Bidding for Glory: The Flawed Bidding Process for the Olympic Games
INTRODUCTION
The Olympic Games originated in Greece nearly 3,000 years ago. Since the first modern Olympics in 1896, the Games have undergone massive changes and become a spotlight for international success in athletics. Beginning in 1994, the Winter Games and Summer Games were held separately. While the decision to separate the Games marked a significant milestone and signaled the wide expanse of events athletes could participate in, the separation also opened the opportunity for greater corruption in the International Olympic Committee (IOC) and nations seeking the glory of hosting the Games. This essay explores corruption in the IOC and the Olympic bidding process for hosting the Olympic Games and touches on the anti-corruption efforts made in the last several years as well as the benchmark case of U.S. v. Welch. The essay then makes a modest proposal to amend the bidding process via an Olympic charter amendment that would require candidate countries to enact legislation to create a cause of action against bad actors in the bidding process.
BACKGROUND
In the past several decades, countries across the globe have clamored to host the Olympic Games; the international recognition that comes with hosting the Games is unparalleled. Moreover, hosting the Games often leads to an increase in a host country’s global trade status and overall economy. In fact, the very act of bidding shows a country’s willingness to commit to trade and increasing its trade flow on an international level.[1] Additionally, hosting the games often leads to a boost in national pride, resulting in greater work productivity among the country’s citizens and an increase in morale.
With the opportunity for international recognition and the positive economic benefits of hosting the games, it is no wonder why bidding countries might be motivated to engage in unethical behavior or excessive spending during the IOC bidding process. For years, the bidding process has allowed for corruption and waste at the expense of the bidding country’s citizens. In 1986, it was estimated that bidding cities spent a collective $50 to $70 million on bids for the 1992 games, averaging roughly $800,000 per IOC voter.[2] While greater attention has been drawn to the issues surrounding the bidding process after United States v. Welch, where IOC members were successfully bribed to vote for Salt Lake City to host the 2002 Winter Games, the IOC still faces significant hurdles in eliminating corruption in Olympic bidding.
A. Bidding for the Olympic Games
In December 2014, the IOC introduced new rules of conduct for the bidding and application process, which went into effect for the first time during the 2022 Winter Olympics bidding process. The IOC elects its members from whoever the IOC “deems qualified.”[3] These “qualified” members are typically active athletes, former athletes, and presidents or those in senior positions at international sports federations or other international organizations recognized by the IOC. The recruit or potential member must then receive a majority of votes at an IOC Session.
According to the new procedures put in place by the IOC, each country begins the bidding process when the country’s National Olympic Committee (NOC) proposes a host city and submits an application to the IOC.[4] The NOCs then attend an “Applicant City Seminar” in Lausanne, Switzerland, where the committees learn more about the bidding process and the long-term benefits of hosting the Olympic Games.
Following the seminar, NOCs go through a “Candidature Acceptance Procedure.” The purpose of procedure is to determine each city’s potential to host and organize the Games. The procedure involves a questionnaire, which is compiled into a risk assessment report by an IOC Working Group to be presented to the IOC.[5] The Working Group consists of various Olympic Stakeholders, such as the International Federations, the National Olympic Committees, and the IOC Athletes’ Commission. The risk assessment report aids the IOC Executive Board in selecting candidate cities. Once the risk assessment report is compiled, the IOC’s Working Group examines the application files, and the IOC Executive Board accepts the candidate cities. The process then moves into the “Candidature Phase.”
During the Candidature Phase, cities are asked to fill out a second questionnaire and submit detailed plans about the city’s capacity to host the games. The second questionnaire considers several factors, including the vision and legacy of the city; the games concept and competition venues; the Olympic village; the potential press and media accommodations; the overall sporting experience; the candidate city’s environment and meteorology; the transportation available; the candidate city’s medical service and doping control; the safety and security in the candidate city; the candidate city’s government and public support; any possible immigration issues; and the financial and marketing capabilities of the candidate city. In addition to the questionnaire, the IOC considers the country’s compliance with the Olympic Charter, the World Anti-Doping Code, and the IOC Rules of Ethics as well as any other applicable rules established by the IOC. Independent experts audit the financial management of the candidate country using financial statements, an audit report, and other financial information provided by the NOCs.
Members of the IOC Evaluation Commission also conduct on-site visits in each of the candidate cities. Applicant cities are responsible for expenses incurred as a result of these visits. Presumably, in an effort to combat bribery, accommodations for Evaluation Committee members must be “modest.” Interestingly, there is no precise figure for what constitutes “modest” accommodations. Once the on-site visits have concluded, the Evaluation Committee publishes a report to be presented to the IOC.[6] The report highlights the all the challenges that each potential host city presents with their projects. After the report is published, the IOC begins the voting process. All eligible IOC members are asked to vote and may only vote for one city per round. IOC members who are nationals of the candidate country are ineligible to vote. Voting continues for as many rounds as are needed for a city to obtain a majority of IOC votes.
There are some anti-corruption measures built into the bidding process. For instance, IOC members are barred from visiting candidate countries apart from the on-site visits during the bidding and candidature process. If an IOC member must travel to a candidate city or country for any reason during the bidding and candidature process, he or she must inform the IOC Ethics Commission beforehand. The member’s travel cannot be used as an opportunity for promotion of the candidate city. Moreover, IOC members must be very limited in their interactions with candidate cities. IOC members cannot be invited to any reception linked to the promotion of election of candidate city or receive an honorary degrees or official decorations from candidate countries or cities. Additionally, ambassadors of candidate countries cannot visit IOC members and cities cannot use the name or image of an IOC member in connection with the country’s candidacy.
Although these safeguards are in place and each NOC must comply with the Olympic Charter throughout the bidding process, allegations of corruption in the IOC bidding and voting process abound.[7] IOC members have allegedly accepted bribes to vote for Rio De Janeiro, Brazil as the site of the 2016 Summer Games and Tokyo, Japan as the site of the 2020 Summer Games.[8] In fact, these allegations began in 1998, when six committee members were dismissed for accepting bribes from members of the committee that advanced the bid of Salt Lake City, Utah, for the 2002 Winter Games.
B. The Decision in United States. v. Welch
To understand the extent of corruption within the Olympic bidding process, it is essential to consider an instance where corruption occurred. There have been allegations of corruption all over the world, but a recent, domestic scandal occurred in 1998 when Salt Lake City, Utah, bid for the 2002 Winter Games. The Salt Lake City scandal is an excellent example of the lengths cities and countries will go through to host the Olympic Games. The legal discussion of this scandal is laid out in the Tenth Circuit decision U.S. v. Welch.[9]
The Defendants in this case were Thomas Welch and David Johnson, respectively President and Senior Vice President of the Salt Lake City Bid Committee (SLBC).[10] The SLBC was set up as a 26 U.S.C. § 501(c)(3) not-for-profit corporation and its primary purpose was to secure, in collaboration with the United States Olympic Committee (USOC) and IOC, the right to host the 2002 Winter Games. The SLBC began competing for 2002 Winter Games in 1994 and won the bid in June 1995. Defendants Welch and Johnson were indicted for fifteen bribery-related counts of criminal misconduct related to their actions to win the bid to host the Olympics.[11] The counts included fraud, wire fraud, use of communication in interstate and foreign commerce to facilitate unlawful activity, and conspiracy to defraud the U.S. by committing numerous bribery-related offenses. The District Court dismissed the indictment, but the Tenth Circuit reversed and remanded the decision.
The indictment alleged that the Defendants violated these federal statutes by bribing members of the IOC. Specifically, there were direct and indirect payments of money to IOC members. The Defendants paid for tuition, paid for living expenses, and gave spending money to children and relatives of IOC members. Expenses of IOC members, such as medical, travel, and personal expenses, were additionally paid by the Defendants. Other bribes included free ski holidays, sleigh rides, shopping trips, and massages.[12] The Defendants proved to be skilled at the art of bribery, tailoring each of the bribes to specific IOC members.[13] For instance, SLBC officials gave IOC members free credit cards when they were in town and brought IOC couples to the 1995 Super Bowl. The Defendants even went so far as to attain a resident alien status for an IOC member’s son by providing false documents to immigration authorities. Additionally, one of the sons of an IOC member had their tuition and living expenses at Brigham Young University (BYU) paid for by the SLBC.[14] The bribes amounted to about one million dollars in benefits to the IOC members and their families.[15]
The SLBC, its board of trustees, and the SLBC’s contributors claimed ignorance to the all the Defendants’ bribes. Everyone involved, including the USOC, IOC, Salt Lake City, the State of Utah, and the U.S. denied any knowledge of the Defendants’ bad actions. As previously discussed, IOC members are subjected to the provisions of the International Olympic Charter as well as the countries competing for the bids. Most importantly, IOC members are required to take an oath that they will not be swayed by commercial influence.[16] To circumvent these procedural safeguards, the Defendants allegedly made cash payments to IOC members and improperly recorded payments and benefits in SLBC’s corporate books and records.[17]
In examining the Defendants’ violations of federal statutes, the District Court focused on Travel Act in its dismissal of this proceeding. The Travel Act prohibits using mail or “any facility in interstate or foreign commerce with intent to . . . facilitate . . . any unlawful activity.”[18] Bribery is included in the Act’s definition of unlawful conduct. The court looked to the Utah Code’s definition of bribery, which defined bribery as “any benefit with the purpose of influencing the conduct of the . . . agent, or fiduciary in relating to his . . . principal’s affairs.”[19] The District Court dismissed this charge after examining previous prosecutions where a defendant was charged for a violation of the Travel Act. The applicable Utah statute was deemed the state’s “commercial bribery law” and the court thought it absurd to hold the Utah’s legislature intended to criminalize “gifts” used to promote Utah as location of the 2002 Winter Games.[20] The District Court also dismissed the conspiracy, mail, and wire fraud charges that were based on the Defendants’ alleged intent to defraud the SLBC of actual property and right to control how that property was used.
Additionally, at the District Court level, the Defendants argued that under Swiss Law, where the IOC is based, an IOC member is not considered an agent or fiduciary as required to support a charge under the Travel Act and Utah Code. The Tenth Circuit noted that the Travel Act was enacted by Congress to try to alleviate the complexities between state and local governments’ ability to cope with the international interstate nature of criminal organized crime.[21] Further, the court stated that the Olympic Games are an international event that are hosted by Utah and the U.S. As such, the SLBC acted as a U.S. representative when the U.S. had an “undeniable interest in denouncing corruption in the selection process for the host city of the Olympic Games.”[22]
The Defendants argued that since the SLBC’s funds were used for the purpose of being awarded the Olympic games, the SLBC was not defrauded or deprived of money or property. The court ruled against this argument by stating that the SLBC was still deprived of its funds because the Defendants were awarded the games under fraudulent pretenses. Therefore, the Defendants could still be held criminally liable for the mail and wire fraud charges against them. The indictment was thus reversed and remanded.
On remand, the Defendants filed a motion for acquittal. The motion was granted upon a finding that no reasonable jury could find either of the Defendants had the criminal intent to promote, manage, or facilitate any unlawful activity.[23] Additionally, there was not enough evidence in the record to find that the Defendants violated Utah’s commercial bribery statute. In fact, a juror from the trial commented that the Defendants were only acting in the best interest of Salt Lake City.
Moreover, the Travel Act, the most highly contested statute in this case, did not provide adequate means to prosecute the Defendants. The court specified that a successful prosecution under the Travel Act requires a strong “[U.S.] nexus” or evidence that gifts had been transferred through the U.S. The prosecution did not meet this standard because there was a disconnect between the gift-giving and a furtherance of the Defendants’ jobs. Further, as noted by the trial court, the gift giving was not actually harming anyone. However, this is an arguably contentious assertion. Taxpayers and donors that fund these committees arguably suffered unnecessary losses due to the large sums paid out by the bribes—funds that could have been used to fund education, healthcare, upkeep of public properties, or other governmental or charitable programs. Further, it is conceivable the bribery negatively impacted other candidate counties that were ethical in their Olympic bids by putting these candidate countries at an unfair disadvantage. At the very least, these bribes embarrassed the United States on an international stage.
U.S. v. Welch is considered by many as one of the biggest ethics scandals the Olympics has seen in the present day. The way the IOC decided to respond was critical to its revamp of reputation following the scandal. None of the conduct by the involved IOC members was acceptable, especially considering an IOC rule explicitly stated that members could not receive more than the monetary value of $150 US dollars before a bid was granted.[24] Following the case, the IOC conducted an internal investigation with the goal of effectively ridding the bidding process of corruption to ensure that a similar scandal could not happen again. Concluding in 1999, the internal investigation revealed allegations of bribes by other potential host cities, but unlike Salt Lake City, there was no evidence that the bribes were ever fulfilled.
In response to the scandal, the IOC expelled six of its members, three members resigned, and nine other members were investigated but only received warnings. The Ethics Commission was developed in 1999 and the Commission finalized a Code of Ethics which focused on the responsibilities of the candidate cities.[25] U.S. v. Welch thus signaled a departure from former processes that tolerated corruption during the Olympic bidding process and a greater need for ethical checks for IOC members and candidate countries.
ANALYSIS
The SLBC, its President and Vice President misappropriated over one million dollars in funds to win an Olympic Bid, yet no one was criminally prosecuted.[26] The United States did not have an appropriate federal or state statute to use against the Defendants in the action.[27] The closest the government came to such a statute was the Travel Act, but that was ultimately insufficient for the prosecution because the Defendants’ bad actions did not fall within the code and the state’s definition of unlawful activity.[28] However, what happened in U.S. v. Welch is just one example of bad actors abusing the Olympic bidding process and a country not having the proper laws in place that would lead to a successful criminal prosecution for this poor behavior.[29]
As such, the Olympic charter should be amended to require that countries create a law or have a law in place to prosecute bad actors as a condition of the country’s candidacy. If the IOC refused to amend the charter, the United States could act as an ethical leader and amend the Foreign Corrupt Practices Act to grant jurisdiction over bad actors that bribe IOC members.
A. Amending the Olympic Charter to Require an Enforcement Statute
The IOC should address the legal hurdles the United States faced in prosecuting the bad actors involved in the Salt Lake City scandal by amending the Olympic Charter to include a provision that requires bidding countries to have an anti-corruption legislation enacted before they begin their Olympic bids. The only consistent punishment of bad actors involved in scandals has been expulsion from their respective committee. This penalty is insufficient to punish unethical committee members’ actions and deter future corruption. The legislation could be tailored to govern a country’s National Olympic Committees and state level Olympic committees or the functional equivalent and their representatives and agents. The proposed amendment to the Olympic Charter would describe the aspects required of the anti-corruption legislation in a way that any country, developed or developing, could create a domestic statute.
The ideal anti-corruption statute would focus on two major provisions: anti-bribery and accounting.[30] At the outset of the statute, there would need to be defined terms that explicitly include that the legislation applies to a country or state’s Olympic Bid Committees. For example, the IOC could provide in their charter definitions for terms such as bribery and/or agent of the committee. The IOC’s definition of bribery should also proscribe situations where there was an “intent to influence” an agent or fiduciary of either the IOC or the domestic Olympic committee to account for situations where there was evidence of a bribe or improper influence but the transaction between the two bad actors was not executed. When the IOC performed the internal investigation following the Salt Lake City Scandal, it found proof of numerous instances where an IOC member was in correspondence with a bidding country’s representative about transactions contingent on that host country winning a bid. Including an “intent to influence” provision, also referred to as “conspiracy to commit offense or defraud,” will allow the hosting country a route to prosecute any Olympic committee members that are attempting to bribe the IOC members.[31]
Throughout the prosecution of the Defendants and investigation of SLBC, the SLBC claimed ignorance. The SLBC had no accurate record of how and when the money from the committee was used. To combat against this defense of ignorance by bidding cities and countries, the IOC should require an accounting provision for the anti-corruption statute. The accounting provision would regulate the funds expelled by the committee and instill strict reporting guidelines in which each NOC would be required to provide an accounting to the bidding country’s federal government or its equivalent and the IOC. This approach would leave no excuse for committees to turn a blind eye to the actions their members are engaging in without being prosecuted by their own government. The accounting provision would additionally include measures requiring committees to keep books, records, and accounts, described in reasonable detail, that accurately reflect the transactions and dispositions of assets. Thus, if there is a misappropriation of funds, there will be a clear paper trail of where the funds went and who handled the transactions.
While it would be ideal for the IOC to require that countries enact a law with the requirements described above, the IOC might be hesitant to make such an amendment to the Olympic Charter. Requiring countries to enact a law could result in a great deal of backlash as candidate countries may feel that the IOC is effectively telling the country how to run its government. Additionally, there may be a decrease in bidding as countries do not want to go through the laborious task of enacting such legislation. Countries that have democratic governments may be especially perturbed by this amendment. On the other hand, the IOC should be hesitant to award the Games to countries that are unwilling to enact such legislation. Refusal to enact protective legislation would highlight a country’s unwillingness to cooperate with anti-corruption measures in the bidding process, overall putting the bidding process at risk. Regardless of the backlash, there should be some requirement that bidding countries hold bad actors accountable.
B. Amending the Foreign Corrupt Practices Act
If the IOC were to refuse to enact a charter provision requiring that bad actors be held accountable in bidding countries, the United States could exemplify its prowess as an ethical governmental body by amending the Foreign Corrupt Practices Act (FCPA), thus giving the United States federal jurisdiction over bad actors and IOC members who accept bribes when the U.S. is a candidate country.
Passed in 1977, the FCPA prohibits United States citizens from bribing foreign government officials and foreign firms.[32] The Act is specific to publicly traded companies, making it a felony for these companies to use any instrument of interstate commerce to make corrupt payments to foreign officials.[33] If a foreign entity is engaged in bribery while in a United States territory, through use of the United States postal system or any other means, then the United States has criminal jurisdiction over that foreign entity.[34]
Under the Act, bribes can take many forms and are not only limited to payment in cash, but also the mere offering of “anything of value.”[35] Not all payment to influence a foreign official is punishable under the Act. The Act does not punish “grease payments,” meaning, payments made to facilitate an act or expedite performance of an act that the official was bound to do.[36] Moreover, the FCPA penalizes only those individuals and companies that use instrumentalities of interstate commerce “corruptly.”[37] The Act does not explicitly define “corruptly,” but it seems that the term applies to “any situation in which a payment or offer of payment is intentionally made in exchange for a business favor.”[38]Corruption can extend to payments made for the purposes of influencing an act of a foreign official in violation of her lawful duty.[39]
One primary issue in U.S. v. Welch was the Tenth Circuit’s inability to obtain jurisdiction over the IOC members who had accepted bribes. Thus, the FCPA could be amended to grant the U.S. jurisdiction to enforce ethical measures in the bidding process and extend to bribery of IOC officials. Members of the IOC are arguably foreign officials; they are elected to an international body to perform duties in the service of international sports. The issue in applying the FCPA to bribery of IOC officials lies in the corruption of the bribery; individuals and NOCs that bribe IOC members do not necessarily do so to obtain a business favor within the meaning of the Act. The FCPA could thus be amended to expand its definition of corruption as to allow for a bribe to be considered corrupt if it confers an indirect business benefit to the briber.
As discussed, the Olympics can lead to a boost in productivity and overall economic health of a country. Thus, an individual or business that bribes an IOC member arguably does so to obtain a business benefit or a business favor, though in an indirect way. A boosted economy could lead to greater prosperity for the individual’s business ventures. In the case of an NOC member bribing an IOC member, the prospect of having the Olympic Games in the country would mean job security for that NOC member as the NOC member would likely be employed to plan the Games.
Further, the FCPA would need an amended definition of “grease payments.” IOC members who accept bribes could argue that they voted for the candidate country in the course of their duties. Because there are so few countries that make it to the candidature phase, IOC members could argue they would have voted for the candidate country regardless of the bribes because there were few choices. Thus, the definition of “grease payments” would need to be amended as to prevent corrupt IOC members from making such an argument.
While the FCPA punishes a briber, it does not punish an individual for accepting the bribe and conferring the benefit. Therefore, under the current Act, IOC members could not be prosecuted for accepting bribes from NOCs or other individuals. Thus, the final proposed amendment to the FCPA would be to extend the Act to IOC members who accept a bribe and confer the indirect business benefit upon the candidate country by voting for the country as a host for the Games. Such an amendment would allow the United States to prosecute both corrupt IOC members and those who bribe the IOC members, ultimately exercising a role as a moral compass on an international scale.
A charter amendment requiring every country to have a law in place to prosecute bad actors would be most preferable. However, it is possible the IOC would be hesitant to tell countries how to run their governments. In any event, the United States could lead the charge in restoring ethics to the Olympic bidding process by amending the Foreign Corrupt Practices Act to reach corrupt IOC members and those who bribe them.
CONCLUSION
The allegations of fraud and dishonesty have jeopardized the purity and integrity of the Olympic Games. U.S. v. Welch is just one of many examples of corruption during the Olympic bidding process. It is crucial that the IOC continues to make strides to implement ethical practices and procedures in the bidding process and ensure candidate countries abide by these practices. Ensuring that unethical parties are held accountable may ultimately dissuade bad actors from engaging in unscrupulous behavior. Regardless of the measures implemented, the Olympic Games play an important role in international union and national pride. As such, the Games—from the bidding process and onward—should reflect honesty and integrity on the world stage.
Hannah Brefeld (‘22) is a Juris Doctor candidate at Michigan State University College of Law. She is a Managing Editor on the Michigan State Law Review. She graduated from Aquinas College with a Bachelor of Art in Political Science and minor in Legal Studies (‘19) where she played four years of college basketball. Her focus is in litigation and employment law.
Liesl Eschbach (‘22) is a Juris Doctor candidate at Michigan State University College of Law. She is a Managing Editor on the Michigan State Law Review. She graduated from Berklee College of Music with a Bachelor of Music (‘18), a minor in History (‘18), and a Master of Arts in Music Business (‘20). Prior to attending law school, Liesl fronted a country-rock band and worked as an indoor cycling instructor. Her primary area of interest is sports and entertainment law.
[1] See Moorad Choudhry, The Olympic Effect: Good for the Economy, CNBC (Aug. 7, 2012), https://www.cnbc.com/id/48544924.
[2] See Salt Lake City Olympic Scandal, CBC (Jan. 12, 1999), https://www.cbc.ca/archives/entry/salt-lake-city-olympic-scandal.
[3] See How Does One Become and IOC Member?, IOC, https://olympics.com/ioc/faq/roles-and-responsibilities-of-the-ioc-and-its-partners/how-does-one-become-an-ioc-member (last visited Nov. 11, 2021).
[4] See generally International Olympic Committee, Implementing Provision of the IOC Code of Ethics, https://stillmed.olympic.org/Documents/Commissions_PDFfiles/Ethics/Rules_of_Conduct-Cities_2022_Eng.pdf (last Nov. 12, 2021).
[5] See XXIV Olympic Winter Games 2022 Working Group Report, IOC (May 9, 2014), https://stillmed.olympics.com/media/Document%20Library/OlympicOrg/Documents/Host-City-Elections/XXIV-OWG-2022/Working-Group-Report-for-the-XXIV-Olympic-Winter-Games-2022.pdf?_ga=2.135103857.1722073342.1636385727-798991882.1636385726. In 2014, cities competed for the bid to hold the 2022 Winter Olympics, including Oslo, Almaty, Beijing, Lviv, and Krakow. See id. at 5.
[6] See generally Report of the 2022 Evaluation Commission, IOC (June 1, 2015), https://stillmed.olympics.com/media/Document%20Library/OlympicOrg/Documents/Host-City-Elections/XXIV-OWG-2022/Report-of-the-IOC-Evaluation-Commission-for-the-XXIV-Olympic-Winter-Games-2022.pdf?_ga=2.240535875.1722073342.1636385727-798991882.1636385726.
[7] In another attempt to fight corruption, the IOC launched the International Partnership Against Corruption in Sport (IPACS), its mission was to unite international sports organizations, governments, and international organizations to help eradicate corruption in sports. See International Partnership Against Corruption in Sport, IOC (IPACS), https://olympics.com/ioc/integrity/international-partnership-against-corruption-in-sport (last visited Oct. 13, 2021). IPACS created four tasks force to accomplish their mission and a fifty-page practical tool guide that aids potential host countries in their bid for an Olympic event. See id. However, this is an intergovernmental organization and countries may choose to partner with the organization, there are no requirements to abide by their guidelines or governance. IPACS efforts have resulted in informal partnerships with only ten countries’ governments. At this point, the IPACS has not produced any promising results that would indicate the IOC should not be doing more to prevent corruption in the bidding process.
[8] The Olympic Charter, International Olympic Committee, Aug. 8, 2021, Rule 33 (“All Applicant Cities shall comply with a Candidature Acceptance Procedure, conducted under the authority of the IOC Executive Board, which shall determine the contents of such procedure. The IOC Executive Board shall decide which cities will be accepted as Candidate Cities.”); Michael Rosenberg, When Will the IOC Finally Take a Stand and Protect Its Athletes?, Sports Illustrated (Aug. 2, 2021), https://www.si.com/olympics/2021/08/02/tokyo-olympics-protests-politics-international-olympic-committee; David C. Young, Olympic Games, Britannica, https://www.britannica.com/sports/Olympic-Games/Corruption (last visited Nov. 8, 2021).
[9] See U.S. v. Welch, 327 F.3d 1081 (10th Cir. 2003).
[10] See id. at 1084. Tom Welch was a lawyer and David Johnson was a Utah Economic Development Professional. These two resigned from their positions as soon as the scandal was leaked.
[11] See id. at 1084; see also 18 U.S.C. § 371; 18 U.S.C. § 1952(a)(3); 18 U.S.C. § 1341; 18 U.S.C. § 1343.
[12] See A. Jennings & C. Sambrook, The Great Olympic Swindle 2 (Simon and Schuster ed., 2000).
[13] See A. Shepard, An Olympian Scandal, Am. J. Rev. (April 1999).
[14] See id. The SLBC provided many benefits for the IOC members’ children. For example, there was a position with the Utah Department of Economic Development for one IOC member’s child, she also received tuition for her school in Texas she attended. There was also a real-estate transaction that was cleared between Utah and an IOC member, Jean Claude Ganga, for $60,000.00 once Utah was awarded the games. He also received $70,000.00 in cash for the purpose of feeding the children in his country, the Republic of Congo.
[15] See Welch, 327 F.3d at 1085–86. The alleged gifts consisted of: $320,000 to Jean Claude Ganga of the Congo; $91,000 to Bashirt Attarabulsi of Libya; $42,000 to Charles Mukora of Kenya; $20,000 to Zen Gadir of the Sudan; $78,000 to Un Yong Kim of South Korea; $195,000 to Rene Essomba of Cameroon; $3,000 to Austin Sealy of Barbados; $30,000 to Augustin Arroyo of Ecuador; $1,200 to Slobodan Filopovic of Yugolavia; $99,000 to David Sibandze of Swaziland; $107,00 to Lamine Keita of Mali; $33,750 to Pirjo Haggman of Finland; $8,000 to Guirandou N’Daiye of the Ivory Cost; $5,000 to Anton Geesink of the Netherlands; and $20,000 to Sergio Santander-Fantini of Chile.
[16] See id. at 1086. The Charter provides these relevant instructions: “limited certain expenditures by candidate cities, created rules concerning visits by IOC members to candidate cities, and placed limitations on the value of gifts and other benefits which could be given to IOC members by and on behalf of candidate cities.” See id.
[17] See id. at 1086 (using cash allowed the Defendants to use the funds for their “own personal purposes”). The Defendants additionally created a fake program that was advertised to provide training and equipment to children in developing countries; entered into sham contracts on behalf of the SLBC; provided fraudulent and misleading documents for the SLBC financial records; and concealed material information from the public. See id.
[18] See generally 18 U.S.C. § 1952.
[19] See Utah Code Ann. § 76-6-508(1)(a).
[20] See Mark A. Dodds, Revisiting the Salt Lake City Olympic Scandal: Would the Outcome be Different Today?, ResearchGate (May 2016); see also Welch, 327 F.3d at 1087. “Any benefit” was vague because it caused individuals to “guess” the proscribed conduct. See id.
[21] See id. at 1090. Travel Act “imposes criminal sanctions upon the person whose work takes him across State or National boundaries in aid of certain activities.” See id.
[22] See Welch, 327 F.3d at 1093.
[23] See Paul Foy, Judge Throws Out Salt Lake City Case, Washington Post, https://www.washingtonpost.com/archive/sports/2003/12/06/judge-throws-out-salt-lake-city-case/505c4d94-2a03-462f-836c-961adcaf15e0/ (last visited Nov. 11, 2021).
[24] See Steven Pealstein, Evidence of Corruption “Irrefutable,” IOC Official Says, Washington Post (Jan. 21, 1999), https://www.washingtonpost.com/wp-srv/digest/daily/jan99/oly21.htm.
[25] See Preamble, IOC Code of Ethics (2007).
[26] See Thomas A. Hamilton, The Long Hard Fall from Mount Olympus: The 2002 Salt Lake Olympic Games Bribery Scandal, 21 Marq. Sports L. Rev. 219, 219 (2010).
[27] See U.S. v. Welch, 327 F.3d 1081, 1081 (10th Cir. 2003).
[28] See id. at 1086.
[29] Tokyo Olympic Bid Committee paid $370,000 to the son of an IOC member before and after Tokyo was chose for the 2020 Summer Olympics. See Olympic Bid Scandal Linked to Former IOC Member’s Son, AP News, https://apnews.com/article/virus-outbreak-tokyo-lamine-diack-2020-tokyo-olympics-japan-057023df193a02e2799678917df7d055 (Sept. 21, 2020). Carlos Nuzman, head of the Brazilian Olympic Committee, was arrested for his role in the bribery scandal which allegedly won Rio the Bid. See Martha Kelner, Rio 2016 Olympic Chief Carlos Nuzman Arrested in Corruption Investigation, The Guardian, (Oct. 5, 2017), https://www.theguardian.com/world/2017/oct/05/brazilian-police-arrest-olympics-chief-carlos-arthur-nuzman-bribery-investigation. Nuzman was accused of storing 16 gold bars in a Swiss bank for a payment to Massata Diak who is banned for live from athletics and is a son of a former IOC member who voted for Rio to host games in exchange for money. See id.
[30] See generally Spotlight on Foreign Corrupt Practices Act, SEC, https://www.sec.gov/spotlight/foreign-corrupt-practices-act.shtml (last visited Nov. 13, 2021).
[31] See generally 18 U.S.C. § 371.
[32] See id. § 78a.
[33] Northrop Corp. v. Triad Fin. Establishment, 593 F. Supp. 928, 940 (C.D. Cal. 1984).
[34] See 15 U.S.C. §§ 78dd-1(g), 78dd-2-(j)(1).
[35] See id. § 78dd-1(a).
[36] See 18 No. 10 Andrews Corp. Off. & Directors Liab. Litig. Rep. 11.
[37] See United States v. Liebo, 923 F.2d 1308, 1312 (8th Cir. 1991).
[38] See 18 No. 10 Andrews Corp. Off. & Directors Liab. Litig. Rep. 11.
[39] 15 U.S.C. §§ 78dd-1(a)(2)(iii), (3)(iii).
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