The Washington Free Beacon, January 30, 2014
Daniel Wiser
The Sochi games will be the most expensive in history at a total cost of more than $50 billion—more money than was spent on the sport buildings for all of the previous Winter Olympics combined, according to the Institute of Modern Russia (IMR).
Corruption was so rife during preparations for the upcoming Winter Olympics in Sochi, Russia, that a local highway project cost about four times more than the entire 2010 games, according to a recent report.
IMR, a U.S.-based think tank that advocates for democracy and human rights in Russia, released a website and a report on Thursday that documents corruption at the games.
Russian President Vladimir Putin originally pitched the Olympics at Sochi—located in a sub-tropical swamp on the shore of the Black Sea—as a $12 billion project. Sochi is reportedly near his favorite ski resort, but many of the sites for the games are situated on the coast near a beach resort.
Boris Nemtsov, a Russian democratic opposition leader and coauthor of the report, said at an IMR event on Thursday that the decision to host the games in the warmest region of Russia received no public input—and made rampant corruption possible.
“There was no discussion about the place at all,” he said. “There was no discussion in parliament. This is [Putin’s] personal decision—the Sochi Olympic games are his personal project.”
Nemtsov estimated that about $25 to $30 billion of the $50 billion price tag for the games was “embezzled.” Some of the largest investors were companies led by close confidants of Putin, he said.
The largest investor, the state corporation Olympstroy, controlled $9.4 billion of state budget funds for construction at the games and is now being operated by its fourth manager. The previous three were dismissed and face multiple criminal charges of corruption, but none have yet gone to trial.
The next two largest investors were companies affiliated with the Rotenberg brothers, Arkady and Boris—childhood friends of Putin—and state-owned Russian Railroads (RR). The Rotenberg brothers’ companies received almost $7 billion in state funds for building the gas pipeline, roads, airport, sea ports, and other infrastructure.
RR is led by Vladimir Yakunin, a friend of Putin. The state railroad company oversaw the most expensive project for the games—the more than $8 billion Adler-Krasnaya Polyana Highway.
RR contracted with the SK Most group and Transyuzhstroi, companies that had close ties to Yakunin, to build the 30-mile highway. Construction was marred by environmental damage that included deforestation and toxic sludge in the Mzymta River, according to the report.
Nemtsov said the cost of the highway project was about four times as much as the entire 2010 Winter Olympics in Vancouver—which cost about $1.8 billion. He also said the project cost about three and a half times more than the U.S. program that placed the Curiosity rover on Mars.
“Unfortunately for Russians and Americans, flying to Mars is much cheaper than to build a road,” he said.
Additionally, there are reports that thousands of migrant workers on the construction projects were paid minimal wages and faced grueling working and living conditions. At least 2,000 families in the region were also evicted from their homes.
The report said the games encapsulate all of the problems with Putin’s Russia.
“Essentially, the Olympics have exposed, in concentrated form, the main flaws of the [Russian] system: abuse, corruption, petty tyranny, cronyism, non-professionalism, and irresponsibility,” it said.
Dozens of political prisoners remain behind bars in Russia despite the recent high-profile release of businessman and opposition activist Mikhail Khodorkovsky.
IMR has published on its website a list of 41 persons recognized as political prisoners by Russia’s Memorial Human Rights Center.
