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U.S. got what bargained for in Lance Armstrong, his lawyers say

Lance Armstrong, founder of the LIVESTRONG foundation, takes part in a special session regarding cancer in the developing world during the C
Lance Armstrong, founder of the LIVESTRONG foundation, takes part in a special session regarding cancer in the developing world during the C

By David Ingram

WASHINGTON (Reuters) - Lawyers for disgraced cyclist Lance Armstrong said on Tuesday he should be able to keep the sponsorship money he got from the U.S. Postal Service during his record-breaking victories, despite his admission to using performance-enhancing drugs.

In papers filed in U.S. District Court in Washington, Armstrong's lawyers said the Postal Service benefited from the sponsorship and they asked a judge to dismiss the federal government's fraud lawsuit demanding its money back.

"The government wanted a winner and all the publicity, exposure and acclaim that goes along with being his sponsor. It got exactly what it bargained for," the lawyers wrote. The Postal Service is an arm of the federal government.

The once-revered athlete is fighting to hang on to what remains of his reputation and his earnings after he was stripped last year of his seven Tour de France titles and banned for life from cycling.

In February, a month after Armstrong admitted to doping, the Justice Department said it was joining a fraud suit filed in 2010 by Floyd Landis, a former Armstrong teammate. Landis filed the suit under a federal law that allows whistle-blowers to report fraud in exchange for a reward.

The Postal Service paid $40 million from 1998 through 2004 to have Armstrong and his teammates from Tailwind Sports wear its logo during record-breaking wins. At least $17.9 million of these fees went to Armstrong, according to the government.

The sponsorship contract included promises to obey cycling rules. In arguing those rules were broken, the government is asking for triple damages.

"The Postal Service contract with Tailwind required the team to enter cycling races, wear the Postal Service logo and follow the rules banning performance-enhancing substances - rules that Lance Armstrong has now admitted he violated," Stuart Delery, an acting assistant attorney general at the Justice Department, said in February.

Armstrong's lawyers wrote that despite intense international attention on doping and a French investigation, the U.S. government never suspended the cycling team. Instead, the government renewed its sponsorship.

"It is now far too late for the government to revisit its choice to reap the benefits of sponsorship rather than investigate allegations of doping," they wrote.

The filing argues that the six-year statute of limitations under the anti-fraud False Claims Act expired in 2010, nine days before Landis filed his suit, barring the government's claims.

FORMER TEAMMATES BATTLE

While the court papers argued that the suit was filed too late, Armstrong's lawyers separately asked U.S. District Judge Robert Wilkins, who is overseeing the case, to dismiss Landis' complaint against his former teammate.

Landis won the Tour de France in 2006 but was stripped of the title a year later after testing positive for synthetic testosterone.

The fact that Landis, like Armstrong, used performance-enhancing drugs should prevent him from suing under the False Claims Act and getting a reward, Armstrong's lawyers wrote.

"Landis defrauded his fans and other donors in order to amass a fund to pay the legal fees he racked up litigating his false denials," they wrote. "Now he would like to be paid for casting the first stone."

The False Claims Act, which dates to 1863, allows whistle-blowers to sue over suspected fraud involving U.S. government money and, if successful, get a percentage of whatever the government recovers.

Landis' lawyer Paul Scott has said that Armstrong's "false victories" forever hurt the Postal Service. He said on Tuesday that he was still reading through the new legal briefs but that he disagreed with the conclusions of Armstrong's lawyers.

Armstrong's doping scandal led to a cascade of difficulties for the cancer survivor, including the loss of sponsorships, private lawsuits and the end of his affiliation with the Livestrong Foundation, the cancer charity he founded.

Justice Department officials have said they have no plans to bring a criminal prosecution against Armstrong.

(Reporting by David Ingram; Editing by Eric Walsh, Eric Beech and Philip Barbara)

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