Disgraced cyclist Lance Armstrong is asking a judge to dismiss a lawsuit against him that alleges he defrauded the United States Postal Service (USPS), which was one of his sponsors. His lawyers are arguing that in 2000, the Postal Service should have heeded press reports that suggested Armstrong was doping, instead of believing his own assurances that he was clean. In other words, Armstrong lied to his sponsors at the time, in order to keep his multimillion-dollar contract, and now that he’s been exposed as a fraud, he's blaming those he lied to for believing him. Just in case the judge is unconvinced by that incredible argument, Armstrong's lawyers are also asserting that the USPS got its money's worth out of the deal in terms of publicity.
That last argument is based on the USPS's own study on the matter, which was commissioned long before Armstrong's doping was exposed, in order to justify the agency's sponsorship of the cycling team. Ever since the perennially broke Post Office was criticized for its nine-figure sponsorship of the 1992 Olympics, it has had to defend its sponsorship expenditures. As such, it hired marketing firms to quantify the value of its association with Armstrong. They reported that value to be over $100 million, buttressed by the goodwill generated by Armstrong's Livestrong charity and his relationship with singer Cheryl Crow.
The suit against Armstrong was originally filed in 2010 by Armstrong's former teammate, 2006 Tour De France winner Floyd Landis. Landis’s suit alleges that the sponsorship deal was struck with the understanding that illegal drugs would not be used, so Armstrong’s doping constitutes fraud. (Ironically, but not surprisingly, Landis himself has admitted to doping.) Armstrong’s lawyers insist there was no anti-doping condition to the sponsorship. The Department of Justice joined the suit last February.
The suit is being brought under the False Claims Act, which allows whistle-blowers (in this case, Landis) to report anyone who defrauds the government, and share any funds recovered. According to the Department of Justice's 28-page complaint, “Because the Defendants' misconduct undermined the value of the sponsorship to the USPS, the United States suffered damage in that it did not receive the value of the services for which it bargained”.
Lawyers are arguing over the value of the publicity Armstrong attracted, but so far, they haven't attached a dollar value to the damage of being associated with a professional cheater. If Armstrong loses the suit, it could cost him dearly, as under the False Claims Act, a defendant can be liable for triple damages. Armstrong’s USPS sponsorship was worth $40 million, meaning he may be on the hook for up to $120 million — almost his entire net worth, after the loss of endorsements forced him to liquidate significant assets — if he's found guilty.