TCO is pleased to once again feature our Partner in Austin, Texas, Gouri Bhat. Please enjoy.
Here in Austin, Lance Armstrong is more than a world-renowned cyclist and one of the greatest athletes who ever lived—he’s a hometown hero. Armstrong lives and trains in the hills outside the city, and the headquarters of the Lance Armstrong Foundation and its Livestrong brand, which has raised more than $325 million for cancer research, is in downtown Austin. So it pains me to put this prediction on the record, but here goes: Armstrong’s growing legal problems, stemming from accusations that he participated in systematic doping while riding to seven consecutive Tour de France titles, are going to overtake him in the end. He’s going down.
As reported yesterday in the Austin American-Statesman, in response to a recent 60 Minutes interview with his former U.S. Postal teammate Tyler Hamilton, Armstrong lawyered up and fired off a four-page letter to CBS, accusing the network of shoddy reporting and demanding an on-air apology. 60 Minutes stands by its story. Hamilton, who testified before a federal grand jury, said he saw Armstrong use performance-enhancing drugs on many occasions. Hamilton’s statements echo similar accusations by Floyd Landis, another U.S. Postal teammate who was stripped of his 2006 Tour de France title for doping, and by George Hincapie, a long-time and loyal teammate whose grand jury testimony is also reported to implicate Armstrong in doping. Armstrong has always denied using performance-enhancing drugs.
Watching Hamilton come clean about routine doping in the upper echelons of competitive cycling on 60 Minutes, I was struck by two pieces of information that I did not fully appreciate before. First, CBS reporter Scott Pelley noted that all the second and third place finishers in each of the seven years that Armstrong won the Tour de France (1999-2005) were at some point implicated in doping, except for one. That’s an astounding statistic that illustrates the degree to which doping pervaded the sport and, indeed, became a virtual necessity to compete and win.
Second, the U.S. Postal Service, which sponsored Armstrong and his teammates for so many years, is a government agency, and its sponsorship contract included a “moral turpitude” clause and likely required various representations that U.S. Postal riders were drug-free and not engaged in illegal activities. Receiving money from a U.S. agency based on statements that are false is called fraud on the government.
The U.S. Postal Service invested about $40 million in Armstrong’s team from 1998-2004. Government sponsorship of U.S. Postal makes a federal doping investigation of Armstrong more complicated and potentially much more consequential than the cases against Barry Bonds, Roger Clemens, Marion Jones and other athletes, who have mainly been indicted or convicted on perjury or obstruction of justice charges – essentially lying to federal investigators or Congress. If the accusations of illegal doping on U.S. Postal are proven, Armstrong and team management are potentially vulnerable to many more serious charges, including fraud, conspiracy, money laundering, racketeering, and drug trafficking. Not surprisingly, Floyd Landis has already filed a federal whistleblower lawsuit claiming that U.S. Postal defrauded the U.S. government. Filed last September, the lawsuit remains under seal while the U.S. Justice Department decides whether to intervene.
One of Armstrong’s new lawyers, John Keker of Keker & Van Nest LLP, who previously won a major Ninth Circuit victory against federal investigators in a doping case involving Major League Baseball players, has called the whole doping investigation of U.S. Postal a waste of time and money: “That the government is spending tax money investigating long ago bike races in Europe is an outrage.” But investigating $40 million of fraudulently obtained funds does not seem like a waste of resources to me – it is, in fact, something the federal government should be doing a lot more of.
Maybe with his peloton of high-powered lawyers, Armstrong will somehow win this race. But regardless, his yellow jersey won’t be looking so sunny anymore.
Guest post by Gouri Bhat