Wednesday, July 14, 2010

Drug Probe Widens to Trek Bikes

The U.S. investigation into fraud by bicycle riders has now widened to include the Trek Bicycles corporation, reported the Daily News today.

In a continuation of the investigation of allegations by known fabricator Floyd Landis, the United States District Attorney's office has now issued a subpoena for documents from the bicycle manufacturer based in Wisconsin that has supported Lance Armstrong's cycling teams since 1998.

Trek's marketing presence in this year's Tour de France as well as the 2009 Tour is ubiquitous. Last year the company had famous designers and artists including Damien Hirst decorate seven bikes (for the seven Tour wins by Armstrong).

Those bikes were later auctioned off at Sotheby's in the fall for $1.125 M, with proceeds going to Armstrong's Livestrong foundation for fighting cancer.

The subpoena seeks to examine Landis' claims that many team Trek bikes were sold off to pay for performance enhancement drugs and blood transfusions. Landis has claimed publicly that Armstrong and other major riders like George Hincapie were complicit in illegal performance enhancement in 2002, 2003, and 2004 while he rode with them on the U.S. Postal Service Team.

The company would not comment on an ongoing federal investigation said Bill Mashek, a spokesman for Trek according to the Daily News.

A close up of the Damien Hirst Trek bike that Armstrong rode last year in the 2009 TDF. The bike was auctioned last year for $500,000.

"Trek will not comment on whether or not it has been contacted by federal investigators; however, if contacted, the company would fully cooperate in an investigation," the statement said.

"Trek has no knowledge of the sale of any team bikes to purchase drugs," Trek said. "We did not, and never would, condone such activity. Trek does not support doping in cycling and has included in all of its sponsorship contracts the right to terminate any athlete who violates the doping rules."

Just the tinge of fraud could undo millions of dollars spent on marketing by Trek bikes through the support of Lance Armstrong and the Livestrong foundation, the Tour de France and every other race the team rides in.

It would be a fatal blow for the company if for some reason any portion of the investigation were to come up with a corroboration of Landis's allegations. It would be cycling world equivalent of the oil for food corruption investigation that embroiled the son of then United Nations chief Kofi Annan in 2005.

Pic: Lance's Trek bike designed by Marc Newson, sold for $110K at auction. 

Trek Bicycles which has been around since 1976, made $550 million in their last fiscal report, and employs 1500 people in their Waterloo, Wisconsin factory. Armstrong is a lightening rod for bitter cyclists who are no longer performing or worse whose careers ended long ago, and perhaps their thinking is not as clear as it used to be, and that has often caused trouble for Trek. One other example was Greg Lemond who made repeated public accusations of cheating by Armstrong.

Lemond had a manufacturing and marketing agreement for his namesake bikes with Trek, an agreement which unraveled over Lemond's damaging, and uncorroborated statements. In October 2009, Trek settled out of court with Lemond over the dissolution of their contract, and said good bye to the cyclist forever.

The investigation by the U.S. District Attorney is being led by Douglas Miller, who is based in the Major Frauds Section in the Central District of California.

Miller was also an investigator in leaks of grand jury testimony in the BALCO case. The Landis allegations are also being probed by the Food and Drug Administration's Jeff Novitsky. Recent inquiries have gone out to George Hincapie and Tyler Hamilton.

1 comment: said...

Its hard to believe that Trek knew much about the doping allegations.