DOJ move a bad sign for Armstrong

Lance Armstrong's decision to tell the truth about his doping exposed him to two major problems -- the risk of a $90 million debt and the renewed possibility of a criminal charge and time in the penitentiary.

Neither was a surprise to Armstrong and his team of lawyers, and they were talking with the U.S. Department of Justice about a settlement to solve both problems even before he confessed to Oprah Winfrey. The report on Friday that Justice Department lawyers are intervening in a lawsuit Floyd Landis filed against Armstrong indicates that, for Armstrong, the negotiations are not going well.

In his lawsuit, known in courthouse parlance as a whistle-blower or "qui tam" action, Landis seeks to recapture from Armstrong more than $30 million that the U.S. Postal Service paid Armstrong and his team based on their false assertions that they had not used performance-enhancing drugs in their triumphs in the Tour de France. The federal law governing whistle-blower actions allows the assessment of triple damages in such cases. Armstrong's admission of PED use thus exposes him to a potential loss of $90 million that he would pay to the federal government and to Landis.

Under the whistle-blower law, known officially as the federal False Claims Act, the government is entitled to enter into the lawsuit when it concludes that there is merit to the whistle-blower's allegations. Armstrong desperately sought to settle with the government to avoid its entry into the Landis litigation, making an initial offer of $5 million and no doubt increasing the offer in the past couple of weeks.

But now, with the official entry of Justice Department lawyers into the litigation, it appears that the government is using its leverage to push Armstrong toward a larger offer. Without a settlement, Armstrong faces the embarrassing prospect of a public airing of the details of his doping as the litigation enters into the pretrial discovery phase with sworn testimony and public exchanges of documents and other evidence.

In addition to the discussions of the whistle-blower lawsuit, Armstrong and his lawyers were trying to convince the federal authorities that they should stick with their decision to drop their investigation into the possibility of criminal charges against Armstrong. Andre Birotte, the U.S. attorney for the Los Angeles region, closed the criminal probe in February 2012 in a sudden decision that shocked the federal agents working on the investigation.

Recognizing that the confessions Armstrong made to Winfrey could lead to a second look at criminal charges, the Armstrong legal team included a demand for broad immunity from any criminal charge in its settlement. The team's goal was a global settlement that would have ended Armstrong's concerns about the whistle-blower lawsuit and the penitentiary.

According to an ABC News report, government lawyers were not willing to offer broad immunity and offered immunity to Armstrong only in the Postal Service dispute.

With the government's entry into the whistle-blower litigation, Armstrong is left with no resolution of his two most significant problems. What will happen? To settle the lawsuit, it's a simple matter of money. If he wants to settle and begin to recapture a fraction of his legacy, Armstrong must pay more than he wants to pay.

The possibility of a renewed criminal investigation is not so simple. Will the Obama administration and U.S. Attorney General Eric Holder agree to drop all efforts against a man who has confessed to numerous federal crimes? Early in 2012, an election year, they were willing to drop the charges against Armstrong, who enjoys the support of thousands of cancer survivors. Now, with the admissions of doping and the re-election of President Barack Obama, what will the government do?