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More fighting over legal fees

Pair’s attorneys trying to stop plan; SLOC stands firm

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Attorneys for Tom Welch and Dave Johnson are trying to stop a proposal that would pay their legal fees only if they agree to waive future claims the former bid leaders might have against the Salt Lake Organizing Committee.

But SLOC president Mitt Romney, who's pushing the proposal, said Thursday nothing he's heard so far has changed his mind, including a memorandum written by Brigham Young University law professor Fred Gedicks that argues Welch and Johnson are entitled to the advancement of their legal fees by SLOC.

"I'm not surprised that attorneys being hired by Tom and Dave would support their view. That's what they're paid to do," Romney told the Deseret News Thursday.

He is scheduled to meet with Beth Wilkinson, the Washington, D.C.-based attorney representing SLOC in the scandal, before the issue of advancing Welch's and Johnson's legal fees goes before members of the SLOC Management Committee Friday morning.

"What our attorneys are charged with doing is saying what are our obligations as an organization. We haven't hired them to say, 'Hey, tell us why we don't have to pay,' " Romney said.

Gedicks, who analyzed the issues of indemnification and insurance as a consultant for Snow Christensen & Martineau, the law firm representing Johnson, argues that SLOC is already obligated to advance the legal fees based on its past dealings with Welch, the former Olympic bid president, and Johnson, the former vice president.

Romney believes that SLOC not only does not have to advance fees to Welch and Johnson but may be prohibited from doing so based on a provision in its bylaws.

Instead, the SLOC president is proposing that SLOC's insurance company cover Welch's and Johnson's costs of fighting the conspiracy, racketeering and fraud charges they face in federal court related to the more than $1 million in cash and gifts handed out to the International Olympic Committee during the bid to host the Winter Games.

In exchange, Romney wants Welch and Johnson to forgo any further claims against the organizing committee, a condition Welch and his attorneys aren't willing to accept.

When the investigation surfaced into alleged wrongdoings by bid organizers more than 20 months ago, SLOC agreed to pay Welch's and Johnson's attorneys fees if they complied with some conditions, including the signing of an insurance "subrogation" agreement, which handed SLOC the right to handle all their insurance matters, Gedicks said.

SLOC also required them to cooperate with its ethics investigation, which eventually placed blame for the scandal on Welch and Johnson.

"They (SLOC officials) had taken the authority the bylaws gives them, and they had decided to pay fees," Gedicks said. "There is nothing in the correspondence that says we'll pay them until you are indicted."

Because SLOC became contractually obligated to pay the attorneys' fees through its actions and correspondence with Welch and Johnson in March and April 1999, it cannot now say "we're not obligated," Gedicks said.

But Romney said court documents and statements made by attorneys for Welch and Johnson suggested the pair violated a provision in SLOC's bylaws against "willful misconduct" by accepting cash from a sponsor without reporting it to the bid committee

E-MAIL: hans@desnews.com ; lisa@desnews.com