Salt Lake City Olympic Officials Indicted

July 21, 2000 -- One week after rejecting a plea bargain, the two top officials in Salt Lake City’s Olympics bid were indicted Thursday by a federal grand jury for their alleged roles in an international vote-buying scheme to bring the Games to Utah.

The 15-count indictment, brought in Salt Lake City, alleges thatThomas Welch and David Johnson “offered and paid $1 million toinfluence the votes of more than a dozen International OlympicCommittee members,” the Justice Department said Washington.

Welch, 55, the former president of the Salt Lake City Olympicbid committee, and Johnson, 41, the ex-vice president, “preparedand executed a series of bogus contracts and falsified … books,records and other publicly available documents so as to concealtheir activities,” the Justice Department statement said.

The Justice Department also said Welch and Johnson “personallydiverted $130,000” in bid committee income.

Franklin Servan-Schreiber, director of communications and new media for the International Olympic Committee, told ABCNEWS.com: “It appears that no IOC member has been indicted. That’s all I know at this time, and therefore it’s very difficult for me to comment. … We’re very glad that we can get this over with.”

The United States Olympic Committee said in a formal statement, “The indictments issued today represent another important step to bringing closure to this matter. With the investigation apparently complete, we look forward to attention once again being focused on the athletes of the world. …”

Collapsed Negotiations

The two were charged with one count of conspiracy, five countsof mail fraud, five counts of wire fraud and four counts ofinterstate travel in aid of racketeering. Welch resigned from theSalt Lake City Olympic Bid Committee in 1997 and Johnson resignedin 1999.

Each of the charges carry a maximum sentence of five years inprison and a $250,000 fine.

The indictment followed the collapse of negotiations aimed at aplea bargain.

Last week, Welch and Johnson rejected a deal that would have hadthem plead guilty to a scheme to obstruct the Internal RevenueService from collecting taxes. That strategy builds on the case ofa former U.S. Olympic official who admitted evading taxes in asecret consulting agreement with Salt Lake City bidders.

“The idea that we defrauded the bid committee or anybody elseis preposterous. So is the charge that we bribed anybody,” Welchsaid in a statement.

Later, outside his home in Huntington Beach,Calif., he said: “We will be acquitted and we will present adefense that the people of Utah will understand.”

Johnson’s lawyer, Max Wheeler, had said Welch and Johnsonconsider themselves scapegoats for the vote-buying scandal, whichhas been investigated by the Justice Department for 1 1/2 years.

Lavish Gift-Giving

A Salt Lake ethics panel found that the bidders lavished morethan $1.2 million in cash, gifts, travel and other inducements onmembers of the IOC and their relatives. The panel largely blamedWelch and Johnson.

Bid trustees, including Gov. Mike Leavitt, have insisted theywere kept in the dark by Welch and Johnson.

Mitt Romney, president of the Salt Lake Organizing Committee,had said he hoped Welch and Johnson could reach a settlement thatwould end the scandal. Romney was brought in to clean up theorganization after the scandal broke in December 1998.

Scandal Prompted IOC Resignations

In the wake of the scandal, 10 IOC members resigned or wereremoved from the 105-year-old organization, and the organizingcommittee’s upper management was replaced.

Communications executive David Simmons pleaded guilty to taxfraud and admitted conspiring with bid leaders to provide a phonyjob for John Kim, son of South Korean IOC member Kim Un-yong. Theyounger Kim was indicted for allegedly entering the country on anillegally obtained visa and lying to the FBI.

Former USOC International Relations Director Alfredo La Mont ofColorado Springs, Colo., pleaded guilty to filing false tax returnsand admitted to conspiring with two unidentified bid officials inthe process.

The Associated Press contributed to this report.