Fri January 18, 2013
Lance Armstrong's Confession Could Cost Him Millions
Originally published on Fri January 18, 2013 3:09 pm
In an interview that aired last night on the Oprah Winfrey Network, Lance Armstrong confessed that he doped. That confession, added to mountains of other evidence, could cost him millions of dollars. There are three groups of people he may owe money to:
1. SCA Promotions
SCA is a company that underwrote millions of dollars of bonuses that Lance received for winning the Tour de France. Now that he's been stripped of those titles — they want their money back.
SCA had already planned to sue Armstrong before his Oprah interview. Last night, the company's lawyer, Jeff Dorough, was watching for specific phrases that could make their case easier to win. Dorough says the company wanted Armstrong to say he hid the doping, and last night he did. He was also watching to see if Lance would implicate anyone else, but that didn't happen.
2. The U.S. Postal Service
The U.S. Postal Service spent about $30 million sponsoring Lance Armstrong's cycling team, according to ESPN and the Wall Street Journal.
A former teammate of Armstrong's, Floyd Landis, has filed a whistle-blower lawsuit on behalf of the U.S. government, alleging that Armstrong was the architect of a massive doping operation. If the Justice Department decides to join Landis in the suit, the amount of money they could win would triple-- up to $90 million. The Justice Department has not made public decision about whether to join the suit.
3. People he sued and threatened
Over the years, many people publicly accused Armstrong of doping. He sued and threatened many of those people and, in one case, in one case, he actually won damages from a newspaper for printing what he now admits is the truth. Now that paper has said they want their money back.
Forbes has estimated Armstrong's net worth at over $100 million.
AUDIE CORNISH, HOST:
From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.
ROBERT SIEGEL, HOST:
And I'm Robert Siegel. Lance Armstrong's televised interview with Oprah Winfrey made for must-see TV last night. After years of denials, the now disgraced cyclist admitted doping throughout much of his career. As Zoe Chace from NPR's Planet Money reports, his confession won't simply hurt his already tarnished reputation, it could also end up costing him tens of millions of dollars.
ZOE CHACE, BYLINE: For all the lawyers watching last night, and there were lots of lawyers watching, this was the moment.
(SOUNDBITE OF TELEVISION INTERVIEW)
OPRAH WINFREY: Yes or no, did you ever take banned substances to enhance your cycling performance?
LANCE ARMSTRONG: Yes.
DANIEL COYLE: There's a price tag to this confession. I think Armstrong's lawyers are keenly aware of exactly what that price tag is because you can figure it out.
CHACE: Daniel Coyle says there are lots of different kinds of people who could stand to make money here. He's been writing about Lance Armstrong for years. One of those with the biggest claim, he says, is the company called SCA.
COYLE: You've got about $12 million going to the SCA, a company that underwrote a bunch of Lance's bonuses.
CHACE: This gets complicated, but there was a company who had to pay out what amounts to insurance every time Armstrong won the Tour de France.
JEFF DOROUGH: By the 2004 Tour de France, we had already paid him, let's see, I want to say 4.5 million.
CHACE: 4.5 million they wouldn't have had to pay if he hadn't won. That's SCA lawyer Jeff Dorough. And now that he's been stripped of his titles, he hasn't won after all and they want their money back. SCA had this lawsuit all prepared and then they heard about Oprah.
DOROUGH: With news that he was going to do this interview kind of put things on hold.
CHACE: They watched, watching for specific phrases that would make their case even tighter. For example...
ARMSTRONG: I doped.
CHACE: Check. The SCA lawyer would also be looking for another phrase.
ARMSTRONG: I hid that fact.
CHACE: This could show fraudulent concealment.
ARMSTRONG: There wasn't that much out of competition testing, so you're not going to get caught.
CHACE: So check, but there was something else.
DOROUGH: I think we're also interested in who else he might implicate. You know, we feel like anybody who was involved in this conspiracy to defraud our company would be fair game.
CHACE: That one, no dice, at least not last night.
ARMSTRONG: I'm not comfortable talking about other people. I'm not. And it's all out there.
CHACE: But SCA is filing suit very soon. Another group that was probably watching, lawyers for the government. The U.S. Postal Service, remember, spent around $30 million sponsoring Lance Armstrong's team. Rick Morgan is a lawyer who specializes in government fraud cases.
RICK MORGAN: The money that was paid was paid under false pretences and in violation of the contract and so, that times three would be recoverable under the law.
CHACE: Potentially, $90 million at stake. The third group that's watching very carefully, people sued by Lance Armstrong. Remember, during the years when the allegations were swirling, many people came forward to say, yes, he was doping. In many cases, Armstrong would sue or threaten legal action. In one case, he actually won damages from a newspaper for printing what he now admits is the truth.
(SOUNDBITE OF TELEVISION INTERVIEW)
WINFREY: You're suing people and you know that they're telling the truth. What is that?
ARMSTRONG: That's a major flaw.
CHACE: A character flaw and a legal blunder. So far, at least one target of Armstrong's legal bullying is planning to sue him back, the Sunday Times of London. That could cost Armstrong a million-five. Others may follow. Forbes has estimated Armstrong's net worth at around $100 million. After Oprah, they have some recalculating to do. Zoe Chace, NPR News. Transcript provided by NPR, Copyright NPR.