Five-Ring Scandal

Andre Guelfi loves the olympic business. Or, rather, the business he gets from the Olympics. Known to the press and police of France as Dede the Sardine, the 78-year-old Guelfi is a flamboyant, Moroccan-born French entrepreneur who's played on his friendship with International Olympic Committee president Juan Antonio Samaranch to hustle up deals worth hundreds of millions of dollars. Or so he claims. Guelfi, who earned his fortune as a fishing magnate, says that he helped Moscow fight the Olympic boycott in 1980 and backed Tashkent's brief bid for the Games in the 1990s. Along the way, Guelfi got a cut of more than 40 business deals. He'd have won the 2004 Olympics for St. Petersburg, he boasts, if only he hadn't been thrown in jail by a French judge on allegations related to another scandal.

Though wealthy and well-connected, Guelfi is not the kind of friend that Samaranch can use right now. Since December the IOC has been weathering the worst crisis in its history. Last week it held an emergency session to address charges of corruption and expelled six members who'd refused to resign. Another nine received "warnings." One remains under investigation. The U.S. Senate will be holding hearings on Olympic corruption next month. Government investigators in Sweden and the United States are hot on the committee's trail.

Perhaps worst of all, the sponsors that pay the IOC hundreds of millions of dollars to use the Olympic rings are worried the trademark may be tarnished. "We promised them to clean it up and to begin important reforms inside the IOC," Samaranch insisted last week. "We kept our promise."

But Samaranch's highly paid media advisers are finding it difficult to distance him from scandal--and from men like Guelfi. Clubby friendships and personal loyalties are the essential elements of the Samaranch style. While IOC staffers insist that Guelfi has exaggerated his ties to Samaranch, they admit that he flew Samaranch to Moscow, Uzbekistan and possibly other destinations. Guelfi, who pilots his own jet, told NEWSWEEK, "When I take Samaranch in my airplane I pay everything." He claims each trip costs around $150,000. As one Samaranch spokesman puts it, "[Guelfi] made it very difficult in some respects to say no."

Part of the time that Samaranch was traveling with him, Guelfi was working his Central Asian contacts for Elf-Aquitaine, a company now mired in corruption investigations. (It was the Elf connection that landed Guelfi in jail in 1997, when an investigating magistrate was pressuring him to cooperate as a witness.) Samaranch, meanwhile, was building support for the IOC in the newly independent republics of the former Soviet Union, such as Uzbekistan. "It was a free plane ticket to a very difficult place to reach," says IOC spokesman Franklin Servan-Schreiber. "It allowed the president to rope in several new countries."

Later, Guelfi would trade on his Olympic connections to drum up further business for himself. In 1997 St. Petersburg bid for the 2004 Olympics, and Guelfi offered his Russian friends a deal. If he failed to deliver the Olympics, "I don't ask for a cent from St. Petersburg, or from anyone," he told NEWSWEEK. "If I succeed I want to be the one who chooses all the companies to do the major construction projects there will be to build." In the end, Athens got the Games. But Guelfi still made dozens of new business contacts.

There is no suggestion by Guelfi or anyone else that Samaranch himself was on the take, but his self-importance is right out front, waiting to be exploited. "The world needs the Olympic Games," he said last week. "It's the most important event in the world." Pandering to that view, a representative of the Stockholm bid committee for the 2004 Olympics lobbied members of the Swedish Parliament to nominate Samaranch for the Nobel Peace Prize in 1997. They declined. But a replica of a statue dedicated to peace that stands outside the United Nations was donated to the Olympic Museum. Who paid for it and how is part of the Swedish prosecutor's investigation into illegalities tied to Stockholm's bid.

Until the Olympic scandal started breaking in Salt Lake City in December, neither Samaranch nor many others on the committee exhibited much concern over the appearance of impropriety. Several IOC members who have been disciplined say they were unaware that they were doing anything wrong by soliciting scholarships or medical care for their families, or funding for the sports organizations they ran. Some who were wined and dined by Salt Lake City and other contenders remain on the committee. Since Guelfi is not an IOC member, there's no brief for him to be investigated. Meanwhile, Samaranch's peers voted 86 to 2 at the IOC meeting last week to keep him as president until 2001. Now, that's what friends are for.