Sports

Gauging the cost of a scandal

JAMES DEACON January 25 1999
Sports

Gauging the cost of a scandal

JAMES DEACON January 25 1999

Gauging the cost of a scandal

Sports

The Olympic rings are tainted, but they still have value

It was getting ugly for the International Olympic Committee. Every day, investigators delving into a month-old bribery scandal discovered more rot in the bidding process that resulted in Salt Lake City winning the right to host the 2002 Winter Games. In addition to college scholarships and medical care for IOC members and their rel atives, overzealous Utah bidders al legedly enticed voting delegates with cash, real estate deals and even "escorts" for visiting dignitaries. It did not stop there. Although the IOC's inquiry into the affair is fo cused solely on Salt Lake, officials in cities that bid for other Games claim IOC members demanded favours from them, too. And while organiz ers of Toronto's pitch for the 1996 Games insist they did nothing wrong, a former Ontario government offi cial alleges the group did help to find ajob for the husband of Finnish del egate Pirjo Haggman. The IOC's most damaging scandal ever was getting worse, not better, and that was bad news for an organization trying to re-sign some 11 world-wide sponsors-for $84 million eachover a four-year period. -

Surprisingly, though, current and potential sponsors may not be that difficult to woo. A Maclean’s survey has revealed that while the widening scandal has assuredly tarnished the multicoloured rings—the IOC’s emblem and chief source of revenue—it has not stripped them of their allure. Canadian representatives of so-called top sponsors—the 12 multinational companies, such as Panasonic, Kodak and Xerox, that pay the IOC quadrennial fees to use the rings to promote their products worldwide—say they are monitoring the situation and awaiting the results from the investigations. But most add that they intend to continue their association. Only one, IBM, says it is dropping its sponsorship after the 2000 Games in Sydney, Australia, and the company announced that decision—due to the prohibitive cost of supplying information technology to the Games—long before the controversy in Salt Lake erupted. Locally, firms that have deals with the Canadian Olympic Association say the scandal has

not diminished their commitments. ‘We are happy with our relationship with the COA, and we fully intend to be onboard for Salt Lake City,” says Doris Bitz, director of marketing for General Mills. “It is important for companies like ours to support Canadian athletes.”

Those are brave words considering the millions at stake and the damning details emanating from four separate investigations into the 2002 bid—by the IOC, the U.S. Olympic Committee, the U.S. justice department and the Salt Lake committee’s own ethics panel. Among other things, auditors examining the committee’s creditcard records found payments for escort services, and Utah officials admitted to giving up to $70,000 (U.S.) to individual delegates and arranging for IOC member Jean-Claude Ganga of the Republic of the Congo to receive $60,000 in profit from a land deal.

Ganga, a strong supporter of IOC presi-

dent Juan Antonio Samaranch, had company at the trough: his organization has sent letters demanding explanations from 13 members implicated in the scandal, and Samaranch promised to expel any member found guilty of accepting bribes. Dick Pound, the Montrealer heading the IOC’s internal inquiry, admitted that the preliminary findings were worse than he had expected, and spent what was supposed to be a holiday in Barbados last week writing a report that he will submit to the Olympic board on Jan. 24.

Samaranch refused to step down last week, saying he still had the support of the IOC board. But Salt Lake has already started cleaning house—the top two executives of the 2002 group resigned on Jan. 8, and the organizing committee suspended the $15,000-a-month consulting fee paid to Tom Welch, who headed the city’s bid to host the Games until he was forced to step down in 1997 after being charged with spousal abuse. Welch admits u his group agreed to IOC members’

3 various demands, but still claims \ his committee did nothing wrong, l saying the payments to Ganga were donations to help needy children. We made contributions out there as a part of the Olympic family,” Welch said.

Salt Lake’s purge is vital for the embattled 2002 Games. Organizers are still more than $300 million short of meeting their budget commitments, and they hope much of that will come from sponsors. One major sponsor, the telecommunications firm U.S. West Inc., delayed a scheduled $7.5-million payment to Salt Lake, and the companies contacted by Maclean’s, though still supportive in principle, said they, too, were eager to see that the mess was cleaned up. “We are pleased the IOC is taking appropriate steps to bring the situation under control,” said Jack Scott, director of communications for Kodak Canada. “We look forward, with tremendous interest, to the eventual outcome.” They are not alone.

JAMES DEACON

SUSAN McCLELLAND