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Latest Crises May Finally Mean Change for U.S.O.C. February 10, 2003 By RICHARD SANDOMIR and BILL PENNINGTON Amid the lush gardens and the replicas of Greek statuary at a museum near Montgomery, Ala., called Jasmine Hill, officials of the United States Olympic Committee and some of the organization's most important corporate sponsors gathered in August to discuss their entwined futures. After Anthony T. Ponturo, the vice president for sports marketing of Anheuser-Busch, finished a presentation, Lloyd Ward, the Olympic committee's chief executive, rose and, smilingly broadly, asked Ponturo, "What can we do for you?" Ponturo quickly replied, "Stay out of the newspapers." Seldom has less heed been paid to advice from a powerful sponsor. Over the last month alone, the bitter infighting among members of the Olympic committee's senior board and staff has produced a cascade of headlines concerning conflicts of interest, resignations, factional battles and possible no-confidence votes. The organization's executive committee determined that Ward had acted in a way that gave the appearance of a conflict of interest. Five Olympic officials, including the ethics officer, resigned in protest, saying that the committee had failed to take strong action against Ward. Then last week, the Olympic committee's president, Marty Mankamyer, stepped down after a month of pressure from five vice presidents and two other top officials, a period of crisis that culminated after it was revealed that she may have also violated the organization's ethics code. The turmoil has been deeply embarrassing to the Olympic committee, but the long-term consequences could be much more serious. There is growing concern that corporate sponsors may become reluctant to continue to spend millions for athletes' training, that the bid by New York City to play host to the 2012 Summer Games may be undermined and that the Olympic committee may find it hard to attract top-notch executive talent. To stave off those possibilities, several United States senators have begun talking about the need to pare the Olympic committee's organizational structure. There is talk, too, of imposing more stringent federal oversight of the Olympic committee. The organization's executive committee, meeting over the weekend in Chicago, voted to deny Ward the $184,800 bonus he had earned for 2002. "This is a national embarrassment to us and to the Olympic movement," said John MacAloon, an Olympic historian at the University of Chicago. Referring to Dr. Jacques Rogge, the president of the International Olympic Committee, MacAloon added, "Mr. Rogge has said he only wants the U.S.O.C. to fix itself, but they have been going through this for 20 years: the absence of trustworthy, reliable management." Senator Ben Nighthorse Campbell, Republican of Colorado, is eager to overhaul the organization, whose actions, he said, "make me sick to my stomach." A member of the United States Olympic judo team in 1964, Campbell said he wanted to see headlines only about competing athletes, not warring executives. "I don't want to pick up the paper and read about another fight," Campbell said, "unless it's in the boxing ring." It appears very likely that the Olympic committee's unwieldy structure - a 123-member board of directors and a 21-member executive committee - will be changed. But many people in the Olympic movement question whether a reorganization will, by itself, ensure stable management or leaders who can work cooperatively and understand how to avoid conflicts of interest. The latest round of conflict with the Olympic committee began with the ethics investigation into Ward, who was found to have violated the committee's ethics code when he directed a staff member to help his brother and a friend, who were seeking a $4.6 million contract to provide backup power to the Pan American Games, which will be held in the Dominican Republic this summer. The executive committee determined that Ward had created only an appearance of a conflict of interest. That decision provoked the resignations of five Olympic officials. It also led indirectly to the resignation of Mankamyer, the committee's president, after it was revealed last week that she had accepted part of a real estate agent's commission from a purchase of property by Ward, even though she had no role in the transaction. Many people in Congress and around the country now seem convinced of the need to change how the organization is operated. "It should have been done before, and now we've created a crisis to create change," said Bill Stapleton, a vice president of the Olympic committee and the leader of the anti-Mankamyer campaign. Ways to Restructure Among the likely changes are trimming the 123-member board to 20 or fewer members, and reducing the powerful executive committee, with 21 members, to fewer than 10. The roles of the president, who is a volunteer, and the chief executive, who is the senior paid executive, may be defined more clearly. Over the past two decades, presidents and chief executives of the Olympic committee have often been in conflict, squabbling over everything from who will speak to the news media to who will oversee international relations. "There has never been a bright line that says this is the responsibility of paid staff and this is the responsibility of volunteer staff," said Richard D. Schultz, who served as executive director from 1995 until 2000. The title was then changed to chief executive and the position's powers were expanded. But Schultz's replacement, Norm Blake, who was accustomed to a corporate environment that allowed him to decide matters swiftly and decisively, floundered when he offended volunteers with his blunt approach to cutting costs and staff. Blake left after eight months, in October 2000. A year later, Ward was named chief executive, and his relationship with Sandra Baldwin, who was then the president and who supported his selection, was not friction-filled. But Baldwin resigned in May after acknowledging that she had lied on her resumé about her academic credentials. Mankamyer replaced Baldwin, and she and Ward quickly became adversaries, especially after Ward declined to resign in the fall from the Augusta National Golf Club because of its all-male membership. Mankamyer had wanted him to leave the club because it discriminated against women, Olympic officials said. "You didn't see the acrimony at executive committee meetings," said Patrick Rodgers, the Olympic committee's ethics officer who stepped down last month. "But you noticed they didn't speak." How much a major change in governance will alter the organization's inbred culture is difficult to gauge, nor will it guarantee that the most qualified, most ethical people will be attracted to leadership positions. Anita DeFrantz, a bronze medalist in rowing at the 1976 Summer Olympics who is a member of the United States and International Olympic Committees, said: "To paraphrase George McGovern during the Watergate hearings: good laws are important, but even more important are good people. Can we attract a Bill Gates? I don't think we can afford him." Donna de Varona, a two-time gold medalist in swimming at the 1964 Summer Olympics, said: "You're always held captive to your leadership and who you bring in. It's still a roll of the dice." A change in the size of the board and the executive committee may reduce the number of constituencies fighting for attention and money. But more important, many critics of the Olympic committee say, is the need for government oversight of the organization's operations and finances, which have expanded drastically over the past two decades. The harshest critic among Olympic sponsors is David F. D'Alessandro, the chairman of John Hancock Financial Services, who recently demanded an accounting of how sponsors' money was spent. In essence, the Olympic committee is a nonprofit organization whose prime function is raising money. It has political and international roles, and a headquarters staff of about 500, but it exists primarily to distribute money from the public, sponsors and television to the national sports governing bodies, which spend the money on athletes. "There is a cancerous tumor within the U.S.O.C., and it's not just about governance and people," D'Alessandro said. "It has to do with the way it brings in and spends money, and how it's incredibly dependent for more than 50 percent of its revenues from the I.O.C." Many have said that more direct and continual Congressional oversight is required. In the past, such regulation was rejected, but now, with the ethics crisis coming after the organization's failures in the Salt Lake City bidding scandal, there is greater sentiment to find a forceful, permanent way to make the Olympic committee more accountable. "Virtually every other country has a minister or subminister cabinet position for sport, which introduces a discipline where a cabinet ministry is continuously dealing with the Olympic committee," MacAloon, the Olympic historian, said. "Without it, problems remain and fester. The challenge is for Congress to find a proportionate American solution that can't be a weak, `Oh, send us a report' kind of oversight." The Trickle-Down Effect In gyms and weight rooms across the country, Olympic-level athletes are weighing the fallout from the Olympic committee's troubles. A trickle-down effect is feared, one that is damaging not only to the size and the number of sponsorships, but also to the image of the Olympic movement. "I hope the public understands we have nothing to do with it," said Steven Lopez of Houston, a gold medalist in taekwondo at the 2000 Olympics in Sydney, Australia. "A lot of people come to me asking about all this stuff, and I say: `That's at the top. I'm just down here training as hard as I can day after day.' If anything, the people at the top are supposed to be watching our backs. "But I know if the sponsors are reading the same papers I'm reading, you have to wonder what they are thinking. The Athens Olympics are just around the corner. This is when sponsorship deals get done. I haven't felt an effect yet, but what if this continues?" Others have already seen an impact on sponsorship dollars and in requests for public appearances at the corporate level - a common way for Olympic athletes to supplement their incomes to pay for training. Evan Morgenstein is the agent for more than 50 Olympians, from swimmers to bobsledders. "This has been a nightmare for us," Morgenstein said. "The Olympic movement is turning into the laughingstock of the sports marketing world. Everything is on hold. Many Olympic sponsors won't sign on right now. What would be the point? If you had a press conference or a satellite meeting, there is nothing you could do in the media that would outshine this circus going on. "This can't continue, because if you anger enough of the public, it is so easy to turn the Olympic movement into something inconsequential." Shane Hamman is among the world's top weight lifters and an American Olympian from the Sydney Games. "As athletes we're pretty focused on our training, but you do hope everything will be cleared up soon," Hamman said. "We're all worried about the sponsorships. That's a lifeblood." De Varona, the two-time gold medalist, noted that in the midst of the organizational uproar, American Olympians have been performing well this winter in international skiing and skating. But can that level of achievement be sustained in a climate of chaos? Joe Umphenour, a triathlete from Bellevue, Wash., trains at least six hours a day, six days a week while living at the Olympic committee's dormitory complex in Colorado Springs. While he does not dwell on each news development, he has become wary. "If things get worse and if the sponsors decide to pull back," Umphenour said, "that's when we'll feel the trickle-down effect. They mean everything to us and if we don't have support, we're not going to get the medals." Tracy Mattes, a pentathlete from Wisconsin, longs for more representative guidance from the Olympic committee's power structure. "I still think, on the whole, the Olympic image is great," Mattes said. "Unfortunately, a few individuals have created a controversy that has hurt everyone. The disappointing thing is that, as athletes, we're doing everything we can to be the best in the world. And we expect the same of our leadership, too. One Olympic ideal should fit all." With 18 months until the 2004 Summer Games, many sponsors are hoping that the current crisis will fade and that the public will continue to separate the unsightly executive problems from the athletic events in Greece and beyond. With sponsors paid up through Athens, the goal for the U.S.O.C. is to persuade them to re-enlist through 2008. "Major sponsors know it's about the athletes and the Games," said Philip Guarascio, a consultant, who, when he worked for General Motors, negotiated a long-term sponsorship with the Olympic committee that expires in 2008. The sponsors' contracts include escape clauses, which were added after the Salt Lake City bidding scandal. Those clauses let sponsors out if U.S.O.C. actions create "offense, outrage, ridicule and contempt" among a substantial segment of the public. The continuing danger is whether its current crisis and management problems will reduce the willingness of sponsors and the public to help finance the Olympic committee. So far, sponsorship sales of nearly $60 million for the period from 2005 to 2008 far exceed the pace four years ago. Still, one lost donation was Jasmine Hill, where U.S.O.C. officials and sponsors met in August. Jim Inscoe, president of the Jasmine Hill Foundation, wanted to donate the property to be used as an academy to teach Olympic values and ethics. But last month, Inscoe withdrew his offer because of inattention from Ward and the Olympic committee's executive difficulties. "Everywhere you turn, they have ethical problems," Inscoe said. "They can't do what is good and fine and wonderful for the Olympics." http://www.nytimes.com/2003/02/10/sports/othersports/10USOC.html?ex=1045878681&ei=1&en=162ef5cdc76d595a HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact [EMAIL PROTECTED] or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to [EMAIL PROTECTED] Copyright 2002 The New York Times Company