Former Olympic Bid Officials Indicted

A federal grand jury on Thursday indicted two former Utah Olympic bid officials on charges of conspiracy and interstate travel in aid of racketeering for their alleged roles in paying $1 million to help bring the games to Salt Lake City.

The 15-count indictment, brought in Salt Lake City, alleges that Thomas Welch and David Johnson "offered and paid $1 million to influence the votes of more than a dozen International Olympic Committee members," the Justice Department announced in Washington.

Welch, 55, the former president of the Salt Lake City Olympic Bid Committee, and Johnson, 41, the ex-vice president, "prepared and executed a series of bogus contracts and falsified ... books, records and other publicly available documents so as to conceal their activities," the Justice Department statement said.

The Justice Department also said Welch and Johnson "personally diverted $130,000" in bid committee income.

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

Each of the charges carries a maximum sentence of five years in prison and a $250,000 fine.

The indictment followed the collapse of negotiations aimed at a plea bargain.

This week, Welch and Johnson rejected a deal that would have had them plead guilty to a scheme to obstruct the Internal Revenue Service from collecting taxes. That strategy builds on the case of a former U.S. Olympic official who admitted evading taxes in a secret consulting agreement with Salt Lake City bidders.

Johnson's lawyer, Max Wheeler, had said Welch and Johnson consider themselves scapegoats for the vote-buying scandal, which has been under a Justice Department investigation for one-and-a-half years.

A Salt Lake ethics panel found that the bid lavished more than $1.2 million in cash, gifts, travel and other inducements on members of the International Olympic Committee and their relatives. The panel largely blamed Welch and Johnson.

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

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

CBS News Legal Consultant Andrew Cohen thinks there are two main reasons Welch and Johnson were indicted.

"First, prosecutors probably figured that they could finish a trial well before the 2002 games if they begin the process sooner rather than later, which would ease any embarrassment the feds might have felt about a trial like this on the eve of the games," Cohen reports. "And second, the feds likely felt that if the defendnts didn't take the last plea deal, then they weren't going to take any deal."

Cohen thinks there could still be a plea deal—that sometimes prosecutors simply indict people in an effort to ratchet up the pressure on them to settle. However, on the face of it, the indictments look like a game of chicken between prosecutors and defendants that the defendants, at least for the moment, appear to have to lost, says Cohen.

And if it's true that prosecutors won't be embarrassed by a trial, then the bargaining power of the defendants may have slipped away, Cohen feels.

In the wake of the scandal, ten IOC members resigned or were removed from the 105-year-old organization and the organizing committee's upper management was replaced.

Communications executive David Simmons pleaded guilty to tax fraud and admitted conspiring with bid leaders to provide a phony job for John Kim, son of Korean IOC member Kim Un-yong. The younger Kim was indicted for allegedly entering the country on an illegally obtained visa and lying to the FBI.

Former USOC international relations director Alfredo Lamont of Colorado Springs, Colo., pleaded guilty to filing false tax returns and admitted to conspiring with two unidentified bid officials in the process.