The Banker Who Put His Faith in Armstrong

When Lance Armstrong’s interview with Oprah Winfrey about his suspected use of illegal performance-enhancing drugs is broadcast on Thursday, an investment banker will most likely be watching it very carefully (and nervously): Thomas Weisel.

Mr. Weisel is a legend in finance and Silicon Valley. He was the banker behind Yahoo’s public offering and some of the biggest deals during the dot-com bubble. He famously sold the firm he ran, Montgomery Securities, for $1.2 billion in 1997. And he sold his next firm, Thomas Weisel Partners, for $300 million to Stifel Financial in 2010.

But it is Mr. Weisel’s extracurricular activity that connects him to the news of the moment: he was Mr. Armstrong’s biggest financial backer and the single individual most responsible for the money machine that propelled Mr. Armstrong’s career.

Depending on what Mr. Armstrong says in the interview about his purported doping, Mr. Weisel, who was a co-owner of the United States Postal Service Pro Cycling Team through a cycling management firm that he helped found called Tailwind Sports, could be subject along with his partners to lawsuits from corporate sponsors seeking millions of dollars. Already, there is a False Claims Act case contending that Mr. Armstrong and the team defrauded the Postal Service.

Perhaps more anxiety-producing is what Mr. Weisel may have known, or should have known, about a team that for years ran “the most sophisticated, professionalized and successful doping program that sport has ever seen,” according to the United States Anti-Doping Agency.

Its report last year did not name Mr. Weisel, but did say that Mr. Armstrong was assisted by a “small army of enablers, including doping doctors, drug smugglers, and others within and outside the sport and on his team.”

Mr. Armstrong is expected to admit to doping in an effort to persuade officials to lift his lifetime ban from Olympic sports. To do so, however, he would probably need to lay out in explicit detail how the program worked and implicate those who were part of it. Late Monday, The New York Times reported that Mr. Armstrong had confessed in the interview with Ms. Winfrey that he used performance-enhancing drugs. The Times also reported that he was in discussions with the Justice Department to possibly testify in a federal whistle-blower case against several team officials and owners, including Mr. Weisel.

Mr. Weisel is currently not talking. When I called Mr. Weisel seeking a comment, his assistant told me: “He’s not commenting. And he’s not returning any calls.”

For a glimpse of the way Mr. Weisel thinks about performance-enhancing drugs in cycling, here’s what he had to say about the matter four years ago: “Handle the problem below the surface and keep the image of the sport clean,” he told The Wall Street Journal. “In the U.S. sports — baseball, basketball, football — most fans couldn’t care less.”

For Mr. Weisel, the team and Mr. Armstrong were an all-consuming passion. He would go every year to the Tour de France and at times travel in the team’s pacer car, occasionally yelling instructions to Mr. Armstrong over the radio system. He rode the team’s bus, ate meals with them and ultimately celebrated each year’s victory. On the wall of his office in San Francisco, he displayed Mr. Armstrong’s yellow jerseys.

Always the consummate banker, Mr. Weisel even tried to help Mr. Armstrong raise funds to buy the Tour de France itself. (The effort never went anywhere.)

Mr. Weisel’s name has occasionally come up in connection with accusations of doping on the team.

The wife of the famed cyclist Greg LeMond, Kathy, reportedly testified under oath in a deposition in 2006 that she had been told by one of Mr. Armstrong’s mechanics that Mr. Weisel, along with Nike, paid $500,000 though a Swiss bank account to the honorary president of the International Cycling Union to silence a drug test Mr. Armstrong purportedly failed in 1999.

Nike has vehemently denied the contention. So far, Mr. Weisel has not commented publicly.

When Floyd Landis, one of Mr. Armstrong’s former teammates, tested positive in 2006, he denied using performance-enhancing drugs under pressure from Mr. Armstrong. Soon after, Mr. Weisel set up the Floyd Fairness Fund with some of Tailwind’s co-owners to help pay his legal bills. Mr. Landis later confessed to doping in 2010.

Mr. Weisel, a longtime athlete who was a champion speed skater as a teenager, became a cycling enthusiast in the 1980s and took up racing himself. Sports dominated his life: he often said that he liked to hire athletes to work for him at the bank because of their competitive instincts. He was also the chairman of the United States Ski Team Foundation. In 1987, while still working as a banker, he started Montgomery Sports, to begin his first cycling team. In the early 1990s the team was called Subaru-Montgomery; it later became Montgomery-Bell (Bell Sports was a client that he took public) and then was renamed for the Postal Service. (Yahoo, another client, was also a sponsor of the team.)

According to a biography of Mr. Weisel, “Capital Instincts: Life as an Entrepreneur, Financier and Athlete,” he invested more than $5 million in the early teams and lost money on the investment. Mr. Armstrong was one of Mr. Weisel’s early riders for the Subaru-Montgomery team. He later left the team to join the Motorola team. After his bout with cancer, Mr. Armstrong joined what was the Postal Service team in 1998.

Tyler Hamilton, another former teammate of Mr. Armstrong, told “60 Minutes” that the team was pushing performance-enhancing drugs on its cyclists long before Mr. Armstrong battled cancer and then in 1998 rejoined the team.

“I remember seeing some of the stronger guys in the team getting handed these white lunch bags,” Mr. Hamilton said on “60 Minutes” about when he joined the team in 1995. “So finally I, you know, started puttin’ two and two together and you know, basically there were doping products in those white lunch bags.”

Given how widespread the doping now appears to have been on the Postal Service team based on testimony of 11 teammates, and charges against the team’s director and several of its doctors, you wonder how much due diligence its founding banker did on the most prominent deal of his career.