January 14, 1999 | Read Time: 2 minutes
The U.S. Justice Department is investigating the non-profit group organizing the 2002 Olympic Winter Games in Salt Lake City in the wake of accusations that the group bribed the Olympics officials who decide where the Games are to be held.
Although the focus of the investigation is unclear, the Salt Lake Organizing Committee’s status as a charity may be in jeopardy if it is found to have used money donated to it to buy gifts and favors for the Olympics officials. From the time the group was formed in 1987 until eight years later, when Salt Lake City was awarded the 2002 Winter Games, the charity raised roughly $15-million in donations, which accounted for nearly its entire operating budget.
Federal law prohibits money that is donated to a charity from being used for non-charitable purposes.
Past and present committee members have acknowledged that they paid college tuition for the relatives of International Olympic Committee members and gave members expensive rifles and skis during visits to the city. On federal tax returns filed annually from 1991 to 1997, the Salt Lake City group answered “No” to a question asking whether it had made any grants for scholarships, fellowships, or student loans.
“The tax-fraud question is a big one,” says Boyd Kimball Dyer, a law professor at the University of Utah. “Donations have been made to the Olympics group and tax deductions have been taken. The deductions are premised on the money being used for charitable activities, so something seems to be seriously wrong.”
A Justice Department spokesman declined to say if tax fraud was among the federal statutes that may have been violated in the case, but observers say that the investigation is likely to focus on the possibility of such fraud, along with wire fraud and extortion.
Along with the Justice Department inquiry, the United States Olympic Committee and the Salt Lake Organizing Committee’s own ethics panel are each conducting separate investigations into the case. The International Olympic Committee is also looking into the Salt Lake scandal and into broader allegations of corruption in the worldwide bidding process among potential host cities.
In the meantime, in Switzerland, where the International Olympic Committee is based, tax authorities are doing their own inquiry, according to The Wall Street Journal, which said the Olympics group could lose the $1.5-million-a-year tax concession it gets as a public-service organization.
