Negotiations between Salt Lake's two bid leaders and federal prosecutors ended only a few hours after they began Monday, after attorneys for the pair rejected a deal that could have included jail time on a felony charge.
Max Wheeler, the attorney for former Salt Lake Organizing Committee vice president Dave Johnson, described the session for the Deseret News Tuesday and said he believes his client and former SLOC president Tom Welch could be indicted soon.
"They want us to admit to facts that we do not believe are accurate or true, so we told them that we couldn't do it and negotiations are finished. We're just waiting for the kitchen sink to be thrown at us," Wheeler said.
A spokesman for the U.S. Department of Justice had no comment.
Wheeler, who returned to Salt Lake City Monday night, said the federal government wanted Johnson and Welch to plead guilty to a single felony charge, involving a conspiracy to impede the lawful function of the Internal Revenue Service.
The conspiracy apparently involved two of the three other people already charged in the case, local businessman David Simmons and former U.S. Olympic Committee official Alfredo LaMont, Wheeler said, as well as "some anonymous cash contributors."
Simmons pleaded guilty in August 1999 to a misdemeanor tax violation in connection with his hiring of the son of an International Olympic Committee member at the request of bidders.
LaMont pleaded guilty to two tax felonies in March. One was a conspiracy charge that allegedly involved two unnamed officials of the Salt Lake bid committee in an attempt to defraud the IRS of taxes owned on money LaMont earned from consulting for the bid.
Sentencing guidelines associated with the charge could have been satisfied by home confinement, Wheeler said, "but the government was reserving the right to argue for some jail time."
Fines were not discussed during the five-hour meeting in Washington, D.C., Monday, which was supposed to be the first of many between now and July 28. That's the deadline set by both sides for a plea agreement.
Wheeler said he has no indication federal prosecutors will come back with a new proposal. "We have no plans on doing anything else," he said. "If they come back to us we will be happy to talk, but I don't expect that will happen."
This is not the first time negotiations have broken off in the case. Last week, Johnson and Welch rejected another plea agreement, and the Justice Department appeared ready to file indictments against the pair.
However, both sides signed an agreement that in effect extended the negotiations for another two weeks as SLOC President Mitt Romney and other local officials began a push to avoid a trial.
They fear that a trial could further damage the 2002 Winter Games, which have already been hurt by allegations that bid officials tried to buy the votes of International Olympic Committee members with more than $1 million in cash, gifts, trips and scholarships.
Romney, reached on vacation, had little comment Tuesday on the stalemate.
"I won't jump into speculation," Romney told the Deseret News. "I've told you before I hope this can reach a speedy conclusion. That's not going to weigh heavily on either of the parties."
Romney said reports that SLOC would be willing to pay the legal expenses of Johnson and Welch if they plead guilty were not true. "I vehemently oppose offering any financial incentive for Mr. Welch and Mr. Johnson to settle.
"Our position is they should do exactly what they believe is in their own best interest. At no time has the board or its committees considered any incentive payments whatsoever for settlement," Romney said.
The issue was apparently raised during a closed-door session of the SLOC Management Committee last Thursday. The organizing committee has already paid about $1 million in legal fees.
Johnson and Welch apparently would be responsible for those fees if they either plead or are found guilty in the case according to the organizing committee's bylaws. SLOC is covered by insurance on legal matters.
Wheeler said both he and William Taylor, Welch's attorney, had already instructed their clients not to consider such offers. "That's a form of coercion we not not want to be a factor in making this judgment call," Wheeler said.
He said Johnson "is very positive at this stage. . . . The thought of being charged, the thought of being the focus of the unlimited resources of the federal government is a very scary, frightening proposition.
"Once you learn what they're going to accuse you of, if you have defenses to it, which we clearly do here, you become reconciled to the fact that you're in a fight and you're going to have to stand up and defend yourself."
Contributing: Hans Camporreales