RUSSIA: Winter Olympics – Putin Warns Against Corruption

By Kester Kenn Klomegah Reprint | | Print |

Kester Kenn Klomegah

MOSCOW, Sep 13 2007 (IPS) - President Vladimir Putin has issued a blunt warning to heads of organisations and regional administrations involved with the preparations for the 2014 Winter Olympics in Sochi, Russia’s southern sea resort, to eschew corruption.

After a meeting with his prosecutor general Yury Chaika who has been entrusted with the responsibility of monitoring all funds set aside from the federal budget for the games, Putin said that all charges of corruption and financial mismanagement would be dealt with severely.

“Control – sufficiently rigorous control – must be organised over the rational spending of state funds in all regions,” he said.

The Olympic games is going to be big business in Russia. State investments under the federal programme are fixed at 1.5 billion US dollars and directed at the development of infrastructure including the construction of railroads and highways, and provision of energy and environmental facilities, Komsomolskaya Pravda newspaper reported.

A law scheduled to be adopted this month by the State Duma, the lower house of parliament, stipulating the procedures for holding the games, would also contain a detailed list of provisions, including preparatory steps, the taxation of companies involved, and the simplification of visas and customs regulations for participants.

Authorities also plan to set up an Olympic State Corporation (OSC) in November or December to carry out construction work (including the building of both infrastructure and facilities) for the 2014 games, according to Kremlin’s source.

Russia is strongly wooing private investors to make a significant contribution towards the provision of the needed facilities expected to exceed some 20 billion dollars. The construction of all the key hotel facilities and restaurants is expected to be financed from private investment, and a number of roads will also be financed privately.

Meanwhile, the Ministry of Economic Development and Trade has praised the work of the Chinese builders who constructed the facilities for the 2008 Olympic Games in Beijing and has invited them to participate in the construction of the infrastructure for the games.

“Never before have the Olympic Winter Games been staged in Russia, a country with a passionate and highly successful traditions in winter sport – so I think it will be a tremendous boost to the dynamism of Krasnadar region where Sochi is located and turn it into a world-class sport cum holiday resort destination,” deputy director of the communications of Sochi 2014 Committee, Arina Birshteyn told IPS.

Besides, she said, it would serve as an economic and social catalyst to transform and diversify the region’s economy, increase employment and improve overall quality of life for the residents of the region.

Just as the game itself is so important for the country, so also authorities are taking steps to control and monitor the flow of funds. Reports will be made available to any sort of auditing at any time, Birshteyn added in remarks.

A former prime minister during Yeltsin’s regime, Boris Nemtsov told IPS in an interview that if embezzlement is to be prevented, the president would have to either take full fledged responsibility to oversee the financial aspects or set up an independent committee to handle matters relating to the federal budget spending.

“Anything at all is possible including embezzlement or misappropriation of funds at the highest levels … But first and foremost, Putin’s iron-handedness on the society is a guarantee that he will exercise full control over the huge budget Russia is committing for the games,” Nemtsov told IPS.

He suggested: “It’s strategically important that an independent committee comprising famous and experienced Russian figures, as such as world chess champion Garry Kasparov and many others, would also provide parallel check and balances in the rational use of money and prevent possible embezzlement.”

Substantial investment, he acknowledged, that goes now into construction and development of the region undoubtedly calls for establishing an interdepartmental working group or independent committee that will handle financial arrangements for the 2014 Olympics

The Audit Chamber of Russia, an institution in charge of monitoring and auditing government accounts, plans to closely monitor land and property prices in Sochi, the city chosen to host the 2014 Olympic games.

“The effort to check the spending of funds earmarked for the Olympic games in Sochi has begun. Several working teams are being put together. Analysts and experts on real estate and property issues will be involved,” head of the Audit Chamber of Russia Sergey Stepashin told Interfax news agency.

Stepashin advocated the creation of a separate ministry for sports.

“Given the coming Olympic Games and the attention the state is paying to physical culture, sports and public health, the issue is quite pressing today,” he said. Last July, in Guatemala City, the International Olympic Committee (IOC) members elected Russia’s district of Sochi as the venue for the winter games. Sochi competed against Austria’s Salzburg and South Korea’s Pyeongchang. Salzburg was disqualified in the first round of the voting, while in the second round Sochi emerged victorious, receiving 51 votes against Pyeongchang’s 47 votes.