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Tour de Farce 

Lance Armstrong, Thom Weisel, and questions about anti-doping efforts in American cycling

Wednesday, Sep 7 2005
While lounging on Taylor Street this past Sunday watching America's biggest bike race make its way around North Beach, you might have allowed your mind to wander to the recent doping scandal involving Lance Armstrong. After all, the story -- published in the French sports daily L'Equipe last month -- was pretty shocking. It detailed laboratory reports showing that the seven-time Tour de France winner used banned performance-enhancing drugs to aid him in his first Tour victory in 1999. The allegations dominated international sporting headlines for a couple of weeks.

The French newspaper's report was taken seriously in Europe, with cycling's international governing body, the Union Cycliste Internationale, and the World Anti-Doping Agency both announcing they would launch probes of possible drug use at the '99 Tour.

A few days after the story broke, though, Armstrong spent an hour on CNN's Larry King Live dismissing the L'Equipe report, contending it was unfair because it came from a tabloid newspaper reporter's efforts, rather than through formal anti-drug protocols. A few days later, the chief operating officer of USA Cycling, the governing body responsible for punishing bike-racing drug cheaters in this country, was quoted in more than 100 newspapers dismissing the L'Equipe piece as the scandalmongering of a French tabloid newspaper, adding, in a remarkable echo of Armstrong's public position, that the positive drug results were unfair because they had been exposed by a news reporter, rather than through formal drug-policing protocols.

"To me, this is an issue for the French people. They seemed very concerned about it, and frankly I don't care what they think. And I don't think Lance does either," Reuters quoted USA Cycling COO Steve Johnson as saying last week. "This is just a publication in a French tabloid newspaper. That's our perspective."

And there the story seemed to peter out. And why not? There's no point bothering with drug allegations that the doping cops of American cycling say are bogus, right?

By week's end, the story had disappeared from the U.S. media, just in time for the Barclays Global Investors Grand Prix SF, the bike race local investment banker Thom Weisel brought to the city four years ago with the help of Armstrong, who lent his prestigious presence to the race during its first two years. The unsavory subject of doping faded. Lance Armstrong, and the massive publicity empire that surrounds him, remained relatively unscathed, able to enjoy his July 2005 retirement with the inspiring tale intact of his comeback from cancer to win the first of seven Tours de France in 1999.

There happens to be more to USA Cycling's pooh-poohing of the charges against Armstrong than the news headlines suggested, however. This isn't merely an instance of U.S. doping cops repelling spurious French charges against an American superhero.

Johnson, the widely quoted USA Cycling official, appears to suffer from a serious conflict of interest between his organization's role as a doping cop and his personal, institutional, and financial ties to the diversified business world surrounding Lance Armstrong. Financier Weisel is Armstrong's longtime patron, employer, investment manager, and friend. Weisel is also Johnson's longtime patron and friend and the founder of a nonprofit entity that employs him.

And then there's this little fact: Johnson essentially works for Armstrong. In addition to serving as chief operating officer of USA Cycling, Johnson is executive director of the USA Cycling Development Foundation, an affiliated nonprofit organization founded by Weisel, who serves as president of the board of directors, according to the foundation's most recently available IRS returns, filed in 2003. According to the foundation's current Web site, the board of directors now includes Lance Armstrong.

"This whole thing isn't a big deal for Americans," Reuters quoted Johnson as saying of Armstrong's doping troubles last week.

That may or may not be true. It's safe to say, however, that it's a very big deal for Johnson's bosses.

According to Capital Instincts: Life As an Entrepreneur, Financier, and Athlete, the book Thom Weisel co-wrote in 2003 with business journalist Richard Brandt, Weisel took up cycling in 1983, and by 1985 wanted to be a player in both the commercial and athletic ends of the sport. That year Weisel entered his first race and started the U.S.-based amateur Montgomery Cycling Team, sponsored by his San Francisco investment bank at the time, Montgomery Securities. In 1987 Weisel started a company called Montgomery Sports Inc., the predecessor to Tailwind Sports, to serve as a commercial vehicle for running his team.

In 1990, Weisel brought on Subaru as a sponsor and turned his team pro, hiring a young Lance Armstrong, who would leave for the stronger Motorola team in 1992. Weisel would take steps to see that this kind of thing didn't happen again. In 1995, he hired Olympic gold medal cyclist Mark Gorski to build from scratch a much grander team. The U.S. Postal Service was impressed with Weisel's vision and in 1996 signed on as the team's lead sponsor.

In 1997, the team raced the Tour de France; its best rider, a French hired gun, finished a lackluster 15th place. Things improved dramatically from there. In 1998 Weisel hired back Lance Armstrong after the cyclist's French Codifis team dumped him on the belief that he would not recover from advanced testicular cancer. That year began Armstrong's storied comeback from his deathbed, with high placings in prestigious races such as the Vuelta de Espana. To show his gratitude, Weisel augmented Armstrong's meager 1998 starting salary with $1 million in bonuses out of the financier's own pocket.

In 1999, Lance Armstrong won his first Tour de France with Weisel in the follow car. The financier accompanied the team on a victory lap on the Champs d'Elysée. Weisel's venture stake in the once-obscure sport of American cycling had turned up gold.

The next year Weisel took control of the governing side of bike racing, establishing the USA Cycling Development Foundation and placing himself and two other members of his foundation on the board of USA Cycling's predecessor, the U.S. Cycling Federation. Weisel now controlled America's top team as well its top cycling regulator.

The next year Weisel's team backed Armstrong to another Tour win, with Weisel in the pace car. Four more Armstrong Tour wins, and four more Weisel pace cars, followed.

In 2005, after Armstrong had retired upon winning his record-surpassing seventh Tour de France, Weisel's old cycling buddy and cycling-official protégé, Steve Johnson, fielded press calls and publicly dismissed allegations that Armstrong had won the 1999 Tour using banned drugs.

If you've been following the L'Equipe doping story as closely as I have, you may have noticed something a little weird about the short arc of Lance Armstrong's August PR crisis in the United States.

While the head of USA Cycling was dismissing L'Equipe's allegations, cycling's international governing body, the Union Cycliste Internationale in Aigle, Switzerland, was announcing that it took the reports seriously enough to launch its own investigation into drug use at the 1999 Tour de France. The head of the World Anti-Doping Agency, the planet's top sports-drugs cop, likewise said his group would analyze 1999 Tour drug-test results. The director of the Tour de France characterized the report as hard evidence Armstrong had cheated in 1999, saying Armstrong may have deceived fans.

Was this just another case of America against Europe, of french fries vs. Freedom Fries?

Not really. According to L'Equipe -- which enjoys the sort of high-journalism reputation in Europe that Sports Illustrated does in the U.S. -- a drug-testing lab developed a urine test for the banned endurance booster erythropoietin in 2001. The lab recently examined frozen urine samples from 1999 Tour doping tests to gauge the test's effectiveness. The lab figured that the lack of a test for the 1999 Tour might have led some riders to use the drug, which thickens athletes' blood so that it can carry more oxygen to muscles. Sure enough, one cyclist came up positive for the drug in six separate doping tests of urine given for the 1999 Tour. L'Equipe journalists obtained a leaked copy of the anonymous results of the tests. They compared the athlete identification number on the results with the number on Armstrong's other drug-testing records -- and found a match.

The results at least seem definitive -- and damning.

So why have those results gotten little traction in the public mind here in the U.S.?

The web of financial ties that connects USA Cycling, Lance Armstrong, and the businessman who backs both -- San Francisco's own Thom Weisel -- may offer some explanation.

In the U.S., organized cycling is a small world where many roads lead to or through Armstrong and Weisel.

In 2000, the sporting team Weisel owned backed Armstrong as he won the Tour de France for a second time. That same year, Weisel orchestrated the equivalent of a leveraged buyout of the regulatory side of bicycle racing in the United States. The U.S. Cycling Federation was suffering a $1.4 million budget deficit, with no solvency in sight, when Weisel made the organization an offer it couldn't refuse, according to an account from Weisel's authorized biography. By helping to make the organization solvent, Weisel was able to fill the board of directors with his friends and set up a peculiar arrangement in which the bailout and future fundraising for the renamed bike-racing regulator, USA Cycling, would be conducted through the USA Cycling Development Foundation, a nonprofit that Weisel set up, staffed with his friends, and led as president.

"Weisel spent over three years reorganizing USA Cycling, and his team is largely in charge," the book explains.

In exchange for the bailout, Weisel demanded that his new nonprofit's executive director, Steve Johnson, also be named chief operating officer of USA Cycling, which is charged with participating in drug investigations and handing out punishment. The president of USA Cycling is Jim Ochowicz, who is also a broker at Weisel's current investment bank, Thomas Weisel Partners, according to reports in Outside magazine, the Milwaukee Business Journal, and other publications. Meanwhile, USA Cycling has a marketing arrangement with Carmichael Training Systems, the company owned by Lance Armstrong's coach, Chris Carmichael, through which USA Cycling does mass mailings on Carmichael's behalf in exchange for discounts on coaching services for USA Cycling members.

At the same time that he wields influence over bike racing's regulator, Weisel has an important financial connection to the most famous racer in the world, Lance Armstrong: For the past eight years, Weisel has owned the team employing the champion. Additionally, Weisel brought to San Francisco the San Francisco Grand Prix, the culmination of America's most important pro bike racing series. Armstrong helped get the event off the ground in 2001 by suiting up for the start line, allowing the event to be promoted as a chance to "come watch Lance Armstrong." Armstrong did not race the event this year because he's retired.

Given the financial and organizational links among Weisel-related entities, it seems reasonable to assume the financier might be irked if USA Cycling officials in his employ did anything to acknowledge drug allegations against Armstrong. Weisel's book mentions his "protégé and friend" Armstrong 100 times. It notes that Weisel's office is dominated by poster-size photographs of the cycling hero. During Armstrong's post-cancer career, Weisel has served as founder, architect, motivator, companion, and sugar daddy for Armstrong's team, according to Weisel's book.

However, Johnson, with all his links to Weisel, Armstrong's primary patron, sees no problem with denouncing the L'Equipe report on behalf of USA Cycling.

"Why would that be a conflict of interest? Explain it to me," Johnson said.

Sure. The USA Cycling Development Foundation is a nonprofit entity set up by Weisel and dedicated to raising money for USA Cycling. The foundation provides around a quarter of USA Cycling's $4 million annual budget, according to the group's IRS filings from 2003, 2002, and 2001. The nonprofit employs Johnson as executive director, the filings say.

The USA Cycling Development Foundation is overseen by a board of directors that includes Armstrong and is presided over by Weisel. Johnson runs the nonprofit out of the same Colorado Springs office as USA Cycling, the governing body.

Weisel is founder and owner of Tailwind Sports, which co-owns Armstrong's new Discovery Channel Team. The team has the retired champion under contract beyond 2006 in a public relations role, Armstrong said during an April press conference transcripted on the team Web site. This role would seem likely to lose significant value in the event of any U.S. anti-drug action involving the superstar.

In his book, Weisel makes clear the connection between Armstrong's reputation and his own financial interests. Armstrong's role as a Tour de France champion and Armstrong himself "make up our brand," Weisel boasts in a chapter on business philosophy that he penned himself.

Though Reuters headlined its story quoting Johnson "USA Cycling lashes out at Armstrong allegations," it would have been just as accurate to say "A Thom Weisel-supported official lashes out at Armstrong allegations harmful to Thom Weisel investments in Armstrong."

A spokeswoman for Weisel said he would not comment for this column.

Johnson and other Armstrong supporters have fretted in print that the discovery of banned chemicals in Lance Armstrong's 1999 urine samples did not follow the official protocol for exposing drug cheating. But the L'Equipe reporters certainly followed standard protocol for journalists wishing to get at the truth.

Allegations that Barry Bonds and other Major League Baseball players used banned steroids might not have seen the light of day if it weren't for San Francisco Chronicle reporters Mark Faiinaru-Wada and Lance Williams, who worked tirelessly to persuade people who had inside information on a federal steroid investigation to bend protocol and leak some of that information. The first time America really confronted the issue of drug use in sports was when Associated Press reporter Steve Wilstein wrote that he'd observed in slugger Mark McGwire's locker a bottle of the steroid Androstenedione, which was not then banned by Major League Baseball. This, too, was a horrible violation of protocol, baseball officials, athletes, and fans said back in 1998. Since then, the reporter's been vindicated by events.

"On behalf of the journalism profession, I want to apologize to Steve Wilstein today," wrote Orlando Sentinel sports columnist Mike Bianchi recently, in reference to widespread claims that Wilstein had created a "tabloid-driven controversy."

When I spoke with him last week, Johnson repeated his press message regarding protocol.

"As I've tried to point out, there is a well-established international protocol for handling samples and adjudicating doping cases. We adhere to that protocol and support it. This is not one of those cases," he said. "What you've got to realize is that you've got a publication in a French newspaper. From our perspective, that's not valid."

From the perspective of this particular tabloid journalist, Johnson's statements violate protocol. The fact that Johnson represents a so-called drugs regulator while serving a boss who would be financially harmed by any real drugs regulation invalidates his perspective entirely.

About The Author

Matt Smith


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