The Lance Armstrong fiasco has inevitably led to a series of lawsuits, as organizations seek to recover money they paid to Armstrong for his ill-gotten accomplishments. The Tour de France itself, along with the company that paid out Armstrong’s victory bonuses want their money back. So does the Times of London, which lost a defamation suit brought by Armstrong after a series of “libelous” stories that turn out to have been true.
So how about the US Postal Service? As Postcom asked today, “Why has no one called for Armstrong to repay the Postal Service sponsorship funds he fraudulently used? Isn’t the money the USPS spent on the cycling fiasco a misuse of mailer-paid money?”
Good questions- but the answers might not be very satisfying. While the Tour and the Times probably have pretty good arguments for retrieving their money, it’s not quite so straightforward for sponsors like the USPS. As one expert told the BBC earlier today, sponsors paid Armstrong and his teammates for publicity- and they got it.
In the case of the US Postal Service, of course, that publicity was mixed- but at the time, it didn’t stem from any wrongdoing on Armstrong’s part, but from the very idea of the USPS sponsoring a cycling team that mostly raced in Europe. And the fact that postal big-wigs took junkets to France didn’t help any. As Sean Reilly reported recently in the Federal Times,
Postal pooh-bahs may have gotten something out of the deal, too. Another document says that Tailwind Cycling would provide “a complete hospitality package for selected guests of the sponsor at the Tour de France.”
The package would include lodging and meals, as well as transportation in Paris, the document said. Tailwind also agreed to “customize the VIP package for postal officials attending and will bill back those charges to the United States Postal Service for their respective lodging, meals, transportation and other related charges.”
More importantly, the USPS might have a hard time proving damages, since it seems to think the whole deal worked out just swell. As we reported in January 2011, the USPS believes that its sponsorship paid big dividends:
Studies commissioned by the United States Postal Service estimated the agency received at least three times the value of the $32 million spent sponsoring Lance Armstrong’s cycling teams during their heyday.
Of course, some of the “value” received by the USPS was pretty intangible, to say the least: “The 2004 report noted that exposure, and value, increased in part because of the creation of Armstrong’s LiveStrong bracelets and his then-relationship with singer Sheryl Crow.”
The value of Lance’s “then-relationship with singer Sheryl Crow” would certainly seem to define “intangible”! But that’s the problem- if the USPS thinks it tripled its investment, how does it argue that it suffered any damages?