What Do I Have Against Lance?

I was told by a friend that someone asked him what I have against Lance. Maybe others have also wondered that. Before I get to that, let me comment on some other news in pro cycling.

Lance Armstrong Investigation: Skeptics at ESPN

I just read a thought piece at ESPN about the Lance Armstrong investigation being suddenly dropped this past week. The author offers several thoughts on how this may have happened and is generally pretty skeptical that it wasn't--at least--a political move in the Obama administration. If so, we definitely have some corrupt politicians IMO...Check out the article, it's short but worth the time.

Lance Armstrong Investigation: Petition Opened

I received an email today that informed me about a petition on the White House website asking for President Obama's administration to look into and comment on the reason that the Justice Department dropped the Lance Armstrong investigation. The petition (click here to go to the petition) requires 25,000 signatures. Last I checked it only had about 100 signatures so it has a way to go. If you're interested in finding out more about why this investigation was closed, you might want to take a minute to sign the petition and pass this link on to friends who also might be interested.

Lance Armstrong Investigation: More to the Story

Several news outlets (including NPR, VeloNation and CyclingNews) are reporting that the decision to drop the criminal charges against Lance Armstrong came as a big surprise to several federal agencies that were working on the case. The word is that the other agencies believed they had a solid case against Lance. You have to wonder what motivated the individual at the US Attorney's Office who allegedly made this decision on his own, Andre Birotte, to take this action. Was Birotte given a donation like the UCI received a donation?! Here are some quotes to consider:

Contador Ruling: Stripped of Tour de France Title

VeloNation is reporting that the Court of Arbitration in Sport (CAS) has ruled on Alberto Contador and, to my surprise, they found that his doping violation will hold. What this means is that he is stripped of one of his Tour de France titles, a Giro d' Italia title and several wins in other races. Contador was given the full two-year ban. It appears that justice is sometimes served in pro-cycling!

The SEC's Record with Large Ponzi Schemes: Not So Hot

I've been listening to Harry Markopolos's book, "No One Would Listen: A True Financial Thriller" (I recommend it by the way) and have been surprised at how much of the book is devoted to criticizing the SEC. From Harry's account, the SEC totally dropped the ball and was incompetent, corrupt or both in how it handled the Madoff case. I personally think he has a pretty good argument and that the SEC has managed to avoid serious consequences even though the Madoff case was a tragedy that they could have prevented.

Well, now that the Stanford Ponzi scheme is being tried, we are learning that the SEC also dropped the ball with Sir Charles. It may be that the SEC really doesn't understand Ponzi schemes or that they are underfunded, undereducated, understaffed and under-incentivized. All we know for sure is that they appear to be underperforming. Reuters has an article that talks about how Sir Charles was able to keep the SEC at bay for so many years while he built his Ponzi empire, complete with retail offices in the U.S. I recommend it for further insight.

One claim by Markopolos is that the SEC staff are all basically looking for a job in industry to make more money. As such, when they go to investigate a firm, they also ask for a job application. The Reuters article seems to add a second witness to this claim as it describes a former SEC investigator by the name of Barasch and his role in helping Stanford stay out of the SEC's crosshairs:

Barasch was told at the time by an SEC ethics officer that he was legally precluded from representing Stanford. Barasch went to work for Stanford anyway. In a later investigation of the failure to catch Stanford earlier, the SEC Inspector General asked Barasch why he did so. His reply, according to the Inspector General's report: "Every lawyer in Texas and beyond is going to get rich over this case. Okay? And I hated being on the sidelines." 

FBI agents and prosecutors also uncovered evidence that on at least two occasions Barasch sought confidential information regarding the SEC's probe of Stanford during his brief representation of the banker, Justice Department officials said in court records and a press release. 

In agreeing to pay the fine, Barasch denied any misconduct, settling the matter "to avoid the expense and uncertainty of protracted litigation," his attorney, Paul Coggins said.

Another claim by Markopolos is that the SEC seemed to avoid taking on the Madoff case because it was too large and complex. Instead, they went after cases that Harry describes as fleas while the elephant (Madoff) was running free. This Reuters article also seems to bear this out in the following quote:

In 1997, 1998, 2002, 2004, and 2005, according to internal agency records seen by Reuters, examiners for the SEC recommended that the agency investigate Stanford. In three of those instances, Barasch, at the time an SEC official in Ft. Worth, personally overruled the examiners' recommendations, according to those records. Those decisions helped the Ponzi scheme to continue unabated for several additional years, costing investors additional billions of dollars, according to a report by the SEC's Inspector General. 

Barasch told the SEC Inspector General that he made those decisions because he was not sure the SEC had the statutory authority or jurisdiction to investigate. He blamed his superiors and a broader culture within the SEC for pressuring the staff not to pursue complex and difficult cases, according to the Inspector General report. 

Apparently, Barasch was able to help Stanford both while he worked for the SEC and after he went to work for Sir Allen (i.e. Stanford) himself. Sounds like a bad case of a corrupted fraud investigator. I have a feeling I will be reading another book in the future about how the SEC dropped the ball in the Stanford Ponzi scheme too, costing thousands of people billions of dollars.

Lance Armstrong Investigation: What Did We Learn?

As you've probably heard, it was announced yesterday that the Grand Jury investigation that involved Lance Armstrong's alleged criminal activity on the U.S. Postal Service cycling team has been closed without any charges. When this investigation first opened, I remember talking with a friend about what would come of it. I thought at the time that the most likely scenario was that we would learn a lot more about Lance and that his reputation would be seriously damaged but that it was unlikely that he would find himself in jail. I never totally thought it was impossible that Lance would end up in jail but I thought it was a very long shot (like half court at the buzzer). After all, if they couldn't find his blood or urine with drugs in it then it would probably be hard to make the charges stick.

In my view, Lance's record has become extremely tainted from the news of the past two years. If you believe the saying that where there is smoke there is fire, then you have to observe all the smoke that came from this investigation and conclude there must be something causing it. The following points are what I think are some of the biggest stains on his record that came from this investigation. As I look at the list, I have to believe that those who followed the investigation will likely have lost most, if not all, respect for Lance (unless they are in complete denial and hero worship). Here is my summary (with links to the top posts on the topic) of the most interesting, and in many cases the most damaging, tidbits to come out from this investigation:

Stanford Trial: Two Friends Become Enemies

The NY Times discusses how the trial regarding the alleged Ponzi scheme run by R. Allen Stanford will pit Stanford against his long-time friend and CFO of Stanford Financial Group before it collapsed, James M. Davis. It's a classic example of the Prisoner's Dilemma. Here are some excerpts:

Doping in Cycling: Some News that Caught My Eye

Today has two strange stories about cyclists who have been linked to doping that I just couldn't resist commenting on...

Another Link Dump

Here are a few more links to keep you up to date on the latest fraud-related news:

Contador Investigation: Expect Alberto to be found Innocent

VeloNews is reporting that WADA lawyers have threatened to walk out of the Alberto Contador hearing which is supposed to rule this week whether the Spaniard will be found to have violated doping rules. Contador has a lot riding on this ruling (no pun intended) since the rule states that any clenbuterol found in his system is a violation that will cause him to lose his Tour de France title and ban him for up to two years. As we've covered on Fraudbytes previously, Contador claims he got the steroid from eating tainted beef during the tour.

The VeloNews article is short and highlights several claims by an anonymous source that Contador has biased the arbitration process in his favor. If you're interested in why WADA is so frustrated by this hearing, I'd recommend reading the article.

Lance Armstrong Investigation: LiveStrong Brought to Light

Outdoor Magazine published an extensive article on Lance Armstrong's LiveStrong Foundation today. I know they have been working on this for a while since the author, Bill Gifford, first contacted me in May 2011. Interestingly, I received several phone calls from investigative reporters around the same time--undoubtedly because they found these posts of interest.

As far as I can tell, Gifford's article is the first one to hit the press. His article notes why this may be the case by saying:

At least two other major publications have done serious reporting on Livestrong—that is, they started to. In both cases, Livestrong lawyers succeeded in shutting down the stories before they were published. They applied the same pressures to Outside, blitzing my editors with pissed-off e-mails, phone calls, and, eventually, a five-page letter from general counsel Mona Patel complaining about “Mr. Gifford’s conduct, professionalism, and method of reporting.” One of my crimes was a failed attempt to get a source to talk off the record, an ordinary journalistic practice. All of which now makes me wonder if I missed something. 

I recommend reading the article if you're interested in LiveStrong and Lance. For those who want to get a flavor of the article, here are a few highlights that summarize the main conclusions:

Happy New Year and A Few Links

Happy New Year! While I've never really been one for New Year's resolutions, I do intend to post more often over the next year. In the meantime, I've been collecting links to write about on FraudBytes and I've fallen a bit behind. In an effort to purge my queue, here are a few articles worth reading: 

Doping in Cycling and the Mafia

The head of the World Anti Doping Association (WADA), David Howman, gave an interview in New York City that gives some insights into the difficulty of battling doping in cycling and other sports. Here are some of the meatier quotes from an article on CyclingNews, along with my comments: