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CNN's Greg LaMotte reports on the investigation
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December 22, 1998
Web posted at: 7:48 p.m. EST (0048 GMT)

WASHINGTON (CNN) -- The Justice Department and the FBI began a preliminary investigation Tuesday into allegations of corruption by Salt Lake City officials in their bid for the 2002 Winter Olympics.

In a related development, former Senate majority leader George Mitchell has been named to lead a special Olympic commission to investigate the scandal.

In announcing Mitchell's appointment, United States Olympic Committee President Bill Hybl said, "The integrity of the Olympic Movement is central to the USOC'S mission and its ability to maintain credibility with the American people and all those who support the nation's Olympic movement."

Federal authorities are trying to determine whether any federal laws were broken in connection with a rapidly unfolding scandal that has threatened the reputation of the U.S. Olympics.

Some Salt Lake City bid committee members have been accused of giving lavish gifts, free medical care and thousands of dollars in scholarships to International Olympic Committee representatives and their relatives as part of a successful campaign for the games.

Law enforcement personnel told CNN the Justice Department fraud section has begun a review of the allegations, and the FBI's Salt Lake City office has opened a case on the controversy.

According to these sources, the primary focuses are fraud and potential tax violations associated with the scholarship and gift allegations.

Senior law enforcement personnel tell CNN the possible violations are considered serious because the alleged corruption may have deprived other cities of hosting the games, which generate millions for the local economies of the host communities.

The sources say the Salt Lake City U.S. Attorney's office has been taken off the probe to avoid the appearance of a conflict of interest involving local officials.

The USOC special investigation is expected to begin in January, as committee leaders are promising a swift response to allegations that have caused the committee major embarrassment.