The International Olympic Committee stands to lose more than its tax-exempt status in the United States if it doesn't enact a series of reforms sought by Congress.
Legislation being prepared in advance of next month's hearing on the Olympics would also take away the IOC's share of the millions of dollars made from selling television broadcast rights in the United States if the IOC doesn't comply.A summary of the legislation, provided to the Deseret News Thursday, would also eliminate tax deductions for the millions of dollars spent by American companies to sponsor the 2002 Winter Games and other Olympics.
That would hurt the Salt Lake Organizing Committee financially. But new SLOC President Mitt Romney said he doesn't believe Congress will do anything that would damage Salt Lake City's Olympics.
"I think it's appropriate for Congress to push for reforms at the IOC level and to exert its muscle," Romney said. I think you'll see those IOC reforms (and) therefore the punitive measures won't be necessary . . . This will shore up their backbone when they encounter resistance to reform."
The IOC, a Swiss-based organization that's controlled the Olympics for more than 100 years, is not happy about the prospect of having Congress dictate everything from its membership to its rules of conduct.
"We'd love to listen to suggestions. But the idea we should change the makeup of the organization because a senator believes that's what is good for us seems a little bit crazy," an IOC spokesman, Theo Chapman, said Thursday.
The IOC has already announced it is forming a new commission on reform, led by Samaranch. Chapman said the members of the reform commission will be announced soon.
The United States is a key source of revenue for the IOC. American corporations and television networks contribute millions of dollars to the Olympics annually.
NBC paid a record $545 million for the rights to the 2002 Winter Games in Salt Lake City. The Salt Lake Organizing Committee was allowed to keep 60 percent, and the rest was split between the IOC and the USOC.
Under the terms of the "International Olympic Accountability Act" drafted by Sen. Ted Stevens, R-Alaska, the USOC would be given "clear exclusive right" to the U.S. broadcasts after 2008, when NBC's current contract expires.
While that might seem like a windfall for the USOC, a spokesman for that organization isn't so sure. After all, the $3.5 billion paid by NBC for the rights through 2008 is now shared with national Olympic committees worldwide.
"American television money is a lot of the whole worldwide pot. You've got to think of the other Olympic committees which are our brethren around the world. They depend on that money," USOC spokesman Mike Moran said.
"This country has been the backbone financially of the worldwide Olympic movement for decades," Moran said. "The USOC has a huge concern for the value of this product, which has been damaged."
The IOC would lose its share of the U.S. broadcast revenues as well as its tax-exempt status in the United States only if it fails to enact the long list of reforms outlined in the legislation by July 1, 2000.
Those reforms speak more to control than money. The legislation would require the Olympic Charter, in effect the constitution of the IOC, to be amended in seven areas.
Those include adding penalities for violations of the IOC's gift policy, which now prohibits members from accepting items valued at more than $150 from cities bidding for the Olympics.
Other reforms sought include guaranteeing seats on both the IOC and the IOC Executive Board to the United States and other countries that have hosted the Olympics. Currently, Samaranch selects new members.
There are some new seats to fill in the future. The Salt Lake scandal forced four members to resign. Another six were expelled, four warned and one has since died. At least two members remain under investigation.
SLOC may have a friend in the debate. Sen. John McCain, R-Ariz., one of the chief critics of the Olympics and the driving force behind the hearings, was a supporter of Romney's unsuccessful campaign for a Senate seat in Massachusetts.
Romney said he plans to meet with McCain and other lawmakers in Washington, D.C., next month before the April 14 hearing into the vote-buying scandal surrounding Salt Lake City's Olympic bid.
So far, Romney has not been asked to appear before the congressional committee. The witness list is limited to the IOC and representatives of the U.S. Olympic Committee.
IOC President Juan Antonio Samaranch is on the list, but there's now a suggestion he'll rely on IOC Vice President Anita DeFrantz of the United States or IOC Vice President Dick Pound of Canada to defend the IOC.
DeFrantz, one of two IOC members from the United States, met earlier this week with McCain. Jim Easton, the other U.S. member of the IOC, has already criticized the congressional effort as politically motivated.