Friday, January 27, 2012
Romney had decided to gamble his future on the chance to save the 2002 Winter Games. Tapped by Utah's governor to step in as chief executive of the Salt Lake Organizing Committee, which had embarrassed itself by lavishing gifts on International Olympics executives to get the Games, Romney portrayed his decision as an act of charity.
He had "won the lottery" through his work at Bain Capital, Romney told reporters. Now, he made clear, it was time to give something back to his country and to a city inextricably tied to his beloved church, The Church of Jesus Christ of Latter-day Saints
But standing in D'Alessandro's office on the 59th floor of the Hancock Tower, with miles of Massachusetts sprawling beneath him, Romney offered a more personal reason for taking on the Olympic challenge. Having been defeated in his Senate race against Democratic Sen. Edward M. Kennedy in 1994, Romney knew his political future hung on the fate of the Games.
"If this doesn't work, I can come back to private life, but I won't be anything anymore in public life," he confided, according to D'Alessandro.
Thus began an experience that cemented Romney's reputation as a "turnaround artist" — a manager so competent that he could turn deficits into surpluses and who might one day be able to guide the nation. Romney would run the Games with a strong hand, personally lobbying business leaders such as D'Alessandro to maintain their Olympic contributions and helping bring new financial backers on board. Along the way, he managed to remove the stink of scandal and replace it with the glow of success.
"Through an extraordinary effort by Mitt Romney and the staff he put together, they not only avoided a very difficult time for the Olympics, but put on the greatest Winter Games I have ever seen," said William Hybl, then the president of the U.S. Olympic Committee.
But Romney's other agenda — buffing his own image for a political career — was never far from the surface, according to many former associates.
The man who was famous at Bain Capital for letting others take the credit suddenly was giving his permission for a series of Olympics promotional buttons bearing his own likeness, accompanied by slogans like "Hey, Mitt, we love you!" and "Are we there yet, Mitt?" There was even a superhero pin depicting Romney draped in an American flag.
His determination to present himself as a white knight came at a cost: Some colleagues now say he magnified the extent of the Olympics committee's fiscal distress, risked some possible conflicts of interest among board members and shunted aside other people whose work had been instrumental in promoting the Games.
"Mitt could have been a hero if he had just come in and been polite," said Sydney Fonnesbeck, a former Salt Lake City Council member and a longtime critic of Romney. "What turned me sour was his demand to get all the credit and ignore everybody who put in thousands and thousands of hours before he arrived."
That day in March 1999, the success of the Games was far from assured. Scanning the memorabilia in D'Alessandro's office, Romney sought inspiration from a signed copy of a memoir by Winston Churchill, the British statesman who epitomized resolve in the face of grave threats.
Taking over the Olympics would be Romney's personal crucible.
"He had done what he wanted to do in business and was looking to leapfrog into the world of public service," said Robert Garff, the chairman of the Salt Lake Organizing Committee, who has known Romney since childhood. "This was the thing he could do to propel himself into the national spotlight, which I believe was all part of his overarching plan of his life."
A tainted prize
Romney communicated his intention to take full command of the Olympics on his first day on the job in February 1999. A century and a half after his ancestors trudged through Emigration Canyon to help pioneer the valley as a land of the righteous, Romney arrived in a cheerless ballroom in a Salt Lake City hotel. Immediately, he raised a rhetorical scythe at the trustees of the scandal-tainted organizing committee.
"There is no justification for compromising integrity," Romney warned the 53-member board. "I will expect that if any of you casts a shadow on the Games, even where no wrong may have been done, you will stand immediately aside."
It mattered little that Romney lacked any Olympic experience. A week earlier, he had received "a 101 course in the Olympics" from Andy Baldwin, then vice president of the U.S. Olympic Committee. Romney learned about the three factions that had been created to serve the world's finest athletes: the USOC, the International Olympic Committee, and the local organizing committee. The groups had all but destroyed one another in a convulsion of territorial infighting.
Much of the damage seemed to stem from decisions made by two previous executives on the Salt Lake City organizing committee, chief executive Thomas K. Welch and vice president David P. Johnson, who embraced the tacit form of influence peddling that greased the international selection process former Olympic sites.
After Salt Lake City lost its bid for the 1998 Games to Nagano, Japan, Welch and Johnson concluded they had failed to lavish enough largess on members of the IOC, which chooses host cities. While Nagano had plied IOC members with about $540,000 worth of souvenirs, including laptop computers, Salt Lake City had handed out little more than cowboy hats.
Vowing not to be defeated again, Welch and Johnson funneled through the committee more than $1 million in gifts to numerous IOC delegates for the 2002 Games — a stunning trove of booty that included cash, college tuition, medical-care payments, jobs, lodging, beds and bedding, bathroom fixtures, Indian rugs, draperies, doorknobs, dogs, leather boots and belts, perfume, Nintendo games, Lego toys, shotguns, a violin and trips to ski resorts, Las Vegas and a Super Bowl in Miami. Almost no request from an IOC member went unmet.
Then came the comeuppance. After Salt Lake City won its bid for the Games, a local ABC affiliate received a news tip about college tuition payments the organizing committee had made for the daughter of an IOC delegate from Cameroon. Soon, investigations were launched by the U.S. Justice Department, Congress, Utah's attorney general, the USOC, the IOC and the Salt Lake committee.
Shamed by the scandal — in which 10 members of the International Olympic Committee would resign or be expelled for accepting gifts, the Olympics chiefs wanted a Salt Lake CEO wise in the ways of business, the law and Mormonism.
They fast settled on Romney, whose ties to the state ran deeper than his ancestral roots. Romney had visited Utah as a child, married his wife, Ann, at the great LDS temple in Salt Lake City, and attended Brigham Young University in Provo, where two of his sons were enrolled at the time. Ann, struggling with her recently diagnosed multiple sclerosis, was finding some relief in the mountain air of Park City, Utah, where she and Mitt had just built a magnificent vacation home, now assessed at $5.2 million.
"He had high credentials in and out of the church," said Garff, a member of one of the church's presiding councils, the Quorums of the Seventy, and a former speaker of the Utah House of Representatives. "It would have been a disaster if we just picked a stranger and they didn't understand the mores of this community."
Anxiety in LDS role
Almost as soon as Romney took the job, however, the LDS Church's role in the Games became a source of contention — a dispute exacerbated by Romney's request for an additional $8 million in loaned property and cash from the church, among other contributions.
With Romney having been chosen in part because of his LDS credentials, some people in Utah — including some LDS leaders —feared that the church could be the next target of scandal-mongers.
After all, the church had played a significant role in the Olympic movement. In a state where nearly every political leader and an estimated 70 percent of the population was LDS, President Gordon B. Hinckley made no secret that he viewed the Games as a vehicle to fulfill pioneer Brigham Young's prophesy that Salt Lake City would "become the great highway of the nations."
"Kings and emperors and the noble and the wise of the Earth will visit us here," Hinckley said, quoting Young.
Church leaders had traveled the world with the Salt Lake City organizing committee. Documents in Garff's archives at the University of Utah show church officials recommended employees to the organizers, commented on committee policies, and sought direct public relations benefits from the Games. An LDS leader, Elder Robert Hales, also met privately with an NBC executive in New York to offer the church's cooperation in the television presentation of the Games.
Romney's initial decisions, including the request for greater church contributions and the hiring of another prominent Mormon as his top assistant, Fraser Bullock, a former colleague at Bain & Co. who now serves in the church's Quorums of the Seventy, made some people anxious.
Utah's wealthiest businessman, Jon Huntsman Sr., the father of Utah's current governor, assailed Romney for exploiting his ties to the church. Huntsman himself is prominent in the LDS Church.
"'We've got a chairman who is active LDS, now we've got a present CEO who is active LDS," Huntsman was quoted in the Salt Lake Tribune as saying of Garff and Romney. "They claim they're going out (to) really scour the world to find the best person, and Mitt brings in one of his cronies to be the COO. Another broken promise. Because we've got three LDS folks who are all cronies. Cronyism at its peak. ... These are not the Mormon Games."
Huntsman, who later made peace with Romney and now serves on his campaign finance committee, did not respond to interview requests.
Wary of appearing to dominate the Games, church leaders asked Romney to scale back his requests for aid, which he did. They also curbed their ambitions to use the Games to promote awareness of Mormonism — with a few exceptions, among them a book one of the church's publishing companies released for the Games, "Why I Believe," in which the Romneys joined about 50 other prominent Mormons in expressing their religious faith.
"It all worked out beautifully after the church backed off and the prophet (Hinckley) said we won't have any missionaries on the streets proselytizing," Garff said.
Behind Romney's funding request to the church was a larger concern about the budget for the Games.
Three years shy of the opening ceremonies at the University of Utah's hillside stadium, Romney inherited a $1.45 billion budget. Then Romney crunched the numbers and concluded that the trustees needed to raise more than $400 million to cover the budget. He cast the challenge as a monumental crisis, one that would require extraordinary efforts from everyone involved.
"We could be liquidated by our creditors and shamed," Romney told then-Gov. Michael Leavitt, according to Romney's memoir, "Turnaround: Crisis, Leadership, and the Olympic Games."
Fund-raising had stalled as companies feared becoming enmeshed in the scandal. Sponsors had retreated, scared off in part by D'Alessandro, who told reporters that any chief executive who signed sponsorships without reforms in the Olympic movement "should be fired."
"The best way I can describe what (Romney) faced is, trying to rebuild an airplane while it's flying," D'Alessandro said.
Romney trimmed the budget to $1.32 billion, launched marketing campaigns and established an austerity program whose symbolic features included abolishing free lunches for the trustees. In lieu of grand buffets, Romney ordered Domino's pizza and required board members to pay $1 a slice, plus 25 cents per soda.
While Romney's moves energized the committee, some people familiar with the budget insist his dire forecasts were overstated. A Globe review of archived records showed the organizing committee already had secured commitments of nearly $1 billion in revenues, including $445 million as its share of the NBC contract and nearly $450 million in contracts for sponsorships, before Romney arrived.
In addition, the Utah Legislature already had loaned $59 million in sales tax revenue to the Games and Congress was prepared to provide hundreds of millions in direct support. Direct federal aid for the Games ultimately totaled $382 million.
"In fact, most of the federal money was already in place before Mitt came on," said Sen. Bob Bennett, a Utah Republican who supports Romney and served as point man for the federal funding. "The Clinton administration was completely supportive in saying these are America's Games, we will do whatever we can to make sure they are successful. The one concern I had was whether we would get the same degree of support from the Bush administration, which we did."
Romney has since touted his economic rescue of the Games as a hallmark of leadership: "The tsunami of financial, banking, legal, government, morale, and sponsor problems following the revelation of the bid scandal swamped the organization. It was the most troubled turnaround I had ever seen," Romney wrote in his book.
But he failed to convince even some key members of the organizing committee that the budget was in peril.
"Yes, we were out of balance, but we had (three) years to organize that," said Garff, the chairman. "In my mind, there was no sense of panic."
Even if the finances were fixable, there were real doubts about how to fix the reputation of the Games — and of Salt Lake City.
Romney moved quickly to remove the taint of the scandal, partly by blaming his predecessor, Welch, and by suggesting there had been only a few bad apples on the organizing committee.
Welch and his legal team held an opposing view. Facing bribery charges punishable by up to 75 years in prison, Welch said everyone involved in the process, including Leavitt, knew favors were being given to members of the international selection committee.
Romney joined Leavitt in insisting the organizing committee was the victim in the case. Prosecutors alleged that Welch and Johnson and a few cohorts had defrauded the committee of more than $1 million in gifts given to IOC delegates.
"We amassed significant, undeniable information that everybody involved in the process was knowledgeable about what was going on, all the way to the governor's office," insisted Max Wheeler, one of the defense attorneys.
"The governor could have stopped (the prosecution) in the very beginning if he had just said, 'Look, this is the way the game was played. We knew about it and maybe we went overboard, but it's just like what goes on in every other bid city.' The whole case would have gone away because there would have been no victim. But the governor denied everything."
Leavitt, now U.S. secretary of health and human services, declined to discuss specifics of the case.
"I don't want to go into it in a lot of detail because it resurrects a lot of old history," Leavitt said. "I wish I or others had known (about the alleged improprieties) and if others did know I wish they would have acted sooner."
Romney went so far as to encourage Welch to accept a plea bargain for the good of the Games, angering those in the community who believed Welch and Johnson had not acted alone and were unfairly targeted. Romney's request looked even worse when a federal judge threw out all 15 felony charges for insufficient evidence and praised Welch and Johnson's contributions to the Games.
"I can only imagine the heartache, the disappointment, the sorrow that you and your loved ones suffered through this terrible ordeal, "U.S. District Judge David Sam said, according to a court transcript. "My hope is that you will now be appropriately recognized and honored for your efforts."
Yet Romney had stigmatized Welch and Johnson, including barring their names from appearing with more than 20,000 other committee staffers and volunteers on a Wall of Honor at the city's Olympic Legacy Plaza.
"Mitt's objective was to look as good as he could," Welch said. "He showed a mean side as well as a competent side."
Romney angered lawyers on both sides of the case after the charges were dismissed by continuing to express doubt about Welch's innocence and describing the federal prosecutors in his book as "inept."
"Mitt Romney, as far as I know, was never in the courtroom, didn't review any of the evidence, and never asked the prosecutors for a summary of their case," said Richard Wiedis, the government's chief prosecutor. "I don't see how he was in a position to make a judgment as to the competence of the prosecution team."
Making the sale
As a businessman, however, Romney knew that nothing was more important than regaining the trust of potential sponsors. Raising money, and fast, was more important than winning court sanctions of Welch and Johnson.
Romney cast himself as the anti-Welch, the clean businessman who would restore integrity to the Games. Thus, the Olympics became a showcase for Romney's entrepreneurial abilities.
He personally won over D'Alessandro and then criss-crossed the country in helping to reap more than $300 million in additional sponsorships. Prohibited from soliciting companies in marketing categories that already had been claimed — Pepsi could not sponsor the Games, for instance, because Coca-Cola already had committed — Romney created more than 20 new categories, including an official Olympic cake mix (General Mills) and official meat (Certified Angus Beef).
"I have no doubt whatsoever, as the representative of the chief investor in the Salt Lake City Olympics, that Mitt Romney was single-handedly responsible for those Games being the immense success they were," said Dick Ebersol, chairman of NBC Universal Sports & Olympics. "The list of people who could have pulled it off began and ended with Mitt Romney."
But despite his overall insistence on high ethical standards, Romney himself risked the appearance of conflicts by soliciting companies such as Staples and Marriott International that listed him on their boards of directors. As a director, he was responsible for protecting the companies' interests; as CMO of the organizing committee, he had promised to get the best deal for the Olympics.
Romney dismisses any conflict. "It is not a conflict of interest for the Olympics for its chief executive to be soliciting sponsorships from anyone I could find," he said in an e-mailed follow-up to an interview. "That was my job — to use every personal association I had to raise money."
To be sure, Romney's entanglements were nothing like those of the trustees who resigned when he took over, including Alan Layton, whose construction company received a $29 million contract from the organizing committee, and Earl Holding, whose ski area signed a $13.8 million dean with the committee.
But Romney did allow some trustees whose companies engaged in relatively small business with the committee to remain on the board.
"They removed the people who were the poster children for conflicts of interest," said Glenn Bailey, a leader of Salt Lake Impact 2002 and Beyond, a coalition of community groups. "But they still had conflicts."
Romney tolerated little dissent from trustees who aggressively questioned his decisions. While his many admirers in Salt Lake City viewed him as pristine, amiable and self-effacing, he developed an alternate image among a group of dissenters: petty, vindictive and self-aggrandizing.
His chief foe was Ken Bullock — no relation to Romney's friend and COO Fraser Bullock. Ken Bullock served on the organizing committee and also was executive director of the Utah League of Cities and Towns. Bullock believed his job with the league made him an official watchdog for the state's $59 million investment.
"He tried very hard to build an image of himself as a savior, the great white hope," Bullock said of Romney.
"He was very good at characterizing and castigating people and putting himself on a pedestal."
The two clashed often, never more publicly than when Romney went nose to nose with Bullock at the state Capitol after Bullock failed to support Romney's request to defer repaying the state its $59 million.
"You don't want me as an enemy," Romney said in the corridor outside a conference room, according to Bullock. "Ted Kennedy and I get along. Why can't you and I?"
"I'm doing my job," Bullock replied.
To which Romney repeated, "You don't want me as an enemy."
Salt Lake City Mayor Rocky Anderson, a Democrat who also served on the organizing committee and remains a Romney friend, said Bullock had long played a "very destructive" role in the Olympic movement.
"We were all running out of patience and were pretty proud of Mitt that he finally put Ken in his place," Anderson said.
Yet Garff, the organizing committee chairman whose association with Romney went back to childhood, believed Romney inappropriately tried to silence Bullock.
"Mitt saw him as an agitator," Garff said, "and I saw him as a watchdog who needed to be heard."
Romney showed little sympathy for another trustee who criticized his performance. When Lillian Taylor, a small-business consultant, questioned why the committee continued to retain a pricey law firm that had acknowledged losing documents related to the scandal, Romney, who at the time said he had no problem with her raising the issue, sat silently while the board's attorney aggressively dismissed her complaint.
"Shame on Mitt for that one," Taylor said.
Sharp elbows sting
The Olympics was Romney's first intensely public leadership role, and by his own account, it showcased the skills he believes made him an effective governor and will make him an effective president.
In Salt Lake City, some found him inspiring and others found him intolerant. Many tended to trace his strengths and weaknesses to his long business career. They said he focused single-mindedly on the task at hand, starting with reaching out to some of Salt Lake City's leading critics of the Games, including Stephen Pace.
"It was very clear he was blowing in my ear, but it was a smart gesture," said Pace, a health-care consultant who had protested the use of public funds for the Games.
But Romney also appeared insensitive at times.
JoAnn Seghini, the mayor of Midvale, Utah, said Romney once rebuked her for talking to someone while he was testifying at a legislative hearing.
"He almost fit the definition of a strict nun in a Catholic school," Seghini recalled.
Later, he clashed with Utah police after they alleged he twice used the f-word in berating Shaun Knopp, a volunteer who was directing snarled traffic at an Olympic venue. Police were angered that Romney denied shouting the expletive and were further miffed when Romney later offered a partial apology to a sheriff's captain but not to Knopp.
"There were a lot of people in public safety who were extremely angry," said Peter Dawson, a lawyer today who served as an intern in a communications center at the time. "The general consensus was, 'I hope he doesn't need any help from us because we aren't going to respond very quickly."'
Romney, in an interview, denied using the f-word and said two other witnesses — a Secret Service agent and an Olympic aide, Spencer Zwick — corroborated his denial. "I have not used that word since college — all right? — or since high school," he said.
Romney's strengths and weaknesses were both on display in how he dealt with the impact of the attacks of Sept. 11, 2001. He worked closely with federal officials to enhance security and give the Games a new patriotic gloss as one of the first national events after the devastation.
Romney helped to secure an additional $34 million in federal aid for security and convince wary nations, Japan among them, not to pull out of the Games.
Romney had witnessed the horror of the attacks, having ridden through the smoke billowing from the Pentagon after hijackers plunged American Airlines Flight 77 into the building.
When he returned to Utah, Romney gathered hundreds of staffers and volunteers in an outdoor plaza and delivered a speech that several described as the most presidential moment of his Olympic tenure. While he addressed the fears many harbored of terrorists striking again during the Games, Romney invoked the glory of patriotism, public service and facing down danger.
He delivered a similar message in an e-mail to the staff.
"In the annals of Olympism and the history of Utah, this may stand as one of the defining hours," he wrote, according to his book. "I am confident we will all perform with honor."
Zianibeth Shattuck-Owen, who served as a trustee and later as luge manager, said of the speech, "By the end, he had everybody singing 'God Bless America,' but not in a 'Kumbaya' kind of way. ... It was leadership."
Romney later successfully lobbied the IOC to drop its opposition to the U.S. team carrying into the opening ceremonies a tattered American flag found in the rubble of the World Trade Center.
But he angered safety officials when his office denied free or discounted tickets to widows and orphans of firefighters who died at the World Trade Center. Romney's executive assistant, Donna Tillery, twice rejected the requests, citing a policy barring ticket giveaways, according to e-mails she sent to former Salt Lake City firefighter A.J. Barto. Romney's staff says he was unaware of the request.
Six weeks later, the committee found itself with unsold seats and Romney approved distributing 100 tickets valued at $885 each to Utah legislators.
"I was outraged at the hypocrisy," Barto said. "In less than two months, he went from saying we're going to run a tight ship to throwing out free tickets to a group of people who could help him politically."
On Feb. 8, 2002, Mitt Romney and President Bush marched together amid heavy security to the center of Rice-Eccles Olympic Stadium in Salt Lake City to mark the arrival of the flag from the World Trade Center and open the Winter Games.
Over 17 days, 2.1 billion people around the globe watched the competition, with the United States winning 34 medals.
In overseeing the event, Romney helped to clear Brigham Young's "great highway of the nations" for the kings and queens, presidents and nobles, elite athletes, and everyday people who converged for the Salt Lake Games. -->
In the end, Romney helped to generate nearly a $100 million budget surplus for the committee and a trove of political goodwill for his next endeavor.
There was no need for him to return to private life. Before the Zambonis had cleared the last ice shavings from the Olympic rinks, Romney was racing to make another change.
On March 17, 2002, Mitt and Ann Romney stepped off a plane at Hanscom Field wearing matching leather jackets adorned with Olympic logos. They headed home to Belmont, where more than 200 supporters encouraged Romney at a rally the next day to continue in public service.
There was a job on Beacon Hill to pursue.
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