IOC could lose US$5m due to Madoff scandal

By Chris Lehourites  |   2008-12-22  |     NEWSPAPER EDITION

THE International Olympic Committee could lose close to US$5 million in investments because of the Madoff hedge fund scandal.

IOC finance commission Chairman Richard Carrion said on Saturday that the Olympic body had about US$4.8 million tied to the multibillion dollar Ponzi scam by New York financier Bernard Madoff.

"That could be the maximum loss," Carrion told The Associated Press in a telephone interview from Puerto Rico, adding that the IOC's money wasn't directly in Madoff funds. "They're in funds invested in Madoff funds."

IOC spokeswoman Emmanuelle Moreau said the Madoff affair would have "limited impact" on the IOC's overall finances.

Madoff, a 70-year-old former Nasdaq stock market chairman, is accused of swindling investors of US$50 billion in a massive Ponzi scheme. He was ordered on Friday to remain in his New York home under 24-hour surveillance and to hire security guards for protection.

The IOC's exposure to the affair was first reported in the Wall Street Journal.

Earlier, Carrion said the IOC has financial reserves of more than US$400 million - a fund designed to keep the Olympics afloat in the event of the games being canceled.

"It's a little over 1 percent of the money in the portfolio," Carrion said of the funds tied to Madoff. "It is possible that we could lose a substantial portion of that. That is not something that makes us very happy."

Carrion said the IOC has policies in place to limit major concentrations of money, but the Madoff scam has caught the organization off guard.

"This is obviously something unexpected because this is a fraud," he said. "It's never any fun when you lose money."

At an IOC meeting in Lausanne, Switzerland, Carrion said the amount of money in the IOC reserves had dropped about 14 percent in recent months due to the fall in stock prices and the strengthening of the United States dollar against the IOC's non-dollar investments. On Saturday, Carrion said that other monies are hurting the IOC more.

"Probably the improvement of the other currencies vis-a-vis the dollar is bigger," Carrion said. "We'll have to see when all the dust settles how much is lost."