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Romney's Olympic ties helped him reap campaign funds

By Bob Hohler
Globe Staff / June 28, 2007
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SALT LAKE CITY—The day Mitt Romney took over the scandal-tainted Salt Lake City Olympics in 1999, he pledged not to exploit the role for political gain and announced that he would not accept any severance pay when he finished the job. Public records indicate he did otherwise.

Romney not only accepted a $476,000 severance package from the Salt Lake Organizing Committee, according to federal tax records, but he helped to lobby the committee for similarly large pacts for his 25 senior managers, 17 of whom contributed to his 2002 Massachusetts gubernatorial campaign or the state Republican Party soon after the Winter Games.

Romney donated the severance package money as well as his Olympic salary to charity, his spokesman says, and Romney himself says that soliciting campaign contributions from friends and colleagues is a common and legitimate practice.

In addition to tapping senior managers, Romney also solicited donations from the organizing committee's 53-member board of trustees, 14 of whom contributed to his campaign or political action committees during his governorship. Romney also received political funds from individuals associated with companies such as Nu Skin, Questar, and NBC that sponsored or did business with the organizing committee.

More recently, branches of Romney's Commonwealth Political Action Committee accepted $10,000 from a businessman and family friend who pleaded guilty to a tax fraud charge and was one of the two individuals held culpable for wrongdoing in the Olympic scandal.

    All told, Romney reaped more than $1.5 million in campaign funds during his governorship from individuals and families with ties to the Olympics.
Many of his Olympic-related donors have since joined a massive fund-raising movement for Romney's presidential campaign. Utah residents have contributed a significant proportion of Romney's presidential campaign financing this year.
''It would be hard to underestimate how significant his role in the Games has been in terms of his fund-raising ability in Utah,'' said Jeff Hartley, former executive director of the Utah Republican Party. ''Even our long-term senators haven't had the success he has had pulling money out of Utah. He's a fund-raising rock star in Utah.''

No one has alleged any quid pro quo between Romney's support for larger severance packages and his campaign's solicitation of the recipients for contributions soon after the Games. Nor has anyone cited any impropriety in Romney seeking campaign funds from Olympic trustees, sponsors, donors, and contractors in the afterglow of the closing ceremonies.

Romney, in a Globe interview, described soliciting campaign funds from individuals with ties to the Olympics as part of his fundamental strategy.

''We solicited everybody for political contributions,'' he said.

Though Romney accepted the severance package, he donated the money to charity, according to his spokesman, Eric Fehrnstrom. Asked what charities received the money, Fehrnstrom said Romney does not discuss publicly his charitable giving.

Romney's critics, however, say there is a measure of duplicity in his vowing to separate his political ambitions from the Olympics, only to quickly capitalize on the experience for his campaign.

''The word 'disingenuous' comes to mind,'' said Ken Bullock, a trustee of the Salt Lake committee and prominent Romney critic who has spurned his campaign's fund-raising requests.

Romney's supporters on the Salt Lake Organizing Committee said they saw nothing inappropriate about him soliciting them for contributions.

''In politics, you raise money from people you know,'' said Robert Garff, who was chairman of the committee and previously served as speaker of the Utah House of Representatives. ''You don't ask total strangers for money.''

Garff also defended the board's approval of Romney's request to boost the severance packages for senior managers. Under the original plan, senior managers were to receive up to one year's salary in severance pay. Under the initiative Romney backed, they received about 18 months of salary, in addition to an estimated $10,000 in contributions to their retirement savings plans.

As a result, Romney's chief operating officer, Fraser Bullock, and senior vice president for legal affairs, Kelly Flint, each received $367,514 in severance in addition to their annual salaries of $217,692. The rest of the senior management received similar severance packages commensurate with their salaries.

Several members of the nonprofit organizing committee said they reluctantly approved the increased severance deals. The trustees served as unpaid volunteers.

''A few of us were surprised by how big [the severance packages] were,'' said Joan Guetschow, a former Olympic biathlete who served on the board. ''But I didn't have the experience to know what would be acceptable for that level of management, so I didn't object.''

In comparison, senior managers for the 1996 Summer Games in Atlanta received an average of two months severance pay on salaries that ranged from $180,000 to $200,000, according to Richard Stogner, deputy chief financial officer of Atlanta's organizing committee. The committee's president and chief executive, Billy Payne, received an annual salary of $669,000, which Stogner attributed to the ''substantial difference in the size and scope of the Summer and Winter Games.''

In Romney's case, he signed an offer letter in 1999 acknowledging he would be paid $280,000 annually for the Olympic job and receive up to one year in severance pay after the Games. Romney announced the day he started the job that he would not accept any wages unless the organizing committee completed the Games with a profit. He also told the Salt Lake Tribune one of his ''absolutes'' was that he would ''not accept any severance pay when his three-year term is complete.'' He also cited his pledge to forgo any severance pay in his book, ''Turnaround: Crisis, Leadership, and the Olympic Games.''

When the organizing committee posted a surplus of nearly $100 million after the Games, Romney accepted $922,980 in total salary as well as the $476,000 severance package. Fehrnstrom said Romney gave his salary as well as the severance pay to charity. Romney and his wife, Ann, also donated $1 million to the organizing committee during his tenure.

Fraser Bullock, reminded of Romney's pledge to refuse his severance pay, said, ''I think I made him take it. I said, 'Mitt, you earned it like everybody else. Here it is.' ''

Bullock, a Utah venture capitalist who worked with Romney at Bain & Company in the 1980s, joined several trustees of the organizing committee among Romney's top Olympic-related donors. Bullock and his family donated $53,000 to Romney's campaign committees and the Massachusetts Republican Party during his governorship. Bullock and his wife, Jennifer, also contributed $2,000 each to Romney's 1994 US Senate campaign.

The largest donors among the trustees included Spencer F. Eccles, a retired Utah banker, whose family gave $85,000 to various Romney-related committees; venture capitalist James R. Swartz, who contributed $51,150; and John Price, a Utah real estate magnate, who donated $21,500. Eccles and his wife, Cleone, donated $1,000 each to Romney's 1994 campaign.

''He reached out to all of us,'' said Paul George, a Wellesley lawyer who served as a trustee of the Salt Lake committee as well as the United States Olympic Committee.

George and his wife, Helen, gave a combined $2,000 to Romney's gubernatorial campaign.

''As one of his constituents on the board, I saw a lot of talent that would be helpful in Massachusetts,'' George said.

Romney also reached out to wealthy individuals in Utah who he previously solicited for contributions to the Olympic movement. Notable among them were Jon Huntsman Sr., whose family donated more than $192,000 to Romney's campaigns and the Massachusetts Republican State Committee during his governorship. Huntsman, whose family also gave a combined $6,000 to Romney's 1994 campaign, later joined Romney's presidential campaign as a member of his national finance committee.

Romney's gubernatorial campaign also rang up major contributions from individuals associated with companies that sponsored or did business with the Salt Lake Games, particularly Utah-based Nu Skin. The firm's executives and their families gave $118,500 to Romney's committees during his term in office.

Executives with Marriott International, another Olympic sponsor, rank among Romney's top donors, though his ties to the Marriott family predate the Salt Lake Games by many years.

Romney's federal PAC also received $5,000 last year from Dick Ebersol, chairman of NBC Universal Sports & Olympics, which paid $545 million to broadcast the 2002 Games. Ebersol, who described himself as generally a liberal Democrat, said he has yet to decide how he will vote for president. But he said he was enormously impressed with Romney's performance in managing the Salt Lake Games.

''I believe a large part of governing is being a great businessman,'' Ebersol said. ''We haven't had a great businessman as president of the United States for a long, long time.''

Romney's contributors during his governorship also included David E. Simmons, who pleaded guilty in 1999 to misdemeanor tax fraud involving the Olympic scandal. Simmons admitted creating a sham job at his former communications company to help Jung Hoon Kim, the son of an influential South Korean on the International Olympic Committee, try to obtain legal permanent resident status in the United States.

Romney has taken credit for restoring the Olympic movement's reputation after the scandal, and has described federal prosecutors as inept for failing to secure convictions against two key defendants in the scandal prosecutions. But his campaign twice accepted donations from Simmons. On March 31, 2006, Romney's PACs in New Hampshire and Iowa each took $5,000 contributions from Simmons, according to campaign finance records.

Asked why Romney's PACs accepted the funds, Fehrnstrom replied via email that Romney has known members of the Simmons family for a number of years, and that "What Mr. Simmons did was wrong, but he expressed regret for it and accepted responsibility for his actions. It's time to put the past behind us."

Simmons also has donated to the campaigns of two of Romney's rivals for the Republican presidential nomination. In March, he gave $2,300 to John McCain 2008, Inc., and $1,000 to the Rudy Giuliani Presidential Committee, Inc.

Bob Hohler can be reached at hohler@globe.com.

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