, Samaranch advised Welch and his top lieutenant to “become personally acquainted with as many IOC members as possible and to become part of the ‘Olympic family,’ ” the report said, adding that some IOC members expected to be treated lavishly.

Welch, who resigned from the bid committee in 1997 amid allegations of spousal abuse, could not be reached for comment. His attorney did not return repeated phone calls.

Arroyo, who served as Ecuador’s ambassador to Britain in the 1970s, maintains he neither expected nor demanded perks at Salt Lake City or anywhere else.

A report released this month said Atlanta bidders gave Arroyo a ruby pin worth $475. The report also shows the Atlanta committee gave out 37 other gifts worth $200 or more. Samaranch got one. So did two members of the committee that investigated the Salt Lake City scandal.

Arroyo said he does not recall receiving the pin. His wife, Miss Venezuela of 1947, also said she does not remember the pin.

Officials in Atlanta--as well as in Manchester, England, and in Toronto, another 1996 bidder--said they never saw Arroyo with his hand out.

Mary Drye, a volunteer hostess in Atlanta, said she met Agustin and Raquel Arroyo at the 1989 IOC session in Puerto Rico and later spent many hours with them before and during the 1996 Games.

She said the Arroyos delighted in simple pleasures, such as traipsing off to a discount drug chain, where they would load up on items they apparently couldn’t find in Ecuador. “He was in line waiting to pay,” Drye said. “He didn’t wait for me to pay for anything.”

Arroyo said his 1991 official inspection of Salt Lake City helped persuade him that it was the appropriate location for the 1998 Games, so he had no compunction about fraternizing with the head of the bidding group. Even his wife became allied with Salt Lake’s effort.

While the Arroyos were in Utah, Welch arranged an unusual excursion--to a cloistered nunnery. The idea was that Raquel Arroyo could invoke divine grace for Salt Lake’s bid by leaving a basket of 13 eggs for the nuns--one egg apiece for Jesus and the 12 apostles. A South American custom, she said.

“As you know, I have great faith in Raquel’s feelings and promptings and would love to accompany her to the convent,” Welch wrote to the Arroyos before the visit.

Salt Lake, however, did not win the 1998 Games. The victor was Nagano, which investigators say was aided by millions of dollars in contributions from Japanese companies to the IOC museum in Switzerland.

Afterward, Arroyo recalled, Welch told him that Salt Lake would bid for the 2002 Games. But, he said, no one could influence his vote with gifts or anything else because he already considered Salt Lake City the best venue for the Games.

“You try to bribe a person who is either undecided or is for someone else,” he said. “Do you believe that during the second bid Salt Lake City needed to bribe a person that in the first bid . . . voted for Salt Lake City?”

Ethics expert Josephson said that as a general matter, there is a reason to curry favor with allies: “You bribe people so that they stay bribed.”

About 40% of the $33,569 listed by investigators allegedly went to Arroyo’s stepdaughter, Nancy Rignault de Chezeuil, as part of the bid committee’s “scholarship” program. At the time, she was in her 40s and not in school.

The father and stepdaughter question the accuracy of some spreadsheet items, and they say the rest of the expenditures were represented to them as personal gifts from Welch.

Charlie Battle, who came to know Welch and Arroyo while heading “international relations” for Atlanta, said press reports have convinced him that Welch “went way overboard.” But, Battle added, Welch “legitimately was these people’s friend, would call them, would do personal things for them.”

On a trip to Ecuador, Welch arrived bearing a black curly-coated retriever puppy. Arroyo said he didn’t believe he could graciously refuse the gift.

In gratitude, Raquel Arroyo said, she sent Welch’s wife a black coral necklace from Ecuador.

The first three items on the spreadsheet--a total of $1,010 listed as “entertainment and gifts”--were checks made out to the Florida breeder who provided the dog.

Investigators, meantime, have consistently referred to the dog as a golden retriever. That’s the sort of mistake, Arroyo said, that should cast doubt on all their findings.

He acknowledges that he was given $5,077 in June 1995 so his wife could accompany him to Budapest for the IOC vote on the 2002 Games. But he said he recalls Welch told her: “You go as my personal guest.”

If Welch had said the money was from the committee, Arroyo insists, he never would have taken it. “I’m not stupid. I’m a lawyer,” he said. “It [would be] like taking the rope they’re going to hang you with and putting it yourself around your neck.”

The same goes, he said, for $6,991 spent on a ski vacation the extended Arroyo family enjoyed in Park City, Utah, in December 1994.

Arroyo’s son-in-law, Allan Pollak, who was there, said he had originally intended to pick up the tab and, as managing director of Chase Manhattan Bank’s branch in Venezuela, could easily have afforded the bill. But, he said, “Mr. Welch said, ‘No, no, no, this is my invitation.’ ”

The Arroyos said Welch’s generosity was never more evident than when it came to Rignault, Raquel Arroyo’s daughter from a previous marriage.

In 1992 Rignault, living in Houston, was recently divorced and short on cash. As any concerned father would do, Arroyo said, he called his friend for help: “But I said very, very clearly, ‘Nothing to do with the bid committee,’ ” to avoid a conflict of interest.

Rignault said Welch paid for her to fly to Salt Lake City to see if the place suited her. An artist, she said he helped her get a job in July 1992 repairing murals at the state fairgrounds. And, she said, he agreed to pay for her moving expenses, several weeks’ rent and furniture for an apartment.

The hospitality amounted to more than $2,400, according to the spreadsheet. But Rignault said she did not consider it excessive. “As a South American,” she said, “if I invite you and I have the means . . . I pay everything for you.”

Six weeks in Utah, meantime, was enough to convince her to return to Texas, she said.

The spreadsheet says several more checks were made out to her. One, for $3,000, was issued in September 1993, the same month the IOC awarded Sydney the 2000 Games and turned its attention to 2002. Another check, for $2,500, was issued in May 1995, weeks before the vote on the 2002 Games.

Rignault said she never received those checks. Pointing to the driveway and to her 1984 Toyota Supra, with more than 220,000 miles, she said, “I would have fixed my car or bought a new car--and I would have fixed my credit--if the Olympics were giving me money. I never saw a cent.”

In a report issued in March, the IOC said the $3,000 bought a cashier’s check made payable to “Mr. Agustin C. Arroyo.” The $2,500 check was made payable to a Salt Lake City bank “for Nancy Arroyo” and “a cashier’s check was issued in exchange for this check.”

Arroyo denied receiving the money. “I never saw one check,” he said. “I can swear that with, how do you say, a lie detector.”

Also disputed is a $529 reimbursement to a bid committee staffer for an August 1994 hotel bill attributed to “Arroyo” at a Holiday Inn in Provo. Arroyo said he was in Monaco that month, and Rignault said she has never been to Provo.

Noting that his family coat of arms bears the motto Veritas vincit, or “the truth wins,” Arroyo said he cannot fathom how anyone could construe his conduct as wrongdoing. “They keep saying corruption and bribery, corruption and bribery,” he said. “I don’t believe I have ever done anything incorrect in my life.”