USOC Waiting for the Other Shoe to Drop

After two months of crisis, the U.S. Olympic Committee finds itself in limbo, awaiting a major restructuring, perhaps including key changes to the 1978 law that gave it life.

A purge of senior leadership, sparked by an ethics-related investigation centering on former chief executive Lloyd Ward, has given the USOC a once-in-a-generation opportunity for a makeover, Olympic observers have said. Two reform commissions are at work, one chartered by Congress, the other a USOC in-house panel.

At issue: any and all aspects of USOC operations, structure and culture. Unclear, however, is how broad or deep change can be, particularly to the 1978 Amateur Sports Act -- given time-related constraints as well as the prospect of war in the Middle East.

At stake is ensuring the USOC’s leading position among the world’s 199 national Olympic committees. But the reform process unfolds at a delicate moment, just as the International Olympic Committee undertakes negotiations for U.S. television rights for the 2010 and 2012 Games. Such rights have traditionally been a leading source of USOC revenue.

“We understand that it’s a task,” said Don Fehr, who heads the five-person committee appointed by Congress to review the USOC.

One of the tests confronting the USOC is what -- if anything -- ought to be done about finding replacements for those gone in the recent exodus.

Ward resigned Saturday. He had been a focus of increasingly critical attention for the last months of 2002. It was amplified by the Dec. 30 disclosure that he had directed USOC staff to help a company with ties to his brother and a friend that was seeking a contract for the 2003 Pan American Games, and then by news reports last week on USOC ticketing procedures and travel expenses.

Jim Scherr, a senior USOC staffer, is handling day-to-day operations. There is no timetable for finding a new CEO.

Fred Wohlschlaeger, the USOC’s chief operating officer, resigned Tuesday. Ward had hired him in January 2002.

Marty Mankamyer, elected USOC president last summer, resigned Feb. 4. Bill Martin, athletic director at the University of Michigan, is serving as acting president.

Toby Wong, the marketing director hired by Ward, resigned a few weeks ago.

Other senior USOC officials have resigned in recent weeks, among them ethics compliance officer Pat Rodgers.

Sen. Ben Nighthorse Campbell (R-Colo.) said Tuesday that the USOC’s chief financial officer, Early Reese, also ought to step down.

In recent weeks, Congress has convened two hearings into the USOC’s management tumult.

A General Accounting Office audit remains possible and the possibility of direct governmental involvement in U.S. Olympic affairs cannot be dismissed, USOC officials have said.

The Justice Department is apparently investigating allegations leveled by an organizing committee official in Santo Domingo, capital of the Dominican Republic, that a bribe was offered to win a Pan Am Games deal for Energy Management Technologies of Detroit, although no deal was struck.

The USOC’s internal reform commission is aiming to finish by April. Sen. John McCain (R-Ariz.) and others have made it plain in recent weeks, though, that they are not much interested in the USOC’s internal study. The congressional panel is due to report by June 30.

John MacAloon, a University of Chicago professor and expert on the Olympic movement, said he expected the USOC that comes out of the reform process to be directed by a slimmed-down executive board of 12 or 15, perhaps even fewer, as opposed to the 123 on the current board.

MacAloon said he also hoped it would include “persons who are respected worldwide as Olympic managers and authorities,” to rectify a common U.S. problem within the IOC, where U.S. political influence has long been on the wane.

Laurence Chalip, a University of Texas professor who has studied the USOC and the Olympic committees of other countries, said it’s essential that a “new” USOC be subjected to an oversight process.

There is no oversight now, and “on a scale of one to 10, [an oversight function] is a 10,” he said. “Whether it should be congressional, I’m not persuaded.”

Harvey Schiller, a former USOC executive and a member of the congressional reform panel, said this week, “If we’re reflecting, really, on the U.S. Olympic Committee, I think we have to run it like a great business.”

The reform process also promises to open doors to those who have not been part of the USOC -- in particular, current or former Olympic athletes with business or management experience. For example, Mark Spitz, who won seven gold medals in swimming in the 1972 Munich Games, has not held any position of authority in the USOC.

Scherr, a 1988 Olympian in wrestling, earned an MBA at Northwestern University’s Kellogg Graduate School of Management and has been a sports administrator for more than a dozen years. He enjoys widespread respect within the USOC.

Because of Scherr’s reputation, as well as uncertainties involved in the reform process, Martin said Thursday in a conference call with reporters, the USOC ought not to be in a hurry to find a replacement CEO. He also said he would stay on as president if need be, calling it “service to your country.”

“I am not certain when reform is going to be over,” Martin said.

“If this is going to take congressional legislation to amend the act, which it in all likelihood will, and [the Senate commission reports at the] end of June, that puts it into the next legislative cycle, I would imagine. The question is, what should we be looking for?”

The focus, several observers stressed, ought to be on the most fundamental of issues: What is the USOC in business to do? Is it to win medals? Or develop sports around the country?

Since 1978, through 11 chief executives, four in the last four years, the USOC has wrestled with the nature of its mission.

“The whole movement is driven by three things,” said Spitz, now a successful businessman and motivational speaker. “Money, more money and the most money.

“There’s nothing wrong with that. If you’re running a corporation, it’s all about that. But at the end of the day, there are those people who are in the process who never in the same breath talk about the athletes. [U.S. athletes are] the product. And that is the problem.”

Given the competing interests at work, however, there can be little surprise if the focus drifts from the achievements of U.S. Olympians.

The current 123-member board includes officials from traditional Olympic sports such as track and field, wrestling, swimming, ice skating and skiing. But also part of the USOC “family” are representatives from such groups as the Jewish Community Centers Assn. and the Dwarf Athletic Assn. of America.

Scott Blackmun, a former USOC chief executive, said, “There are lots of things the USOC does because of references in the Amateur Sports Act. This is a great time for Congress to clarify what it wants the USOC to focus on. The easy thing is then finding a structure to focus on whatever it is they’re supposed to be focused on.”

The 1978 act doesn’t set out how the USOC should be structured. Moreover, according to architects of the law, the USOC is expected to decide common-sense priorities -- for instance, should the team handball federation get more money than the basketball federation and, if so, for what purpose -- but often struggles to do so.

The reason: USOC structure accords equal voting rights to those with conflicting priorities. Before the team handball players and basketball players march together into an Olympic stadium as part of the U.S. team, the individual federations are going their separate ways.

The act came out of attempts to resolve jurisdictional bickering between various interests, in particular the NCAA and Amateur Athletic Union.

It was drafted at a time when Olympic athletes were still amateurs, at least nominally, and the notion of billion-dollar television deals and corporate sponsorships, which now dominate the Olympic scene, was years away.

Scherr said the USOC had three primary objectives: “Winning medals. Inspiring Americans. And developing interest and participation in Olympic sport. Those three work together. But they have to be led by winning medals.”