Author: Veronica Harper
What comes to mind when someone mentions the Olympics? Images of elite athletes competing in such events as swimming, track and field, figure skating, or gymnastics, can flood a person’s mind and a sense of awe creeps in at the sacrifice and hard work these athletes go through to realize their dreams. Years and years of dedication lead up to the moment when an athlete wins a spot on the Olympic team. But there is nary a thought about the other side of the Olympics equation. People do not necessarily think about such things as transportation, contractual agreements, or financials for example, all topics of subsequent articles. The topic of this article will focus on the financial side of things, as well as what Utah and other host cities did in order to win the bid.
Utah and those involved in trying to get Utah named as an Olympic city date back to the 1960’s. In 1966, Sapporo Japan won over three other competitors, including Utah, In 1975, Salt Lake became a bid entry despite financial issues and push back from residents, and again in 1985 for the 1992 games, losing out each time. This did not deter certain individuals determined to see the games come to Utah. From 1986 to 1995, Tom Welch (Chief Executive Officer) and David Johnson (Vice-President of the Bid Committee) presided over the Salt Lake Bid Committee. They worked for years trying to get the bid for the 1998 games. However, the summer games in Atlanta two years previously seemed to be the reason Utah did not get the bid in 1998.
Despite the loss for the 1998 games, it did not stop the Salt Lake Bid Committee from their mission. Their focus was set on the international relationships needed in order to obtain the winning votes. This included establishing long-term relationships with IOC and USOC members and other key people who may have influence over IOC members and how they vote. It was full steam ahead for Utah’s Olympic organizing committee as they were determined to secure a spot for the 2002 games. Utah ended up winning the bid for the games. The games took place in Salt Lake City and surrounding areas. Things seemed to go smoothly, and the games were an enormous success. However, in a seemingly innocent television broadcast by KTVX regarding Sonia Essomba, daughter of Rene Essomba, International Olympic Committee (IOC) member to Cameroon, the report opened the door that revealed a pay to play scandal that rocked the state. This led to the discovery that the Salt Lake Organizing Committee (SLOC) had set up a scholarship program that would pay for family members of IOC members. It was a way to help secure the votes needed to bring the games to Salt Lake City. These payments, it seemed,
“were part of a larger scheme set up by SLOC to award scholarships to the family members and friends of IOC members in an effort to win their votes to become the Host City. The scholarship program had its start when Salt Lake City was bidding to win the 2002 Olympic Winter Games. Within a few days after the revelation of the Essomba “scholarship” the media reported that, beginning in 1991, shortly after Salt Lake City had lost the 1998 Winter Olympic bid to Nagano, 13 individuals had received scholarship assistance worth almost $400,000 from the Salt Lake Bid Committee or SLOC. Of these 13 individuals, at least six were close relatives of IOC Members.”
The corruption did not stop there. Intermountain Health Care “provided free medical care to three people connected to an IOC member.” Such things as a knee replacement, hepatitis, and cosmetic surgery totaled approximately $28,000. Additionally, IOC member David Sibandze’s, son was hired as an intern for Salt Lake City. Even IOC President, Antonio Samaranch received “expensive guns as gifts from Salt Lake City.”
As the investigation continued, what followed was a litany of payments and benefits including, $111,389.12 to the son of IOC member David Sibandze of Swaziland, scholarship programs for family members of IOC members, employment arrangements for another family member of the IOC committee by Keystone Corporation, living expenses for the daughter of yet another IOC committee member, as well as payments to consultants to help “facilitate introductions between IOC Members and bid committee members.” The buying of Olympic votes did not stop there but you get the point, this was a pay to play system, and the Utah players had no problem doing just that. A staggering amount of $16 million went toward the Olympic bidding process. The investigation further exposed that the games in Nagano were not free from this pay to play corruption. The investigation revealed that “shortly before the International IOC Meeting at which Nagano was chosen, Japanese companies made large donations, possibly in excess of $15 million, to the IOC Museum in Lausanne”.
When the scandal broke out but before investigations took place, Tom Welch and David Johnson resigned. However, both indicted for bribery and fraud charges. Eventually they were acquitted of “all criminal charges in December 2003”. The investigation, however, uncovered numerous wrongdoings and as such a total of twenty IOC members were either expelled from the IOC or sanctioned. When the dust finally settled, not only had the Olympic bidding process cost taxpayers $16 million but the Salt Lake Organizing Committee was in the hole to the tune of $379,000,000.
Enter Mitt Romney. He showed up in 1999 to help reorganize the committee and turn it around. He was coming off a loss for public office and needed something to dull the sting of defeat. His time spent learning how the world of politics worked seemed to help him tremendously as he “mastered the news media, built a staff of loyalists and made fund-raising connections in Utah” which helped him turn the SLOC around. It is important to note that there are two budget areas for the Olympic games. The SLOC is a private committee responsible for sponsorships, ticket sales, and TV rights. “Under the rules at the time, this revenue funded the operational costs of the Olympics as well as the costs of building the necessary sports venues.” The second budget comes from the federal government. This money was used to cover security operations and to cover transportation.
Romney boasted that he was responsible for balancing the budget and turning the deficit into a surplus. This is partially true as he was referring to the budget the SLOC was responsible for. According to Fraser Bullock, a Bain Capital colleague of Romney’s who became his chief operating officer (and is in charge of Utah’s 2034 games), reported that the committee had a deficit of approximately $400 million and later ended up with a surplus. Part of that turnaround included his lobbying “heavily for earmarks, helping extract millions of federal dollars for projects in some cases only loosely tied to the Olympics.” The federal government contributed approximately $342 million in federal money, which came in the form of earmarks. This was to help with the planning and staging of the games,
“but in the three years leading up to the Games, taxpayers ended up paying for a lot of things that had little to do with downhill racing or the perfect triple Lutz, including $33,000 for an Olympic horse adoption program and $55,000 for the Department of Justice to assess and resolve racial tension in Salt Lake City. More than half of the federal money was spent on security, but the federal government also footed the bill for shuttle buses, drug testing, park-and-ride lots and upgrades to the lighting at Salt Lake City International Airport.” He also put his effort into some projects that were not “must haves”, including “a light-rail system in Salt Lake City that some politicians were keen on having.”
Voters rejected a sales tax increase approximately seven years before light rail operations began in 1999. Again, the light rail system was not a must have for the 2002 games. However, when the IOC named Salt Lake as the host city for the games, the Utah Transit Authority used this to their advantage. They were able to secure a deal that would have the Federal Transit Authority paying 80% of the project. The government budget, as noted above, contributed approximately $342 million but the total cost was much more than most Utahns thought. According to the Kem C Gardner Institute,
“The Salt Lake Organizing Committee (SLOC) spent an estimated $1.9 billion, in constant 2018 dollars, between 1996 and 2003 on the 2002 Winter Games, including wages, venue construction and enhancements, broadcasting expenses and general operational purchases. Adding additional infrastructure investments financed outside of the SLOC budget, visitor spending during the Games, and federally-funded security expenses to SLOC expenditures, direct expenditures totaled an estimated $3.5 billion. After adjusting for purchases from out-of-state companies, in-state revenue sources, and the displacement of regular skier visitation, net-new direct expenditures total an estimated $2.5 billion.”
According to the September 2000 United States General Accounting Office (GAO) report,
“As of April 2000, federal funding and support provided or planned for the 2002 Olympic Winter Games in Salt Lake City is estimated to be almost $1.3 billion (in 1999 dollars). Of this amount, about $254 million has been planned or provided for activities related to planning and staging the Games. The remaining $1 billion is planned or has been used mostly for highway and transit projects that Utah and Salt Lake City officials wanted to have completed in time for the Olympic Games.”
The cost of the games carried a considerable price tag and Utahns may not have been so willing to let the games proceed had they known the full cost. Legislators and city officials were determined to include the cost of a light rail system into the overall Olympic costs as a way to get around taxpayers rejecting tax increases in previous years. Taxpayers ended up paying even though they did not want the project to move forward. Additional roads were built even though Utah transportation officials said they were not part of the “long-range transportation plan.” It is a classic example of our elected officials not listening to the will of the people and manipulating the system to garner support for projects they want to see fulfilled, even at the expense of the taxpayer.
Can Utah residents afford another round of the Olympic games, given the corruption that occurred previously? Can they afford the possibility of Salt Lake City becoming a permanent host city and everything that would entail? If the light-rail system was incorporated into the cost of the 2002 games, what other transportation projects are in store for Utahns for 2034? Are Utahns aware of the installation of Intelligent Transportation System (ITS) devices? With the upcoming games in 2034, will more surveillance cameras show up on our highways? Will Utah continue to follow in the path of questionable behavior for 2034 as they did for 2002? It seems so as they agreed to a major concession in order to secure their bid for the 2034 games. “Several International Olympic Committee proposed an amendment” that would have the FBI dropping their investigation into “the Chinese Doping controversy.” Twenty-three swimmers tested positive for doping in the 2020 Tokyo Olympics. Eleven of those twenty-three swimmers participated in the 2024 games in Paris. When the United States found out, they were outraged and used the Rodchenkov Act, which allows the FBI to go after those involved. However, the U.S. Olympic Committee and the Utah officials agreed that the FBI would drop the doping investigation. Given Utah’s ties to the Chinese government AND knowing that Utah officials are not above corruption, the question remains, will Utah officials continue to engage in corrupt practices that will cost the taxpayers millions or billions of dollars?
More on what the Olympics were REALLY about here and here.
RESOURCES:
Olympics return to Utah faced long path, heavy odds
Utah transit could look completely different for 2034 Olympics | KSL.com