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Sources: Feds unlikely to join Landis’ whistleblower suit

  • By Neal Rogers
  • Published Feb. 21, 2013
  • Updated Feb. 22, 2013 at 12:39 AM EDT
VeloNews understands that U.S. attorney general Eric Holder will not join Floyd Landis' Qui Tam case against Lance Armstrong and U.S. Postal Service team management. Photo: Saul Loeb | AFP

BOULDER, Colorado (VN) — Sources close to an ongoing federal whistleblower lawsuit against Lance Armstrong have told VeloNews that U.S. attorney general Eric Holder is unlikely to join the case filed by Armstrong’s former U.S. Postal Service teammate Floyd Landis.

If true, this would mark the second instance in 12 months that the U.S. Department of Justice (DOJ) has opted out of filing formal charges against Armstrong in relation to the years-long systematic doping within the U.S. Postal Service team that Armstrong admitted to on television last month.

In February 2012, U.S. attorney for the Central District of California Andre Birotte shut down an 18-month investigation, which had included agents from the Federal Bureau of Investigation (FBI), the Food and Drug Administration (FDA), and the U.S. Postal Service, looking into federal crimes such as fraud, drug distribution, and witness tampering.

That announcement was made late on a Friday afternoon immediately before the Super Bowl, in what is often referred to as a “Friday news dump,” just hours after surprised prosecutors and agents had been interviewing witnesses.

As the New York Daily News reported in January, DOJ officials responsible for making the decision on whether to join the suit turned to Holder after being contacted by Armstrong lawyer Robert Luskin in December about a possible settlement based on the $30 million the Postal Service paid to sponsor its teams from 1998-2004.

Filing under the Federal False Claims Act, Landis launched a Qui Tam case in 2010, suing Armstrong and former U.S. Postal team associates, including Thomas Weisel, for defrauding the government by violating the sponsorship agreement between the team and the U.S. Postal Service.

Defendants in the suit include Tailwind Sports and Montgomery Sports, owned by wealthy San Francisco financier Weisel, as well as Austin-based Capital Sports & Entertainment, which lists Armstrong, Johan Bruyneel, Bill Stapleton, and Bart Knaggs among its principals.

The New York Daily News published the sealed 33-page federal whistleblower lawsuit, dated June 10, 2010, in January.

If Landis were to win the suit, he could stand to gain a percentage, up to 25 percent, of three times what the Postal Service spent — roughly $90 million. If the U.S. Department of Justice were to intervene, Landis would be entitled to up to 15-25 percent of any money the government recovered, rather than 25-30 percent if he pursues the case without the government’s resources.

Should the government decide to join the suit, chances of a conviction, or convictions, were believed to have been much greater.

Yet credible sources told VeloNews Thursday that Holder had decided not to join the suit, with an announcement from the Department of Justice imminent — potentially set for another Friday afternoon. Those sources asked not to be named due to the sensitivity of the matter.

The Department of Justice has been tight-lipped about its original investigation, the decision to shut it down, and whether or not it would intervene in the federal whistleblower case.

After the initial investigation was shuttered in February 2012, Birotte’s spokesman, Thom Mrozek, said only that “we cannot and will not discuss the internal deliberations” that led to the decision, and that “the decision was made with a full and fair consideration of all the relevant evidence and law.”

Messages sent to Holder by VeloNews on Thursday were not returned.

However, VeloNews has obtained a letter written by U.S. Anti-Doping Agency CEO Travis Tygart to Holder, dated January 14, in which Tygart defended Landis, questioned DOJ tactics, and pleaded for Holder to join in Landis’ civil case.

“Fraud and other crimes were committed,” Tygart wrote. “Illegal drugs were used and trafficked, both within and outside the United States; witnesses in both the USADA and federal investigations were intimidated; riders were coerced into using drugs to keep their places on the teams; an insurance company (SCA Promotions) was defrauded by false testimony under oath; and sponsors (including the U.S. Postal Service) paid tens of millions of dollars to the team based on representations that there was no doping, which turned out to be cold, calculated lies… Further, we suspect that the evidence of fraud assembled by the FDA and FBI, working with the U.S. Attorney’s Office for the Central District of California, exceeds the evidence of fraud which USADA has uncovered.”

In the same letter, Tygart also offered to share USADA evidence with the DOJ.

“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. We would also be happy to meet with you to discuss this request.”

Tygart said he could not comment on the situation when contacted by VeloNews on Thursday afternoon.

In addition to Holder, the letter went to Stuart Delery, acting assistant attorney general, and Ronald C. Machen, Jr., U.S. attorney, out of Washington D.C. It’s understood that Machen’s office would handle any Qui Tam claim. His is also the office that lost the Roger Clemens PED case, perhaps a reason why Tygart acknowledged in his letter that, while the sporting aspect of the Armstrong probe was unappealing for the feds, the DOJ should press on regarding those who made the doping financially possible.

“This situation is different. USADA has already done the work in the sports case and won,” Tygart wrote. “Indeed, Mr. Armstrong and his representatives have admitted that doping took place on the United States Postal Service cycling team. Unlike the Clemens case, the central fact of doping is no longer an issue. What remains unresolved is the massive economic fraud perpetrated by individuals who are outside USADA’s jurisdiction.”

Read the full USADA letter to attorney general Eric Holder >>

Politically influenced?

While the Department of Justice has refused to discuss its decision-making processes, speculation is rife that it has been politically influenced. It has taken nearly three years for the Justice Department to decide whether or not to join the Landis case, a period of indecision that is nearly unprecedented in Qui Tam cases. The longer the DOJ has delayed, the more open it has become to political meddling.

In an October 2012 article titled “The Influence Peddler,” journalist Selena Roberts reported that a source told her that former U.S. president Bill Clinton persuaded Birotte into unexpectedly closing down the DOJ’s 18-month investigation. The DOJ denied that its decision was the result of political pressure.

Armstrong has several powerful friends on Capitol Hill, including California senators Barbara Boxer and Dianne Feinstein. Armstrong is friendly with Clinton as well — Armstrong was frequently a speaker at the annual Clinton Global Initiative — and a top-ranking member of Armstrong’s legal team, Mark Fabiani, worked in the Clinton White House. Fabiani’s business partner, Chris Lehane, worked in the White House with Clinton attorney Lanny Breuer, who is now the assistant attorney general for the Criminal Division of the U.S. Department of Justice.

On February 3, 2012 — the same day the DOJ dropped its investigation — Livestrong donated $100,000 to Planned Parenthood. The reproductive healthcare provider is a favorite project of Feinstein’s, and it was Feinstein who appointed Birotte, the former inspector general of the Los Angeles Police Department, to his U.S. attorney post in late 2009.

And in September 2012, The Los Angeles Times reported that 23 California state senators delivered a letter to Feinstein and Boxer, asking them to request that the Office of National Drug Control Policy conduct a “comprehensive review” of USADA after it stripped Armstrong of his seven Tour de France titles.

In that story, the Times also reported that Armstrong’s Livestrong Foundation had given $1.5 million to a California ballot measure in June 2012 that aimed to raise the state tax on a pack of cigarettes by $1. The proposal was defeated.

WADA: ‘An open-and-shut case’

World Anti-Doping Agency‪ director general David Howman‬ told VeloNews Thursday that if the Department of Justice does not join Landis’ Qui Tam case, it would essentially be acting against the interest of those who passed the Federal False Claims Act, which was enacted in 1863, during the Civil War, and amended in 1986 and 2009. ‬‬‬

“I think if [the US. federal government] are going to justify the reason for the legislation, it helps to have the support of those who have given truthful, whistle-blowing evidence,” Howman said. “If they don’t, it shows they don’t support the legislation itself.

“From a cycling perspective, you have an individual [Landis] who was described as a scumbag by the federation president, yet he’s been totally vindicated, both by USADA and by Armstrong himself, who has admitted to everything. So we’re really talking about an open-and-shut case.”

Howman conceded that, ultimately, this was a decision for the U.S. federal government, and that WADA respected the DOJ’s sovereign right to make such decisions.

“WADA has no actual role, nor should it at that level, “ Howman said. “What we are trying to do, in society in general, is to encourage people who have information about fraud, and crimes of that general nature, to come forward and give that information. Whistleblowing laws are meant to incentivize that, and to do what legislators say is the right thing. So those who work for the legislature would vindicate their jobs by supporting those people who do come forward.”

VeloNews reporter Matthew Beaudin contributed to this report.

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Neal Rogers

Neal Rogers

Neal Rogers is editor in chief of Velo magazine and VeloNews.com. An interest in all things rock 'n' roll led him into music journalism while attending UC Santa Cruz, on the central coast of California. After several post-grad years spent waiting tables, surfing, and mountain biking, he moved to San Francisco, working as a bike messenger, and at a software startup. He moved to Boulder, Colorado, in 2001, taking an editorial internship at VeloNews. He never left. When not traveling the world covering races, he can be found riding his bike, skiing, or attending a concert.

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