Headstrong
California Lawyer

Headstrong

Illegal doping cost Lance Armstrong his seven Tour de France titles. Confessing to Oprah may cost him even more.

July 2013

"Yes."

Lance Armstrong had finally said yes.

"Did you ever take banned substances to enhance your cycling performance?" Oprah Winfrey asked him. It was a question Armstrong had heard countless times before.

"Yes," he answered for the first time in his life - at least publicly - in a television interview broadcast in January 2013. Years of vehement denials, some under oath, about his cycling career and his seven consecutive victories in the Tour de France - a race he's called "the toughest event in the world where the strongest man wins" - crumbled away.

Winfrey paused for a few seconds. Armstrong, dressed in an open-collared shirt and blue blazer, stared at her, his eyes flinty, nervous. If finally admitting that he'd cheated were cathartic, it didn't show. Armstrong seemed as truculent in truth as he'd been in falsehood.

Four more times Winfrey asked him questions to which she wanted only a yes or no response. Had he taken erythropoietin, commonly called EPO, a naturally produced hormone that stimulates the production of red blood cells?

"Yes."

Done blood doping? Yes. Testosterone and cortisone? Yes. Did he take "banned substances or blood dope" during each Tour de France win? Yes.

And then: Was it "humanly possible" to capture seven straight tour titles without doping?

"Not in my opinion."

It was the opinion of a disgraced and desperate man. Last August the United States Anti-Doping Agency (USADA) disqualified all of Armstrong's competitive results achieved since August 1, 1998 - and banned him for life from any sport that adheres to the World Anti-Doping Code.

In October 2012 the USADA issued a massive "Reasoned Decision," finding that Armstrong's professional cycling career was, as critics had maintained for years, "fueled from start to finish by doping." (United States Anti-Doping Agency v. Lance Armstrong, Report on Proceedings Under the World Anti-Doping Code and the USADA Protocol, Oct. 10, 2012.)

Helped by "a small army of enablers, including doping doctors, drug smugglers, and others," Armstrong had masterminded "a massive team doping scheme, more extensive than any previously revealed in professional sports history," the USADA report said. It cited "overwhelming evidence," including sworn affidavits from more than two dozen teammates and witnesses who would have testified under oath that "Lance Armstrong and his handlers engaged in a massive and long-running scheme to use drugs, cover their tracks, intimidate witnesses, tarnish reputations, lie to hearing panels and the press, and do whatever was necessary to conceal the truth."

The testimony on blood doping was particularly graphic. Tyler Hamilton described reinfusions that he and former teammates Armstrong and Kevin Livingston received of their own blood, administered by team doctors in adjoining hotel rooms during the 2000 Tour de France. "Each blood bag was placed on a hook for a picture frame or taped to the wall, and we lay on the bed and shivered while the chilly blood re-entered our bodies," Hamilton recalled. He said the riders "joked about whose body was absorbing the blood the fastest."

After Hamilton's affidavit became public, according to the USADA report, Armstrong accosted him in 2011 at a restaurant in Aspen, Colorado. "When you're on the witness stand, we are going to fucking tear you apart," Hamilton testified Armstrong said to him. "I'm going to make your life a living ... fucking ... hell."

Armstrong remained defiant, calling USADA's findings "outlandish and heinous," claiming the agency lacked jurisdiction to sanction him and alleging it would never provide him a fair hearing. But he refused to contest its findings through arbitration. "I am ... finished with this nonsense," Armstrong said in a statement. "I will no longer address this issue, regardless of the circumstances."

His circumstances, however, changed quickly.

Armstrong had gotten rich pedaling a bike up the Pyrenees and the Alps faster than any other cyclist. He was not über rich - certainly not as rich as some of his patrons. But rich in the way the best jocks acquire wealth from their physical prowess when they might otherwise have ended up managing a Sears or teaching gym. Armstrong was worth perhaps $125 million.

Within days of USADA's August announcement, Armstrong told Winfrey, he lost $75 million in endorsement contracts as Nike, Trek Bicycle Corp., Oakley sunglasses, Anheuser-Busch, and others ditched him. He resigned as chairman of his cancer charity, Livestrong Foundation, and then from its board.

In late October the International Cycling Union (UCI) - world cycling's governing body - stripped Armstrong of all his Tour de France titles. Pat McQuaid, UCI president, said Armstrong "deserves to be forgotten in cycling."

But to an athlete who hosted victory parties on the roof of the MusÃ(C)e d'Orsay, dated Sheryl Crow and Kate Hudson, and hung out with George W. Bush, being forgotten might have seemed an even worse fate than risking his fortune.

So, with his brand in tatters, it came to this: Armstrong would plop a cycling cap figuratively in his hands and answer any question asked by, well, Oprah Winfrey. Despite her enormous popularity, she will never make anyone forget Mike Wallace's interviews on 60 Minutes. Still, she achieved those first five answers: "Yes ... yes ... yes ... yes ... yes."

What did those little words really signify to the world? Contrition? Penitence? Anyone who even casually followed Armstrong's career - and possessed a modest amount of skepticism - had likely concluded long ago that he doped, that he simply stayed ahead of the drug tests, took the right masking agents, bribed the right people, employed the right flunkies. Who didn't see the cynicism in his admissions?

But did he really think he could get his lifetime ban reduced or lifted? Armstrong soon said through his lawyer that he wouldn't cooperate with USADA's investigations of cycling, greatly reducing even the slight chance of a lessened sanction.

Did Armstrong imagine his former sponsors would come running back with new contracts? Could he write another best-selling book, one finally containing the truth? Would he be able to recover enough credibility to once again be an effective advocate for cancer victims, even after claiming that surviving nearly fatal testicular cancer was the reason he'd never doped? ("I have been on my deathbed, and I am not stupid. I can emphatically say I am not on drugs.")

But perhaps the most serious issue Armstrong and his advisors must have pondered was the financial liability his admissions would create, both for himself and for others. In a Q&A with The American Lawyer just weeks after his Winfrey interview, attorney Elliot R. Peters - who along with fellow partner John W. Keker at San Francisco's Keker & Van Nest leads Armstrong's legal team - refused to discuss any conversations he might have had with his client before the broadcast: "I'm not going to talk about that," Peters said.

Armstrong must have known the risk: If he demolished his fortress of lies, the first ones picking through the ruins would be plaintiffs lawyers.

And that's exactly what happened. By finally admitting to more than a decade of doping, Armstrong immediately exposed himself to an array of civil litigation and moved the Department of Justice to join a whistle-blower suit that a former teammate filed in 2010 over his alleged defrauding of the U.S. Postal Service, the government sponsor of his cycling team.

Contrition, penitence, or whatever Armstrong seeks could wind up costing him tens of millions of dollars in damage awards. And that's on top of his legal bills - and what he told Winfrey were intense, and probably very expensive, psychotherapy sessions.

It was just last year that Armstrong barely dodged a criminal grand jury indictment in Los Angeles for witness intimidation, obstruction of justice, and other potential charges, so even his personal freedom could now be at stake. Why, after all this time, would he want to come clean?

Slick and well-funded, Lance Armstrong had managed to stay one step ahead of the law for many years. He won libel suits, beat insurance companies, and denounced skeptics - calling the dogged British journalist David Walsh, who pursued the truth about Armstrong's doping for more than a decade, "a fucking little troll."

But after his confession to Winfrey, Armstrong was sued four times in quick succession: twice in Texas and twice in California. And he wasn't the only defendant. The suits named his book publishers, a sports-supplement company he pitched for, his managers, his longtime agent, and the corporate owners of his cycling team.

Armstrong's televised admissions also bolstered the Sunday Times in London, which months earlier had sued him based on the USADA report. In 2004 the newspaper paid Armstrong a settlement over allegations that the Times had libeled him by reprinting falsehoods contained in an excerpt of L.A. Confidential: The Secrets of Lance Armstrong, written by Walsh and Pierre Ballester. Following the Winfrey interview, the Times quickly issued a statement: "Armstrong [made] numerous admissions regarding taking performance-enhancing drugs ... our case for recovering the [$2 million]-plus he obtained from us by fraud is now even stronger."

The two Texas suits were brought by companies hoping to recover a combined $15 million they paid Armstrong for his Tour de France victories.

One plaintiff, SCA Promotions Inc., incorporated television screen grabs and balloon quotes in its complaint, showing Winfrey questioning Armstrong. The images made the filing look more like a graphic novel than a court document. "Lance Armstrong perpetuated what may well be the most outrageous, cold-hearted, and elaborate lie in the history of sports," claimed SCA's attorney, Jeffery M. Tillotson of Dallas's Lynn Tillotson Pinker & Cox. Tillotson contended that Armstrong had rendered himself bare by admitting lies that should enable his client to recoup $12 million, including legal costs and interest. (SCA Promotions, Inc. v. Lance Armstrong, No. 13-01564 (Dallas Cnty. Dist. Ct. filed Feb. 7, 2013).)

SCA had battled Armstrong since 2005, when it balked at paying him a Tour de France victory bonus because of doping allegations in Walsh's book. Armstrong sued, and after a lengthy arbitration SCA made a "voluntary payment" of more than $5 million.

Armstrong's lawyers have moved to dismiss the current lawsuit. "SCA is barred by the [2006] settlement agreement from challenging, appealing, or attempting to set aside the award," the motion argues.

The second suit was brought by the insurer covering Armstrong's 1999, 2000, and 2001 Tour de France wins, seeking the return of $3 million in performance bonuses. The company alleged fraud, breach of contract, and unjust enrichment, and it requests exemplary damages on top of economic damages. (Acceptance Ins. Co. v. Armstrong, No. 13-000761 (Travis Cnty. filed Feb. 28, 2013).)

Both California suits are federal class actions, and they too rely heavily on Armstrong's public admissions. In the Eastern District, two Sacramento men claim they were harmed by reading Armstrong's books - It's Not About the Bike, My Journey Back to Life, and Every Second Counts - because the publisher (a codefendant) had falsely marketed them as "true and honest works of nonfiction." (Stutzman v. Lance Armstrong, No. 13-CV-0016 (E.D. Cal. filed Jan. 22, 2013).) The plaintiffs seek damages and injunctive relief under the Consumers Legal Remedies Act. (Cal. Civ. Code § 1750-1784.)

According to the complaint, Rob Stutzman, who worked as a spokesman for Gov. Arnold Schwarzenegger and "doesn't buy or read many books," found It's Not About the Bike so enthralling that he managed to meet Armstrong and thank him for being an inspiration. Coplaintiff Jonathan Wheeler, a high school teacher, "felt cheated and betrayed" after Armstrong admitted lying.

Armstrong "certainly helped out [the] plaintiffs by giving that interview," says Karl Olson, a partner in the San Francisco office of Ram, Olson, Cereghino & Kopczynski who specializes in media law and has no connection to the suit. But he adds that "lawsuits over books are unusual" and wonders whether the complaint can pass the "so-what?" test. "It would be like reading Schwarzenegger's autobiography and then claiming emotional distress after learning that he cheated on Maria Shriver," Olson says.

The other California case, says Olson, may have legs because it is "tied to a false statement" about a consumer product. The plaintiffs allege that a Torrance-based maker of sports supplements marketed its products as Armstrong's "secret weapon." The cyclist, the suit claims, owned an equity share in FRS Company and sat on its board from 2007 until his resignation following release of the USADA report. According to the complaint, Armstrong led a "misleading and false [campaign] to trick consumers," later admitting to Winfrey that doping "was the only way [he] could possibly have won seven Tour de France titles or exhibited the extraordinary strength, speed, energy, and endurance" he previously had closely associated with his use of FRS products. (Hyle v. FRS Company, No. 13-CV-01456 (C.D. Cal. filed Feb. 28, 2013).)

But those four lawsuits are hardly Armstrong's biggest financial worry. Remember, the U.S. Postal Service once paid $40 million for him to wear the USPS logo on his neon yellow cycling jersey - and now, after Armstrong made all those admissions to Winfrey, Uncle Sam wants treble damages.

Floyd Landis is no Lance Armstrong.

Oh, he wanted to be. When Landis won the 2006 Tour de France, he was doping - just like Armstrong did before him. And like Armstrong, he lied about it continuously. He was even convicted by a French court in absentia for his role in a computer hacking scheme intended to steal drug-test results.

But Landis, Armstrong's Postal Service teammate from 2002 to 2004, lacked Armstrong's hubris - and money. So when the USADA tried to bar him from competition after his 2006 Tour victory, Landis began soliciting donations from fans through an operation called the Floyd Fairness Fund to help defray his litigation costs.

Ultimately, though, Landis gave up the fight. In April 2010 he came clean to antidoping expert Paul Scott of Scott Analytics Inc., who then informed the USADA. In a subsequent meeting of all parties, Landis confessed to doping, and he shared information about widespread doping by the U.S. Postal Service team.

The admission got USADA off his back, but it opened Landis to legal scrutiny. In Southern California, where he lived in the mountains south of Palm Springs, FBI agents began investigating. They found that he'd solicited funds under false pretenses, telling supporters that he'd never doped and taking in nearly $500,000 from 1,765 contributors to the Floyd Fairness Fund.

Prosecutors eventually charged Landis with wire fraud. Last August a federal judge allowed him to enter a deferred prosecution agreement: If he makes complete restitution to donors within three years, he'll avoid serving a potential 20-year prison sentence. (United States v. Landis, No. 12-CR-3481 (agreement entered Aug. 24, 2012).)

Landis, however, had prepared for his future. He'd been Armstrong's teammate, and he knew things. His allegations against Armstrong in 2010 led the USADA to take action. But the allegations were also contained in a sealed qui tam complaint that his lawyer, Paul D. Scott of San Francisco, had filed in June of that year in Washington, D.C. In the complaint, Landis claimed that the U.S. Postal Service had been defrauded of $40 million by Armstrong's doping - and that for whistle-blowing, Landis should receive between 15 and 30 percent of the recovery.

News of the filing and a broad outline of the allegations quickly leaked to the press. Reacting to the reports, an Armstrong spokesman called Landis "a serial liar, an epic cheater, and a swindler."

Like any relator in a qui tam case, what Landis wanted most was for the government to join as intervenor - a frequent path to judgment. But with the complaint sealed and Landis unable to discuss it, Armstrong remained defiant, telling reporters that Landis had "zero credibility."

As nearly a dozen of his former teammates came forward, the investigations snowballed. In October 2011 lawyers for the DOJ's civil division, working to verify Landis's claims and writing that their work was separate from an ongoing criminal investigation, asked a judge to compel Armstrong to produce business and medical records.

In Los Angeles, U.S. Attorney AndrÃ(C) Birotte Jr. had convened a criminal grand jury to examine evidence of wire and mail fraud, drug distribution, witness tampering, and obstruction of justice. A number of top U.S. cyclists reportedly testified - including Landis, Hamilton, George Hincapie, and David Zabriskie, who asked to have USADA Executive Director Travis Tygart at his grand jury appearance.

But Birotte suddenly dropped the probe in February 2012, taking the rare step of announcing in a press release that he'd decided not to proceed against Armstrong. He didn't give an exact reason.

During the criminal investigation Keker, Armstrong's defense attorney, had complained that Birotte's office "needed to address the patterns of illegal leaks to the media" and refused to release anything to investigators - including even the DOJ's civil lawyers. "The Central District of California prosecutors and U.S. DOJ civil attorneys are working hand-in-glove," he charged in support of a motion to quash a subpoena for records. In a series of terse emails with the government, Keker demanded act-of-production immunity. (See United States v. Hubbell, 530 U.S. 27 (2000).)

Keker further alleged that the "illegal leaks" were a tactical move to force Armstrong to plead his Fifth Amendment right against self-incrimination, thereby creating another unfavorable item to leak.

The federal prosecutor backed down. But there were still all those affidavits from former teammates, especially Zabriskie, who had testified about Armstrong's bullying and insistence on doping. Although Zabriskie succumbed to the pressure, life on the team bus wasn't without humor. In a USADA affidavit, he recounted singing a new verse to Jimi Hendrix's "Purple Haze": "EPO all in my veins / Lately things just don't seem the same / Actin' funny, but I don't know why / 'Scuse me while I pass this guy."

The DOJ's civil subpoena fight continued for more than a year - well after the grand jury probe was scuttled - until Armstrong complied in late 2012. But by that time the USADA had disqualified him from his seven Tour de France titles, imposed a lifetime ban from competition, and issued its report.

And then along came Oprah.

In February, one month after Armstrong's five "yeses" on national television, the DOJ - citing his public admissions - announced it would intervene in Landis's qui tam case. In an amended complaint, attorney Scott wrote, "Mr. Armstrong's interview [with Winfrey] was lacking in detail and inaccurate in substantial respects but ... [he] finally admitted to blood doping and the use of performance enhancing drugs." Scott stated that, in the interview, Armstrong had also acknowledged "it was Mr. Landis coming forward with his inside knowledge that was the tipping point" leading to Armstrong's confession. Scott declined to comment further, other than to say there was "still a long way to go" in the case.

In late April the government filed its formal intervention, adding Armstrong's management companies - Tailwind Sports Corp. and Tailwind Sports LLC - and former team manager Johan Bruyneel as codefendants. It asked for treble damages for the U.S. Postal Service sponsorship - a potential award of $120 million, dwarfing Armstrong's liability in the other suits. (United States ex rel. Landis v. Tailwind Sports Corp., No. 10-CV-00976 (D.D.C. complaint in intervention filed Apr. 23, 2013).)

Aside from the harm Armstrong's admissions did to himself, they arguably hurt no one more than Thomas W. Weisel, a San Francisco investment banker, former speed skater, and avid cyclist who owned Tailwind Sports. According to Capital Instincts: Life as an Entrepreneur, Financier, and Athlete, the 2003 biography Weisel authorized and cowrote, he was instrumental in hiring Armstrong for the USPS Team, and he personally paid a portion of Armstrong's salary. Weisel had pumped millions of dollars into the Armstrong teams, rode in their support cars, pedaled alongside Armstrong on Paris victory laps, and has been linked to $50,000 in contributions to Landis's defense against doping charges.

Weisel had amassed a fortune at Montgomery Securities, exercising fiduciary responsibilities over other people's money and financing IPOs. In 2010 Thomas Weisel Partners was acquired by Stifel Financial, where Weisel is now cochairman. His career path doesn't suggest he'd be prone to being hoodwinked. Yet when Armstrong finally admitted to doping, Weisel expressed shock. "I believed him," he said of Armstrong's earlier denials.

In addition to the Tailwind entities, Landis's complaint names Weisel personally as a defendant, claiming on information and belief that the investor benefited financially from USPS funds paid to his companies and knowingly concealed doping from the government. Team masseuse Emma O'Reilly testified that in 1999, when Armstrong tested positive for cortisone, Weisel became frantic. But the crisis dissolved after Armstrong produced a backdated prescription for treating saddle sores. The qui tam complaint also alleged that Weisel was aided by former UCI president Hein Verbruggen, who allegedly failed to enforce antidoping rules against Armstrong during a period when his personal funds were managed by Thomas Weisel Partners.

Weisel gave interviews after the USADA report and following Armstrong's appearance with Winfrey, but he is no longer talking to reporters. Roberta Sacks, Weisel's lawyer and a managing partner at the Los Angeles office of Sullivan & Cromwell, didn't respond to a request for comment.

U.S. ex rel. Landis is likely to be one of the most watched qui tam cases in memory, says David Freeman Engstrom, an associate professor at Stanford Law School who has studied and written about False Claims Act litigation. "Intervention is huge for a case," Engstrom said: About 90 percent of the time, it signals a recovery for the government and the original complainant.

Historically, the government takes a pass on 70 to 75 percent of qui tam cases, adds Jessica T. Moore, of the San Francisco office of Phillips & Cohen, which specializes in these cases. Moore says she is perplexed by Armstrong's public admissions. "I find it very puzzling," she says. "You aren't going to get a CEO to come clean on Oprah."

Though Landis lacks the financial wallop of the qui tam cases the government brings against defense contractors and drug companies, Engstrom says it has something less common: human drama. "This case has such a unique character," he says. "One major athlete taking on another major athlete" - with Landis apparently desperate for money to repay his former donors, and Armstrong seeking to retain the remnants of a financial empire.

Often, Engstrom notes, what forces a qui tam defendant to settle is the threat of being barred from future federal contracts. But Armstrong, facing the loss of tens of millions of dollars, could be that rare defendant who fights to the bitter end, he says.

Such a scenario could mean putting Landis under oath in front of a jury. Engstrom admits that Landis is "not a perfect witness" - more like the wheelman in a drive-by killing who flips on the shooter. Defense counsel could portray him "as an opportunistic whistle-blower who is no different from Armstrong."

Still, Moore says, Landis is key to the government's case. In his complaint he claimed - like Hamilton - to have lain on a hotel bed next to Armstrong as each received a booster transfusion of his own oxidized blood. Landis can be "a witness with direct and irreplaceable knowledge," she says.

This spring, Peters of Keker & Van Nest revealed the first hints of Armstrong's legal defense strategy. The government, Peters asserted in a statement, got its money's worth from Armstrong. "The U.S. Postal Service benefited tremendously from its sponsorship of the cycling team. ... The USPS was never the victim of fraud. Lance Armstrong ... gave the brand tremendous exposure during the sponsorship years."

At trial, Engstrom says, the government will have to show that it wouldn't have paid Armstrong a cent if it had known about the doping, just as the Department of Defense wouldn't pay a contractor if it knew the rotors on a helicopter would detach midflight. Armstrong's contract clearly called him to race drug-free, and of course he was adamant that he did so, until those five "yeses" changed everything.

Back in Texas, where the Winfrey interview took place, Armstrong has sold his Austin estate. The amount of the successful bid wasn't disclosed, but the buyer has acknowledged he paid nothing close to the $10 million asking price for the property.

It's possible Armstrong's liberty may also be in jeopardy. Regardless of what happened to the grand jury investigation in Los Angeles last year, criminal charges against Armstrong for intimidation, witness tampering, and obstruction of justice remain possible, as the media speculated throughout the spring.

The central question remains: Why did Armstrong put himself at such risk?

It seems that Lance Armstrong may have only one true enemy - Lance Armstrong.

Adam G. Gasner, a criminal defense lawyer in San Francisco, allows that "Most of the worst evidence against my clients comes out of their own mouths." In Armstrong's case, he says, "Ego and public relations won out. It is difficult to understand what drives a sportsman like Lance Armstrong. [He] cheated death. He beat cancer. He made hundreds of millions of dollars. And he won the Tour de France seven years in a row, a race so daunting that winning just one stage is the capstone of most professional cycling careers."

Any attorney would have counseled silence, Gasner says, and it's clear that Armstrong made his own decision. But he ended up being sued by insurers, and "thumbing his nose" at the DOJ, "essentially daring it to reopen [its] investigation."

If the Justice Department is looking again to put the man in the yellow jersey into an orange jumpsuit, its efforts have not been plagued by the leaks that undermined the earlier grand jury probe.

In other words, those with knowledge of any revived criminal proceedings have done something Armstrong may now wish he'd done when Oprah called: shut up.

Thomas Peele is an investigative reporter for the Bay Area News Group.


We welcome your comments!

By submitting a comment, you agree to abide by our comment policy. California Lawyer reserves the right to delete any comment. We may remove comments that are off-topic, crude, or vulgar, that are of low quality, or that violate the law or common decency. California Lawyer also reserves the right to edit any letter for use in its print publication. By posting a comment, California Lawyer does not necessarily endorse the views expressed.


Please enter your name:

Please enter your E-mail: (will not be published)

Your comment



Enter the Text you see on the left: