Lawyers for Tom Welch and Dave Johnson believe the payments will figure in a barrage of grand jury indictments against them. No charges had been filed by Wednesday.
New York-based Jet Set Sports, a corporate ticket and travel agent for the 2002 Winter Games, made a series of cash payments to bid leaders totaling $130,000 from August 1994 to May 1995, according to Johnson attorney Max Wheeler.
He said the money was spent on bid expenses, a claim that brought a derisive scoff from a law enforcement official who would not elaborate.
Jet Set corporate counsel Robert Boyar issued a statement Wednesday confirming that company president Sead Dizdarevic made contributions to the Salt Lake bid committee at the request of bid officials.
"Mr. Dizdarevic has fully disclosed and explained these contributions to Department of Justice investigators and is cooperating with the ongoing investigation," Boyar said. He did not immediately return a call for elaboration.
Jet Set is a broker of Olympic hospitality services. The company, also a sponsor at the 2000 Summer Games in Sydney, is selling an Australian package including tickets and lodging for up to $135,000 for two people. The company says on its Web site that it financed an expansion and took over management of a Japanese hotel for its customers at the 1998 Winter Games in Nagano.
Dizdarevic made the cash payments to Welch and Johnson because he stood to "make a huge profit" as a Utah sponsor, Wheeler said.
Welch and Johnson can prove the money was spent on the bid effort, not to enrich themselves, said Wheeler, who nonetheless expects the Justice Department to allege the bid leaders kept the money.
"The $130,000 question is, where did the money go?" asked Paul Cassell, a University of Utah professor and former federal prosecutor who has closely watched the scandal unfold.
"Even if it seems fishy, the government has to prove the money went in Welch and Johnson's pocket for personal gain. That's straightforward fraud that a jury can understand. But again, the burden of proof is on the government. The defense doesn't have to prove anything."
Wheeler said the money was used to reimburse Welch and Johnson for travel and lodging expenses and gifts for International Olympic Committee members. The cash came in handy when banks were closed on weekends or at overseas meetings, he said.
The funds were not recorded on the bid committee's books, deposited in its bank accounts or reflected on tax filings, prosecutors told defense lawyers. But Wheeler said he can't verify that assertion because he doesn't have the records.
Dizdarevic has hitched his business to the Olympics since the 1984 Winter Games in his native Sarajevo, Yugoslavia, now osnia-Herzegovina. Through the years, Jet Set has played host to national Olympic committees, corporate sponsors, broadcasters and others. It locks up hotels and restaurants in Olympic cities for its clients. Dizdarevic pledged $20 million in cash and services in May to renew an Olympic sponsorship.
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