The SLOC Management Committee voted unanimously Friday to negotiate "a fair settlement" with Tom Welch and Dave Johnson over paying the bills for their legal defense.
The vote came after a 2 1/2-hour discussion behind closed doors with the Salt Lake Organizing Committee's Washington-based attorney, Beth Wilkinson, on the details of a plan proposed earlier this week by SLOC President Mitt Romney.
Welch, who led the now-tainted bid for the 2002 Winter Games, told the Deseret News that while the management committee's decision was reasonable, Romney's plan remains unacceptable.
The management committee's action authorized Romney to continue to negotiate a settlement with the former bid leaders that includes payment of their legal fees by the organizing committee's insurance company "while resolving all other claims against SLOC."
Romney announced a plan earlier this week that would require Welch and Johnson to give up any potential claims
against the organizing committee, including the $1 million Welch lost when his consulting contract was canceled shortly after the scandal surfaced.
"If they're standing on that proposal and there's no movement, then, no, we won't reach an agreement," Welch said from his California home Friday. "Hopefully reasonable minds will be able to come together and find a solution.
"I don't want to get into a fight with SLOC. I don't want to hurt the Olympics. But at this point, I need to protect myself," he said. Welch will be in Salt Lake City early next week with his Washington-based attorney William Taylor.
Romney, too, held out the hope that a settlement will be reached.
"I think there's opportunity for us to reach a common ground," he said. "Obviously, I recognize that if we can't reach agreement, one can always go to a court. I would be surprised if that were the result."
Welch's attorney, William Taylor, could not be reached for comment Friday, and Max Wheeler, Johnson's attorney, did not return calls for comment.
Wheeler said during an interview Thursday that he is willing to discuss Romney's proposal but that SLOC's attorneys had not responded to an invitation for a meeting. He also reaffirmed that "both Tom and Dave have future claims and obviously SLOC must agree that they do or they wouldn't be so insistent on their waiving the claims."
Longtime Olympic scandal observer Paul Cassell, a University of Utah law professor and former federal prosecutor, does not believe the management committee's action was a loss for Welch's and Johnson's defense.
"Certainly they didn't get all they were asking for, but on the other hand the resolution was not necessarily the one that Mitt put forward either," Cassell said. "I think they are going to continue to look for some happy medium between the various positions."
SLOC and its insurance company, Fred A. Moreton & Co. of Salt Lake City, have worked out a deal that Romney said remains contingent upon Welch and Johnson giving up their claims against the organizing committee.
Under the terms of the deal, the insurance company would advance legal fees to Welch and Johnson. Those fees would have to be repaid if the two, who face felony fraud, conspiracy and racketeering charges in federal court, are found guilty.
SLOC would give up its fight to get the insurance company to pay legal bills related to the bid scandal for other current and former Olympic officials. Romney said those bills total between $2 million and $3.5 million, depending on who's doing the accounting. Welch's and Johnson's legal bills before the indictment added up to more than $700,000, he said.
"That obviously costs us something. We're giving up a claim for well over $2 million. What we're going to get in return is we're going to get Tom and Dave to agree they're not going to make claims against us," Romney said.
Much of Friday's closed-door discussion dealt with a series of 18 questions raised by Romney, including whether SLOC could or couldn't pay the legal fees itself. Romney has said the possible "willful misconduct" of Welch and Johnson might prohibit payment.
He declined Friday to tell reporters whether SLOC's legal counsel agreed with him, citing attorney-client privilege. "Surely in these negotiations, we will discuss the issue of willful misconduct," Romney said.
"You can't go into a game of poker with all your cards on the table, so it's understandable that Romney is playing his cards closes to the vest now," Cassell said. "The board of trustees knows they have a very, very skilled negotiator on their side of the table — Mitt Romney — and so, they probably want to see what he can get."
In addition to the SLOC Management Committee, the full board of trustees also voted unanimously on a motion made by Salt Lake City Mayor Rocky Anderson to authorize the negotiations.
Those negotiations, Anderson said in his motion, "should comply with fundamental principles of fairness to all concerned," an issue that had been raised by Gov. Mike Leavitt. The governor's representative, Nolan Karras, supported the motion.
Among the unanimous votes cast Friday were those by several former bid leaders, including former SLOC Chairman Frank Joklik, who is now a trustee. Joklik said he had no concern about voting because SLOC attorneys said there was no conflict.
Romney agreed.
"The comments that Mr. Welch and Mr. Johnson have been reported to make about potentially going after the principals and so forth, gee, maybe they include everybody in that room. We frankly have to be able to make decisions with the board we have," he said.
Cassell believes that regardless of the approach to the negotiations, in the end Welch and Johnson will get their legal fees: "There may be some give and take on some of the other issues, but I would expect at the end of the day Welch and Johnson will have the ability to provide for their defense," he said
Trustees also had a quick look privately at the design of the medals that will be awarded to athletes at the 2002 Games, as well as some of the plans for the Olympic torch relay. The International Olympic Committee will be asked to approve the medals next month.
The design of the gold, silver and bronze medals being produced by local jeweler O.C. Tanner may be made public during a celebration being planned for Sept. 26 to mark 500 days remaining until the start of the 2002 Games.
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