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The partial admissions made by Lance Armstrong have been well-publicised.  His shift from world icon to pariah is clear.  His belated truthfulness has been generally welcomed.  However, this article will demonstrate that when considered with a legal microscope the admissions were calculated, both literally and metaphorically, to limit damage to himself both in financial and reputational terms.  In short, it is contended that the interview was no more than the latest instalment of Armstrong’s compulsive ability to manipulate events.

Whilst at the outset of the Oprah Winfrey interview Armstrong admitted taking banned substances to enhance his cycling performance, when asked whether he doped when he placed third in the Tour de France in 2009, his response was “the last time I crossed that line was in 2005”. 

That specific date is very significant since federal criminal charges which have been suggested – such as illegal distribution of steroids and prescription drugs, conspiracy, racketeering and/or misuse of public funds – have a 5-year limitation periods. Further, even though Armstrong’s confession means that his sworn testimony to an arbitration hearing in 2005 concerning the payment of Tour de France bonuses was deliberately false, a criminal charge of perjury also has a 5-year limitation period. With a 2005 end point, limitation expired in 2010.  US federal prosecutors, therefore, face an uphill struggle to persuade a judge to hear criminal charges against Armstrong in the first place.  Round one to Armstrong – and his fleet of expensive lawyers – in being able to resist any criminal charges levelled against him it would seem.

Turning to civil actions, SCA Promotions (which lost the 2005 arbitration hearing) are already seeking to recoup $12m in paid bonuses.  Although there may also be an argument about limitation, that would appear to be a good claim, especially since Armstrong is no longer declared to have been the “official winner” in his Tour victories – which was the crux of the dispute in the first place.  That sum, though, is less than 10% of his reported net worth and is hardly likely to cause Armstrong sleepless nights.

Similarly, subject to arguments about a settlement agreement being at the parties’ own risk as a form of commercial agreement, the Sunday Times’ action for the return of £1.5m paid following a defamation claim brought by Armstrong will probably also have to be repaid.  Again, though, that figure is a drop in the ocean compared to Armstong’s means.

Potentially the largest claim is a whistleblowing action under the Federal False Claims Act originally brought in 2010 by Floyd Landis and now joined by US Government.  Somewhat ironically, like Armstrong, Landis is another Tour de France champion who originally denied drug-taking only to then confess.  The nuance to his action is that, if damages are awarded, Landis is entitled to 25% under US law as the “whistleblower”.  The action will consider whether the US Post Service has suffered loss when paying out about $30m despite Armstrong knowingly inducing his USPS-sponsored team to commit criminal acts by doping in breach of contract.

The difficulty with that action, putting to one side limitation, is that it will be difficult to show that USPS actually lost any money once the profit and loss accounts are calculated.  After all, during the period of its sponsorship, the USPS team was incredibly successful, which led to enormous financial returns for both Armstrong, his team-mates and also USPS.   Although some commentators suggest the action could be lead to an award of $90m – which would come close to wiping-out Armstrong – the commercial reality of the situation is radically different.  Armstrong will be confident of avoiding anything other than a minimum pay-out in the circumstances.

There could also be defamation actions brought by individuals Armstrong now he admits he “ran over” – such as Emma O’Reilly, Betsy Andrieu, David Walsh and another former Tour de France winner, Greg Lemond – but none of them have intimated to date that they plan to re-open old wounds or apparently possess the financial might for a protracted struggle with the Armstrong lawyers.  Armstrong has also already notably tried to ease relations with some of them by making pubic apologies and/or engaging in direct telephone conversations.

Given the above, and Armstrong’s deep pockets, it would be surprising if any of the potential civil actions result in Armstrong giving evidence at a contested hearing.  He will almost certainly seek to settle claims at levels well below the sums demanded based on arguments about limitation and quantum of actual loss.  There is also only a very small risk that he could face criminal sanctions.

Although Armstrong has outlandishly suggested that his ban from competitive sport is like a “death-penalty”, it is very likely that in reality he will continue to enjoy his liberty at close to his current net worth once the fall-out from his interview settles.  Ultimately, the Oprah interview was no more than an exercise in damage limitation which, if anything, has currently insulated him from some of the more serious criminal charges he could have otherwise faced.
Related link:  Profile of John Mehrzad
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