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Fri February 8, 2013
Lawsuit, Investigation Loom Over Lance Armstrong
Originally published on Fri February 8, 2013 7:41 am
There are more troubles for disgraced cyclist Lance Armstrong.
A Texas-based promotions company sued the former cycling champion Thursday for more than $12 million, which was paid to Armstrong for several of his record seven Tour de France wins. Armstrong publicly admitted last month that those herculean victories were aided by doping.
The lawsuit is part of a flurry of activity: Armstrong still is in talks with the U.S. Anti-Doping Agency, and there is now word that he is under federal investigation, a year after another federal criminal inquiry ended abruptly.
The SCA Suit
Armstrong made a lot of money for winning his seven straight Tours de France, from 1999 to 2005. Some of it came from SCA promotions, which delivered hefty bonus payments to Armstrong – $1.5 million for his 2002 victory, $3 million for 2003.
SCA promised $5 million for a 2004 win. Armstrong delivered on that one, too, but SCA didn't. The company withheld payment after major allegations of doping surfaced that year in the book L.A. Confidentiel. The dispute over payment went to arbitration. The sides settled in 2006, with SCA paying Armstrong and the company that managed his cycling team, Tailwind, the bonus plus legal fees for a total of $7.5 million.
But now, SCA CEO Bob Hamman wants his money back.
"We feel the payment was improper," Hamman says, adding, "It wasn't earned."
The lawsuit, filed in state district court in Dallas, asks for $12,120,000 in prize money and interest that SCA paid to Armstrong/Tailwind — all of it for breach of contract.
Mark Fabiani, Armstrong's spokesman, says SCA can't reopen the case. He points to a line in the 2006 settlement agreement that reads: "No party may challenge, appeal or attempt to set aside the arbitration award."
But Hamman says several factors justify the suit: Last summer's USADA sanction against Armstrong includes "forfeiture of any medals, titles, winnings, finishes, points and prizes"; and Armstrong's sworn testimony in the SCA arbitration hearing that he never took banned performance-enhancing drugs in connection with his cycling career was rendered false by last month's admission of doping in Armstrong's interview with Oprah Winfrey.
"There are a number of contentions that we believe are all valid contentions," Hamman says, "any one of which would've eliminated our liability."
SCA lawyer Jeff Tillotson says he hopes for resolution before a possible trial but says he's not optimistic. Tillotson says the plan is to push forward with the suit aggressively, since others are lining up as well to reclaim money paid to Armstrong. The biggest potential claim could be from the federal government, which reportedly still is deciding whether to join a whistle-blower lawsuit filed by Armstrong's former teammate Floyd Landis.
It's a lawsuit that potentially could cost Armstrong tens of millions of dollars.
A Hint Of Conciliation?
Certainly, Armstrong's world is contentious now, though there may be a hint of conciliation with his biggest nemesis, USADA.
The agency sanctioned Armstrong last August and in October released the blockbuster, 1,000-page Reasoned Decision, which led to Armstrong's downfall. The agency's CEO, Travis Tygart, felt there was a lot missing, and that there were downright lies, in the Winfrey interview. For instance, Tygart told CBS' 60 Minutes that Armstrong's statement was false when he said he didn't dope during his cycling comeback in 2009 and 2010.
Tygart told CBS' Scott Pelley: "The evidence is clear. There are blood tests in 2009, 2010, expert reports based on the variation of his blood values from those tests — one to a million chance that it was due to something other than doping."
USADA wanted more from Armstrong, especially if he hoped to get a reduction in his lifetime ban from officially sanctioned sporting events. So the agency set a deadline of this past Wednesday for Armstrong to decide whether he would testify fully, and under oath, about his doping. When the deadline was announced, Armstrong's attorney Tim Herman said in an interview, "Why would we cooperate with USADA? USADA isn't interested in cleaning up cycling." Herman went on to say that Armstrong intended to appear before a planned "Truth and Reconciliation" commission administered by cycling's international governing body, the UCI.
On Wednesday, however, Tygart announced that he was giving Armstrong a two-week extension on his deadline. In a statement, Tygart said, "We understand that he does want to be part of the solution and assist in the effort to clean up the sport of cycling."
Fabiani, Armstrong's spokesman, would not say Thursday why Armstrong now appears to be cooperating with USADA. In an email, he said: "Lance was granted a two-week extension. That's it. It would be a mistake to infer anything else from that."
Still, it's a notable shift from Tim Herman's defiant words late last month.
Since then, the UCI plan for truth and reconciliation was put on hold, as the governing body was blasted by anti-doping officials who don't believe the UCI is doing enough to help cycling out of the crisis created by the Armstrong scandal. There's speculation that Armstrong realized the UCI isn't the best group to associate with right now — hence the move toward USADA.
Another possibility: Armstrong is in a more cooperative mood now that he's the target of a new federal criminal investigation. NPR spoke to a witness who has been contacted by agents as part of an active investigation. The person did not know which federal agency is running the probe. According to ABC News, authorities aren't concerned with Armstrong's drug use, but rather alleged obstruction, witness tampering and intimidation.
A year ago, the U.S. attorney in Los Angeles, Andre Birotte Jr., suddenly dropped a nearly two-year-long Armstrong investigation. He wasn't required to give an explanation, and he didn't at the time. This week, he was asked at a news conference about Armstrong's recent admission, and he said, "Obviously we've been well aware of the statements that have been made by Mr. Armstrong and other media reports. That has not changed my view at this time. Obviously, we'll consider, we'll continue to look at the situation, but that hasn't changed our view as I stand here today."
Birotte reportedly is not part of the new investigation. ABC News quotes a "high-level source" as saying, "Birotte does not speak for the federal government as a whole."