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Analysis: Why the feds may have passed on USPS money man Weisel, others

  • By Matthew Beaudin
  • Published Feb. 27, 2013
The Department of Justice is suing Lance Armstrong and his former team director, Johan Bruyneel, as part of a whistleblower suit filed by ex-Armstrong teammate Floyd Landis. Photo: Graham Watson | www.grahamwatson.com

BOULDER, Colorado (VN) — When the Department of Justice announced last Friday that it was joining the whistleblower suit filed against Lance Armstrong and others, the immediate losers appeared to be Armstrong and his longtime manager, Johan Bruyneel.

They became federal defendants while Thomas Weisel, the wealthy San Franciscan who bankrolled the U.S. Postal Service team, avoided the heavy hammer of the Department of Justice. Others who profited from Armstrong’s successes — now widely seen as ill-gotten — were off the federal books, for now, as well.

Armstrong, though, found himself on the government’s hook for the second time, having already emerged from a previous two-year criminal inquiry unscathed, at least until anti-doping authorities took over. The Belgian Bruyneel now faces a bumpy legal road stateside, in addition to his pending issues with the United States Anti-Doping Agency, which he has yet to address.

The feds passed — at least for now — on intervening with respect to Weisel, and some of those tied to Austin-based Capital Sports and Entertainment (CSE), which lists Armstrong, team manager Bruyneel, attorney Bill Stapleton, and longtime Armstrong associate Bart Knaggs among its principals and who Floyd Landis named in his suit. Stapleton and Knaggs were passed over by the feds as well.

Instead, the DOJ will focus on Armstrong, Bruyneel, Tailwind Sports LLC, and Tailwind Sports Corporation as the defendants financially responsible for damages to the USPS.

The question, though, is why. Why Bruyneel and not Weisel? As usual, the answer may come down to money. Those whom the feds passed on may be working on settlement deals.

“The government’s action would be interpreted several ways,” wrote Mark Stichel, a Baltimore-based attorney who has litigated civil cases in state and federal courts throughout the U.S., in an e-mail to VeloNews.

“One interpretation is that the government believes that Armstrong and Bruyneel were the primary architects of the fraud on the government,” Stichel wrote. “Another interpretation is that the government may have reached or is near reaching settlements with the other defendants and that Armstrong and Bruyneel were balking at settlement so it intervened against them only to prod them into settlement.”

The government can intervene at a later date, though it’s on the clock now: it has 60 days from Feb. 22 to do so. The Department of Justice could also bring additional charges, “such as those based on common law fraud, breach of contract, unjust enrichment and other theories that have limitations periods that arguably do not run so long as the defendant is fraudulently concealing his conduct,” Stichel wrote.

Stichel said the government can also ask that the cases be dismissed or settled, or it could intervene “at a later date and for good cause.”

There was speculation last Thursday that the feds wouldn’t intervene on the Landis suit in general, but that faded as it was reported that the Armstrong camp couldn’t reach a palatable settlement figure regarding the perceived damages to the U.S. Postal Service.

Travis Tygart, the CEO of the United States Anti-Doping Agency, pushed hard on the Department of Justice to intervene in a Jan. 14 letter to U.S. Attorney General Eric Holder Jr. and others within the DOJ. If anything, the letter illustrates USADA’s findings of — and appetite for — financial wrongdoings that led to systemic PED usage among the pieces of Armstrong’s vaunted Blue Train.

“USADA’s specific request here is that the Justice Department join in the reported pending civil action to bring to light and impose financial consequences on the non-sports individuals who owned and controlled the U.S. Postal Service team, which we now know was involved in a massive economic fraud on the United States Postal Service and other easily-identifiable individuals, companies, and the public. USADA is willing to share with your office the information it has gathered in its investigation,” Tygart wrote.

Whether or not the government gets to the end of the financial maze that enabled such widespread doping, however, remains to be seen.

FILED UNDER: Analysis / News / Road TAGS: / / / / / /

Matthew Beaudin

Matthew Beaudin

Matthew Beaudin graduated from the University of Colorado at Boulder's journalism school in 2005 and immediately moved to Telluride, Colorado, to write and ski, though the order is fuzzy. Beaudin was the editor of the Telluride Daily Planet for five years. He now lives in Boulder, where he joined VeloNews in the spring of 2012. Music. Coffee. Bikes. That about sums it up.

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