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IOC Pays High Price To Look Good: Part 2 of 2 -- January 3, 2000

"The IOC would have appeared to have not been transparent had we not answered the phones during the first five months," Mr. Servan-Schreiber says. "Hill & Knowlton are giving us high-level advice in America and helping us with IOC member testimony in Congress. I don't think we would have gone through this without them."

As described in internal IOC memos, the public-relations effort amounts to classic damage control. Among the documents is a June IOC report that cites Hill & Knowlton polls that showed the IOC scandal to be "equivalent to the Bhopal accident in India or the Exxon Valdez Oil Spill in Alaska."

To counter that perception, one IOC memo says, a P.R. campaign is needed to "protect and enhance the image of the IOC, its leadership and its members" and to "minimize the negative financial, legal impact of the situation," one memo says. Hill & Knowlton's task, the memo continues, is to identify "the most vocal potential IOC critics," to "neutralize impressions" and to embark on the "image rehabilitation" of current IOC members.

All of this is unsettling for those who argue that the IOC needs a thorough housecleaning. Just ask one of Mr. Samaranch's more prominent critics, Gary Wadler, a New York physician and winner of the 1993 Samaranch Prize, which is awarded to people who make significant contributions to physical education research and sports medicine. "Samaranch has put tremendous spin on reforming the IOC," Dr. Wadler says. "But he is not the disinfectant, and there is no reform."

Also upset are Olympic athletes, particularly those out of the limelight. But they say that Mr. Samaranch's grip on their careers prevents them from showing any disapproval of how the IOC boss has conducted the reform process. "Fear plays a big part in athletes not wanting to criticize the Olympic structure of Samaranch," says Canadian Olympian volley ball player Kristine Drakich. "No one wants to be seen rocking Samaranch's boat...their fear of being cut from the team is real."

Olympic corporate sponsors are also worried, it seems. According to one internal IOC memo, investigations into the awarding of the Games to Atlanta, Sydney and Salt Lake City have ignited a moral dilemma for leading sponsors that have spent billions of dollars to have their names associated with the Olympic image of wholesomeness and fair play. "The situation with sponsors is very fragile," the memo says, adding that the fallout from Salt Lake had "an extremely serious impact on virtually all aspects of Olympic marketing."

Some Olympic sponsors have, according to the memos, gone so far as to pull their sponsorships or demand better terms from the IOC for their continued support. "Privately, [the sponsors] have made it very clear to the IOC that if the crisis is allowed to drag on, the consequences could be fatal for their Olympic partnership," one report says. "A number of prospective and current partners have either withdrawn (Johnson & Johnson: $45 million, BMW) or requested to renegotiate terms of their agreements (Swatch, General Motors)."

The internal memos suggest that many companies remain committed to the terms of their sponsorships, partly out of fear that competitors would take their places. Others seem less concerned. Visa International, for instance, recently renewed its approximately $60 million global partnership agreement. But IOC insiders say the renewal came only after Olympic officials agreed to make Visa the only credit card accepted by the United States Olympic Committee merchandise arm, among other concessions. A Visa official declined to comment on the new arrangement.