[Senate Hearing 108-897]
[From the U.S. Government Publishing Office]
S. Hrg. 108-897
STATE OF THE UNITED STATES OLYMPIC COMMITTEE (USOC)
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
JANUARY 28, 2003
__________
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii
TRENT LOTT, Mississippi JOHN D. ROCKEFELLER IV, West
KAY BAILEY HUTCHISON, Texas Virginia
OLYMPIA J. SNOWE, Maine JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas JOHN B. BREAUX, Louisiana
GORDON SMITH, Oregon BYRON L. DORGAN, North Dakota
PETER G. FITZGERALD, Illinois RON WYDEN, Oregon
JOHN ENSIGN, Nevada BARBARA BOXER, California
GEORGE ALLEN, Virginia BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire MARIA CANTWELL, Washington
FRANK LAUTENBERG, New Jersey
Jeanne Bumpus, Republican Staff Director and General Counsel
Robert W. Chamberlin, Republican Chief Counsel
Kevin D. Kayes, Democratic Staff Director and Chief Counsel
Gregg Elias, Democratic General Counsel
C O N T E N T S
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Page
Hearing held on January 28, 2003................................. 1
Statement of Senator Breaux...................................... 7
Statement of Senator McCain...................................... 1
Statement of Senator Smith....................................... 7
Statement of Senator Stevens..................................... 2
Statement of Senator Wyden....................................... 3
Witnesses
Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado........ 4
Duberstein, Kenneth M., Chairman, USOC Ethics Committee.......... 8
Prepared statement........................................... 10
Godino, Rachel, Chairperson, Athletes' Advisory Council, and USOC
Executive Committee Member..................................... 28
Prepared statement........................................... 31
Mankamyer, Marty, President, United States Olympic Committee..... 43
Prepared statement........................................... 45
Marshall, Jr., Thurgood, Vice Chairman, USOC Ethics Committee.... 14
Prepared statement........................................... 15
Rodgers, Patrick J., Former USOC Ethics Compliance Officer....... 34
Prepared statement........................................... 36
Ward, Lloyd, Chief Executive Officer and Executive Director,
United States Olympic Committee................................ 39
Contents
Response to written questions submitted by Hon. Barbara Boxer to
Lloyd Ward..................................................... 68
Snowe, Hon. Olympia J., U.S. Senator from Maine, prepared
statement...................................................... 67
STATE OF THE UNITED STATES OLYMPIC COMMITTEE (USOC)
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TUESDAY, JANUARY 28, 2003
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 2:30 p.m. in room
SR-253, Russell Senate Office Building, Hon. John McCain,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JOHN McCAIN,
U.S. SENATOR FROM ARIZONA
The Chairman. Good afternoon. I welcome the witnesses and
thank those who made special arrangements to be here. The
purpose of this hearing is to examine both the recent reports
of turmoil within the USOC's leadership and what steps should
be taken to address this situation. The ongoing feud between
Mr. Ward and Mrs. Mankamyer has drawn sharp criticism from
corporate sponsors, the media, and the international sports
community.
Among those who have been critical include David
D'Alessandro, chairman and CEO of the USOC sponsor John Hancock
Financial Services, who called the USOC ``a dysfunctional
family that keeps electing the daft cousin or uncle to the top
job. Their bureaucracy must be blown up and restructured.'' The
head of one Olympic governing body referred to the USOC's
leaders as not only ``dysfunctional'' but ``cannibalistic''. A
writer for the Boston Globe wrote that, ``Everything that
happens with the Olympic committee has to do with ethics. It is
just one ethics problem after another.''
Frank DeFord of Sports Illustrated called the USOC
collectively a ``nincompoop'', and Dick Pound, a former IOC
vice president, warns that the current situation is, ``bad for
the United States.'' He goes on to say that, ``ultimately, if
it persists, it will be bad for the Olympic movement.''
The mission statement of USOC is to ``preserve and promote
the Olympic ideal as an effective, positive model that inspires
all Americans.'' Recent actions by those charged with leading
the USOC, however, have contradicted that mission and tainted
the organization's credibility in the eyes of the public. If we
are to restore the public's faith in the United States
Olympics' Committee we must resolve conflicts that exist within
its leadership but also reconsider the overall structure of the
organization.
The Commerce Committee oversees Olympics issues and has a
responsibility to ensure that the USOC operates effectively. In
light of the ongoing problems that exist within the USOC, which
may be compounded by the many changes this organization has
experienced since it was chartered back in the 1978 Ted Stevens
Amateur Sports Act, including the fact that since 1984 the USOC
has become a very big money operation, $500 million every 4
years, I would like to say today that this Committee will hold
another hearing within the next month to look beyond the
organization's current leadership roles. At that hearing, we
will examine the structure of the organization with an eye
toward reducing the tension that has existed historically
between the USOC CEO and its president, and to work to adapt
whatever reform measures may be needed.
During this process, I hope to rely on the expertise of my
key colleagues to my left, Senator Stevens and Senator
Campbell. Senator Stevens is the author of the 1978 Amateur
Sports Act, and we all know Senator Campbell is a former
Olympian. I want to thank them both for their dedication to the
preservation of amateur sports, and I appreciate their
involvement in this issue. I look forward to working with them,
with the rest of the Members of the Committee, as we try to
resolve this very, very unpleasant situation.
I would yield to Senator Stevens.
STATEMENT OF HON. TED STEVENS,
U.S. SENATOR FROM ALASKA
Senator Stevens. Thank you very much, Mr. Chairman, and
thank you for holding this hearing. I am concerned with recent
events within and surrounding the USOC. It seems that the USOC
has become dysfunctional as an institution, and has lost sight
of its principal focus, the American athletes. Not once over
the last 2 months have I read a single story about the USOC
that mentions the athletes.
As you have mentioned, after I was on President Ford's
Commission on Olympic Sports I spent 16 months working on this
Amateur Sports Act. We had two or three meetings a week here in
this very room for hours at a time trying to reach a consensus
on what should be in that act, and in the end we thought we had
created a system that would work.
Now, I am concerned that something in that system has
failed. It is not clear to me whether changes in the act are
needed, or if the governing structure of the USOC needs to be
changed. What is clear is that what is currently happening is
not acceptable to any of us. The USOC is an organization
created by Congress, and Congress has the power to revoke that
charter. Time and time again we have seen the failings of the
governance within the USOC. In 1995, the karate issues kept me
and my staff tied up for months. The athletes should not have
to turn to Congress to get disputes resolved in a timely
manner. The current equestrian problems have been going on for
over 2 years, and to my knowledge there is no resolution in
sight. Congress has been assuming good management, and with
good management these kinds of problems do not arise.
Chairman McCain, I do thank you for holding this hearing. I
hope we will work together, and I am delighted that Senator
Campbell is here to work with us. I will offer my staff to work
with the Committee staff in reviewing the act to see if we can
find solutions to these problems, but clearly it is going to
take some hard work to do so.
The Chairman. Thank you, Senator Stevens. Senator Wyden.
STATEMENT OF HON. RON WYDEN,
U.S. SENATOR FROM OREGON
Senator Wyden. Thank you, Mr. Chairman. I will look forward
very much to working with you and Senator Stevens and Senator
Campbell on this. Senator Stevens in particular has just done
such extraordinary work to support the Olympic Committee, and I
want him to know how much I have appreciated his leadership and
look forward to working with all three of you. This is going to
be a truly bipartisan effort.
Mr. Chairman and colleagues, plagued by conflicts of
interest among executives and inflicted by the turmoil of
turnover, scandals seem to follow the U.S. Olympics Committee
like dogs follow a meat wagon. There is a pattern of conflicts
of interest: the current U.S. Olympic Committee CEO signed a
conflict of interest statement on July 1 of 2002 saying he had
no real or perceived conflicts of interest at about the same
time he was trying to steer a $4.6 million contract related to
the Pan Am Games to his brother's company.
The Justice Department and FBI are also investigating a
bribery allegation involving Mr. Ward's brother's company and
the Pan Am Games. In December, the Ethics Committee of the USOC
found Mr. Ward's conduct created the appearance of a conflict
of interest, but then dismissed his conduct as what they called
a technical violation. In response, three members of the Ethics
Committee and his chief staff person, Mr. Patrick Rodgers,
resigned.
The pattern of conflict of interest really goes on and on,
and I also intend to investigate the press reports indicating
at the time he was hired to run the U.S. Olympic Committee Mr.
Ward failed to disclose his membership in the Augusta National
Golf Club, whose membership policy runs contrary to the Ted
Stevens Amateur Sports Act's goal, and I quote, ``to encourage
and provide assistance to amateur athletic activities for
women.''
So this Committee has got a big job to drain the swamp over
there at the Olympic Committee, and it is my view that the U.S.
Olympic Committee needs top to bottom restructuring, and I
would especially like to see more sunshine in its operations.
Finally, Mr. Chairman, I would like to note that Mr. Fred
Fielding, who did the internal investigation report of Mr.
Lloyd Ward, was invited to today's hearing but could not
attend. I am very disappointed because he, of course, did the
actual ethics investigation, and I hope that this Committee is
going to hear from Mr. Fielding in the future. I hope that he
would be willing to appear voluntarily, but if he is not
willing, Mr. Chairman, I think this is of such importance that
the Committee ought to consider issuing a subpoena to have Mr.
Fielding appear.
I thank you.
The Chairman. Well, thank you, Senator Wyden. I was very
disappointed that Mr. Fielding seemed to have other important
engagements than to be here, and if he refuses to appear before
the Committee, then I obviously I would ask the Members of the
Committee to approve a subpoena. It is very difficult to get
all the facts in this hearing without the person who conducted
the investigation, and I was astonished at his refusal to
appear. You would think that he would be interested in helping
this Committee clear up this issue. I thank you.
Senator Campbell.
STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL,
U.S. SENATOR FROM COLORADO
Senator Campbell. Thank you, Mr. Chairman. I appreciate you
convening this very important hearing, and appreciate your
allowing me to sit with the Committee as a guest. However, I
would be happy to defer to my colleague, Senator Breaux.
Senator Breaux. That is all right. Go ahead.
Senator Campbell. Then I will continue. I might say, Mr.
Chairman, I above many of my colleagues have a vested interest
in this issue, not only as a Senator in whose State the United
States Olympic Committee is headquartered, but as a taxpayer
and as an Olympian myself. I take the whole sordid mess, very
frankly, very personally and believe me, if medals were given
for bickering and in-fighting, people involved in this would be
gold medal recipients themselves.
Tonight, most of the English-speaking world will be
listening to the President of the United States as he outlines
an agenda to deal with issues of great importance, of potential
war in Iraq, a stagnated economy, homeland security, the budget
deficit, health and education for our people, and many other
things. There are going to be very difficult problems that we
have to contemplate in this upcoming Congress. America should
not be distracted by what appears to be a state of dysfunction
in the U.S. Olympic Committee.
My time as a member of the team, the Olympic Team, provided
me with considerable opportunities in my lifetime that I might
not otherwise have had, and they are certainly experiences that
I will treasure for my entire life, but because of those
memories years ago when I got involved in public policy I
decided to do what I could for young athletes who have had the
same experiences that I did.
I first started helping the USOC as a member of the
Colorado State legislature when I worked on legislation to
provide a State income tax check-off to raise money for the
USOC. I also worked on language to give tuition waivers to out-
of-State students attending colleges in Colorado while they
were in training, and to waive in-State certification for
doctors working at USOC headquarters.
Since I have been a Member of Congress, I, along with
Senator Stevens and several others, have been some of the
strongest supporters of the Olympic movement. As members of the
Appropriations Committee, we have been working for the last 6
years, as an example, to provide the USOC with a new office
building in Colorado Springs. We have worked to provide $14
million for the USOC's drug testing administration. We provided
that money directly through the United States Antidoping Agency
so the Office of the National Drug Control Policy does not have
administrative powers or any oversight.
The USOC often states with great pride that the Government
does not subsidize their effort, but we should set the record
straight. Since transfer of the Air Force base to the USOC in
the 1970's, although we do not directly subsidize, the Federal
Government has become increasingly involved in the Olympics by
providing billions, not millions, billions of dollars in
financial support for international sporting events both here
in the United States and worldwide, too.
For the recent Winter Games in Salt Lake City, the Federal
Government allocated well over $1.3 billion for infrastructure
improvements, security, and other needs. Compare that with the
$75 million we allocated for the 1984 Summer Games in Los
Angeles, or the $609 million that we allocated for the 1996
Summer Games in Atlanta. More taxpayers' money is spent with
each passing Olympiad.
We are also concerned with the continued safety of the U.S.
athletes. Last year, Senator Stevens and I, while in Athens,
directly questioned Greek Cabinet ministers, and, in fact, the
prime minister himself, about the security precautions we were
helping finance with American dollars for the upcoming Athens
Olympiad to make sure our team, as well as youngsters and
officials throughout the world, can compete in a safe
environment.
I was literally raised in the Olympic movement and I must
say that in the over half-century I have been part of it, I
have never known a time when it has been in more discord. It
seems for the past 15 years or so most of what I have read
about the USOC is one problem after another.
In 1991, Bob Helmick was accused of accepting bribes and
other improprieties. In the mid-1990's, there was a need to
hold hearings to make sure the USOC was fulfilling its mission
of providing equal opportunities for women and minorities. In
1998, it was the bribery and influence-peddling scandal
engulfing Salt Lake Winter Olympic bid, and in the last 2
years, there has been a constant change of leadership. The USOC
has had three presidents and four CEO's since the year 2000.
There is no way this country's Government, let alone a business
or any organization, can survive very long with that kind of
turnover.
Clearly, Olympic business is big business. As with any big
business, the management skills of its leader will determine
the success or failure of the agenda. To be sure, as I have
mentioned in other hearings before you, Senator McCain, the
IOC, the USOC, and the Olympic organizing committees at the
local level are all different entities, but when the five rings
are tarnished, we all suffer.
My commitment to the Olympic ideal did not waver when I
came to Washington that time, which was no surprise, the USOC
had problems with money management and a number of other
things, including accusations by the Colorado Springs Gazette
of feather-bedding and a number of other improprieties. At that
time, former Senator Bill Bradley, former Senator Tom McMillan
and I, who were the three here in Congress who had been on the
Olympic teams ourselves, we formed a bipartisan caucus with
other Members who believed in the Olympic ideals to act as sort
of a buffer against any potential congressional oversight of
the Olympic team, but because of the money and the man-hours
provided by the Federal Government and its agencies, and the
fact that Congress chartered the USOC in 1978 with the passage
of Senator Stevens' Amateur Sports Act, Congress has a larger
vested interest in this with each passing year.
For 20 years, I have opposed any Federal oversight over the
USOC's decisionmaking process, but Mr. Chairman, I think the
time has come to rethink that position. We in Congress do not
demand that our team wins gold medals, but we do have the
expectation that USOC officials keep the goals and be an
inspiration for personal conduct of our young athletes. My
ideal of the Olympic movement should promote unity,
camaraderie, sportsmanship, citizenship, and character, and
this Olympic-sized food fight of incessant squabbles and
internal dissension are not indicative of the Olympic ideals as
I understand them, and can only hurt the athletes.
I tell every official in the audience today that this is
not your personal team. I will tell you who it does belong to,
though, in my view. It belongs to every boy and girl who, as we
speak, are working their hearts out on sandlots, wrestling
mats, on tennis courts and swimming pools across America and
dreaming of the day that somewhere, sometime, they, too, will
be able to march into a stadium behind our flag. It belongs to
all of the moms and dads who drive endless miles and wait
endless hours and make endless sacrifices so the dreams of
their kids can come true. It belongs to every American donor
and sponsor, from those who give $1 to those who give millions,
who have followed the rags to fame stories of Jim Thorpe and
Jessie Owens, of Bob Mathias, and Mohammed Ali, and Mark Spitz,
and Wilma Rudolf, and Florence Griffiths Joyner, who is a great
friend of mine, and all of those athletes for over a century
who have personified what is supposed to be best in America.
The Olympic motto of citius, altius, fortius must not
become citius, altius, fortius, and devious. The USOC has lost
its way, and I am beginning to believe, with some of my
colleagues, that a little Government oversight is not a bad
idea. I have spoken to three of the people that resigned from
the Ethics Committee, and really from the standpoint of
regardless of who is in charge, the lines of authority seem to
be very unclear, and it looks to me like they need some major
structural changes.
I have declined to speak with a couple of the antagonists,
by the way, Mr. Chairman, who have, I think, complicated the
issue by already hiring attorneys. This is not a court of law
and, quite frankly, the introduction of the attorneys tells me
that there is already some degree of movement toward lawsuits,
which I think can only complicate it and make it all the worse,
and turn a media fiasco into something worse than it already
is.
So I thank you once again, Mr. Chairman, for this hearing.
I look forward to the testimony of our speakers.
The Chairman. Thank you, Senator Campbell, and we
appreciate your very strong statement, and we look forward to
working with you and Senator Stevens and Senator Wyden and
other Members of this Committee as we address this very
difficult issue, which you described in such compelling terms.
Senator Breaux.
STATEMENT OF HON. JOHN B. BREAUX,
U.S. SENATOR FROM LOUISIANA
Senator Breaux. Thank you, Mr. Chairman, and thank you very
much for convening this very timely and, I think, very, very
important hearing. The Olympics, as most all Americans and,
really, all people around the world has always been an
organization and a set of games every 4 years that the people
of the world have always looked up to with great admiration and
great inspiration.
I have been involved, along with a number of our colleagues
at the dais, in helping to raise funds here in this city on a
regular basis for the Olympic Committee, and we have been very
successful because we have always been able to tell the
sponsors and the participants that the Olympics are about the
very best in society. The Olympics bring out the very best in
humanity, the right to compete on a level playing field with
the nations and athletes from all over the world, and so I have
always had an extremely high view of everything that the
Olympics represents. It has always inspired me.
When you hear the stories of the athletes it brings tears
to your eyes to look at the sacrifices that they have made to
be able to compete in a world forum and be successful, being
successful just by competing, but today, apparently, we are
finding out that the organization that we require to put on
these wonderful games is in itself becoming dysfunctional, and
that is completely and totally unacceptable.
We saw the problems with the International Olympic
Committee that they have had, and that was very disturbing, and
I always felt, well, it is not going to happen here, because
our people are really above that, and yet we are finding out
that perhaps that is not true. I think that the games are
always about bringing out the very best in the athletes that
compete, so we certainly can expect no less of a standard for
those who put on those games. The hearing today that the
Chairman has called is to look at ways in which we can help
bring back those standards not just to the athletes but also to
the people who are in charge of the games themselves, and
hopefully out of all of this bad news can come a good
resolution to a very difficult problem.
Thank you.
The Chairman. Senator Smith.
STATEMENT OF HON. GORDON SMITH,
U.S. SENATOR FROM OREGON
Senator Smith. Thank you, Mr. Chairman. There is a
statement, a publication by the U.S. Olympic Committee
entitled, ``What is the United States Olympic Committee?'' They
answer the question, you, the American people, are the United
States Olympic Committee. You understand that the Olympic Games
are a shining example for so many that are good in our world.
Peace, harmony, and unity are words that go hand-in-hand with
the ideals of the Olympic movement, and you are committed to
ensuring that we set the tone for instilling those ideals in
all of our outreach efforts. You have bestowed upon us one of
the country's most precious commodities, the Olympic and
Paralympic dreams of young men and women from every corner of
the United States.
Mr. Chairman, that is a wonderful statement of purpose, but
if we have instilled in the committee the precious commodity of
the dreams of our young people, it seems to me the conduct of
some in the committee are turning those dreams into a
nightmare, and so I thank you for holding this hearing, because
maybe we can put some light and heat where it belongs and maybe
change some conduct for the future.
Thank you.
The Chairman. Thank you.
Our first panel is Mr. Kenneth Duberstein, chairman of the
USOC Ethics Committee, Mr. Thurgood Marshall, who is the vice
chairman of the USOC Ethics Committee. Mr. Duberstein, we will
be glad to hear any opening statements that you may make,
followed by Mr. Marshall. Welcome to the Committee.
STATEMENT OF KENNETH M. DUBERSTEIN,
CHAIRMAN, USOC ETHICS COMMITTEE
Mr. Duberstein. Thank you, Mr. Chairman and Members of the
Committee. Thank you for inviting me to appear before you this
afternoon. I am proud of my years of volunteer service with the
United States Olympic Committee and am proud of the Ethics
Oversight Committee report of January 10, 2003. Doing what is
right is not always popular, but we called them as we saw them
and we did it unanimously, 10 for 10, no asterisks, no
dissents, no motions to revise and extend.
As an outgrowth of the so-called Mitchell Commission on
which I served as vice chairman, I was asked to chair the
USOC's Ethics Oversight Committee 2 years ago by former
President Sandra Baldwin. It certainly has not been a dull
time. In light of recent events, many have asked me why I have
been willing to serve as the chairman, why take on this
thankless, endless task. I will admit I have asked myself the
same question more than once recently. It certainly is not
because of my athletic prowess.
I may be old-fashioned, but I believe deeply in the spirit
of Olympic movement, the dreams of kids growing up, going for
the gold, and the bridges built between nations by healthy,
athletic competition. Anyone who has attended the Olympics or
watched it on NBC cannot help but be touched by the patriotism,
the dedication of the athletes, and the true joy of the
competition.
Mr. Chairman, Members of the Committee, on this day devoted
to the state of the Union we all have but a simple wish for the
state of the USOC. We hope its leadership would be as strong
and as principled as that of our President and the bipartisan
leadership of the Congress.
Now let us turn, Mr. Chairman, specifically to the
independent Ethics Committee report, the findings of our
outside attorney, Fred Fielding, who led the investigation, and
the unanimous consensus of the 10 members of our panel. The
Ethics Committee action to review the alleged inappropriate
conduct of the CEO, Lloyd Ward, was initiated at the request of
President Marty Mankamyer by phone, and Ethics Compliance
Officer Pat Rodgers in writing in October 2002.
On October 24, after a telephonic committee meeting where
we were briefed by Ethics Compliance Officer Rodgers, the full
Ethics Oversight Committee authorized Mr. Rodgers to retain on
the committee's behalf outside legal representation to lead the
independent investigation. We unanimously agreed with Rodgers'
recommendation to retain Fred Fielding, the former counsel to
the President of the United States, to conduct the
investigation and report back to the committee on his findings.
Mr. Rodgers subsequently informed me that President
Mankamyer felt that Mr. Fielding was the right choice to do
this investigation, and the committee was authorized to retain
Mr. Fielding. Our charge to Mr. Fielding was to get to the
bottom of this, leave no stone unturned, let the chips fall
wherever they may.
Mr. Fielding carried out his investigation with vigor and I
think with great integrity. He asked for an expansion of the
scope of the investigation when it became apparent to Mr.
Fielding that other USOC individuals had an involvement in the
Ward matter, including Ethics Officer Pat Rodgers. When it
became apparent to Mr. Fielding that Mr. Rodgers was factually
involved, and that he and Mr. Ward had disagreed over Rodgers'
work performance, the Ethics Officer, at the request of the
entire Ethics Committee, agreed not to further participate in
the committee's deliberations.
I also requested, with the encouragement of the entire
committee, that President Mankamyer not participate in any
committee deliberations after our first meeting of October 24.
Mr. Rodgers had approved President Mankamyer's initial
participation because the president was, I was told, an ex
officio member of all committees, but members of the committee
and I, and members of the Executive Committee had received
reports that she was discussing the review and the initial
allegations with individuals outside of the Ethics Oversight
Committee.
On November 22, I requested that Mr. Fielding prepare a
written summary of his fact-gathering so that all members of
the committee could have complete access to his investigatory
report. I spoke with President Mankamyer shortly before
Christmas. At that time, she told me she had scheduled an
Executive Committee meeting for January 13, 2003, at which time
the Executive Committee would consider disciplinary action
against Lloyd Ward, and she expected the Ethics Committee to
conclude its deliberations 2 weeks before then. I told her we
would do our best, but I could not promise that.
The Ethics Committee met on December 23 and reviewed Mr.
Fielding's oral and written report. In addition to the review
of Mr. Ward's conduct, the Ethics Committee now had to deal
with the finding based on Mr. Fielding's oral and written
report, and their own experience during the review, that two
individuals, Ethics Compliance Officer Rodgers and USOC
President Mankamyer tried to use the ethics process to advance
their own agendas. We agreed as a committee that Mr. Fielding
and Mr. Thurgood Marshall, Jr., on my left, the vice chairman
of the committee, would draft a proposed statement based on the
USOC's code of ethics, citing Mr. Ward's conduct, and creating
the appearance of a conflict of interest. Mr. Ward's failure to
make a written disclosure of the potential financial interest
of his brother when he filed his annual disclosure in July
2002, the failure of Mr. Rodgers to do timely compliance
counseling of Mr. Ward, which could have helped avoid all of
this, and the committee's concern about the leaks over our
investigation and our commitment to ensuring the integrity and
confidentiality of our committee processes.
We did not exonerate Lloyd Ward, nor did we allow President
Mankamyer or Ethics Compliance Officer Rodgers' actions to go
unnoticed. We met for a final time by phone on January 8, 2003,
during which we reviewed the draft document and went through
each of the proposed findings one by one, line by line, and
word by word. We voted on the phone unanimously to approve the
report in its entirety. When I reached President Mankamyer she
thanked me for the committee's good work and said we had done
an outstanding service to the USOC Olympic movement. She
expressed special appreciation for the unanimity of our
conclusions.
Our responsibilities were to determine the facts and arrive
at conclusions based on those facts. Our understanding from
President Mankamyer and Ethics Officer Rodgers was that it was
the role of the Executive Committee to decide on what action,
if any, was to be taken on the entire matter based on our
findings and the confidential investigatory report by Fred
Fielding and our report. The Executive Committee, in its
meeting on January 13, it has been reported to me voted 18 to 3
to approve our findings and conclusions and to express the
committee's appreciation for a job well done. This saga clearly
demonstrates how much further the USOC must go to establish
truly a sound governing structure with high ethical standards.
President Reagan years ago reminded me to always do the
right thing. Do not back off from your principles, stay true to
your beliefs. People may try to push you one way or the other
toward their interest or their desires. ``You must stay the
course,'' he told me, ``and do what you think is right.'' We
stayed the course.
Mr. Chairman and Members of the Committee, the Ethics
Oversight Committee tried hard to drive a tough and fair
conclusion through the warring factions of the USOC. I believe
our outcome was right, but as we can all see, it has brought no
resolution, just fighting at a new level in new forums. It is
sad, and it is time to start over. Congress should lead the way
in redesigning the USOC. Even a thick-skinned former White
House Chief of Staff has learned yet again the hard way that no
good deed goes unpunished. If the Olympic flame burns brightly
again in the United States, as I believe it will, then it will
all have been worth the price.
Thank you, Mr. Chairman. Can I turn it over to Mr.
Marshall?
[The prepared statement of Mr. Duberstein follows:]
Prepared Statement of Kenneth M. Duberstein, Chairman,
USOC Ethics Committee
Mr. Chairman and Members of the Committee, thank you for inviting
me to appear before you this afternoon.
I am proud of my years of volunteer service with the United States
Olympic Committee and am proud of the Ethics Oversight Committee Report
of January 10, 2003. Doing what is right is not always popular but we
called them as we saw them and we did it unanimously! 10 for 10. No
asterisks. No dissents. No motions to ``revise and extend.''
Some years ago, former USOC President Bill Hybl asked me to serve
with former Senate Majority Leader George Mitchell on the ethics panel
for the USOC. Later, in 1998, Senator Mitchell and I led a Special
Commission of distinguished Americans to recommend reform of the IOC
and the USOC in light of the bid selection scandal in Salt Lake City.
This threemonth volunteer assignment turned out to take almost two
years, including testimony before this Committee and others. Our wide-
ranging report, I believe resulted in fundamental and positive change
in both organizations.
As an outgrowth of the Mitchell Commission, I was asked by former
President Sandra Baldwin to chair the USOC's reconstituted Ethics
Oversight Committee two years ago. It has not been a dull time, with
her resignation, the vetting of her potential successors, overseeing
the bid city selection process for 2012, the selection of Marty
Mankamyer, and now the current matter.
In light of recent events, many have asked why I've been willing to
serve as chairman. After all, it's not as if my life isn't chock full
of wonderful, rewarding assignments. Why take on this thankless task?
I'll admit I've asked myself the same question more than once recently.
It certainly isn't because of my athletic prowess! I may be old-
fashioned but I believe deeply in the spirit of the Olympic Movement,
the dreams of kids growing up to go for the gold and the bridges built
between nations by healthy athletic competition. Anyone who has
attended an Olympics or watched it on NBC can't help but be touched by
the patriotism, the dedication of the athletes and the true joy of the
competition.
Mr. Chairman, Members of the Committee, on this day devoted to the
State of the Union, we all have a simple wish for the state of the
USOC. We hope its leadership would be as strong and as principled as
that of our President and the bipartisan leadership in Congress.
Now, let's turn specifically to the independent Ethics Committee
and our report, the findings of distinguished attorney Fred Fielding,
who led the investigation and the unanimous consensus of the 10 members
of our panel.
The Ethics Committee action to review the alleged inappropriate
conduct of the CEO Lloyd Ward was initiated at the request of President
Marty Mankamyer by phone and Ethics Compliance Officer Pat Rodgers in
writing in October, 2002. On October 24, after a telephonic committee
meeting where we were briefed by Ethics Compliance Office Rodgers, the
full Ethics Oversight Committee authorized Mr. Rodgers to retain on the
Committee's behalf outside legal representation to lead the independent
investigation. The Committee unanimously agreed with Rodgers
recommendation to retain Fred Fielding of Wiley, Rein & Fielding, a
former counsel to the President of the United States, to conduct the
investigation and report back to the Committee on his findings. Mr.
Rodgers subsequently informed me that President Mankamyer felt Mr.
Fielding was the right choice to do this investigation and the
committee was authorized to retain Mr. Fielding.
Mr. Fielding was previously retained by the Ethics Oversight
Committee last summer to vet the candidates for President, created by
the resignation of Sandra Baldwin. He did his usual thorough
evaluation, which I subsequently used as the basis for my presentation
to the Executive Committee on July 29, 2002.
Our charge to Mr. Fielding was to get to the bottom of this. Leave
no stone unturned. Let the chips fall wherever they may.
Mr. Fielding carried out his investigation with vigor and his usual
great integrity. He asked for an expansion of the scope of the
investigation when it became apparent to Mr. Fielding that other USOC
individuals had an involvement in the Ward matter, including Ethics
Officer Pat Rodgers. When it became apparent to Mr. Fielding that Mr.
Rodgers was factually involved and that he and Mr. Ward had disagreed
over Rodgers' work performance, the Ethics Officer, at the request of
the entire and unanimous Committee, agreed not to further participate
in the Committee's deliberations.
I also requested, with the encouragement of the entire committee
that President Mankamyer not participate in any of the committee
deliberations after our first meeting on October 24. Mr. Rodgers had
approved President Mankamyer's initial participation because the
President was, I was told, an ex officio member of all committees. But
members of the Committee, and I, and members of the Executive
Committee, had received reports that she was discussing the review and
the initial allegations with individuals outside of the Ethics
Oversight Committee.
Upon completion of Mr. Fielding's interviews on November 21, he
made a brief telephone report to me with Mr. Rodgers present on the
phone line. On November 22, I requested that Mr. Fielding prepare a
written summary of his fact gathering so that all members of the
Committee could have complete access to his investigatory report.
I began receiving numerous phone messages from President Mankamyer
urging me to hurry up with the Committee's report to the Executive
Committee so that it could consider appropriate disciplinary action
against Mr. Ward. I did not return these calls initially because of our
earlier decision to go forward without the participation of President
Mankamyer.
I spoke with President Mankamyer shortly before Christmas. At that
time she told me that she had scheduled an Executive Committee meeting
for January 13, 2003, at which time the Executive Committee would
consider disciplinary action against Lloyd Ward and she expected the
Ethics Committee would conclude its deliberations two weeks before
then. I told her we would do our best but I could not promise that.
The Ethics Committee met by phone on December 23rd and reviewed Mr.
Fielding's oral and written report. In addition to the review of Mr.
Ward's conduct, the Ethics Oversight Committee now had to deal with the
finding based on Mr. Fielding's oral and written report and their own
experience during the review that two individuals, Ethics Compliance
Officer Patrick K. Rodgers and USOC President Marty Mankamyer, tried to
use the ethics process to advance their own agenda.
We agreed as a Committee that Mr. Fielding and Mr. Thurgood
Marshall, Jr., Vice Chairman of the Ethics Committee, would draft a
proposed statement based on the USOC's code of ethics, citing Mr.
Ward's conduct, creating the appearance of a conflict of interest, Mr.
Ward's failure to make a written disclosure of the potential financial
interest of his brother when he filed his annual disclosure in July,
2002, the failure of Mr. Rodgers to do timely compliance counseling of
Mr. Ward which could have helped avoid all this, the Committee's
concern about the leaks over our investigation and our commitment to
ensuring the integrity and confidentiality of our committee's
processes.
We did not exonerate Lloyd Ward, nor did we allow President
Mankamyer's or Ethics Compliance Officer Rodgers' actions to go
unnoticed.
We met for a final time by phone on January 8, 2003, during which
we reviewed the draft document and went through each of the proposed
findings one by one, line by line, word by word.
``After receiving and reviewing the attached Report * from the
Special Counsel, the USOC Code of Ethics, and further discussions, the
Committee unanimously now concludes as follows:
---------------------------------------------------------------------------
* The information referred to has been retained in Committee files.
---------------------------------------------------------------------------
Mr. Ward's conduct, in requesting a USOC employee to consider
providing assistance to his brother in a commercial venture, created
the appearance of a conflict of interest.
Mr. Ward failed to make a written disclosure of the potential
financial interest of his brother when he filed his annual disclosure
in July 2002.
There was a serious lack of sensitivity in the enforcement of the
USOC Ethics Code in April 2002, when Mr. Ward's request to a USOC
employee was first revealed, and which could have been easily corrected
without a breach of the reporting requirements and/or further activity
by Mr. Ward or any USOC employee, by the timely compliance counseling
of Mr. Ward as to his ethical obligations and restrictions.
The Ethics Oversight Committee is gravely concerned about the
recent public disclosures regarding the existence of its current
investigation and the comments and speculations attributed to officials
of the USOC in regard to the same. This conduct is contrary to the USOC
Code of Ethics and reflects a purposeful disregard of the spirit and
purpose of the ethics program and the Committee's charter. The
Committee deeply resents any attempt to abuse its process and use that
process for other purposes.
Only members of the Ethics Oversight Committee should participate
in the business of the Committee or its meetings, unless participation
by others is specifically requested by the Chair of the Committee; this
would exclude ex officio members from participating in Committee
business or meetings unless specifically requested by the Committee
Chair.
The USOC Executive Committee and the USOC family are reminded that
all matters pending before the Ethics Oversight Committee are
confidential and should be maintained as such in order to protect the
privacy of individuals involved and pursue the effectiveness of the
ethics enforcement program.''
We voted on the telephone unanimously to approve the report in its
entirety. The report was signed by: Kenneth M. Duberstein, Chair;
Thurgood Marshall, Jr., Vice Chair; Thomas McLarty, Vice Chair;
Nicholaas Peterson, Athlete Representative; Reynd Quackenbush, Athlete
Representative; Dan Knise; John T. Kuelbs; Edward Petry; Stephen D.
Potts; and Malham Wakin.
We agreed that the revised draft would be re-circulated by Mr.
Marshall the next day and he would await e-mails or telephone call
changes or corrections until 10:00 a.m. January 10th, at which time I,
as chairman, would call Lloyd Ward and each of the 6 officers of the
Executive Committee (Marty Mankamyer, Frank Marshall, Bill Martin,
Herman Frazier, Bill Stapleton and Paul George), read them the report
and inform them we had decided that the report should speak for itself
and that none of us would attend the Executive Committee meeting in
Denver on January 13th. As a Committee we had agreed not to answer
questions but simply to let everyone read our report.
No one mailed or called in any revisions whatsoever, so I began my
phone calls at approximately 11:00 a.m., January 10th. I reached Lloyd
Ward first and completed the final call about 4:30 p.m. EST when Marty
Mankamyer returned my call (I had placed the call to her shortly after
my conversation with Lloyd Ward). She thanked me for the Committee's
good work and said we had done outstanding service to the USOC Olympic
Movement. She expressed appreciation for the unanimity of our
conclusions.
Our responsibilities were to determine the facts and arrive at
conclusions based on those facts. Our understanding from President
Mankamyer and Ethics Officer Rodgers was that it was the role of the
Executive Committee to decide on what action, if any, was to be to
taken on this entire matter, based on the findings and the confidential
investigatory report by Fred Fielding and our report.
The Executive Committee in its meeting on January 13th voted 18-3
to approve our findings and conclusions and to express the Committee's
appreciation for a job well done by the independent Ethic Oversight
Committee.
As Chairman of the Ethics Oversight Committee, I supported every
effort to maintain the integrity of the Ethics review. However two
issues have been raised relative to my participation.
Lloyd Ward is on the Board of General Motors, one of the first
clients of The Duberstein Group and a client now for over 13 years.
While I knew somewhere in the back of my mind that he joined the Board
in the last couple of years, it created no pressure on my decision
making. It was not even considered. At no time did it occur to me that
the work of my firm might create a personal conflict. We have no
business dealings with the Board, only with management.
Parenthetically, the names of all our clients have always been a
matter of public record.
General Motors, as you know, is a major sponsor of the USOC. When
you think it through, GM does have an interest in the result of our
work. Its interest is the integrity of the USOC. Period.
The second issue involves the fact that I did not sign and file
USOC Volunteer Annual Disclosure Certification in 2002.
The Committee should understand that the USOC Volunteer Annual
Disclosure Certification is not a request to disclose assets and
business relationships. It is simply a request to disclose known
conflicts. I do not recall that I was asked to sign such a statement
when George Mitchell and I headed up our review. Nor do I recall being
asked to sign such a statement when I was made chair of the Ethics
Oversight Committee. To this date, no one has ever personally talked to
me about signing one.
A review of the e-mail files at The Duberstein Group has revealed
that my assistant was emailed the one and one-half page form in October
of last year, about three months ago. It was not given to me. Had I
received it, I would have checked the box indicating that I knew of no
conflict and signed it.
This entire saga clearly demonstrates how much further the USOC
must go to establish truly a sound governance structure with high
ethical standards.
President Reagan years ago reminded me to always do the right
thing. Don't back off from your principles. Stay true to your beliefs.
People may try to push you one way or the other towards their interest,
their desires. You must ``stay the course'' and do what you think is
right.
I believe the Ethics Oversight Committee did the right thing. We
stayed on course.
Even a thick-skinned former White House Chief of Staff has learned
again the hard way that no good deed goes unpunished. If the Olympic
flame burns brightly again in the United States, as I believe it will,
then it will have been well worth the price.
The Chairman. Thank you. Mr. Marshall, and if you could--
your complete statement will be made a part of the record. If
you could summarize, we have another panel after you. Thank
you.
STATEMENT OF THURGOOD MARSHALL, JR., VICE CHAIRMAN,
USOC ETHICS COMMITTEE
Mr. Marshall. Mr. Chairman, thank you very much for the
invitation to appear before the Commerce Committee this
afternoon. I commend you and the Members of this Committee for
your continued involvement in issues that pertain to the United
States Olympic Committee. I also want to acknowledge Senator
Stevens for his decades of leadership in the field of amateur
sports.
I am appearing before you in my capacity as vice chair of
the USOC Ethics Committee. As Mr. Duberstein indicated, the
Ethics Committee was created in the wake of the Salt Lake
Olympic bid scandal. Staff support is provided by the USOC
Compliance Officer, and our duties include the establishment
and implementation of training and governance programs as well
as investigating specific allegations of ethics compliance and
allegations of ethics violations related to performance of
duties of the USOC members and staff.
Last year, for example, the compliance officer and the
Ethics Committee played a significant role in developing
unprecedented comprehensive governance plans that were applied
to the bid city process that culminated in the selection of New
York City as the candidate city to host the 2012 Olympic and
Paralympic Games.
I fully participated in the deliberations of the Ethics
Committee that gave rise to our January 10 report. As Mr.
Duberstein mentioned, I worked with Mr. Fielding to draft
language for the Ethics Committee to consider, and I worked
with Mr. Fielding to draft the final report language. I remain
fully satisfied with the contents of that report. I am also
confident that the process that we undertook to produce that
report was thorough and fair.
Our report did not address the issue of sanctions in
connection with the conduct of Mr. Ward or any other
individuals, and I believe that the issue of sanctions was
appropriately left to the judgment of the Executive Committee.
Our committee did not, for example, characterize the
allegations as a technical violation. That is not language that
is contained in our report.
I understood that our task was to investigate the facts
associated with the allegations concerning Mr. Ward, and to
render our assessment of those facts. That is precisely what we
did. As our committee report makes clear, our interpretation of
the facts indicated that Mr. Ward's conduct created an
appearance of a conflict of interest. We also found that there
were mitigating circumstances, and the record reflects that the
USOC Executive Committee accepted our interpretation and
determined appropriate sanctions.
I would like to take also one moment to address several
issues that have arisen in connection with the work of our
committee, and specifically with regard to Mr. Duberstein. I am
familiar with the concerns that have been raised. Each of those
concerns is utterly inconsistent with the way in which our
committee proceeded and it is inconsistent with Mr.
Duberstein's overall stewardship of the Ethics Committee. At no
point did Mr. Duberstein influence our deliberations in an
improper way. Moreover, as befits such a committee, each of its
members are independent and has had an independent
communication with the USOC Compliance Officer.
For example, I would have been quick to question Mr.
Duberstein or others involved in our process had any concerns
crossed my mind, and I believe that each of my colleagues on
the Ethics Committee has felt similarly free to raise concerns
as warranted. I questioned Mr. Duberstein extensively, for
example, about the recusal of Mr. Rodgers until I was satisfied
with that course of action.
On the broader issues regarding USOC interaction with its
major corporate sponsors, I submit that the interaction of the
USOC with such sponsors raises some concerns that are far more
complicated than the commentators would have us believe.
Finally, I remain committed to the mission of the USOC and
the important role that it plays in developing, training, and
nurturing our Nation's athletes. It is because of that belief
in the importance of that mission that I am hopeful that
through the congressional oversight process major improvements
can be made.
[The prepared statement of Mr. Marshall follows:]
Prepared Statement of Thurgood Marshall, Jr., Vice Chairman, USOC
Ethics Committee
Mr. Chairman, thank you for the invitation to appear before the
Commerce Committee this afternoon. I commend you and Senator Hollings
and the Members of this Committee for your continued involvement in
issues that pertain to the United States Olympic Committee. I also want
to acknowledge Senator Stevens for his decades of leadership in the
field of amateur sports.
My name is Thurgood Marshall Jr., and I am a partner with the law
firm of Swidler Berlin Shereff Friedman LLP. I am appearing before you
in my capacity as one of the two Vice Chairs of the Ethics Oversight
Committee (``Ethics Committee'') of the United States Olympic Committee
(``USOC''). I have served on the Ethics Oversight Committee and as its
Vice Chair for approximately two years.
The USOC Ethics Committee was created in the wake of the Salt Lake
Olympic bid scandal. It is comprised of ten uncompensated volunteers.
Staff support is provided by the United States Olympic Committee
Compliance Officer. The Compliance Officer is responsible for the
management of the USOC Ethics and Compliance Program. Those duties
include the establishment and implementation of training and governance
programs, as well as investigating specific allegations of ethics and
compliance related issues. Last year, for example, the Compliance
Officer and the Ethics Committee played a significant role in
developing comprehensive governance plans that were applied to the bid
city process that culminated in the selection of New York City as the
candidate city to host the 2012 Olympic and Paralympic Games.
The Chief Compliance Officer reports to the Chief Executive Officer
for matters related to USOC staff and to the Ethics Committee and the
USOC President for matters related to volunteers, member organizations,
and the Chief Executive Officer. Any person or member organization that
violates or condones the violation of the USOC Code of Ethics is
subject to disciplinary measures, which may include termination. The
Ethics Committee is charged with reviewing violations of the Code of
Ethics.
As a member of the Ethics Committee, I participated in the
deliberations giving rise to our recent report, dated January 10, 2003,
a copy of which was made public by the USOC on January 13, 2003. I
first became aware of allegations regarding the USOC Chief Executive
Officer, Lloyd Ward, in the Fall of 2002. The Ethics Committee convened
by teleconference on four occasions to review the allegations, once
each month from October 2002 to January 2003. I was out of the country
and unable to participate in the teleconference that occurred in
November 2002. With that exception, I fully participated in the
deliberations of the Ethics Committee. I concurred in the decision to
retain Fred Fielding to conduct a factual investigation into the
allegations regarding Mr. Ward. I also reviewed and approved of the
unanimous report that the Ethics Committee provided to the USOC
Executive Committee for consideration at its January 13, 2003 meeting.
Consistent with our deliberations, I worked with Mr. Fielding to
draft language for the Ethics Committee to consider during our
teleconference on January 8, 2003. I also worked with Mr. Fielding to
draft the final report language that the Ethics Committee approved
unanimously on January 9 and 10. Other than to offer a technical
addition, Mr. Duberstein did not participate in the drafting of the
language contained in our report. I would note that the Ethics
Committee also agreed to include as an attachment to its report a
memorandum prepared by Fred Fielding which reflected the results of his
investigation of the facts surrounding the allegations against Mr.
Ward.
As a matter of process, our Committee authorized Mr. Duberstein to
contact the USOC officers individually on January 10, 2003, and to
recite to them the contents of our report. I handled the formal
transmittal of the hard copies of our report and the Fielding
Memorandum to the USOC officers and the membership of the USOC
Executive Committee. I completed that task on January 12, 2003, with
delivery of sealed copies of the documents to Mark Levinstein, who
served as Counsel to the USOC Executive Committee.
I have reviewed the contents of the Ethics Committee report and the
Fielding memorandum as recently as last night. I remain fully satisfied
with its contents. I am also confident that the process that we
undertook to produce that report was thorough and fair. Our report did
not address the issue of sanctions in connection with the conduct of
Mr. Ward or any other individuals and I believe that the issue of
sanctions was appropriately left to the judgment of the Executive
Committee. I understood that our task was to investigate the facts
associated with the allegations concerning Mr. Ward and to render our
assessment of those facts. That is precisely what we did. As our
Committee report makes clear, our interpretation of the facts indicated
that Mr. Ward's conduct created an appearance of a conflict of
interest. We also found that there were mitigating circumstances. The
record reflects that the USOC Executive Committee accepted our
interpretation and determined appropriate sanctions.
As he has on previous occasions with respect to other matters that
have come before our Committee, Fred Fielding agreed to undertake an
investigation and to submit his findings to us. He did so in the
thorough manner that we have come to expect from him. He presented his
findings to us by written report and made himself available to respond
to our questions on each of our conference calls. I am satisfied that
Mr. Fielding pursued all relevant issues during the course of his
investigation. He was not constrained in any way. In fact, Mr. Fielding
asked for and was granted permission to expand his charter to permit
additional interviews of others potentially having knowledge of the
alleged incident.
I would like also to take a moment to address several issues that
have arisen in connection with the work of our Committee and
specifically with regard to Mr. Duberstein. I am familiar with the
concerns that have been raised. Each of those concerns is utterly
inconsistent with the way in which our Committee proceeded and is
inconsistent with Mr. Duberstein's overall stewardship of the Ethics
Committee. At no point did Mr. Duberstein influence our deliberations
in an improper way.
Moreover, as befits such a Committee, each of its members is
independent and has had independent communication with the USOC Ethics
Compliance Officer. I would have been quick to question Mr. Duberstein
or others involved in our process had any concerns crossed my mind, and
I believe that each of my colleagues on the Ethics Committee has felt
similarly free to raise concerns as warranted. For example, I
questioned Mr. Duberstein extensively about the recusal of Mr. Rodgers
until I was satisfied with that course of action.
On the broader issues regarding USOC interaction with its major
corporate sponsors, I submit that the interaction of the USOC with such
sponsors raises some issues that are far more complicated than the
commentators would have us believe.
I remain committed to the mission of the USOC and the important
role that it plays in developing, training and nurturing our Nation's
Olympic athletes. It is because of the importance of that mission that
I am hopeful that through the Congressional oversight process
improvements can be made.
The Chairman. Thank you very much, Mr. Marshall, and I
thank both of you for being here. I guess it is important for
the record to point out that both of you serve voluntarily on
this committee and without compensation.
Mr. Duberstein. Yes, sir.
Mr. Marshall. That is correct.
The Chairman. Now let us talk about the report here. In the
USOC constitution and bylaws of the Ted Stevens Olympic and
Amateur Sports Act, USOC Code of Ethics, it says in chapter 19,
Ethics Oversight Committee, there shall be an Ethics Oversight
Committee. The responsibility of the Ethics Oversight Committee
shall be A, B, C, and then D, to review and investigate such
matters relating to ethical practice as it may deem appropriate
and make recommendations resulting therefrom to the chief
executive officer concerning employees, and to the Executive
Committee if concerning the chief executive officer.
Are you aware of the provisions of this, of the rules and
regulations governing the Oversight Committee?
Mr. Duberstein. Mr. Chairman, yes, I am. Yes, we are, but
let me suggest the following.
The Chairman. I would like for you to respond to the
questions when I ask the questions. The question is, why did
you not make a recommendation as to what action should be taken
in the course of this investigation?
Mr. Duberstein. The charge to the committee dated October
11 was the Ethics Oversight Committee retain outside counsel to
conduct the necessary interviews, to determine the facts and
circumstances surrounding the allegation, and provide a report
of findings to the chair.
Number 2, President Mankamyer in more than one phone
conversation said to me, we want your report, we want your
findings, we want your conclusions, and the Executive Committee
will determine what disciplinary action, based upon your report
and findings.
Number 3, we did not, as a committee, decide exclusively on
the Lloyd Ward matter, but also about the behavior of President
Mankamyer and of Ethics Officer Rodgers. We were very
consistent in our report and our findings and following the
lead of our charge and the direction from President Mankamyer.
The Chairman. Well, I respectfully disagree. The subject of
the Wiley, Rein & Fielding, Mr. Fielding to you from Mr.
Fielding says, reference internal investigation report, Lloyd
Ward. Now, I do not know what the instructions from Ms.
Mankamyer were, but according to the regulations of USOC you
are supposed to make recommendations. That is why I find Mr.
Fielding's report so curious.
Every time I have ever asked for an investigation by
anyone, my staff or anyone in the GAO, we have always asked for
recommendations, and I do not know why, frankly, that the USOC
regulations were not complied with. I would be glad to hear a
response, if you want.
Mr. Marshall. I was, at the time of our deliberations and
throughout my service on the committee, well aware of the
relevant provisions of the bylaws and, as I mentioned, I
understood our task to be to assess the facts and to develop
the facts.
What I would add, Senator McCain, is that, as Mr.
Duberstein has indicated, it was not unusual for our committee
to receive direction as to specific tasks. As recently as
October, for example, we were tasked with vetting and reviewing
candidates for elective office at the USOC, and arguably that
may not have been consistent with the four corners of the
bylaws, but it was well within our jurisdictional mandate.
The Chairman. I am not saying you do not have other
jurisdiction. I am saying that it clearly says your job, the
Ethics Oversight Committee, is to review and investigate such
matters relating to ethical practices as it may deem
appropriate, and to make recommendations resulting therefrom.
It is clear, and in writing.
Mr. Duberstein--and again, I cannot understand Mr.
Fielding's product, which you have touted so highly, as not
making a recommendation either. That is why we have
investigations, to make recommendations, not to make judgments,
but certainly to make recommendations.
Mr. Duberstein, on January 15, 2003, Mr. Rodgers resigned
his position as the USOC Chief Compliance Officer and discussed
with in his view the Executive Committee's failure to properly
sanction Mr. Ward. In his resignation letter, Mr. Rodgers
accuses you of telling him to ``find another way to make this
go away,'' in reference to the ethical allegations levied
against Mr. Ward. Did you ever encourage Mr. Rodgers to ``find
a way to make this go away.''?
Mr. Duberstein. No.
The Chairman. Given Mr. Rodgers' position as Chief
Compliance Officer, how would he have been able to make the
Ward allegations go away?
Mr. Duberstein. He would not have.
Mr. Marshall. That is absolutely correct, Senator.
The Chairman. He could not have made it go away, even if
you wanted to.
Mr. Duberstein. And in addition, it is totally inconsistent
with everything I did in leading the committee, hiring Fred
Fielding to do the investigation, encouraging him to leave no
stone unturned. We voted as a committee, not with me on the
sideline, but unanimously in all of our discussions. There was
no split vote.
We said that he did not comply with the code. This is not
an exoneration. This is not trying to make it go away. If
anything, it was to go every bit full-square in favor of
investigating and finding out the facts and making our
conclusions.
The Chairman. My colleagues have additional questions. I
will ask one more question and, if absolutely necessary, I will
ask more.
Would you respond to the recent accusation, Mr. Duberstein,
that your work as a lobbyist for General Motors presented a
conflict of interest in your role as chairman of the USOC's
Ethics Committee investigation of Mr. Ward, who is a member of
the board of General Motors, and why was it not listed in your
report? I believe it is the Ethics Committee report.
Mr. Duberstein. Mr. Chairman, Number 1, I believe there was
no conflict. Number 2, my firm has represented General Motors
since 1989 and has been registered with the rules of the Senate
as required since 1989.
I was generally aware around 2000, 2001 that Mr. Ward had
joined the board of General Motors. We have no business
dealings whatsoever with the board of directors. Our firm
reports to the management and the Government relations staff
here in Washington.
Next, there is nothing inconsistent with what I have done
as far as our work with GM and the actions of the Ethics
Oversight Committee, and let me quote from my statement, sir,
if you do not mind.
The Chairman. I like to quote myself.
[Laughter.]
Mr. Duberstein. It created no pressure on any of our
decisionmaking. It was not even considered. At no time did it
occur to me that the work of my firm might create a personal
conflict. As I said, we had no business dealings with the
board, only with the management, but if I grant you your point,
or the point you raised, yes, General Motors is a major sponsor
of the USOC. When you think it through, though, GM has an
interest in the result of our work. Their interest is the
integrity of the United States Olympic Committee. It is totally
consistent with everything that the Ethics Committee wanted to
do.
The Chairman. Senator Stevens.
Senator Stevens. Thank you very much, Mr. Chairman. I have
been called to the floor, and I would not have time to ask
questions, and I would yield to Senator Campbell.
Senator Campbell. Thank you, Mr. Chairman.
Mr. Duberstein, I do not want to make this too rhetorical,
but you suggested we start over and Congress should lead the
way. What do you suggest in specifics?
Mr. Duberstein. Senator Campbell, I think that the conflict
between volunteers and paid staff, as others have suggested on
your side, makes the USOC completely dysfunctional. I think you
need to have a hard-nosed CEO running the place, not a 125-
member board of directors which is dysfunctional, but, rather,
have a small board with a strong centralized CEO.
Senator Campbell. I agree. That is a structural change, but
I am not sure we have the authority to make that structural
change within USOC.
Mr. Duberstein. I think the Amateur Athletic Act could
maybe be amended so that, in fact, you could get a governing
structure with high ethical standards that works, and that
works for the athletes, and to focus on the athletes and their
leadership rather than on all of this dysfunctional fighting.
Senator Campbell. OK. Well, let me ask a little bit about
ethics, as Senator McCain has. I did read the booklet Senator
McCain does have, but I have a U.S. Senate ethics manual, and I
assume some of the things are rather similar, and that is, here
in the Senate, if we violate the ethics code we can be rebuked,
but if we create the appearance that we violated the ethics
code--whether we violate it or not, if we create that
appearance we can also be in some pretty deep trouble and, in
fact, when the attorneys talk to us, the ethics attorneys, they
tell us that it is our responsibility to prevent the perception
that we have created some violation. That is how tight our
structure is. Well, it is obvious somebody did not pass that
kind of a standard on in the U.S. Olympic Committee.
Let me--and by the way, I am sure you probably have read
that. That is on page 66 near the bottom, in paragraph 2 of
section 37, that that wording comes from. You currently--one of
your clients is General Motors, is that not correct?
Mr. Duberstein. Correct.
Senator Campbell. And General Motors is a major donor to
the Olympic Committee?
Mr. Duberstein. Correct.
Senator Campbell. I am sure Mr. Ward can answer this
himself, but is Mr. Ward on the board of General Motors, too?
Mr. Duberstein. I have been told that, since about 2000.
Senator Campbell. And you do not see that as an appearance
of a conflict of interest?
Mr. Duberstein. I do not, sir. I should also say to you
that there is a USOC volunteer annual disclosure certification
which I would like to offer for the record.
The Chairman. Without objection.
[The information referred to follows:]
Mr. Duberstein. The committee should understand the USOC
annual volunteer disclosure certification is not a request to
disclose assets and business relationships. It is simply a
request to disclose known conflicts. I do not recall that I was
asked to sign such a statement when George Mitchell and I
headed up our review of the IOC and the USOC, nor do I recall
being asked to sign such a statement when I was made the
chairman of this Ethics Oversight Committee.
To this date, no one has ever personally talked to me about
signing one, a review of the e-mails at the Duberstein Group
have revealed that my assistant was e-mailed the one-and-a-half
page form in October of last year, about 3 months ago. It was
not given to me. Had I received it, I would have checked the
box indicating that I knew of no conflict, and I would have
signed it.
Senator Campbell. You made an accusation in your testimony
in which you said, Mr. Rodgers and Ms. Mankamyer are furthering
their own agenda. What do you perceive that to be?
Mr. Duberstein. I perceive, based on phone conversations,
that President Mankamyer really wanted Lloyd Ward gone from the
leadership of the USOC as her personal agenda, and that Ethics
Officer Rodgers was trying to settle some old scores based on a
bad personnel evaluation given to him by Lloyd Ward.
Senator Campbell. That brings up perhaps my last question,
Mr. Chairman. I am not an expert on corporate structure. It
seems to me kind of unusual, though, that in the case of Mr.
Rodgers, technically he worked for Mr. Ward, is that correct,
in a staff capacity?
Mr. Marshall. Actually, Senator, you alluded to the
reporting relationships in your statement, and you put your
finger on, among the many issues that needed to be resolved, a
serious problem. My understanding of the reporting relationship
for the Ethics Compliance Officer is that, depending upon
certain facts, he or she would report to three different
entities associated with the organization: the CEO, the
president, and/or the Oversight Ethics Committee. And needless
to say, in at least this most recent incident, two or three
were in conflict, and they placed the compliance officer in a
very difficult position.
Senator Campbell. Does it not seem unusual--maybe it does
not to you, but it does to me, unusual to have an employee of
mine sit on an Ethics Committee that is going to judge my
behavior? Is there not something structurally wrong with that?
Does that not put the employee at a very precarious position
when he has judged my behavior, as his boss?
Mr. Marshall. Senator, I believe it can, depending upon the
level of independence associated with that job, but I think you
are correct.
Senator Campbell. But that is allowed within the structure
of the U.S. Olympic Committee, apparently.
Mr. Marshall. Apparently.
Senator Campbell. Thank you, Mr. Chairman. I will have some
further questions in the next round, if I could.
The Chairman. Thank you. Senator Wyden.
Senator Wyden. Gentlemen, I am puzzled on a number of
points, but you all have said there was such unanimity, and
agreement. If that is the case, why were people resigning from
the Ethics Committee in protest, issuing these denunciations,
and why does this turmoil continue if everything is so peachy
down there?
Mr. Duberstein. Senator Wyden, I have not spoken to the
three members of the Ethics Oversight Committee, but I have
received e-mails from two of them at least. Both of them cite
their disappointment that the Executive Committee did not have
more disciplinary action against Lloyd Ward, and on that basis
they felt that the Executive Committee and the USOC was not
honoring the code of ethics.
Senator Wyden. Do you want to add anything to that, Mr.
Marshall?
Mr. Marshall. Senator Wyden, I have not discussed the
reasons for those three resignations with the individuals. I do
think, as Mr. Duberstein has said, it is entirely conceivable
that, though these individuals participated in our
deliberations, signed off on the unanimous report, they were
concerned about the way in which the report was handled by the
Executive Committee. I cannot do anything other than speculate.
Senator Wyden. Now, gentlemen, in your investigation, what
did you find out about Mr. Ward's brother's company? This is
important to me, because obviously this goes right to the heart
of the question of conflict of interest, and I would like to
know specifically, what did you do on this question of
investigating Mr. Ward's brother's company?
Mr. Duberstein. Fred Fielding interviewed Lloyd Ward and
others to try to determine the business relationship. One of
the findings that he shared with us, which is in his report, is
that Lloyd Ward had no financial interest whatsoever in his
brother's firm, so there was no potential financial gain
involved.
Senator Wyden. Do you all find it was a legitimate company?
Did you find it was a sham company?
Mr. Duberstein. Fred Fielding did not indicate that it was
a sham company.
Senator Wyden. Mr. Marshall, do you want to add anything?
Mr. Marshall. Senator, from where I sat, I assumed--I
cannot say assumed the worst about that company, but I assumed
that the company was focused on this one objective, and assumed
that there was a plan in place at the company to take full
advantage of Mr. Ward's position, and I concluded, even with
that assumption, that Mr. Ward's conduct was as we described
it, conduct that gave rise to an appearance, period. We found
nothing in the investigation that indicated that he had a
personal stake in this.
Senator Wyden. My last question is, what do you think is
behind all the problems? These are not happening just by
osmosis, gentlemen. I mean, there have got to be some factors
that are producing one ethical misstep after another. I mean,
it is like there is an ethical blind spot down there, and we
ask you specific questions--Chairman McCain asked about General
Motors. I was going to ask a question about recommendations,
and you all are obviously well-prepared here for these
questions, but these problems are not happening by osmosis, and
I think my last question would be, what is behind it, and what
needs to be done to turn this situation around?
I would like to hear from each of you. Mr. Duberstein.
Mr. Duberstein. Senator Wyden, I think the dysfunctional
governing structure creates so much of this turmoil and so much
of this jockeying for control of the organization that it makes
people do bad things. In some ways it is a little bit like what
White Houses sometimes do to people. There is so much jockeying
that goes on. It has to stop. You have to focus on the
athletes, but the way to get to it is by chucking out this
ridiculous dysfunctional governing structure, and coming up
with one where there is trust and where there is a single focus
on the athlete. That is the way to do it, rather than who is
controlling what.
Senator Wyden. Well, I am interested in changing these
organizational boxes around, but it just looks to me like there
is a culture down there that does not make these ethical
questions a priority, and that is what I want to see changed,
and I have not heard either of you speak to anything like that,
that would send a powerful message that this has got to stop.
It is going to change. Yes, we will look at the
organizational structure, but you really want to get at a
culture that looks like it does not make ethical questions a
priority.
Mr. Marshall, do you want to respond to that?
Mr. Marshall. Well, I cannot add much to what Mr.
Duberstein said on this point. I want to emphasize that in the
wake of the Salt Lake Olympic bid scandal a number of ethics
and compliance programs have been put in place, training
programs that Mr. Rodgers can speak to on the next panel. It is
important to note that in this instance the conduct alleged
with regard to Mr. Ward was raised through the processes that
have now been put in place at the Olympic Committee. It was
reviewed consistently. Those processes and sanctions were
applied.
Now, part of the problem, though, that brings us here today
is that there was sort of a breathtaking array of leaks that
occurred, press leaks, by and large tied to various competing
factions within the organization. Now, I think we all
understand that the problem of leaks cannot be completely
addressed, but I do think that, among others, the general
counsel, Mr. Benz at the USOC, is trying to address that as we
speak.
Senator Wyden. One last question, and I know my time is up,
Mr. Chairman, Mr. Duberstein, I am of the impression that you
are serving without submitting an ethics form, is that correct?
Mr. Duberstein. That is what I said.
Senator Wyden. Why was that allowed? Why is one allowed to
serve there without filling out an ethics form?
Mr. Duberstein. Well, as I said to you, or said a few
minutes ago, Senator, the committee should understand that the
USOC volunteer annual disclosure certification is not a request
to disclose assets and business relationships. It is simply a
request to disclose known conflicts. I do not recall that I was
asked to sign such a statement when George Mitchell and I
headed up the review of the IOC and the USOC, nor do I recall
being asked to sign such a statement when I was made chairman
of this Ethics Oversight Committee.
As you know, Senator, we take very seriously the strictures
about registering all of our clients, and we do that in the
U.S. Senate, and we have done that consistently for the 13-1/2
years in operation. I sign ethics disclosure forms for the
corporate boards I serve on, as is required.
As I said, a review of the e-mails at the Duberstein Group
indicated that my assistant was e-mailed the one-and-a-half
page statement in October of last year, more than a year and a
half after I was appointed to the position, and I said to you
it was not given to me. Had I received it, I would have checked
the box indicating that I know of no conflict and, of course, I
would have signed it.
Senator Wyden. Thank you, Mr. Chairman.
The Chairman. Senator Breaux.
Senator Breaux. Well, I thank the witnesses. It is hard to
know where to start in all of this. I was looking at the
material the committee has prepared for us, and I thought the
best summary was by David D'Alessandro, chairman of the John
Hancock Financial Services and, of course, a worldwide sponsor,
which we desperately need to make the Olympics successful. He
wrote a seven-page letter to Ward and Mankamyer and said, among
other things, it is no longer possible to overlook the
seemingly nonstop turmoil and controversy that afflict your
organization. It is a dysfunctional family that keeps electing
a daft cousin or uncle to the top job. Their bureaucracy must
be blown up and restructured.
That is a pretty clear recommendation about what should be
done here, and we are sort of tinkering around the edges about
whether somebody recommended the brother for a job in another
country, in the Dominican Republic. It is much more than that,
is it not?
Mr. Duberstein. Yes. It goes to the whole dysfunctional
governance of the institution.
Senator Breaux. Do either of you disagree with the
statement I just read from Mr. David D'Alessandro? Is he wrong,
or is he pretty close to getting it right?
Mr. Duberstein. I think the answer is, we have to start
over with the governing structures so that we can reassure not
only the American public but the athletes and the sponsors that
everything is being done the right way at the USOC.
Senator Breaux. We have had four CEO's and three presidents
since 1999. Does that indicate a problem, or is this just a
normal turnover?
Mr. Duberstein. Of course it indicates a problem, Senator
Breaux.
Senator Breaux. How do we fix it? I mean, I think all of us
up here, we are here because we really want to make sure we get
this right. It is going to take some changes I think in the
authorizing statute to make it work right. We should look at
this with the utmost of pride, and you know, it does not sound
like that is what it is.
I mean, what kind of legislative recommendations, if any,
would you give us?
Mr. Duberstein. I would suggest either the creation of a
special commission to figure out the governance, or something
directed by the Commerce Committee that would focus on one
organization, not two, eliminating a 120-some member board of
directors so you can get to a group that works, which is 10,
12, 14.
Senator Breaux. The board, I take it from your
investigations, is really just too large to be functional? Is
it an honorary board to some extent? I mean, it is a great
honor to be on the board of the USOC, or the IOC, in my
opinion, but you need more than just an honorary board. I mean,
you need a real functioning board that is going to make this
operation work.
Mr. Duberstein. I would recommend you ask some people in
the next panel who, in fact, are on the board. We do not serve
on the board of directors, on the voting board of directors on
the USOC, but clearly a 125-member board has to be totally
unwieldy.
What you need is a small cadre of a board, and you need a
CEO who has the power and the authority to move things without
constantly being questioned by 125 members.
Senator Breaux. Well, I thank you all for your comments in
all of this. It is much larger than whether one person
recommended his brother to provide generators in another
country. It is much bigger than that. I mean, we can look at
that, and it is sort of symptomatic of a problem, but it is
really much bigger than that. That is minor in comparison to
the big picture we are looking at.
Mr. Duberstein. You and I would certainly agree that ethics
has to be very high on the list, but you have got to get the
governing structure right, and you have to have governing
structure that also requires high ethical standards. That is
the key.
Senator Breaux. I thank both of you.
The Chairman. Thank you. I understand Senator Campbell has
one more.
Senator Campbell. Thank you, Mr. Duberstein, for mentioning
the word, athletes. We have been sitting here for an hour, and
we have not mentioned them. You know, that is what it has
always been about for me, about what is happening to our young
people that are trying their hearts out to be on that team, and
not who is taking trips to Europe, or who is getting the best
of somebody else in the hierarchy or any of that kind of stuff.
We ought to be focusing on what we are doing for young people.
Let me ask you just something about the ethics thing. are
you the only person on the committee who has not turned in a
disclosure form?
Mr. Duberstein. I do not know the answer to that.
Senator Campbell. You are chairman, but you do not know the
answer to that?
Mr. Duberstein. No.
Senator Campbell. When somebody is hired with the U.S.
Olympic Committee, whose responsibility is it to know the rules
of behavior? When we get elected, for instance, we get one of
these, and we are pretty much told what is in it, and it is our
responsibility to read it and understand it, and if we do not,
the Ethics Committee, we can call them any time of the day and
ask them to spell it out for us and, in fact, many of us,
before we even make a decision on doing something, we run it by
them first to see if we could be in trouble, since we are not--
a lot of us are not real experts on the subtleties of a book
that thick.
Is it the responsibility of the Ethics Committee to school
the incoming people, or is it the responsibility of the people
to be aware of any behavior or misconduct that may be spelled
out in the Ethics Committee rules?
Mr. Duberstein. It is the responsibility of the Ethics
Oversight Compliance Officer to administer day-in and day-out
to the ethics oversight program of the USOC.
Our job, the way we have interpreted it, is to be available
to help when there are referrals or allegations made to the
committee, whether it is about bid city procedures for 2012, or
vetting the candidates to replace Sandra Baldwin when she
resigned. That came to the Ethics Oversight Committee, but the
day-in, day-out administration of the ethics program is the
responsibility of the Compliance Officer.
Senator Campbell, if I could take the opportunity to also
say to you that two members of the Ethics Oversight Committee
are athlete representatives, and participated fully. They voted
with everybody else. They have hung in there and continued to
express their pride that we got things right.
It happens to matter a lot to me that it is the two athlete
representatives who really are fighting the fight and saying we
did the right thing.
Mr. Marshall. Senator Campbell, if I could add in response,
with regard to the question of whose responsibility it is to
make sure the rules are in place and that they are followed,
you have got the individual who most recently had that position
coming before you as a witness on the next panel, and I would
like to suggest a couple of questions.
In addition to dealing with the specifics of who may or may
not have submitted disclosure forms, which is an issue I
believe Mr. Rodgers can address, although he has recently
resigned from the USOC, I think looking forward it would be
useful for you to ask him whether, looking forward, the Office
of Ethics Compliance at the USOC has sufficient resources to
track down the issues it needs to track down, or track down
disclosure forms, or develop modifications to our bylaws,
rules, or training programs.
Senator Campbell. Thank you.
The Chairman. Thank you. Thank you, Mr. Duberstein and Mr.
Marshall.
Our next panel is Ms. Rachel Godino, chairperson of the
Athletes' Advisory Council and USOC Executive Committee member,
Mr. Patrick Rodgers, former Chief Ethics Compliance Officer of
the United States Olympic Committee, Mr. Lloyd Ward, chief
executive officer and executive director, United States Olympic
Committee, and Ms. Marty Mankamyer, who is the president of the
United States Olympic Committee.
And as our witnesses are joining us, I would again repeat,
I will be asking the committee members to subpoena Mr.
Fielding. I think there are a lot of questions that need to be
asked of Mr. Fielding, the quality of his report, his failure
to make recommendations, and I am sorry he has higher
priorities than appearing here today before this committee, so
we will have to make sure that he does not have another
important meeting that would supersede our requesting his
presence.
We would like to begin with you, Ms. Godino, and thank you
for appearing here today, and please proceed.
STATEMENT OF RACHEL GODINO, CHAIRPERSON, ATHLETES' ADVISORY
COUNCIL, AND USOC EXECUTIVE COMMITTEE MEMBER
Ms. Godino. Thank you, Mr. Chairman, Members of the
Committee. Thank you for this opportunity to speak to you
today. My name is Rachel Myer Godino. I am a 1992 Olympian in
the sport of figure skating and serve as the elected
chairperson of the United States Olympic Committee Athletes'
Advisory Council, the USOCAAC. The AAC is composed of Olympic,
Pan American, and Paralympic athletes elected by their peers to
represent the interests and protect the rights of America's
athletes. It is truly an honor to represent and lead such a
distinguished group.
I am also here as a member of the USOC Executive Committee.
Today, I am presenting the views of all five USOC vice
presidents, and the chair of the National Governing Bodies
Council, Robert Marbut, who is seated behind me.
It is unfortunate that I am not here to share with you
today the stellar performances of America's athletes on the
field of play, and they have been stellar. Unfortunately, the
continued organizational challenges that plague the USOC
threaten to cloud their significant achievements. We should all
keep in mind that the sports administrators, coaches, and
especially the athletes are the innocent victims of this
turmoil.
I will address first the specifics of the January 13
Executive Committee meeting and, second, the broader issue of
how the USOC can better serve America's athletes. On January
13, the Executive Committee met and considered the Ethics
Oversight Committee report and supporting materials. The Ethics
Oversight Committee report, as you know, had three findings,
and expressed a grave concern.
It is notable, as Mr. Duberstein and Mr. Marshall noted,
that all 10 members of the Ethics Oversight Committee
unanimously approved that report. The Executive Committee took
action on the entire report, as I believe it was our
responsibility to do. First, we accepted and approved the
report, and I would suggest to you that I think, given the
circumstances, it would have been highly unusual for us to do
otherwise.
Second, we provided disciplinary action for the two
findings regarding Mr. Ward, that he failed to comply with the
USOC code of ethics. The Compensation Committee will determine
that penalty.
Third, we asked the five vice presidents, the chair of the
NGBC council, and myself to create an action plan to address
the third finding and the concerns expressed by the Ethics
Oversight Committee. The entire Executive Committee
participated in the discussion with the exception of Mr. Ward
and Ms. Mankamyer, and that motion I just described was passed
by an 18 to 3 vote, an overwhelming majority.
The characterizations of the January 13 meeting in the
media have been less than accurate. While no one expressed the
view in the meeting that the findings regarding Mr. Ward
merited termination, because the press reported in advance that
Mr. Ward's job was in jeopardy, any action less than
termination was portrayed as inaction. Far from it. The
referral to the Compensation Committee will lead to a penalty
for Mr. Ward.
Furthermore, the Executive Committee had an obligation to
consider the entire Ethics Oversight Committee report, not just
the parts that addressed Mr. Ward. I believe that the Executive
Committee discharged its duty properly on January 13. That
said, I think the Executive Committee could have provided more
clarity to the public as to whether Mr. Ward's conduct
constituted a,`` violation of the code of ethics.''
While the Ethics Oversight Committee report did not use
that word, their findings are a literal violation of the USOC
code of ethics. By accepting and agreeing with the report, some
Executive Committee members, including myself, believe that we
were acknowledging a violation by Mr. Ward.
As the committee undoubtedly knows, I am a member of the
group of seven officers, which consist of all five USOC vice
presidents, the chair of the NGB council, and the chair of the
AAC, myself, that requested Ms. Mankamyer's resignation
privately on January 12 and publicly on January 21. We
requested her resignation because of our concerns about her
leadership and handling of this matter. These concerns caused
us to lose confidence in her ability to lead us. We do not take
this request lightly. Indeed, it has been extremely difficult,
for me personally, to request the resignation of our president,
as I consider Ms. Mankamyer a friend.
I would now like to address the broader issue, and in terms
of the future of the Olympic movement in the United States,
perhaps the most important issue of improving the governance
and structure of the USOC. Certainly, it is true that
personalities often play a role in conflict, and have
undoubtedly played a role in this most recent series of events,
but the recurring nature of the organizational challenges we
have faced, as has been suggested today, suggest that we also
have a fundamental structural problem. To date, we have been
unable to rectify these problems.
In the hope of implementing necessary changes, I believe an
Olympic Review Commission could help find possible solutions.
If created, I suggest that the commission's objective would be
to cause changes to our governance structure that apparently
cannot occur through our normal processes. To limit the
continued turmoil and to return your attention and the
attention of the American public to the athletes, and to the
field of play, as swiftly as possible, I request that the
commission, if created, conduct its work as swiftly as
possible.
I would like to take the opportunity to day to request that
the commission, or whatever mechanism is put in place to move
us forward, consider the following concepts in their
deliberations. First, I believe we need a streamlined form of
governance, as suggested publicly by Senators Stevens and
Campbell last week, and by many of you here today. The exact
nature of that streamlining is to be determined, but must
address the size, roles, and responsibilities of the board of
directors, the Executive Committee, and the officers.
Second, the roles and responsibilities of the board vis a
vis the professional staff must be clearly defined and
practiced. Strategies should be part of the recommendations.
Third, we must raise the level of professionalism among our
volunteer leadership and, indeed, across the board. I suggest
consideration of adoption of Sarbanes-Oxley provisions as may
be applicable to the USOC. Implementation of annual board and
Executive Committee training and performance reviews would
undoubtedly precipitate additional improvements.
Overall, we should implement best practices, as recommended
by recognized independent organizations involved in fostering
sound corporate governance.
Ultimately, everyone who is a part of USOC should be held
accountable to all of you, the sponsors, the American public,
and ultimately to the athletes that we serve.
Given the opportunity, and a set of circumstances conducive
to change such as those that we are facing today, we can fix
these problems. We must fix them for America's athletes.
Without our athletes, the U.S. Olympic Committee has no
purpose, no reason to exist. We have just 184 days until the
2003 Pan American Games, and just 561 days until the 2004
Athens Olympic and Paralympic Games. In fact, last week, the
first two members of the 2004 Olympic team were selected. They
are synchronized swimmers Alison Bartosik and Anna Koslova.
Despite the major distraction that the USOC is experiencing
as an organization, we must remember that the athletes of the
United States are hard at work on the field, in the gym, in the
pool, or on the ice and snow, training, competing, and pushing
themselves to limits that most people cannot fathom. We are
proud of our athletes every single day of the year, and every
year of the quadrennium, for their perseverance, ambition,
discipline, and passion for sport. I hope that we can make the
appropriate changes to this organization so that our athletes
are as proud of the USOC as we are proud of them.
Thank you for your time.
[The prepared statement of Ms. Godino follows:]
Prepared Statement of Rachel Godino, Chairperson, Athletes' Advisory
Council, and USOC Executive Committee Member
Senator McCain and Members of the Senate Commerce Committee, thank
you for the opportunity to speak to you today about the Olympic
Movement in the United States. My name is Rachel Mayer Godino. I am a
1992 Olympian in the sport of Figure Skating, and serve as the elected
chairperson of the United States Olympic Committee Athletes' Advisory
Council (USOC AAC). The AAC is composed of Olympic, Pan American, and
Paralympic athletes elected by their peers to represent the interests,
and protect the rights of America's athletes. It is truly an honor to
represent and lead such a distinguished group. I am also here as a
member of the USOC Executive Committee.
Today, I am presenting the views of all five USOC Vice Presidents
and the Chair of the NGB Council, Robert Marbut. Due to the extremely
short timeframe I had to prepare for this hearing, the full AAC has not
yet had an opportunity to meet and take a formal position on these
matters. Moreover, I have not had an opportunity to present my views
comprehensively in this statement, and I may wish to supplement this
statement following the hearing.
It is unfortunate that I am not here today to share with you the
stellar performances of America's athletes on the field of play. Just
three days ago, Daron Ralves won the Hahnenkamm--the ``Super Bowl'' of
Skiing, and Bode Miller is vying for the top spot in World Cup
rankings. Just last weekend Michelle Kwan won her seventh National
Championship, with Sarah Hughes the 2002 Olympic gold medalist close
behind. This summer, our women's softball and basketball teams won
their respective World Championships, and we dominated the Pan Pacific
Championships in swimming. Unfortunately, the continued organizational
challenges that plague the USOC threaten to cloud these significant
achievements by athletes. We should all keep in mind that the sports
administrators, coaches, and most importantly the athletes, are the
innocent victims of this turmoil.
As requested, I will first address the specifics of the January 13,
2003 Executive Committee meeting. Second, I will address the broader
issue of how the USOC can improve and better serve America's athletes.
On January 13, 2003, the USOC's Executive Committee met to consider
the Ethics Oversight Committee report of January 10, 2003 and
supporting materials. By way of background, Kenneth Duberstein chairs
the Ethics Oversight Committee, and Thurgood Marshall, Jr. and Thomas
McLarty serve as its Vice Chairs. Other than two athlete members and a
representative from the National Governing Bodies Council, those that
serve on the Ethics Oversight Committee are independent--that is to say
that they are not otherwise involved in the affairs of the USOC. The
Ethics Oversight Committee hired Fred Fielding as independent counsel
to investigate the matters presented to them by Pat Rodgers in the fall
of 2002. The Ethics Oversight Committee report had three findings and
expressed one grave concern (as set forth below). It is notable that
all ten members of the Ethics Oversight Committee unanimously approved
the final report.
At the January 13 meeting, the Executive Committee reviewed and
considered the Ethics Oversight Committee report, Mr. Fielding's
interview memorandum, and supporting materials. We discussed a proposed
motion and the facts and circumstances. Every member of the Executive
Committee, other than Ms. Manakamyer and Mr. Ward spoke and engaged in
the discussion. The meeting lasted approximately three hours. Following
discussion, the Executive Committee passed a three-part motion
(described below) by an 18-3 vote.
First, the Executive Committee accepted and approved the report of
the Ethics Oversight Committee in full, thereby accepting and approving
the findings and concerns delineated in the report. I suggest that
given the series of events leading to that point, it would have been
highly unusual for us to act otherwise.
By accepting and approving the report, the Executive Committee
agreed with the characterization that Mr. Ward ``created the appearance
of a conflict of interest'', and ``failed to make a written
disclosure''. Therefore, the second part of the Executive Committee
motion provided for disciplinary action for the two findings in the
report that Mr. Ward failed to comply with the USOC Code of Ethics.
While many press reports have represented that Mr. Ward was ``cleared
of wrongdoing'' in the report and/or by the Executive Committee, it is
simply not true. Disciplinary action was taken; Mr. Ward was not
cleared of wrongdoing. The Compensation Committee was directed to
handle disciplinary action for Mr. Ward through his performance review.
The Compensation Committee is charged with determining the penalty, and
will do so. Mr. Ward will suffer a penalty as a result of this action.
Third, the Officers, the Chair of the National Governing Bodies
Council, and I were charged with creating an action plan for
presentation and approval at the upcoming February 8-9 Executive
Committee meeting to address the third finding and the concern
expressed in the Ethics Oversight Committee report. The finding
addressed ``a serious lack of sensitivity in the enforcement of the
USOC Ethics Code'', and grave concern was expressed about attempts to
``abuse its process and use that process for other purposes.''
Furthermore, the Executive Committee was in agreement that the manner
in which the documents relevant to this matter had been selectively
leaked to the media was improper and raised serious questions about the
conduct of the organization. The development of the plan to address all
of the above is underway.
The characterizations of the January 13, 2003 Executive Committee
meeting in the media have been less than fully accurate. While no one
expressed the view in the meeting that the findings regarding Mr. Ward
merited termination, because the press reported in advance that Mr.
Ward's job was in jeopardy, any action less than termination was
portrayed as inaction. Far from inaction, the Executive Committee
referral of the disciplinary action through the Compensation Committee
will lead to a penalty for Mr. Ward. Furthermore, the Executive
Committee had an obligation to consider the entire Ethics Oversight
Committee report, not just those parts that addressed Mr. Ward. Lastly,
it is important to note again that the three-part motion described
above was passed by a vote of 18-3--an overwhelming majority of the
Executive Committee.
I believe that the Executive Committee discharged its duty
appropriately on January 13, 2003. That said, I believe that the
Executive Committee could have provided more clarity to the public as
to whether Mr. Ward's conduct constituted a violation of the Code of
Ethics. While the Ethics Oversight Committee report did not use the
word ``violation'', their findings are a literal violation of the USOC
Code of Ethics. By accepting and agreeing with the report, some
Executive Committee members believed that we were acknowledging a
violation by Mr. Ward. Others believe that we should have addressed the
issue more directly. After consideration of all the factors, it is my
opinion, and the opinion of the five Vice Presidents, the Chair of the
NGB Council, and a number of Executive Committee, members, that Mr.
Ward did violate the Code of Ethics, and that the recommended
disciplinary action through the Compensation Committee was the
appropriate consequence for that violation.
As the Committee undoubtedly knows, I am a member of the group of
seven ``Officers'' (all five USOC Vice Presidents, the Chair of the NGB
Council, and the Chair of the AAC) that requested Ms. Mankamyer's
resignation privately on January 12, 2003 (prior to the Executive
Committee meeting) and publicly on January 21, 2003. This group of
``Officers'' crosses some of the historic ``continental divides'' in
the USOC such as those between the NGB Council and the AAC. After a
discussion with Ms. Mankamyer on the evening of January 12, we the
`'Officers'' concluded that she used her position and her associated
control over calling of Executive Committee meetings, setting of
Executive Committee agendas, and identifying materials to be
disseminated to the members of the Executive Committee, not to conduct
a fair and reasonable review of the conduct of Mr.Ward. To be
absolutely clear, we requested Ms. Mankamyer's resignation not because
of any stand she has taken on ethical matters or related to Mr. Ward's
conduct. We requested her resignation because of our concerns about her
leadership and handling of this matter. These concerns caused us, the
``Officers'', to lose confidence in her ability to lead us. Coupled
with the Ethics Oversight Committee report's ``grave concerns'' which
we took to be regarding Ms. Mankamyer's involvement in the
investigation, we all believed that it was in the best interest of the
USOC, and in the best interest of Ms. Mankamyer that she resign. We do
not take this request lightly. Indeed, it has been extremely difficult
for me personally to request the resignation of our President, as I
consider Ms. Mankamyer a friend. I will note again that this request
came from the ``Officers'', not the Executive Committee or the Board of
Directors.
I would now like to address the broader issue, and in terms of the
future of the Olympic Movement in the United States, perhaps the more
important issue, of improving the structure and governance of the USOC.
As you may know, the USOC has commissioned and undergone numerous
studies over the last decade to analyze and improve our governance
structure. \1\ These studies have a common theme--the inherent
challenges in the structural relationship between the volunteer
leadership and the professional staff. Specifically, the divisions of
power, and shared responsibilities between the CEO and President have
been considered. Recent events have re-emphasized the points raised in
these studies. Certainly it is true that personalities often play a
role in conflict, and they have undoubtedly played a role in this most
recent series of events. But the recurring nature of the organizational
challenges we have faced suggests that we also have a fundamental
structural problem. To date, the USOC has demonstrated a lack of
political will to implement structural changes to rectify these
problems.
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\1\ 1999 McKinsey Report, 1998 Amendment to the Amateur Sports Act,
1996 Marketing Associates International (MAI) Study, 1989 Olympic
Overview Commission (``Steinbrenner Commission''), 1985 USOC Long Range
Planning Commission (Chaired by Jay Flood), 1978 Amateur Sports Act,
1977 Presidential Commission on Olympic Sport.
---------------------------------------------------------------------------
In the hope of finally implementing necessary changes, I believe
that an Olympic Review Commission could help find positive solutions.
If created, I suggest that the Commission's objective would be to cause
changes to our governance structure that apparently cannot occur
through our normal processes.
To limit the continued turmoil, and to return your attention, and
the attention of the American public to the athletes and the field of
play as swiftly as possible, I request that the Commission present an
interim report to you, the Commerce Committee as soon as possible--
ideally before the April 12-13 USOC Board of Directors meeting.
Furthermore, I request that the Commission provide its final report in
time for legislation to be considered, and if appropriate adopted,
before the end of this year.
I would like to take the opportunity today to request that the
Commission (or whatever mechanism is put in place to move us forward)
consider the following concepts in their deliberations.
First, I believe that we need a streamlined form of governance, as
suggested publicly by Senators Stevens and Campbell last week. The
exact nature of that streamlining is to be determined, but must address
the size, roles and responsibilities of the Board of Directors,
Executive Committee, and Officers.
Second, the roles and responsibilities of the Board vis a vis the
professional staff must be clearly defined and practiced. Improved
clarity alone will not solve the problem. We, as volunteers and staff
must actually act in accordance with the defined roles and
responsibilities. As you may know, in 2000 we changed the USOC
Constitution and Bylaws and transferred many responsibilities from the
volunteers to the professional staff as a result of the 1999 McKinsey &
Co. study. However, I believe that we failed to implement critical
changes to the culture and practice to complete the transformation
envisioned. Strategies to ensure that the roles and responsibilities of
volunteers and staff are both defined and practiced should be part of
any recommendations for improvement.
Third, we must raise the level of professionalism among our
volunteer leadership, and indeed across the board. I suggest careful
consideration of adoption of Sarbanes-Oxley provisions as may be
applicable to a nonprofit like the USOC. Furthermore, implementation of
annual Board and Executive Committee training and performance reviews
would undoubtedly precipitate improvements. Overall, we should
implement ``best practices'' as recommended by recognized independent
organizations involved in fostering sound corporate governance. To
ensure that the Board of Directors has a level of sophistication and
professionalism worthy of our esteemed athletes, perhaps the Board
should include Presidential, or other governmental appointees, or at
least additional members from the public sector with governance
experience. Ultimately, everyone who is a part of the USOC should be
held accountable to all of you, the sponsors, the American public, and
ultimately to the athletes that we serve.
Given the opportunity, and a set of circumstances conducive to
change, such as those we face today, we can fix these problems. We must
fix them for America's athletes. Without our athletes, the U.S. Olympic
Committee has no purpose; no reason to exist. We have just 184 days
until the 2003 Pan American Games and just 561 days until the 2004
Athens Olympic and Paralympic Games. In fact, last week, the first two
members of the 2004 Olympic Team were selected. They are synchronized
swimmers, Allison Bartosik and Anna Koslova.
Despite the major distraction that the USOC is experiencing as an
organization, we must remember that the athletes of the United States
are hard at work on the field, in the gym, in the pool, or on the ice
and snow training, competing, and pushing themselves to limits most
people can't fathom. We are proud of our athletes every single day of
the year, and every year of the quadrennium, for their perseverance,
ambition, discipline, and passion for sport. I hope that we can make
the appropriate changes as an organization so that our athletes are as
proud of the USOC, as we are proud of them.
Thank you for your time and attention.
The Chairman. Thank you very much.
Mr. Rodgers, welcome.
STATEMENT OF PATRICK J. RODGERS, FORMER USOC ETHICS COMPLIANCE
OFFICER
Mr. Rodgers. Thank you, Senator. I am here today to speak
to alleged violations of the United States Olympics Committee
code by its chief executive officer, Lloyd Ward. I can only
presume that the Executive Committee read a different set of
documents than I read.
It is interesting to note the evolution of no wrongdoing
and exoneration to that of now a technical violation. However,
it was and remains clear to me that Lloyd Ward abused his
position as chief executive officer of the United States
Olympic Committee by directing an employee to help his
brother's company attempt to secure a multimillion contract
with the organizers of the 2003 Pan American Games in the
Dominican Republic.
His actions are particularly troubling because he bypassed
the USOC compliance and ethics process by not consulting with
me as chief compliance officer or the general counsel on the
propriety of his decisions. He constantly chose to use USOC
assets in the form of asking a subordinate employee to assist
his brother and friend, and by do doing improperly engaged the
reputation of the U.S. Olympic Committee to facilitate contacts
and meetings with the 2003 Pan American Games Organizing
Committee in Santa Domingo. He did this for the express purpose
of benefiting his brother and family friend. He failed to
disclose his conflict of interest on his annual disclosure
statement dated July 1, 2002, and again in November of 2002,
when he failed to fully disclose the extent of his knowledge
and involvement when interviewed by outside counsel. These are
the central issues.
Mr. Ward would have us believe that certain individuals'
political motivations that are Machiavellian plots are the
greater sins. However, these constructive assertions are simply
not compatible with the facts. For Mr. Ward to assert his
actions were clearly transparent because they fully delegated
the matter is pure folly. By referring the matter to his
immediate subordinate, the message was loud and clear. The
employee had no independent knowledge or awareness of even the
existence of Energy Management Technologies, and therefore
would not have made the business introduction but for Lloyd
Ward's direction.
If Lloyd Ward really was concerned about transparency, he
should have stepped down by referring the request from his
brother's company to the chief compliance officer. The charge
that I, as chief compliance officer, should have counseled
Lloyd Ward about his unethical behavior prior to having any
knowledge of it ignores the fundamental facts and infers a
certain failure on the part of Lloyd Ward to understand and
comply with the very code that he and 125 USOC board members
endorsed and adopted this past April at the board of directors
meeting in Boston.
However, separate and apart from this matter, and in line
with my responsibilities as chief compliance officer, I did
provide Lloyd Ward with one-on-one ethics counseling shortly
after his hire, and even discussed a parallel case involving a
predecessor CEO's conflicts over a family member's business
interests.
In addition, I conducted training for senior staff,
including Lloyd Ward, at a senior staff retreat in Alabama on
August 17 of last year, at which I presented a case study
concerning a potential finder's fee for facilitating a business
arrangement, and then discussed misuse of USOC property, misuse
of USOC name and marks, endorsements, proprietary information,
and conflicts of interest related to misuse of position for
personal gain and favored treatment of family and friends.
In this case, the facts, if anybody is willing to look at
them, clearly supports that it was not until October 7, 2002
that I became aware of Lloyd Ward's initiative and involvement
in facilitating potential financial gain for his brother and
friend, and initiated an ethics review.
It is my conclusion that Lloyd Ward misused his position as
chief executive officer of the United States Olympic Committee
to facilitate potential financial gain for his brother and/or
his friend, and in the process violated four provisions--not
one, four provisions of the USOC code of ethics.
Specifically, he violated the code with the requirement to
protect information that belongs to the United States Olympic
Committee or donors, sponsors, suppliers, and fellow workers.
Mr. Ward was aware of or should have known that Energy
Management Technologies' presentation contained proprietary
Olympic photographs of athletes engaged in competition at the
Sydney games, which may not be used for commercial purposes.
Because of Energy Management Technologies' business plan,
the original information that I did not call for marketing
microturbines to the Pan American Games or anybody, for that
matter, in the Olympic family. The note given to Hernando
Madronero, which I received in October, was the first indicator
that this was, at least in part, an initiative undertaken as a
result of information provided by Lloyd Ward to Energy
Management Technologies which he acquired as a direct result of
his position with the United States Olympic Committee.
He violated the requirement to avoid conflicts of interest,
real and perceived. He failed to disclose the business
relationship with his brother, family friend, and another
member of the Olympic family, specifically his friend and
brother's relationship in Santa Domingo.
He failed to meet the requirement of never using USOC
assets or information for personal gain. Lloyd Ward used USOC
staff and the name of the United States Olympic Committee to
facilitate a potential business relationship for his brother
and friend with another national organizing committee which
could have resulted in substantial financial gain for his
brother and/or family friend. It does not make any difference
whether or not any financial gain in fact accrued. The attempt
was there.
The last point he violated, and this is the one finding,
apparently, that somebody is giving some recognition to, to
recognize even the appearance of misconduct or impropriety can
be very damaging to the reputation of the United States Olympic
Committee and act accordingly. Lloyd Ward's knowledge,
associations, and assistance to his brother and family friend
in their attempt to engage in a business transaction with
another member of the Olympic family presented a clear
perception of a conflict of interest.
In conclusion, this is not just about Lloyd Ward and the
failure to enforce the code of ethics. This is about failed
self-governance and leadership which chose to look the other
way and, in so doing, as far as I am concerned, placed the very
Olympic values, spirit, and ideals that they were entrusted to
protect at risk.
And I have one final statement as it relates to Mr.
Duberstein about whether or not I could have made this matter
go away. I absolutely could have made the matter go away by
simply agreeing with Mr. Duberstein's contention from the very
beginning that this was, ``a lot about nothing.''
That is the end of my statement.
[The prepared statement of Mr. Rodgers follows:]
Prepared Statement of Patrick J. Rodgers, Former USOC Ethics Compliance
Officer
My recollection of the following chronology, facts, and personal
interactions best describe my knowledge of alleged ethics violations by
United States Olympic Committee Chief Executive Officer, Lloyd Ward,
and the controversy surrounding them.
On or about April 4, 2002, following a meeting in the office of
Hernando Madronero, the then Managing Director of International
Relations, he shared with me a letter that he said was given to him by
Lloyd Ward, the Chief Executive Officer of the United States Olympic
Committee. The letter was from a company called ``Energy Management
Technologies,'' a division of WestBank Holdings LLC and was signed by
Mr. Lorenzo Williams and Mr. Rubert Ward.
Madronero said that he thought it strange that Mr. Ward would show
him the letter and asked me to look at it. The letter, dated February
19, 2002, thanked Mr. Ward for taking the time to review the attached
business plan and noted that changes had been made to reflect Mr.
Ward's suggestions from the initial plan. The letter contained a
request for Mr. Ward's financial assistance in the form of either a
loan or equity investment in the amount of $150,000 for the purchase of
2-3 microturbines and funding to maintain its operations in the
Dominican Republic.
I reviewed the business plan and noted that the plan called for
marketing microturbines to educational institutions, resource recovery
landfills, medical facilities, American ex-pats, law enforcement
facilities and agriculture. The plan also contained a 5-phase strategic
plan encompassing the Dominican Republic, Panama and Jamaica.
Nothing in the cover letter or business plan gave any indication
that the business ventures proposed were in any way related to the
United States Olympic Committee, Olympic family, sponsors, or the 2003
Pan American Games.
I then asked Mr. Madronero if Mr. Ward asked him to do anything
related to the letter or business plan. Mr. Madronero's response was
that he had not been asked by Mr. Ward to do anything related to the
request or business plan. He added that he was asked by Lloyd Ward to
keep him informed on developments in the Dominican Republic.
At that time, although I did not see any ethics issues associated
with the letter, business plan, or Mr. Ward's request that Madronero
keep him informed of developments in the Dominican Republic, I sought a
second opinion and showed the letter and business plan to the USOC
General Counsel, Mr. Jeff Benz.
We jointly concluded that there was no ethics matter associated
with the request. Mr. Benz and I both decided that it would be
important to ensure that if any contractual business or sponsor
relationship contained the name of this company, ``Energy Management
Technologies,'' we would want to have an opportunity to review it to
ensure that there were not any potential conflicts of interest. In that
regard, Mr. Benz sent an email to his staff at the end of our
discussion.
I also informed the Chairman of the USOC Ethics Oversight
Committee, Ken Duberstein, of the incident during a dinner meeting with
him in at the Chicago Airport Hilton on the eve of the USOC Executive
Committee Presidential election meeting. The information provided to
Mr. Duberstein was routine and in line with keeping him informed of
what I was doing. I did not, at that time, have any additional
information that would cause me to believe there had been any breach of
the USOC Code of Ethics by Mr. Ward.
It was not until October 7, 2002 at a pre-arranged lunch with Mr.
Madronero and another USOC employee that I learned from Mr. Madronero
that he had helped Lloyd Ward's brother. During the lunch discussion,
Mr. Madronero complained that he felt humiliated by being escorted off
the USOC complex without any opportunity to say goodbye to his staff or
return to his office to retrieve his personal effects. He also stated
that he did not believe that Mr. Ward liked Hispanics and was offended
by his treatment after all he had done to help Mr. Ward's brother.
At that point I said ``What do you mean, helped his brother''?
Before he could answer, I reminded Mr. Madronero of my earlier
conversation with him wherein he told me he had not been asked to take
any action in response to Mr. Ward showing him the letter. Mr.
Madronero then said that it was no big deal and he had no interest in
discussing the matter further, as he simply wanted to focus on getting
on with his life and didn't want to jeopardize working out an agreeable
severance with the USOC.
I told Mr. Madronero that he had an obligation to report to me what
transpired and any report that he gave me would not be subject to any
communication prohibitions contained in a severance agreement. I
emphasized that I wanted to know exactly what he did to help Lloyd's
brother, why he did it and if he had any supporting documentation that
could verify it. Madronero then alleged that Lloyd asked him to call
his brother and see if he could be of assistance in facilitating a
meeting with the Pan American Games organizing committee. Madronero
said that he did make some calls on behalf of Rubert Ward to Dr.
Puello, the President of the Dominican Republic Olympic Committee and
he believed that he had a couple of documents at his apartment, as well
as a possible voice mail message left on his office phone from Lloyd
Ward's brother, Rubert Ward. I asked him if there were any other calls
or communications. He said that there were several calls but he only
had the one voice mail.
I followed Mr. Madronero home, retrieved a copy of the February 19,
2002 letter, a handwritten note from Lloyd Ward to Mr. Madronero
stating ``An interesting proposal that could be beneficial for the 2003
Pan Am Games. Let's discuss. Come see me this week.''
Additionally, Madronero gave me a small undated handwritten note
containing telephone numbers for Rubert Ward, allegedly given to
Madronero by Lloyd Ward. I then asked Madronero to call his voice mail
while we were at his apartment and transfer the call allegedly from
Rubert Ward to my office phone.
On October 8th, I listened to and transcribed the voice mail from
Rubert Ward, who thanked Madronero for his assistance and informed him
that a meeting was scheduled with Dr. Puello on August 28th of 2002 in
Santo Domingo to discuss the proposed business venture.
On or about October 11th, I sent a fax to Kenneth Duberstein,
informing him of my discussion with Madronero and the documents
provided by Madronero. I made a recommendation in that memo that ``The
Ethics Oversight Committee retain outside counsel to conduct the
necessary interviews to determine the facts and circumstances
surrounding the allegation and provide a report of findings to the
Chair.
I spoke with Mr. Duberstein by phone on the 15th of October. During
that conversation his initial position was that this was not an ethics
matter but a management issue. I disagreed and following a discussion
concerning the role and responsibilities of the Ethics Oversight
Committee, my responsibilities and the President's responsibilities, he
agreed to schedule a meeting of the Committee and asked me to send him
documentation concerning my responsibilities, as well as that of the
Oversight Committee and the USOC President. He also asked that I
prepare a proposed course of action should the Oversight Committee
decide to take up this matter.
On the 16th of October, 2002, I prepared and sent a memo to Mr.
Duberstein containing the responsibilities of the Oversight Committee,
my responsibilities as Chief Compliance Officer and the
responsibilities of the USOC President. All of the information was
extracted from the USOC Constitution, Bylaws, and Ethics and Compliance
Policy III-1. Additionally, I proposed a course of action for
proceeding if the Ethics Oversight Committee determined that this was
properly a matter for committee review and investigation.
An Ethics Committee teleconference meeting was held at 12 noon EST
on the 24th of October, 2002 to take up consideration of this matter.
Documentation supporting the allegation was sent separately to each
Ethics Committee member in advance of the call. As documented in
meeting minutes, the Ethics Committee was informed of the allegation
and my proposed course of action. The committee unanimously agreed to
the following steps:
1. Retain outside counsel to determine the financial interests
of Lloyd Ward in his brother's company and to determine whether
or not there were other related communications involving Lloyd
Ward, Hernando Madronero, Rubert Ward and other staff. Counsel
was to interview Hernando Madronero and then report back the
results of that interview to the full committee before
proceeding further.
2. The Chair of the Ethics Oversight Committee was to:
A. Inform Lloyd Ward of the allegations and the information
received by the committee, to include all documents and
transcripts.
B. Extend the committee's invitation to Mr. Ward to submit
input or documentation for consideration by the committee.
C. Inform Mr. Ward that the results of the committee's
investigation would either be closed, if unsubstantiated, or
reported to the Executive Committee in accordance with USOC
Bylaws.
At the next regularly scheduled Ethics Oversight Committee meeting
held in Colorado Springs on November 2, 2002, the minutes taken by me
during the October 24th teleconference were reviewed and approved by
the committee and are a matter of record.
During the period between October 24th and the next teleconference
meeting, on or about November 22nd, I contacted outside counsel, Fred
Fielding, on several occasions to determine the status of his
interviews. I was concerned that a matter of this potential
significance to both Mr. Ward and the USOC was taking so long given
that Mr. Fielding's charge by the committee was limited and his report
was necessary to determining whether or not to proceed further. His
response was always the same. He was working on it and would report to
the committee chair when it was completed. During one of those calls he
asked me if I would mind giving him my statement because there were
some discrepancies in the recollection of others that he talked with
and the initial information that I gave him. I agreed, gave him the
information and then again pressed him to complete his work.
Eventually, a committee conference call was scheduled for November
22nd wherein Fred Fielding, the retained outside counsel, was to report
the results of his interviews to the full committee. During a pre-
conference committee call between Ken Duberstein, Fred Fielding, and me
which was scheduled to enable Mr. Duberstein and me to hear the results
of Mr. Fielding's interviews immediately prior to the full committee
conference call, Mr. Fielding gave his verbal report. Upon the
conclusion of that report Mr. Duberstein declared that this was ``a lot
about nothing.'' I said that it was a clear ethics violation. After
several minutes of discussion with no agreement by me that this was not
a clear ethics violation, the 3 of us agreed that a written report was
necessary before further discussion of the matter. When the full ethics
committee conference call began, Mr. Duberstein announced the need for
a written report before discussions of this matter could continue. The
committee agreed and set a time table to receive the report within 10
days. Mr. Fielding agreed to get the report to the committee and I
committed to schedule another full committee meeting as soon as
possible following receipt of the report by committee members.
Immediately following the call, Mr. Duberstein called me back and
told me that this was a management issue and I needed to find a way to
make this go away for my own good. I asked him if he was trying to
infer that I should be worried about my job. I told him that he should
not have such worry because I believed this was a clear ethics
violation and would leave my job before I would ever entertain finding
a way to make this go away. Mr. Duberstein then said that he was
concerned that the Ethics Committee was being used for political
purposes and he would not allow the Ethics Committee to be used for
that purpose. I said that political issues should be considered as
management issues but this was clearly not a political issue and would
not change my position that I believed it to be a clear violation of
the USOC Ethics Code. He again said that this was a lot about politics
and I should think overnight about what he told me and call him back
the next day.
I called him the next work day, I believe it was November 25th, and
reiterated my position. It was at that time that Mr. Duberstein asked
me to recuse myself from Ethics Committee deliberations on this matter
because he believed that I did not like Lloyd Ward and he did not want
any perceptions of conflicts of interest to be part of the Ethics
Committee deliberations. I stated that I had no personal issue with
Lloyd but did, of course, not like what I considered his violations of
the USOC Ethics Code. I then agreed to recuse myself from further
Ethics Committee deliberations and meetings, provided I was kept
informed and that I would have an opportunity to review the committee's
report and provide relevant facts to be considered by the committee. He
agreed.
Subsequent to that date, I discovered additional documents which
included:
1. A July 8th presentation cover letter to Lloyd Ward thanking
him for taking the time to review and critique Energy
Management Technologies planned presentation to the 2003 Pan
American Games.
2. A copy of a 40-page presentation containing an organization
chart listing Rubert Ward as President of Energy Management
Technologies and what I believed to be proprietary photographs
of athletes who competed in the Olympic Games in Sydney.
3. A fax cover sheet, dated September 10th and a, fax letter
addressed to Dr. Puello, from Lorenzo Williams. CEO of Energy
Management Technologies regarding a pricing proposal, dated
September 8th.
I sent those documents to all committee members in a memo prior to
their next meeting, which was scheduled to be held on December 19th but
subsequently changed to December 23rd. I also sent my conclusions to
Mr. Duberstein in advance of the scheduled call.
In summary, it was and is my conclusion based upon a review of all
known documentation that Lloyd Ward misused his position as Chief
Executive Officer of the United States Olympic Committee to facilitate
potential financial gain for his brother and/or his friend, and in the
process violated 4 provisions of the USOC Code of Ethics. Specifically
he violated the following code requirements:
CODE REQUIREMENT: Protect information that belongs to the USOC,
our donors, sponsors, suppliers and fellow workers.
Mr. Ward was aware of, or should have been aware that the
``Energy Management Technologies'' presentation contained
proprietary Olympic photographs of athletes engaged in
competition at the Sydney Games, which may not be used for
commercial purposes.
Because the ``Energy Management Technologies'' business plan
did not call for marketing microturbines to the Pan American
Games. The note given to Hernando Madronero clearly indicates
that this was, at least in part, an initiative undertaken as a
result of information provided by Lloyd Ward to ``Energy
Management Technologies'' which he acquired as a direct result
of his position with the USOC.
CODE REQUIREMENT: Avoid conflicts of interest, both real and
perceived.
Lloyd Ward failed to disclose the business relationship with
his brother, family friend, and another member of the Olympic
family.
CODE REQUIREMENT: Never use USOC assets or information for
personal gain.
Lloyd Ward used USOC staff and the name of the USOC to
facilitate a potential business relationship for his brother
and friend with another National Organizing Committee which
could have resulted in substantial financial gain for his
brother and/or family friend.
CODE REQUIREMENT: Recognize that even the appearance of
misconduct or impropriety can be very damaging to the reputation of the
USOC and act accordingly.
Lloyd Ward's knowledge, associations, and assistance to his
brother and family friend in their attempt to engage in a
business transaction with a member of the Olympic family
presented the clear perception of a conflict of interest.
The Chairman. Thank you very much, Mr. Rodgers.
Mr. Ward, welcome.
STATEMENT OF LLOYD WARD, CHIEF EXECUTIVE OFFICER AND EXECUTIVE
DIRECTOR, UNITED STATES
OLYMPIC COMMITTEE
Mr. Ward. Mr. Chairman, distinguished Members of the
Senate, I am here today to share with you some of my thoughts
on the state of affairs in the USOC, obviously address the
ethics issue and controversy and, very importantly, I would
like to answer your questions as you see fit.
First, let me address the ethics controversy and, as I
address it, let me apologize to the athletes of America and to
you that commissioned us. The fact that we are having this
conversation and not a conversation on athletes and their
performance is truly sad. But I will also tell you that in my
contact with sponsors, my contact with friends and families of
the Olympic movement since this controversy began, it has been
clear to me that they understand the difference between
athletes on the field of competition, between sweatsuits and
performance of our grand athletes and that of blue suits and
bureaucrats that support them.
We need to address the blue suits and the bureaucracy, and
I will give you my thoughts on that as well.
First, the ethics issue. It is amazing to me that we sit
here today focused on this issue. It is important that you
understand the genesis of this issue. The genesis was in an
idle conversation two months after I joined the USOC as CEO. In
a casual conversation over a cocktail one evening, Mr.
Madronero mentioned to my wife and I that the Pan American
Games were going very slowly in preparation, and that they were
having a significant problem with electricity and power to
support the games. In fact, he indicated that it would be very
unpleasant for our athletes to be in Santa Domingo with the
weather conditions and the like. Not only would they not be
able to provide air conditioning, but they would not have the
electricity to power the fans.
I am a CEO. I have honed my skills to solve problems. As I
listened to this, my wife made the comment, ``isn't your
brother doing something in that part of the world?'' Mr.
Madronero and I talked about that momentarily, and I said,
``Hernando, remind me to followup on this with you when we get
back to the office.'' Hernando and I both thought that this
might be something that would be useful to pursue.
When we got back to the office, I made a very simple
request of Hernando; ``Would you please followup on it and
handle it as you see fit--I want to be totally hands off and
not involved.''
Later, I received a business proposal which I forwarded to
Hernando with a cover note and a handwritten note on it that
said, ``This is interesting and may help us with the Pan
American Games. Please come to discuss.'' That was in April.
In July, a proposal arrived for a presentation that was
going to occur in Santa Domingo. They sent it to Hernando
Madronero and me. I forwarded my copy directly to Mr.
Madronero.
Now, what is interesting to me is, I know that I have
created an appearance of a conflict of interest. That was
wrong, and for that I am sorry. I also know that to the extent
that I did not note this on my annual ethics disclosure form,
was also an error in judgment, but I want to be clear with you
that this was in no way to serve any personal interest.
I had no financial stake in this and, in fact, other than
the interactions that I just described to you, I had no further
interactions with Hernando Madronero, no one in Santa Domingo,
and no one on the staff. I allowed this to be handled by a
staff member who is a senior executive and so he could make
full disposition on the matter and determine how to proceed.
Now, what failed me in this was my instincts. You can ask,
how can an experienced CEO end up in this situation? Well, it
is my instincts. You see, I was not as clear then as I am now
that the USOC culture is a culture of ``I gotcha, I gotcha.''
It is not a culture of working together to figure out how we
navigate our way through the rocky shoals of all that we are
faced with day in and day out. It is, I gotcha, and my
instincts failed me, and so to the extent that I might have
been walking off the edge of a cliff, I am used to someone
saying, hey, you know, your next step you go off the edge of a
cliff. I am not used to them building bleachers and selling
tickets, and that, in my estimation, is what happened here.
Mr. Rodgers, if you are to believe him, only got knowledge
of this in October. There is indication in there Fielding
report that Mr. Rodgers was advised of this in April. There are
also indications that our general counsel (Mr. Jeff Benz) was
advised of this in April. Of course, Mr. Madronero was aware of
this when I first made the request of him. At no point did
anyone suggest that there was any danger, and because I felt
that this was something that would serve athletes, and I had my
hands totally off, I felt that Hernando could make the
decisions and he could move forward as he saw fit. I never
pressured him in any way.
So here we are, and this assertion that Mr. Rodgers is
making today that somehow proprietary information of the USOC
ended up in the presentation of EMT is absolutely false, in the
sense that I provided no information and no perspective, and
certainly no proprietary information to EMT whatsoever, and I
resent the implication.
Now, having said that, this situation was reviewed
thoroughly by a distinguished group of renowned individuals.
They came to a unanimous conclusion, and after reviewing the
facts their conclusion was, in fact, shared with the Executive
Committee. They went through a process of evaluation and making
a determination on its disposition.
That disposition is yet to come through an internal
process, and I look forward to concluding this matter with that
final result. I accept the report, and I will accept the
disposition. This is a matter of critical importance to me,
because my whole life has been about ethics. It has been about
walking the talk and truly standing up for what I believe in,
and this attack on me is something that has deeply saddened me.
Now, having said that, I have to soak it up and move
forward, but I want you to understand that this in no way was
anything that was self-serving for me or for my family or
friends.
Next, I would like to talk to you about the leadership
crisis in the USOC. The leadership crisis in the USOC today is
manifest in two people, Marty Mankamyer and Lloyd Ward, and
while we should take our full responsibility for whatever part
we played in the situation we are in today, I would like to
suggest to you that this does beg a bigger issue, as Senator
Breaux was trying to define, and that is, this is an issue of
ideologies and of culture. This is an issue of holding on to
the practices of the past, or reaching to a better tomorrow.
The USOC governance structure is not designed for efficiency,
effectiveness, and business operation. It is a structure with
123 board members and 23 Executive Committee members.
The board, in its inception, was not much of a barrier. In
fact, Senator Stevens in the Amateur Sports Act of 1978 created
a magnificent mission for the Olympics, to lead the world's
best National Olympic Committee to help athletes achieve
sustained competitive excellence while inspiring all Americans
and preserving the Olympic ideal. That is magnificent, but what
the act did not do is define the roles, the structures, and the
levels of authority and power.
So what is missing? What is missing, in an organization
that has a bloated bureaucracy in terms of governance, are
organizational processes that clearly define roles,
responsibilities, lines of authority, and who is responsible
for what.
Now, you would think that grown people could figure that
out, but what is underneath it is a culture. It is a culture
which, in the 25 years since the commissioning of the Olympics
under the Ted Stevens Amateur Sports Act, has had 12 CEO's and
9 presidents. Without exception, almost every administration
had discord and disharmony along the way, and many of the
presidents and CEO's left before their normal scheduled time.
This is not just an issue of today. This is an issue that
has been ever present in the USOC. It is time for us to reach
for a better tomorrow. We have to move beyond political
agendas, personal self-interest, and we have to start to serve
the greater good.
Did I make an error in judgment? Yes, but I did not create
an unethical act.
Could I have been smarter about it? Yes, and I will be in
the future, but this issue is much broader than that. This
issue is about the future of our athletes and the future of
this movement, and I am here to say that the organizational
structure that we have today will not serve our athletes, it
will not serve society, and it will not deliver on the mandate
that you have provided us.
So let me move to my third point, and that is, what do we
do going forward? I support Ms. Godino's recommendation, that
we should appoint under your auspices a blue ribbon commission,
which would look at a new architecture for the United States
Olympic Committee--streamlined and focused. But we have to
understand as we are moving from the sport of the Olympics to
the business of the Olympics. In 1978 our budget was $50
million. Today, it is $500 million, a tenfold growth. Our
governance structure has not kept up with the challenges and
demands of being an Olympic business.
Our sponsors are saying that if you want us to continue to
invest in you, you have to show us a return on our investment,
and with 17 days of glory every other year, the Olympic games
themselves are insufficient to produce this return. We have to
create a new inventory of assets. We have to expand our reach
into society. We have to have more contact points so that we
create opportunities to advance and preserve the Olympic ideal
and provide a return to those sponsors that invest in us.
We have challenges going forward, and I would like to say
clearly that it is not the people. We have incredibly
passionate and talented people on our staff, 500 strong, and if
you think about the ratio of board members to staff, it is 1 to
5. We have one director for every five staff persons. That is
top heavy. These people come to work every day compassionate
and committed to do whatever it is to serve and support our
athletes to help them achieve their Olympic dreams.
We have thousands of people that volunteer their services
beyond those that serve on our board every day to help us help
our athletes achieve their Olympic dreams, and we have
incredibly talented professionals that I think are at the
starting gate and ready to run the race for a better tomorrow.
I encourage the Senate to intervene. I encourage Congress
to establish a blue ribbon panel. It ought to include
independent, knowledgeable resources that can take a look at
the rearchitecture of the United States Olympic Committee.
Thank you.
The Chairman. Thank you very much.
Ms. Mankamyer.
STATEMENT OF MARTY MANKAMYER, PRESIDENT, UNITED STATES OLYMPIC
COMMITTEE
Ms. Mankamyer. Thank you, Mr. Chairman. Thank all of you
Senators for having us here. Good afternoon, and thank you for
giving me the opportunity to address the Committee concerning
the issues we at the USOC are currently grappling with. As you
may know, I am grateful and proud to serve the USOC as a
volunteer since 1984, when I first became a member of the Games
Preparation Committee.
I have lived in the Village in Martaplata, Argentina, I
lived in the Village in Sydney, Australia. I know the athletes.
I recognize----
The Chairman. Pull that microphone just a little bit
closer.
Ms. Mankamyer. I recognize what we should be doing for
them, and that is why we need to be here, and to make some
changes.
Beginning in 1990, I served on the USOC board and National
Governing Body Council and was elected Vice President,
Secretariat of the USOC. In August 2002, when I was elected
president of the USOC, I made it clear that I was elected for
nothing, and I was interested in nothing more than serving for
the remainder of the present quadrennial, which ends after the
2004 Athens Olympics. I have no political agenda and would not
run for reelection.
Throughout my career, one of my particular focuses has been
on making sure that the doors are open for women to participate
in sports. The present circumstances are a great disappointment
to me and, indeed, I find them, after my 20 years of volunteer
work, heartbreaking.
As you know, substantial controversy resulted from an
investigation into the conduct of USOC's chief executive
officer, Lloyd Ward. I am not here to discuss the merits of
that inquiry. Instead, I am here to discuss why that inquiry
resulted in so much public controversy, much of it targeted at
me. Simply put, I do not understand why I have been the target
of such attacks. In my view, in any organization, but
especially in the case of a public organization dedicated to
serving amateur athletes, any alleged conflict of interest
should be reviewed with the greatest care, otherwise the
athletes and the public will lose faith in the organization.
I did not want another Salt Lake, and by the way, it was I
who put the ethics component review for future officers in our
process before I was elected, and I hope it always stays there,
but it was important to me that we have all future leaders
vetted by the ethics process.
At the Executive Committee meeting on January 13, Vice
President Paul George referred to our Ethics Oversight
Committee as a blue ribbon panel. I agree. Here, we had an
ethical issue important enough to eventually cause the protest
resignations of three members of this blue ribbon panel. The
USOC ethics compliance officer, and a valued and respected
member of the Executive Committee. I merely expressed my
conviction that an issue causing such resignations warranted
more thorough review. As a result, I became embroiled in
controversy and became the subject of public attacks. That does
not make sense to me.
How can it be wrong, or contrary to the interest of the
USOC and the athletes it serves, to suggest that a more
thorough and careful review of an ethics issue is appropriate,
particularly where I have the responsibility to maintain public
confidence in the USOC? In such circumstances, shouldn't the
USOC take a harder look, if for no other reason than to restore
the confidence of the athletes and the public and the sponsors
that support them? That and nothing more is what I have
advocated, and I have nevertheless been subjected to personal
attacks from a small faction of the Executive Committee.
Let me be clear, I did not leak information about the
inquiry to the press. Although I believe strongly that greater
transparency is necessary to restore public confidence in our
organization, I take seriously the USOC's longstanding policy
designed to prevent improper leaks to the press, and did not
engage in such behavior. Any allegation to the contrary is
simply false.
Most important, although I am disappointed by these
attacks, I believe they and the present controversy serve a
greater purpose, a focus on the governance of the USOC. In my
view, many of the recommendations of the President's Commission
on Olympic Sports, if they had been implemented, that would
have made a much better situation.
It is true, as all of us have opined, that 123-member board
of directors is too large. So, too, is a 21-member Executive
Committee. Such an organizational change, and you have heard it
throughout, would lead to more efficient decisionmaking and
increased accountability. At the same time, conflicting and
confusing organizational rules must be changed, such as the
fact that the USOC president is responsible for the management
of key international and governmental relationships, whole the
CEO is responsible for hiring and firing the staff personnel
assigned to that effort.
The changes I advocate, and others that should be
considered by a reviewing body, would also make us better,
continuing to provide support to our National Governing Bodies
and to our constituent members, at examining and monitoring our
budget and administrative overhead to ensure our organization
is providing maximum deliverables with minimum cost, and at
assuring our sponsors that their investment and trust in us is
warranted.
Last, and as I previously noted, I believe it is imperative
that we introduce greater transparency into our processes as a
means of restoring public confidence in the integrity of the
organization and its ability to fulfill its primary mission of
promoting amateur athletes to pursue their goals. Public
scrutiny of the USOC should be encouraged and promoted in the
organization's policies in the future, and let me say, by
saying the volunteers are terribly important to the USOC, which
depends on their extensive devotion of personal resources to
help our athletes, I feel that behind the athletes, who must
always come first, my most important constituency is the
volunteers who put on the show.
It is my responsibility as president to lead the USOC, and
in that capacity I am the most visible of all the thousands of
volunteers who devote themselves to the organization. Sometimes
that responsibility makes reasonable disagreement with
different constituencies unavoidable. It is my goal to resolve
those disagreements through a process of discussion and
consensus that is designed to maximize the goals of the USOC
and the athletes it serves. I am confident my efforts have been
in the furtherance of that purpose. I look forward to resolving
these issues, and to the work that remains.
And may I make just one other statement in response to one
of Mr. Duberstein's, please, Mr. Chairman. Mr. Duberstein's
recollection of a conversation and mine vary significantly. I
know that I never said the word, disciplinary. I would not do
that. I would not rejudge that committee's action, and as a
matter of fact it was he who told me that they would not make a
recommendation, and that I must give it to the Executive
Committee.
Thank you.
[The prepared statement of Ms. Mankamyer follows:]
Prepared Statement Marty Mankamyer, President, United States Olympic
Committee
Mr. Chairman and Members of the Committee:
Good afternoon and thank you for giving me the opportunity to
address the Committee concerning the issues we at the USOC are
currently grappling with. As you may know, I am grateful and proud to
have served as a USOC volunteer since 1984, when I first became a
member of the Games Preparation Committee. Beginning in 1990, I served
on the USOC Board and National Governing Body Council, and in 2000 I
was elected Vice-President--Secretariat of the USOC. In August 2002,
when I was elected President of the USOC, I made it clear that I was
interested in nothing more than serving for the remainder of the
present quadrennial (which ends after the 2004 Athens Olympics) and
would not run for re-election. Since I have no aspirations to future
leadership positions in the USOC, I believe I am one of the very few
people who are well-positioned to deal in an unbiased fashion with the
difficult issues facing the USOC, and I am requesting that you,
Senators, along with your colleagues in the House, work with the USOC
to mandate the changes necessary to move the organization forward.
After almost twenty years of volunteering for the USOC, I am very
concerned about its future, particularly in light of the disagreements
and controversies that have caused us to be here today. Indeed, I
recognize that for everyone who loves the Olympic Movement and amateur
sports--as I do--the events of the past two weeks and the attendant
press reports have been a great disappointment. You have asked, ``What
happened to bring us to where we are today?'' I am here to try to
answer that question.
I believe there are really three factors that are responsible.
First, a situation arose requiring review by the Ethics Oversight
Committee and a vote of the Executive Committee. Second, there were
improper and continuous leaks of confidential information to the press
about that ethics issue. Third, as must now be obvious to everyone, the
governmental structure of the USOC must be re-examined and streamlined.
I will address each of these three factors in turn.
I. The Ethics Issue.
As to the first factor (and as others have stated before this
panel), substantial controversy has resulted from the decision by the
USOC Executive Committee after its receipt and review of the report of
the Ethics Oversight Committee, which was chaired by Mr. Ken
Duberstein, concerning the conduct of the USOC's Chief Executive
Officer, Lloyd Ward. The Executive Committee ultimately accepted and
adopted the report of the Ethics Oversight Committee, which in turn
initially concluded that there was only an ``appearance of conflict of
interest'' on the part of Mr. Ward. As a result of that determination,
three members of the Ethics Oversight Committee, a member of the USOC
Executive Committee, and the USOC's Ethics Compliance Officer have
resigned in protest. Subsequently, and without any formal action by the
USOC Executive Committee, my critics have clarified their position at
least to acknowledge a ``technical violation'' of the USOC Code of
Ethics by Mr. Ward, even though the term ``technical violation'' is
nowhere to be found in the USOC Code of Ethics.
I am not the person in the best position to speak to the Ethics
Oversight Committee's process and how it worked in this instance.
Needless to say, I believe that it is essential that the Ethics
Oversight Committee itself be free from perceived or actual conflicts
of interest. But it is not, and was not, my role to make substantive
ethics determinations; and I played no part in the deliberative process
concerning the issues before the Ethics Oversight Committee. Instead,
my role consisted of only two peripheral activities.
First, at the request of Ethics Compliance Officer Pat Rodgers, and
in my capacity as an ex officio member of the Committee (as President
of USOC), I participated in one teleconference to determine whether
resources should be allocated to retain outside counsel for the
Committee. Although the decision was made to retain outside counsel, I
did not take part in that decision or the deliberations that preceded
it--I merely listened in on the call, as I was asked to do by Mr.
Rodgers.
Much later, and only after the conclusion of the Committee's
substantive deliberations, the Committee's chairman, Mr. Duberstein,
informed me that although the Committee had arrived at certain
findings, it would not make a recommendation. Although I did not fully
appreciate this at the time, the USOC Bylaws do not permit the
Committee to decline to make a recommendation. Specifically, Chapter
XIX of the USOC Bylaws states that the Ethics Oversight Committee's
``responsibilities shall be . . . to review and investigate such
matters relating to ethical practice as it may deem appropriate and to
make recommendations resulting therefrom . . . to the Executive
Committee (if concerning the Chief Executive Officer . . . ).''
(Emphasis added).
Mr. Duberstein instead told me that in the absence of a
recommendation by the Ethics Oversight Committee, a decision of the
Executive Committee would be required. As a result, and pursuant to my
responsibilities as President of the USOC, I then convened a special
meeting of the Executive Committee to review the report of the Ethics
Oversight Committee and issue a recommendation, as the Ethics Oversight
Committee had failed to do. I recused myself from those deliberations,
however, out of an excess of caution and due to concerns expressed by
some committee members that past policy differences between Mr. Ward
and me would make my involvement in the deliberations
counterproductive.
The resolution announced by the Executive Committee on January 13th
was inconclusive of the underlying issues, since it led to resignations
by three members of the Ethics Oversight Committee, the USOC Ethics
Compliance Officer and a member of the Executive Committee.
After I refused to resign as President of the USOC, I was publicly
accused in a press conference by certain of my fellow officers of
leaking information to the press, using the ethics review process to
achieve political purposes, and operating the USOC in a way
inconsistent with conducting a fair and reasonable review of Mr. Ward's
conduct. It is my understanding that the press release making these
accusations was at least in part prepared by outside counsel hired to
represent the Executive Committee--of which I am the presiding
officer--even though I was given no opportunity to participate in any
way in the consideration of whether that press release was appropriate.
Because that press release advanced the personal goals of seven members
of the Committee but did not even attempt to represent the Committee as
a whole, the payment of counsel from USOC funds seems to me no
different than the appropriation of corporate assets for private
purposes. It is perhaps not surprising that I initially agreed to
resign when confronted with such attacks. However, on reconsideration I
decided that it was fundamentally improper for my critics (aided by
legal counsel) to ask me to resign, when all I had done was to try to
focus the organization on an issue of such a level of magnitude as to
cause the protest resignations of so many fine people.
It seems to me that when an issue arises of the type that will
cause honorable and capable individuals to resign in protest in
wholesale fashion, it is plain that such an issue warrants the concern
and focus of the USOC. Indeed, it is difficult for me to imagine any
corporation--governmental or private--in which comparable resignations
could occur but where it would not be thought important to look closely
at the underlying causes. Although I have been criticized for
articulating this point of view, I do not believe those criticisms are
well-founded. In particular, I do not believe that my past policy
disagreements with Mr. Ward should preclude me from fulfilling my
responsibilities as USOC President by articulating this basic
viewpoint. If that were to be the case, once the President has policy
disagreements with any other senior officer, there are then important
responsibilities the President can no longer execute. This cannot be
correct, and no other organization to my knowledge functions this way.
What I was doing, and all that I was doing, was asking that an
issue of this magnitude--which had caused such fundamental division--be
reviewed with the greatest care. Especially given the controversy that
the resignations have caused, and the failure of the Ethics Oversight
Committee to fulfill its responsibilities under the USOC Bylaws, I
believe it should be evident why it was in the USOC's best interests to
engage in, and be perceived to have engaged in, the most careful and
extensive review of the matter. Independent of the specific
determinations in this case or my reactions to it, it is obvious that
we have problems that remain unaddressed: An organization dedicated to
the high ideals embodied by the Olympics and to the support of the
extraordinary efforts of our athletes simply should not find itself
required to devote so much of its time and energies to the resolution
of such troubling issues.
II. Dissemination of Information to the Media.
As for the second factor that brings us here today, the
dissemination of information to the press, I want to make three points.
To begin with, I want to make absolutely clear that I did not leak
information to the press.
Next, the USOC has a longstanding policy designed to prevent
improper press leaks. Under that policy, the only spokespersons for the
USOC are the President, the CEO and the Managing Director of USOC Media
Relations and Programs. That policy should be enforced.
Finally, and perhaps most importantly, the Bylaws themselves
require sensitive documents to be disseminated broadly prior to
committee and board meetings. Right now, before the Executive Committee
can meet to consider a report of the Ethics Oversight Committee, the
USOC Bylaws require that ``in order for the [Committee] to take action
on a specific matter at a particular meeting, the agenda for such
meeting must describe the matter with sufficient particularity and be
accompanied by sufficient supporting materials (to the extent then
available) as to afford the members of such body reasonable notice that
it will be offered for consideration.'' Consistent with this and other
Bylaws, I was required to disseminate to the 21-member Executive
Committee a set of the documents considered by the Ethics Oversight
Committee along with the meeting agenda.
Accordingly, the claim that I unnecessarily allowed information to
be distributed is inaccurate. In particular, it has been charged that I
attempted ``to only present the most damaging information and to
present it in a way that would encourage the Executive Committee and
the public to prejudge Mr. Ward as unfit for continued employment
before they ever had an opportunity to view a complete record of the
facts and circumstances.'' This is simply not true. The materials I
transmitted to the Executive Committee contained exactly the same
documents that were considered by the Ethics Oversight Committee, with
the single exception of a Dun & Bradstreet report, the accuracy of
which could not be confirmed and which was therefore omitted.
This policy requiring broad dissemination of information obviously
increases the chances that a leak will occur. Indeed, one could read
the USOC Bylaws XIX to require that the entire 123-member USOC Board
was responsible for considering the findings of the Ethics Oversight
Committee. I chose to convene the Executive Committee in a special
executive session, which not only avoided a sweeping distribution of
information to 123 Board Members, but further contained it by avoiding
the involvement of a relatively large number of staff members and
advisors to the Committee in the deliberations. (As discussed in
Section III below, I believe, for reasons unrelated to issues of
information dissemination, that USOC governance would benefit if the
size of its governing bodies were reduced.)
Ultimately, however, it is not practical or desirable to try to
avoid leaks by unduly restricting the flow of information within the
USOC. The USOC's committees cannot govern unless they are able to make
informed decisions. Especially given its public mission, the USOC
should try hard to avoid leaks, but not at the expense of compromising
either informed decision-making within the organization or informed
public scrutiny of the organization's decisions.
III. Potential Improvements in Governance.
The last issue I would like to address is corporate governance.
Although it is necessary to clarify the ethics review process and
eliminate leaks to the press, the governance issues facing the USOC are
clearly of equal or greater importance and present a potentially
greater challenge.
The Federal Amateur Sports Act, authored by Senator Stevens, was
based on the report of the President's Commission on Olympic Sports, a
commission upon which Senator Stevens served. It is my view that the
current problems of the USOC would have been significantly reduced if
one major recommendation of the Commission had been implemented--that
being its recommendation that the USOC Board of Directors be reduced to
15 persons. We need to make the USOC governance structure smaller and
more efficient. A 123-member Board of Directors is simply too large. So
too is a 21-member Executive Committee which, with the addition of
special assistants, advisors and others, brings the size of any meeting
to over 50 people. To place USOC governance in the hands of so many
people is to make decision-making inefficient and place effective
oversight at risk. Having fewer people be more directly responsible for
the governance of the USOC will increase the accountability and level
of involvement of each of them, while smaller deliberative bodies will
be able to act more quickly and efficiently and to describe their
deliberations and decisions more accurately. Reducing the number of
people involved in oversight will also, to some extent, reduce the
danger of improper leaks to the press by avoiding the need for unduly
broad distributions of sensitive material.
Next, we need to make changes necessary to assure that
organizational roles and responsibilities are clearly defined and
adhered to. For example, the currently mandated organizational
structure places the management of key international and governmental
relationships under the control of the USOC President, where they
should be placed, given the level of international experience typically
possessed by those who hold that office, but the Chief Executive
Officer is given conflicting responsibility for hiring and firing the
staff personnel assigned to that effort. For example, Hernando
Madronero, the Director of USOC International Relations, was terminated
by Mr. Ward. (This issue also overlaps other issues considered today--
before being terminated, Mr. Madronero received directions from Mr.
Ward in connection with the conduct of Mr. Ward giving rise to the
ethics issue that has led to the present controversy.) Such structural
deficiencies, which result in confusion and conflict, are too
commonplace at the USOC, and should be eliminated.
Changes such as these, I believe, would aid us in our primary
mission, which is to do all we can to guarantee that our athletes are
able to train and succeed in their quest to compete in and win medals
in the Olympic, Pan American and Paralympic Games. These changes would
also make us better at continuing to provide support to our National
Governing Bodies and to our constituent members; at examining and
monitoring our budget and administrative overhead to ensure our
organization is providing maximum deliverables with minimum cost; and
at assuring our sponsors that their investments and trust in us is
warranted. These objectives are clearly more important to us than ever,
given that Forbes Magazine recently identified the USOC as one of a
number of nonprofits it ``recommends avoiding--or at least taking a
very close look at,'' because its fundraising efficiency falls below 70
percent. This is of great concern to us, as it must be to you. Of
course, we must also strive to better service our existing sponsor
contracts and maximize our opportunities to renew them; and to seek new
sources of revenue, particularly in the donor giving area.
Lastly, as an element of the revisions needed to the corporate
governance structure of the USOC, I believe it is imperative that we
introduce greater transparency into our processes as a means of
restoring public confidence in the integrity of the organization and
its ability to fulfill its primary mission of promoting amateur
athletes pursue their goals. While in the recent controversy the
premature dissemination of information to the press contributed greatly
to the controversies that sparked this hearing, public scrutiny of the
USOC should be encouraged and promoted in the organization's policies
in the future.
Again, I share the view of those who criticize these leaks as
counterproductive to the deliberative process in this matter. The
USOC's committees must be able to deliberate in private and must be
able to create certain documents that are not properly disseminated to
the media. However, as noted above, apart from enforcing the rules
against leaks, there is a limit to how far it is possible to go to stop
them, without potentially compromising other important goals. (Reducing
the size of governing committees, which has other important governance
benefits, may incidentally also help reduce leaks.) The present
controversies unavoidably erode public confidence in the USOC, which
harms our athletes--the exact opposite of what the USOC is established
to do. Adequate public awareness of the ethical oversight process of
this organization is an important element of restoring faith in the
USOC.
Let me close by saying that volunteers are terribly important to
the USOC, which depends upon their extensive devotion of personal
resources to help our athletes. I feel that behind the athletes--who
must always come first--my most important constituency is the
volunteers who put on the show. It is my responsibility as President to
lead the USOC, and in that capacity I am the most visible of all of the
thousands of volunteers who devote themselves to the organization.
Sometimes that responsibility makes reasonable disagreements with
different constituencies unavoidable; it is my goal to resolve those
disagreements through a process of discussion and consensus that is
designed to maximize the goals of the USOC and the athletes it serves.
I am confident that my efforts have been in furtherance of that
purpose. I look forward to resolving these issues and to the work that
remains.
Once again, I appreciate the opportunity to discuss with this
Committee the issues we at the USOC are struggling with. With the
guidance and support of Congress and the American people, and a
redoubled effort to address the governance issues that confront the
USOC, I am sure we can make the organization one of which all of us--
athletes, volunteers and all Americans--can be proud.
The Chairman. Thank you very much.
Ms. Godino, in your statement you said that it is simply
not true that Mr. Ward was cleared of wrongdoing. Mr. Ward was
not cleared of wrongdoing. The Compensation Committee was
directed to handle disciplinary action for Mr. Ward through his
performance review. Does the Compensation Committee have any
disciplinary powers besides cutting somebody's pay?
Ms. Godino. I believe that would be the disciplinary
action.
The Chairman. So by referring it to the Compensation
Committee you basically decided that the punishment would
entail something monetary and not a formal censure, or
expulsion, or anything else, is that right?
Ms. Godino. It is accurate that the Compensation Committee,
the intention for referring it to the Compensation Committee to
enact the penalty was for there to be financial punishment,
yes.
The Chairman. And none other?
Ms. Godino. No. By accepting the report, I think it also,
at least to my thinking, is that it was also an acceptance of
the report, which said that there were violations of the code
of ethics.
The Chairman. But there was no further penalty besides some
compensation penalties?
Ms. Godino. Correct.
The Chairman. Why do you suggest Ms. Mankamyer resign, and
who else shares your views?
Ms. Godino. The request for her to resign--I will answer
the second part first--was made by the five USOC vice
presidents, the chair of the National Governing Bodies, and
myself.
The Chairman. Which is basically all of them, right?
Ms. Godino. I am sorry.
The Chairman. That is a very significant portion of the
governing body?
Ms. Godino. I think that's accurate, because of her conduct
leading up to the January 13 meeting, and her handling of this
matter.
The Chairman. Her conduct was?
Ms. Godino. I am going to read from my statement, if that
is OK with you. Her control of her calling Executive Committee
meetings, setting of Executive Committee agendas, and
identifying materials to be disseminated to the members of the
Executive Committee were such that it made it more difficult to
conduct a fair and reasonable review of Mr. Ward's conduct.
The Chairman. Well, I guess I would ask you to elaborate a
little bit. To seek someone's removal from office, their
handling of meetings and communications----
Ms. Godino. Well, I think the officers believed--I believe
that you have a copy of the materials that were mailed to the
Executive Committee in advance of the January 13 meeting, which
did not include the Ethics Oversight Committee report, which
certainly was a central issue, and instead included a number of
documents that suggested that Mr. Ward had done something
perhaps even greater than what the Ethics Oversight Committee
report ultimately found. It is my belief the Ethics Oversight
Committee perhaps should have directed the entire referral of
the matter to the Executive Committee.
Also I think Ms. Mankamyer's involvement is alluded to in
the Ethics Oversight Committee report when it discusses an
abusive process, and talks about ex officio members, of which
there is only one, to not participate in Ethics Oversight
Committee discussions.
The Chairman. Mr. Rodgers, as chief ethics compliance
officer, did you fail to act on your knowledge of Mr. Ward's
conduct when it was brought to your attention by Mr. Madronero
in April 2002, and again when Mr. Ward signed his conflict of
interest disclosure form?
Mr. Rodgers. I absolutely failed to act in April because
the two documents that I had in April was a letter from Lloyd
Ward's brother and the chief executive officer of this company
called Energy Management Technologies requesting that Lloyd
invest $150,000 to help their company continue operations.
I also reviewed at that time--the only other document I had
was a business plan from the company. I submit to you that
neither that letter nor that business plan said anything
whatsoever about doing any business with the Olympic Committee
or the Olympic family or any of our sponsors. It was simply a
letter asking for an investment and an accompanying business
plan. I did not receive the cover note that is referred to
until October, and once I saw that cover note, which said come
see me, this might be of interest, in Santa Domingo, which, of
course, was 180 degrees different from what the business plan
suggested, that got my attention.
The Chairman. Are you responsible for the language of the
disclosure forms?
Mr. Rodgers. I am.
The Chairman. Why is it that in 2001 it said, ``an
employee's personal financial relationships have the ability to
influence or be perceived to influence the objectivity of the
decisions when representing or conducting business for or on
behalf of the USOC'' was changed to, ``a conflict of interest
exists when a volunteer or employee's outside activities or
interests interfere with his or her job responsibilities, or
the interest of the USOC?'' Words have meaning.
Mr. Rodgers. There is a section in both of those which
specifically referred to doing business with the Olympic
family, and there is a different form for staff.
The Chairman. Why did you change the language, Mr. Rodgers?
Mr. Rodgers. The Ethics Committee changed the language.
The Chairman. I just asked who was responsible, and you
said you were. I asked if you were responsible for the
language.
Mr. Rodgers. I absolutely was, yes.
The Chairman. Why was it changed?
Mr. Rodgers. There was no intent to change it, other than
make it what I thought was clearer.
The Chairman. It is a significant change in language, Mr.
Rodgers. I thank you.
Mr. Ward, I have before me a handwritten letter from you.
``This is an interesting proposal. It could be beneficial for
the 2003 Pan Am Games. Let's discuss. Come see me this week, or
today.''
Then there's a letter to you from Mr. Williams and Rubert
Ward that says, ``Dear Lloyd, thank you for taking the time to
review and to critique the document, as we recognize the value
of your time,'' then the letter goes on to say, ``you know,
Lloyd, Rubert and I have been pursuing this opportunity for
quite sometime. We've done so because we firmly believe that
this project has the makings of a sure winner, a definite
market need opportunity, and an enormous potential to make a
great deal of money.''
Then we have another letter dated July 8, 2002. The bottom
paragraph says, ``therefore, we would be extremely appreciative
of any direction, candid thoughts, actually we expect that from
you anyway, and suggestions, up to and including a complete new
approach to our presentation that you may have.''
So clearly, correspondence went back and forth between you
and the EMT people which, frankly, is a little more than what
it appears you have portrayed to this committee. Please
respond.
Mr. Ward. Yes. I think you have to give some consideration,
or I would ask you to give some consideration to the fact that
oftentimes, when a person in a family achieves a level of
success, there are many requests that are made of that
individual, and I have many, many requests that are made of me
all the time, as I am sure you can imagine. And there is a
level of, let me call it hyperbole that comes with people in
terms of their view of what you say and what you do, and most
of it, quite frankly, is to encourage you to do things.
I will tell you this, Senator, that the only conversations
that I had were conversations and interactions that I described
to you, and beyond that I did not critique their business plan,
I did not provide information to the business plan, and I did
not have any conversations with Mr. Williams on the proposal,
or his interest in Santa Domingo.
I did have a conversation with my brother, Rubert Ward, but
I did not have conversations with Mr. Williams.
The Chairman. Ms. Mankamyer, finally, and I appreciate the
forbearance of my colleagues, Mr. Ward claims that his computer
calendar was accessed without his authorization, including by
your secretary, on multiple occasions. Is that true?
Ms. Mankamyer. I do not know that, Senator.
The Chairman. You do not know that is true, but your
secretary was fired, is that correct?
Ms. Mankamyer. May I correct that, Senator?
The Chairman. Sure.
Ms. Mankamyer. She was the chief of staff for the former
president, Sandy Baldwin. When Sandy resigned, Mary Kay Parsons
remained in Arizona and offered her services to me in the same
capacity but on a long distance basis, and I was basically
contemplating whether that would work, but I felt the cost was
higher than it should be, and I was just allowing her to help
on international letters, et cetera.
I was called to Mr. Ward's office with Mr. Benz, and they
told me that there had been a security breach, and I did not
understand what it was about, and they finally said, someone
accessed Mr. Ward's calendar, did you do it, and you would have
to know me, I'm the worst person on a computer in the world. I
could never do that.
The Chairman. The question is your secretary, Ms.
Mankamyer.
Ms. Mankamyer. I understand that. She did say she did that.
She was not my secretary per se, she was a USOC employee, and
she was fired, I understand, for lying for an hour, 22-year
employee with an exemplary record.
The Chairman. Senator Campbell.
Senator Campbell. Thank you, Mr. Chairman. Well, a couple
of questions. It is pretty clear that Mr. Mankamyer and Mr.
Ward are the center of this whole swirl, right or wrong. A lot
of things have gone under the bridge, a lot of accusations,
people sort of lined up on one side or the other.
I am interested in knowing from them--now, you said, Ms.
Mankamyer, you do not intend to run again. Is that correct?
Ms. Mankamyer. That is true.
Senator Campbell. I am interested in knowing how you expect
to continue on the job for the remainder of your term. or for
the remainder of your employment, Mr. Ward, when we are trying
to focus on the Athens games when all this bad karma is going
on among members of the hierarchy.
Ms. Mankamyer. I actually have been contemplating a plan.
The officers, some of whom have not been as engaged in the
governance as they might have been, and which is wonderful, got
quite involved with this process, and in so doing I actually
came to the Executive Committee meeting in Denver on January 13
with an idea of dividing up business units among the officers
and having a full team effect with relating to the staff and
the high level staff, and hoping to work forward on a more
seamless basis of governance, so that would be my plan, sir.
Senator Campbell. Mr. Ward.
Mr. Ward. Senator, I came to the Olympic movement because I
believe in it, and while I have never been an Olympian like you
on the field of competition, I feel I have been an Olympian in
life. I used sport to get an education, I used education to
better myself in life, and every step along the way I have
tried to do the right thing.
I came here because I believed I had something to offer. I
came here because I believed I could make a difference, and I
think in my short tenure we are making a difference. We are
ahead of our sponsorship renewals by a significant margin. At
this time in the previous quad we have $50 million that are
committed to our go-forward strategy for renewals. This time in
the last quad we had one deal for $2.5 million.
Senator Campbell. Let me ask you something about sponsors,
since you did bring that up. According to David D'Alessandro of
John Hancock, I read in one report that he said anyone who
writes a check to the U.S. Olympic Committee now is crazy, or
something to that effect.
In the USOC, I also noted with interest Forbes recently did
a report analyzing the efficiency of fundraising, and out of
200 different charities that they analyzed the bottom three
included United States Olympic Committee, which tells me, at
least it suggests it is a very top heavy organization, and
perhaps too many people have too many expense accounts and
credit cards and cars, and whatever, because they have only
something like a 65-percent efficiency rating according to
Forbes, when the average is 85 and some as high as 95.
Who specifically in the chain of command is the person
responsible for the fundraising?
Mr. Ward. In the chain of command we would have a chief
development officer that would report to me. That chief
development officer has moved on to other responsibilities in
another company.
Senator Campbell. And have you been aware of the efficiency
rating of the USOC is that bad, that low?
Mr. Ward. I am very aware of that. That report is a report
of the USOC fundraising efficiency from data from the 2001
calendar year, and it does not accurately represent the USOC.
USOC is very different in its fundraising efforts. Most of the
companies or organizations that the USOC was compared with were
companies that raised the predominance of their money through
fundraising. The USOC raises 80 percent of its fundraising
through sponsors. Our revenue comes primarily from sponsors.
Therefore, it is more of a business proposition.
Now, having said that, I understand your point very well,
and we have to get better in our fundraising efficiency. We
will continue to drive our business results by helping sponsors
get a return on their investment, and Mr. David D'Alessandro,
who as you know is a very valued sponsor of the Olympic family,
has been very outspoken in this regard. I have been in contact
with him, and he and I are working a plan to satisfy his
request and his needs.
In addition, I plan to open up that communication with all
of our sponsors and have regular interactions with them to give
them much more visibility into the inner workings of the USOC.
Senator Campbell. Well, when you talk about the return on
their investment, I do not know for sure because I have not
spoken with all the sponsors, but I have a hunch that the
biggest return on the investment of the sponsors would be
reading in the headlines about the two youngsters Ms. Godino
mentioned about qualifying for the Athens games, and not
reading about you, or any of you for that matter, in a tussle
on the front page of the paper, but I can guarantee what the
headlines will be tomorrow. It is not going to be about those
two kids that made the team in Athens. It is going to be about
the discord among the officials of the USOC. That is what is
tragic, and that is the loss to the sponsors.
Mr. Ward. That is tragic, and it is a loss to the American
people and it is a loss to the athletes themselves, and I am
with you, I am fed up with it as well. We have to choose a
better way. We have to reach for a better tomorrow, and as one
of our sponsors said in recent discussions with me, the issue
for us is to stay out of the newspapers with the people in blue
suits, with the bureaucrats and the administrators. We should
be talking about our athletes, not about this movement, and not
about me.
This movement is not about me, this movement is not about
Ms. Mankamyer. This movement is about our athletes, and I want
reform in this movement, and I encourage Congress to help with
that.
Senator Campbell. Mr. Ward, we are going to help you with
that, with Senator McCain's leadership and Senator Stevens. I
can tell you, if the Olympic house cannot be cleaned up,
Congress will be cleaning it up.
Mr. Ward. If there is one other point I could make on that,
actually there were several attempts historically for the USOC
to address its governance structure, and we have not had the
political will to get it done. It is better to be able to
change from within. We have not had that will, and we will need
some outside intervention.
Senator Campbell. Thank you, Mr. Chairman.
The Chairman. Senator Wyden.
Senator Wyden. Thank you, Mr. Chairman.
Ms. Godino, on this question of punishment for Mr. Ward's
ethical violations, your group of vice presidents is basically
punting on the issue, which to me sends a lousy ethical
message, but what I would like to do is to have you, since you
are here, just give us your personal opinion about what you
think would be a sanction that is commensurate with these
serious ethical violations.
Ms. Godino. Well, as I stated in my both written and oral
testimony, I think the entire Executive Committee, the 18 to 3
vote, 18 members of the Executive Committee believe that that
sanction was appropriate based on the report that we have. So
based on the Ethics Oversight Committee report that the
appearance of the conflict of interest, and that the failure to
make the written disclosure, along with considering the entire
rest of the Ethics Oversight Committee report and the notes by
Mr. Fielding, that that was the appropriate sanction.
Senator Wyden. I am not going to belabor this, but I think
that sends a message that this is no big deal, and I think that
is very unfortunate.
Mr. Ward, a question for you. You said in a statement, and
I very much agree with----
The Chairman. Excuse me. Maybe Ms. Godino wanted to
respond.
Ms. Godino. Thank you, Mr. Chairman.
Most certainly not the message that we intended to send,
and I have been frustrated at the continuing press reports that
suggest that Mr. Ward was cleared of wrongdoing, or that there
was no punishment. I do not believe that that is what occurred,
and I do not believe that is the message the Ethics Committee
intended to send. Ethics are incredibly important, and
particularly as an athlete, that is something that we must
have, the highest ethical standards.
Senator Wyden. Again, the reason I asked the question this
afternoon, I just wanted to give you a chance to state what you
thought personally would be an appropriate penalty, and again I
will just offer my opinion that that does not send much of a
message and does not indicate that it is a priority. I
personally think that is unfortunate.
Mr. Ward, if I might, you said life was about standing up
for what you believe in, and that is something I very much
agree with, and I wanted to ask you along those lines whether,
as of now, you belong to the Augusta National Golf Club?
Mr. Ward. Yes, I do, Senator.
Senator Wyden. I am sure you are aware of their policy with
respect to women, and specifically the United States Olympic
Committee, and I will quote here, is set up to encourage and
provide assistance to amateur athletic activities for women.
My question to you is, do you think your membership in the
Augusta National Golf Club is consistent with one of the major
purposes of the United States Olympic Committee?
Mr. Ward. Senator, I would say this, that (1) my record and
my stance on inclusion and fighting for equal participation for
minorities, gender equity and the like, speaks for itself from
my 32 years in the professional world, and I will stand on that
record.
Point 2, I am a proud member of Augusta. It is a great
golfing institution, and part of the heritage of the great
Bobby Jones, but point 3, and I think the most important point,
is that those that would want me to resign from Augusta see the
world very differently than I do. They see my membership in
Augusta as a privilege, and let me tell you how I, as a
minority, see my membership in Augusta. I see it as a
responsibility. You see, I have been first in my life in many
things, not because I am special, but because the world has
tended to deny opportunities to some and provide it to others.
And, I have been fortunate to be one in which opportunity has
been provided. And, when that door has had a slight crack for
me I have always taken that as a responsibility to open the
door wider for those that might follow.
And so while your sensibility and others might be, that you
would show your displeasure by resigning, that is not my
sensibility. My sensibility is to take the responsibility to
try to open the door wider for those that would follow, and
that is why I am still a member of Augusta.
Senator Wyden. I understand. This afternoon I have not
suggested anything about resigning. I just wanted to get on the
record specifically how you felt that was compatible with the
United States Olympic Committee. You have stated your answer.
Mr. Ward. And the backdrop, Senator, of your question, and
you did not ask it, and I certainly appreciate that
clarification; but in fact, we had a detailed discussion in the
United States Olympic Committee about that very issue, so I
wanted to clarify my position.
Senator Wyden. That is certainly fair enough.
Mr. Rodgers, a question for you, if I might. I would like
to have you detail some more of your discussions with respect
to Mr. Duberstein and the ethical questions. I think we batted
this around several times over the course of the afternoon, and
I am still not clear about exactly what kind of information was
exchanged in those discussions, and would like to have you
detail those at this time.
Mr. Rodgers. Thank you, Senator. The first discussions that
I had with Mr. Duberstein concerning this issue actually
occurred in August at the Hilton Hotel in Chicago. He and I had
dinner prior to the Presidential election, and I went over with
Mr. Duberstein most everything that was going on in my office,
including the first two documents that I mentioned, the letter
and the business plan, and the fact that there was nothing in
either of those documents which in any way suggested any
unethical conduct on the part of the CEO, and can agree.
Nothing then happened, period, until the day Mr. Madronero
was let go. At lunch, Mr. Madronero was expressing
disappointment about how he was treated when he was let go,
walked off the campus, and also mentioned, after all I had done
for his brother, and at that time I said, ``What do you mean,
after all you had done for his brother? '' Mr. Madronero then
said, ``Well, he made a couple of appointments, no big deal, he
basically just wanted to put it all behind him.''
I then pressed him for any and all documents that he had.
That is where the document signed by Mr. Ward came about, the
document with a phone number on it, and then I applied that
document, the cover document to these original two, and now I
had an ethics issue.
I then reported it to Mr. Duberstein as an ethics issue
about 11 October, and I followed it up with a phone call. His
initial reaction after reading it was, well, it looks to me
like this is a lot about nothing. I disagreed with him that it
was a lot about nothing and said the full Ethics Committee
needed to make that determination. He agreed to that.
I sent those same materials to the full Ethics Committee.
The Ethics Committee met and concluded that it was necessary--
and this was my recommendation--that we get outside counsel to
look into the facts and circumstances surrounding it. Outside
counsel was determined to be Mr. Fielding. Mr. Fielding was to
do interviews and then report back to the committee before he
proceeded further, and he was to initially interview Mr. Ward
and to look into the financial background as to whether or not
Mr. Ward had financial interests in this company.
When Mr. Fielding then had his report ready, he, Mr.
Duberstein and I were on the telephone in a preconference call,
Mr. Fielding basically read his report and said he had
concluded that Lloyd Ward was absolutely above board in
everything he did, because Lloyd fully intended to disclose
this matter should any business issue actually develop out of
it.
I expressed an obvious reaction to that. I disagreed with
him. From my perspective it never made a difference whether or
not any business venture actually transpired.
He also made the statement Mr. Ward had no financial
investment, and I said, ``How did you determine that? '', and
he said, ``Well, I asked him.'' My response was, ``The last
time somebody told me that, I asked them for a copy of their
tax return.'' I mean, it is fair to say you do not know whether
he had a financial investment, or that he said he did not, but
it is not fair to say that he did not, because in fact we did
not know that.
We got into that discussion, which overlapped into the
regular call, to the point where when the regular call occurred
with all of the members, we agreed, we being Mr. Duberstein, I
and Mr. Fielding, that it would not be fair to continue the
conversation until everybody from the Ethics Committee had a
written report, so the call was brief. It was agreed that, in
fact, there would be a written report, that report would to go
the committee within 10 days, and then a conference call would
resume.
Immediately following that call, Mr. Duberstein called me
back and he said, ``Look, I am telling you something between
you and I, you need to find a way to make this go away.'' I do
not care what Mr. Duberstein said, that is what he told me, and
I said, ``Ken, I am not going to find a way to make it go
away.''
By now we had a pretty good working relationship, and I
thought he understood where I was coming from. He said, well,
you think about it overnight and call me back the next day. I
did call him back, and I said, ``Ken, I am sure it is not a
surprise to you, but I am not going to make this go away.''
He said, ``well, I think you are biased.'' Your biased was
his response. ``I think you do not like Lloyd Ward, and I do
not want this committee used for political purposes, therefore
I think you should recuse yourself.''
I said, ``I will recuse myself, Ken, provided I have an
opportunity to read the report, whatever it is,'' and that my
input goes to the full committee, and we agreed that I would
recuse myself.
Subsequent to that date, I discovered additional documents
in Mr. Madronero's office, the July 8 letter specifically, and
the actual presentation. I forwarded those to Mr. Fielding and
to Mr. Duberstein. To me, that added an additional problem
because of the proprietary photographs, and to me there was
clear evidence that there was something more to this proposal,
other than what Mr. Ward has purported.
I also ran a D&B on this company, WestBank Holdings, and
found that it was a company formed in 2001, had done $100 worth
of business, it was listed as a financial services company, a
90-day late payment, and no work history for the CEO.
Well, I am just a normal, you know--one time I was called a
dumb old infantryman. I guess I am, but I looked at it and I
said, you know what, this does not seem to fit to me, that
somebody who has had no experience at all on the record, at
least, in this business whatsoever, puts together this kind of
proposal and this kind of business plan, and if you will, yes,
at that point I became absolutely convinced that Mr. Ward in
fact helped him do that, because he is the only one of that
group, at least, based on the record, that would seem to have
that kind of background and experience.
And particularly, he had direct knowledge of what went on
in the Olympic movement. I mean, that knowledge came from the
USOC. It did not come from reading a newspaper. He knew about
the electrical problems and the power problems, and at that
point I--of course, as I said, I had no further deliberations
with the committee.
To continue, one of the things I was accused of was keeping
the president informed. Well, of course I kept the president
informed, because by policy, on matters related to the CEO, I
report to the president, and the oversight committee, so the
president was kept fully informed of all those actions.
The next thing that happened, of course, was--I never, by
the way, had another conversation with Ken Duberstein, so I was
not kept informed. I never saw the report, so I cannot sit here
and say that the Ethics Committee in fact had all the
information. Clearly, I felt they should have had at least my
take on the issue. I am not a voting member of the committee,
but I think I have enough experience in this field to have at
least offered an opinion, and they could have considered it.
The next thing that happened was, I was sitting in Hawaii
and reading the newspaper, headlines like, I have been
exonerated, there was no wrongdoing found of Mr. Ward, and I
quite frankly turned to my wife and I said, I have to resign. I
cannot continue to promote a code that the leadership of the
organization simply turns a blind eye to. I cannot stand in
front of the same employees that I spent the last year standing
in front of doing ethics training and explaining all of this to
them, and then say, it is OK for the CEO--I made the statement
that if it is OK for the CEO, then I will go back and change
all of the policies to say that all employees of the USOC from
now on should invite in their friends, relatives, and anybody
else they want to try to make whatever business connections
they want, because the worst thing that happens is, you are
going to be exonerated, or your salary may be reduced.
That is it.
Senator Wyden. Thank you, Mr. Chairman.
The Chairman. Senator Breaux.
Mr. Ward. Senator Breaux, may I ask the chairman a
question?
Senator Breaux. Sure. Go ahead. Do not use my time, though.
[Laughter.]
Mr. Ward. Mr. Chairman, I was just trying to understand
procedurally if there is any opportunity for me to comment.
The Chairman. If any witness wishes to speak, including
yourself especially, Mr. Ward, in light of Mr. Rodgers'
comments, please feel free to do so.
Mr. Ward. Thank you for that opportunity.
The Chairman. If any of the other witnesses at any time
want to speak, please do so.
Mr. Ward. I was listening very carefully to Mr. Rodgers,
and I was struck by his comments at the end when he was in
Hawaii and reading the newspapers, and he was offended by the
fact that evidently I said I was exonerated. I would like him
to produce that news article, because I never said I was
exonerated, and I have no knowledge of that being reported in
the paper.
I did not feel like I was exonerated, but I do feel like it
speaks to an issue with Mr. Rodgers. I think he has his own
reasons to tell half-truths, misrepresentations, innuendos, and
I think he is taking it to the extreme.
Mr. Rodgers is mounting his own personal vendetta, and he
is misrepresenting facts, and he is drawing conclusions that no
one else drew. He is not pleased with the process and the
outcome and, quite frankly, he has his own reasons.
Mr. Rodgers got a very serious performance counseling
session from me in September. Mr. Rodgers and I had a difficult
interaction. He did not agree with the fact that I took
exception to the fact that he was part of several people who
were getting unauthorized access into my calendar, and instead
of Mr. Rodgers advising me that there was an electronic glitch
in my calendar and people were accessing it in an unauthorized
way, he participated in that himself, and on two separate
occasions he entered into my electronic calendar and viewed it,
and he knew others were doing it as well, and I let him know
that I thought that was a serious performance issue, and that
he was violating the very code of ethics which he was there to
uphold.
Mr. Madronero and Mr. Rodgers were very good friends, and
Mr. Madronero had shared some of this information with Mr.
Rodgers along the way. I find it interesting that Mr. Rodgers
in October, when his friend is leaving the company under some
level of duress, that Mr. Rodgers then starts to mount this
campaign around an ethical violation.
I will say again that my involvement in this was purely to
help our athletes, and what is truly inconsistent is somehow
that I would risk all that I have done, all that I have worked
to be, for this kind of charade, and Mr. Rodgers is just off
base.
Thank you.
Senator Breaux. Thank you, Mr. Chairman. I just hope that
none of you at the table have to work with each other in the
future.
[Laughter.]
Senator Breaux. I tell you what, it is not going to be a
pretty sight. Who fired Mr. Madronero?
Mr. Ward. I did. I did not fire Mr. Madronero. Let me
clarify that. After counseling Mr. Madronero he decided to
resign from the company, and I was agreeable to that.
Senator Breaux. Mr. Rodgers, how did it come to pass that
you had lunch with Mr. Madronero after he had been dismissed,
or quit?
Mr. Rodgers. It came to pass that, in fact, it was
prearranged, when--first of all, I did have a close working
relationship with Mr. Madronero, as the managing director of
international relations, because I made it my point to focus on
that area, since it obviously was one of the major problems in
the Salt Lake scandal.
It is not fair to say that we are friends. I never had
dinner with the man, never, as somebody alleged, played golf
with him. I have never done that.
Senator Breaux. Did you call him for the lunch or did he
call you?
Mr. Rodgers. He called me and he said, I am pretty sure
that Lloyd is going to let me go on Monday because he told me
to come in and see him at 7. I said, OK, great, then let us
have lunch. I did not mean great that he was being let go, but
it is not unusual to have lunch with somebody when
circumstances like that occur, and yes, I did like Mr.
Madronero, but I did not socialize with him, so that is a
mischaracterization.
Senator Breaux. So at the luncheon you had with Mr.
Madronero, after he had been told that he was being removed,
did he just sort of bring up the fact, look, I have got some
information you might like to see?
Mr. Rodgers. Well, it was a luncheon with Mr. Madronero and
another person who was on his staff, and Mr. Madronero said
that he did not particularly appreciate the fact that he was
escorted off of the facility, not given an opportunity to go
back to his office or say goodbye to anybody in his
organization.
Senator Breaux. Mr. Madronero was pretty mad at Mr. Ward?
Mr. Rodgers. Yes, he was, and he said, ``and after all I
did to help his brother.'' Those were his exact words, and my
response was, ``What do you mean, Hernando, after all you did
to help his brother? '' His response was, ``It is nothing. It
is no big deal. I really just want to go on, and I do not want
to jeopardize any kind of settlement, or anything like that.''
I then--yes, I took the initiative, and yes, I pressed him
as to exactly what he meant by that statement, and that is when
he told me he made some phone calls.
Senator Breaux. Let me ask you at that point, did he say
that Mr. Ward asked him to make those calls, or did he take it
upon himself to do that?
Mr. Rodgers. He said Mr. Ward asked him to make those
calls, and I reminded Mr. Madronero that when he first showed
me the letter and the business plan in April, that I had asked
him specifically at that time as to whether or not Mr. Ward had
asked him to do anything, because there is nothing in those
documents, but I did not just rest with my opinion. I went up
and I talked to the general counsel, and he and I both looked
over both of those documents, and we agreed there was nothing
in there.
The general counsel, then, and I agreed that if the name of
that company ever showed up as it related to doing business
with the USOC we would want to know about it, because we needed
to make sure that there would not be any conflicts of interest,
but neither of us saw any conflicts of interest based on those
first two, and in fact if we had known that it had anything to
do with the Pan American Games, we would not have been putting
out any information to the USOC about a USOC contract. We had
no idea.
Senator Breaux. Were there any communications in writing
from Mr. Ward to Mr. Madronero asking him to take those steps?
Mr. Rodgers. That is what was--well, the note, ``Come and
see me,'' is what Mr. Madronero gave me in October. He also
then told me he had a voice mail from Mr. Ward's brother, and I
asked him at that point to transfer that voice mail to my
phone. He did that from his apartment. I transcribed it the
next day.
Senator Breaux. There was nothing from Mr. Ward, other than
a note saying, come see me?
Mr. Rodgers. And Mr. Madronero's statement that Mr. Ward
asked him to make the call, and as far as I was concerned, the
fact that Mr. Madronero had received a voice mail from Rupert
Ward confirming a meeting with Dr. Puello in Santa Domingo was
confirmation that in fact Mr. Madronero made those calls, and
that Mr. Ward's brother was having the meetings.
Senator Breaux. Mr. Ward, why, in your opinion, would Mr.
Madronero take it upon himself, without you asking him, to set
up meetings for your brother with the people in the Dominican
Republic?
Mr. Ward. I asked Mr. Madronero to review the proposal and
make a determination as he saw fit. I did provide him the phone
number of my brother, but prior to the proposal coming to me in
April, because the first contact Mr. Madronero and I had on
this matter was in January, where he mentioned the electrical
shortage, power shortage in Santa Domingo. I had contacted him
one time between January, when we first discussed it, and
April, when the proposed business proposal came in. And, it was
a phone conversation, I asked him if he had had any contact
with my brother on the opportunity in Santa Domingo.
Mr. Madronero said he had not, and I said, ``Well, OK,
fine.'' The proposal came through. I passed it on to Mr.
Madronero with a note that you have noted in the files, and in
that my instructions to him were very specific. Mr. Madronero,
``Hernando, please review this, make a determination around the
viability of this. I want to be totally hands off of this. This
is your call completely'' (I had as specific a conversation
with him as I am saying to you right now) ``and it is yours to
handle. I want my hands totally off this.'' And then Mr.
Hernando went and did whatever he decided to do.
Senator Breaux. Well, Mr. Chairman, I think that I take it
there is another independent review of these actions, is that
correct? Is there not another independent review being taken of
this?
Mr. Ward. Senator Breaux, there was a senior member of the
Executive Committee of the USOC that has recommended to the
Executive Committee that we initiate an investigation of not
only the ethics situation as it relates to my situation, but to
the full ethics report.
Senator Breaux. Has that been done?
Mr. Ward. It has not been put in action yet. It is under
consideration in the Executive Committee.
Senator Breaux. Why would you all even have to consider it?
Mr. Ward. We have not had an opportunity to address that
issue with the other matters.
Senator Breaux. Is there any doubt you are going to agree
to do that?
Mr. Ward. I think the large majority is in support of that.
Senator Breaux. I would highly recommend it. I mean,
hopefully that would shed some additional light on all of these
transactions about Mr. Ward and whether what he did is a
violation or an appearance of a conflict, or what an
appropriate penalty should be, but again, Mr. Chairman, it
speaks to a larger problem here. I think really, to your
credit, you are going to have to be involved in restructuring
this operation. A 123-member board is absolutely ridiculous.
You cannot manage that, and we have to, I think, make some
structural changes in order to prevent this particular problem
from ever occurring again.
Thank you very much.
The Chairman. Thank you.
Mr. Rodgers. Can I make a comment?
The Chairman. Yes.
Mr. Rodgers. First of all, I do have the newspaper article.
I would be happy to provide it.
Second, I never received an adverse performance appraisal
no matter what Mr. Ward may purport, and I would ask that he
produce that.
Third, it is a matter of record when Mr. Duberstein
received not one but three separate requests to complete his
outside interest disclosure. The first one was sent in April, a
followup one was sent in July, and the e-mail was a followup to
that, aside from phone conversations I had with his assistant
just before the end of the year. That is all a matter of
record. I obviously encourage anybody to look, because I think
the facts in this case will speak for themselves if looked at
independently.
The Chairman. Thank you. Any additional information any of
the witnesses think the committee needs, we will be glad to
receive.
Ms. Mankamyer, I only have a couple more questions, and
Senator Campbell has one. You have been very patient, and very
cooperative, all of the witnesses have.
The Washington Post article dated January 26, 2003, states,
``Seven high-ranking USOC officers, all members of the
Executive Committee, claim that Mankamyer, a real estate
broker, sought to defame Ward for months and attempted to
manipulate the ethics process in an attempt to force him out.''
Is this true, number 1, but if it is not, which I would imagine
you will say it is not, why would seven high-ranking members of
the USOC make such claims?
Ms. Mankamyer. The first answer, sir, is that I did not,
and in any corporation, think that there is always, probably in
this one more than anything else, the reason to have
substantive differences of opinion. You have already identified
how the organization works and, if I might, I could give you a
couple of examples of where there are substantive differences.
The Chairman. To the point where your resignation would be
demanded?
Ms. Mankamyer. Senator, the world of sport is a very
different place. Even though I would not stand for election
another time, if I were removed, one of the seven would take my
place.
Two things there. One, they believe that they were probably
operating with as much information, and it is a group, I would
say, that the board of directors elected me, not those seven,
and that is absolutely true, and so I think that it was sort of
a mob mentality, and to some extent there was an effort to
discredit what I believe to be correct on the ethics issue.
There was a difference of opinion.
The Chairman. Thank you.
Finally, Mr. Rodgers, the IT people and Mr. Ward just
stated you accessed his computer a couple of times. Is that
correct?
Mr. Rodgers. I am glad you asked that question, Senator.
Yes, as a matter of fact, Mr. Ward's calendar was openly
available to any employee at the USOC. I inquired one day as to
whether or not Mr. Ward happened to be around, because I was
thinking about going to talk to him, and so he said, well, all
you have got to do is look at his calendar, so I went down,
called up the calendar, which every employee could do, and
noticed that it was on there.
I may have done--he says twice. Maybe I did it one other
time. Anybody can have their calendar on the agenda for the
USOC. That is how you schedule meetings, appointments, and
everything else, and I quite frankly saw nothing wrong with his
calendar being on there, and following, about a month later, a
number of employees came and complained to me because the
general counsel and the director of human resources showed up
at these relatively, in fact very low level employees' offices
accusing them of unauthorized access to the CEO's calendar,
when the CEO's calendar was online for everybody to see, and
question their motives for access, et cetera.
I even wrote a memo back to these same individuals and
said, if the CEO's calendar was erroneously put online by this
assistant, then it seems to me appropriate to take it offline
and to deal with whomever had it online, but do not deal with
the employees who openly access something readily available to
everybody, and therefore calling it unauthorized access was
absolutely inappropriate, and I thought inappropriate to have a
general counsel and the director of human resources show up at
secretaries' offices, accusing them of unauthorized access. I
just thought it was a total overreaction.
The Chairman. Mr. Ward, do you want to respond?
Mr. Ward. Yes, thank you.
The thing that has been very clear in the USOC prior to me,
and certainly as a part of my time there, is that the CEO's
calendar has been confidential. My calendar was not open as a
normal course of events. In fact, my calendar has a lot of
confidential information on it. Mr. Rodgers should be well
aware of that fact. I know that in the executive offices it is
very clear, and is common knowledge that the senior executives'
calendars are not online.
There was an electronic glitch that allowed people to
access it, and which a few people, including Mr. Rodgers, took
advantage of during that period of time. After the glitch was
closed down and that open access was no longer capable
electronically, there are people that continued to try to get
into the system and print out my calendar.
Mr. Rodgers on three separate occasions, and our records
will validate that, went into my calendar, read only, and
viewed my calendar. Mr. Rodgers and I had a conversation about
this. I did refer to it as a performance concern. I did not
have a writeup of that occasion, but he knows that we had this
conversation, and it was an intense conversation between the
two of us.
The Chairman. Senator Campbell.
Senator Campbell. Thank you, Mr. Chairman.
I am interested in your response, Mr. Ward, to Senator
Wyden's comments about your membership in the Augusta National
Golf Club, and I certainly do not want to start an argument
with you, but I want to tell you, because I am Indian on my
dad's side, I am sometimes categorized around here as a person
of color. When people ask me about it, I usually tell them I am
an American who happens to be Indian on my dad's side, proud of
it, but first I am an American.
I do not think that you are the only one who has had to
scratch your way up. Most of the people in here know my
background, which was in an orphanage as a kid, my dad
drinking, in the slammer, my mother sick, all that, high school
dropout, gangs, the whole damn thing that a lot of minority and
mixed blood kids face.
I know what it is like to try to get ahead, but I will tell
you this, I would not belong to any group that had a rule that
said gays or women or people of color could not belong to it,
and I just want that to be a matter of record. Sports, in my
view, in a way saved my life. I was going the wrong way as a
kid, and if I had not gotten into sports, I think I would have
been in a different kind of institution now. As Senator McCain
knows, I sometimes say, it would have had bars on it, not this
kind of an institution. It was really sports that kind of gave
me a lift and got me in the right direction.
But even though it helped me a lot, those of us who came up
the hard way and had to scratch our way up, it seems to me that
we have to try to set an example. I do not know what kind of an
example you are setting. That is up to you. That is your
decision. Certainly, I am not asking you to resign. That is
your decision, too, but I just wanted you to know that, by
golly, a lot of us believe that any organization that
discriminates does not need me involved in it.
Thank you, Mr. Chairman.
Mr. Ward. Mr. Chairman, may I make a comment?
The Chairman. Yes.
Mr. Ward. Senator Campbell, thank you for that, and I
certainly understand that reasonable people can look at the
same situation differently, and for me it is a simple matter.
The grandest occasion for me would be to play the first round
in Augusta with a female member, and to know that in some way
my choice, quite frankly, Senator Campbell, is not an easy
choice--it is not an easy choice to have gone on record
relative to my support of the inclusion of women. It is not
easy to stand up for what you believe in, but all my life I
have done that, and that has been my pathway, and I am not
suggesting that is everyone's pathway.
If I did not believe in what I believe in, I would have
walked away from the USOC. I would have--on most of the things
that I faced in life. I have had to face them and make a very
hard determination around the question, ``is this worth it?''
The Olympics are worth it, and quite frankly, I do have a
thought relative to moving forward. I think that it is
important that the leaders of the USOC are leaders that the
organization have confidence in and will follow, and I am
wiling to stand at this moment and say that as a part of our
internal process, if the Executive Committee and the board of
directors call for my resignation from the United States
Olympic Committee, I will know that I have done my absolute
best to serve the athletes of this country and to deliver on
your charter to us, and I will step down.
I think that that should be true for President Mankamyer as
well. If they want one of us to go, if they want both of us to
go, if they want either of us to go, I think that at this
critical time, as we move forward within the purview and the
oversight of Congress, that we have the leadership in the USOC
that our constituents believe in and are willing to follow, and
if my stance on Augusta or if anything I have done to this
point cause the constituents to lose confidence and faith in me
as their leader, I will step down, sir, and I would suggest
that that be true with any other leader in this movement.
Senator Campbell. Mr. Chairman--and thank you for that
response, Mr. Ward.
In closing, my last comments, in 1963, when we were forming
for the Pan American Games team in Miami, we did not know it
until we got to Miami that the hotel where all of the athletes
were staying had a policy of not allowing the black athletes to
be housed with the white athletes. As a body, we took a vote
and declined our reservations and moved out. I do not know of a
time when the Olympic Committee stood taller.
Thank you.
The Chairman. Well, thank the witnesses for your patience.
It has been a long hearing and a very difficult----
Mr. Rodgers. Senator, can I make one final comment?
The Chairman. Please, Mr. Rodgers.
Mr. Rodgers. I just want to say that in the ethics business
individuals who violate ethical standards historically blame
everybody else, and I think this is an absolute classic case
of, it is everybody else's fault, not Mr. Ward's.
Mr. Ward. Senator, I simply cannot let this hearing--it has
been so honorable--end on that note. I have accepted
responsibility for my actions, and I have paid very dearly. In
the press, I have been defamed, my reputation has been, let us
put it this way, at least called into question, and Mr. Rodgers
has stepped over the line time and time again.
I am not here to cast a shadow on anyone else. I am here to
accept my part in all of this, and I am telling you that I am
willing to go forward, but we have a choice to make, and that
choice is to reach for a better tomorrow, or hold onto the
practices of the past, and if the choice is to hold on to the
practices of the past, then it would be better that I resign,
because my intent is to serve American athletes and deliver on
your charter.
Thank you.
The Chairman. I want to thank the witnesses; this has been
a very unhappy hearing for you, and it has been for those of us
who sit here, because making these kinds of judgments is very
difficult, and sometimes even perhaps inappropriate, but we do
have our responsibilities as a committee, and I intend to
exercise those responsibilities.
Our next hearing, with the participation of Senator
Campbell and with the leadership of Senator Stevens, will be to
try to come up with a way that the USOC can be reorganized to
eliminate and hopefully prohibit this kind of situation from
ever arising again.
I thank the witnesses. This hearing is adjourned.
[Whereupon, at 5:10 p.m., the Committee adjourned.]
A P P E N D I X
Prepared Statement of Hon. Olympia J. Snowe, U.S. Senator from Maine
Thank you, Mr. Chairman. I've read with disappointment the
accounts of recent conflicts and controversies that have come
to light within the U.S. Olympic Committee and I appreciate
your holding this hearing to discuss the state of the USOC as
we consider how this organization might be streamlined and made
more accountable.
The fact of the matter is, the U.S. Olympic Movement
belongs to all of us. That is the entire rationale and raison
d'etre of the Olympics--and it's why the USOC is a federally
chartered corporation, thanks to the Amateur Sports Act
authored by my good friend and distinguished colleague, Senator
Stevens.
Indeed, the USOC describes itself as ``the custodian of the
U.S. Olympic Movement,'' and, ``the moving force in support of
sports in the United States that are the programs of the
Olympic and Pan American Games.'' So there is no question that,
as the ``keepers of the flame'', as it were, the USOC has a
unique and very public responsibility.
That's all the more true when you consider what amateur
sports and the Olympic Movement means. They are supposed to be
the embodiment of integrity, good sportsmanship, and above all
else, success based on merit and merit alone. Unfortunately,
reports of the USOC's recent activity and behavior seem, at
least, to fly in the face of all of those principles.
I'm also struck by the fact that, almost exactly a year
ago, we were holding hearings in this very room to determine
what had gone wrong at Enron. Now, I'm certainly not in any way
comparing what happened at Enron with what's going on at the
USOC. But I can't help but think that, with a year marked by a
diminishment of trust in corporate America, how much more
unfortunate it is that we now have a diminishment of trust in
an institution whose very purpose is to promote and uphold the
very finest ideals of honest competition.
We do expect a kind of purity in our amateur sports--even
if that expectation may be idealistic. That is why we are here
today--to try to determine exactly what's gone wrong . . . why
it's gone wrong . . . and how we can fix it.
Because the erosion of confidence that results from the
kind of conflicts we've recently seen also has very tangible,
practical, effects. For one, it threatens the willingness of
sponsors to continue to lend their money and their name to the
U.S. Olympic movement. This support is essential to the success
of the Movement--and the recent criticism from John Hancock
Financial is emblematic of what happens when confidence is
shaken.
It also has a dilatory effect on the USOC's standing within
the International Olympic Committee. I'm certainly not going to
sit here and say the IOC has always been free from controversy
and ethics questions. But it would also be wrong to think that
controversies such as the one that prompted this hearing
particularly help America's standing, or our efforts to host
the Games in the future.
So, once again, I applaud the Chairman for holding this
hearing. During the process, I think it's vital we focus on two
key issues--is the USOC's governing structure conducive to
adequate oversight and efficient decisionmaking, and should
there be greater accountability and transparency?
Certainly, the organization appears unwieldy just in terms
of its shear numbers--123 members of the Board of Directors, 21
members of the Executive Committee. So we should look at paring
those numbers down. Also, perhaps we should carefully examine
the division of duties between the President and the CEO to
determine if there are ways to reduce the potential for
conflict. And perhaps it is time for a kind of ``Inspector
General'' model at the USOC, or some other independent
oversight at the USOC itself that can report back to Congress.
In closing, when thinking about the USOC's structure, I
can't help of something Admiral Rickover once said, that
``Unless you can point the finger at the man (and I would add,
woman) who is responsible when something goes wrong, then you
have never had anyone really responsible.'' Unfortunately, with
a current structure at USOC that reads less like a corporate
flow chart and more like the cast of a Russian novel, you'd
need a lot more than a score card to figure out where the
problem really lies.
Thank you, Mr. Chairman.
------
Response to Written Questions Submitted by Hon. Barbara Boxer
to Lloyd Ward
Question 1. What specific efforts have you made toward the goal of
eliminating gender discrimination at Augusta?--What have been the
concrete results?
Answer. I publicly stated my desire for Augusta National Golf Club
to expand its membership to include women, first in April 2002, and
again in October that same year. Beyond that, I have had conversations
with Mr. Hootie Johnson and others stating my position and exploring
pathways for progress.
Question 2. Do you plan to resign from Augusta National Golf Club
if the Club does not open its doors to women?
Answer. I will resign from Augusta National if the Club does not
open its doors to women.
Question 3. What is your timetable for resignation from the Augusta
National Golf Club if your efforts to break down the gender barrier are
unsuccessful?
Answer. I have no specific timetable. There is no question in my
mind that women will be members of Augusta National. The only question
is when. The chairman of Augusta National has stated the Club could
very well have a women member one day. Today, women play Augusta
National routinely and frequently.
Question 4. Do you believe that your continued membership in this
club taints the USOC and the Olympic Movement, especially at a time
when the USOC has been subject to heavy criticism on numerous fronts?
Why or why not?
Answer. I do not believe that standing up for the equality of men
and women taints the United States Olympic Committee or the Olympic
Movement at all. However, this question weighs heavily on my mind.
I believe the stand I took in April 2002 (Attachment 1), expressing
publicly that I stand against discrimination and support the inclusion
of women in Augusta National, was the right thing to do.
I believe the public reinforcement of my position to Martha Burke
in October 2002 (Attachment 2) was the right thing to do, not because I
am CEO of the United States Olympic Committee, but because I believe in
equal opportunity and full inclusion.
I have been, and will continue to be, a voice for inclusion for
women, African Americans, and other minorities, both publicly and
privately.
______
Attachment 1
April 11, 2002
Augusta Faces Push for Women
by Debbie Becker
U.S. Olympic Committee chief executive officer Lloyd Ward, one of
Augusta National Golf Club's few African-American members, told USA
TODAY on Wednesday he will ask club members to begin admitting women as
members.
``I want to have influence from the inside,'' Ward said. ``I want
to talk to members of Augusta and say, quite frankly, that's simply not
enough (admitting African-Americans). You've got to have a broader
membership, and that includes women.''
Augusta National is home of The Masters, one of golf's most
prestigious tournaments. The 66th edition of the event begins today.
The club, which opened in 1932, allows women to play its course.
There are no women among its invitation-only membership.
Asked at a news conference Wednesday if women are excluded from
membership, Augusta National chairman Hootie Johnson said: ``We have no
exclusionary policies as far as our membership is concerned.''
Asked what that means, he declined to elaborate.
Johnson said he had no comment when USA TODAY asked later about
Ward's remarks.
USA TODAY interviewed Ward in the wake of a report in the May/June
edition of Golf for Women about the exclusionary membership policies of
Augusta National and the Royal & Ancient Golf Club of St. Andrews in
Scotland. (The R&A runs the British Open.)
The report identified Ward as a member of Augusta National. The
club does not release membership information.
Also, The Masters' corporate sponsors are coming under media
pressure to raise the gender issue with Augusta National.
Ward, 53, was hired by the USOC in November. One of that
organization's underlying principals is race and gender equality.
``Discrimination is evil, and we should not allow that,'' said
Ward, a former chairman of Maytag Corp. who became a member of Augusta
National two years ago. ``I have not gone to Augusta and said, `This is
what you must do now.' . . . But as a member of Augusta, I believe that
once you bring me in, this is what I advocate. Inclusion does not just
mean people of color. It should be extended to that broader base that
includes women.''
USOC President Sandra Baldwin said she does not believe Ward should
resign his Augusta National membership.
``I'm glad an African-American is a member at Augusta,'' Baldwin
said. ``It's absolutely better if he stays. Resigning in a huff never
makes any sense. I, for one, want to make every effort to make sure
women are admitted as well. We need to work to make the situation
better for everyone.''
______
Attachment 2
Lloyd D. Ward, CEO and Secretary General
Colorado Springs, CO, October 7, 2002
Martha Burk, Ph.D.,
Chairperson,
National Council of Women's Organizations,
Washington, DC.
Dear Dr. Burk:
The United States Olympic Committee does, indeed, stand for
inclusion at every level, and that philosophy is one of the basic
principles of the Olympic movement; It stands on a platform that also
includes fair play, sportsmanship and a level playing field for our
athletes. The LTSOC embraces all persons who share that belief. It is
also the cornerstone of my own values and ideals.
I am working with others who are members of Augusta National Golf
Club who share the belief that the organization should include women in
its membership ranks. It is my intent to aggressively work for that
reform.
When I became a member of Augusta, I believed it was a breakthrough
for minorities, and that I had helped to eliminate barriers for others
in this regard. It was a message that this nation does offer the chance
to set goals, achieve them, and open doors for others.
I am committed to breaking down barriers which exclude women from
membership at Augusta in the weeks and months ahead.
Sincerely,
Lloyd D. Ward,
United States Olympic Committee