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Corruption: “Catastrophic Criminality”

Series on Sochi 2014

February 21, 2014

Series on Sochi

This article is part of the Ellison Center blog Series on Sochi. Click here to read more as we cover the 2014 Winter Olympic Games in Russia! 


By Sarah McPhee

For weeks we have seen the viral image of the tandem toilets, incomplete construction and shoddy workmanship in Sochi. “There is no point hosting a prestige event, at a cost of $50 billion, if the standard of hotels and ease of travel around the country isn’t in step,” said David Scowsill, president of the World Travel and Tourism Council. This is a shame, because there is so much that has been impressive and beautiful about the Sochi Games, it highly disappointing that Russia could not pull the event off with panache. Unfortunately, the Games were destined to be plagued with problems because of the catastrophic criminality that hobbles the Russian system.

Corruption of government officials, transnational crime and money laundering are all significant problems for Russia. Security expert Alan Collins explained, criminal activity may be viewed as less a web of cells and more as a marketplace, where government officials who are  “for sale” are included in the criminality. The consequences of corruption are potentially more enduring and dangerous to human security than the machinations of terrorists, because corruption robs all people of a higher standard of living, feeds fatalistic attitudes about the future, and encourage political passivity. A temporary physical attack on a population cannot damage a system as deeply as a continuous bombardment on the public trust and the rule of law.

Putin has been personally engaged in the project to recreate Sochi and the Russian image with a keen interest in how all of this will reflect upon his own legacy, yet corruption has brought into question the true efficacy of his command. As the perennial winner of Russian high offices, Putin’s political will has shaped modern Russia despite a dogged minority opposition and international criticism. Dominic Basulto, U.S. editor of Russia Direct, drew parallels between presidents Putin and Obama to dichotomize the difference between Russia and the West. He noted that Obama had also personally endorsed an unsuccessful Olympic bid for his beloved Chicago:

[The oligarchs were] basically strong-armed by Russian president Vladimir Putin to pay for a large part of all this in one form or another. In the U.S., it would be the equivalent of U.S. President Barack Obama gathering together America’s richest men — people like Warren Buffett and Bill Gates — in one smoke-filled room and forcibly extracting a few billion dollars from them collectively to ensure that a 2016 Summer Olympics in his Chicago backyard ran smoothly. Where Obama failed, Putin succeeded.”

Basulto explained, “Putin basically took a list of these infrastructure needs in 2007 (when Sochi won its Olympic bid) and matched them with a corresponding deep-pocketed oligarch or corporation. It’s the Russian version of the American system of handing out naming rights to stadiums and venues in exchange for a sizable cash investment.” The Economist cited Allison Stewart, of the SAID Business School at Oxford, who estimated that each Olympic endeavor tends to overshoot the initial budget by about 180 percent on average. According to Stewart, Sochi is now more than 500 percent the initial budget. Stewart had also noted the barrier between the businesses and government in Sochi was almost nonexistent. “Large construction projects often have a side-effect of corruption. But in Russia corruption is not a side-effect: It is a product almost as important as the sporting event itself.”

Echoes of Montreal 1976 are revealed in Sochi, where corruption caused the cost to skyrocket and the quality of the structures to plummet. Montreal just finished paying its Olympic debt, and its stadium is only forty years old and crumbling. Well before the Sochi Games, Stewart found the quality of the work to be “patchy” with some concern for structural integrity. The ski jump had to be redone several times due to “geological complications,” the cost rose sevenfold, and the vice president of the Olympic Committee was personally and publicly humiliated as he was sacked by Putin on national television. According to the Wall Street Journal, this occurred after the IOC inquired about the two-year delay on the over-budget project. The Economist reported, in the city, “newly laid sewage pipes have burst, so a nasty smell drifts over a kindergarten playground. Sea-coast fortifications cracked soon after installation. The work has been carried out with little concern for the environment. The river flowing into the Black Sea has been polluted by construction waste and protected forests have been cut down. A green whistle-blower was prosecuted and chased out of Russia.”

The Sochi social media debacle is a direct result of the shameless corruption that is a matter of daily living in Russia. According to PricewaterhouseCooper, Russia is a world leader in economic crime, with misappropriation the main problem. Among all companies operating in Russia, 58 percent complained about corruption and bribery, well above the global average of 27 percent. Putin vowed to fight corruption in his state of the union address, but in Russia the corruption starts at the head. In 2006, researchers at the Brookings Institute revealed that large segments of a Ph.D. dissertation President Putin defended in 1996 while serving as deputy Mayor of St. Petersburg had been stolen “virtually word-for-word” from the Russian edition of an American business school textbook written by two University of Pittsburgh professors. Putin never acknowledged the charges, but purchasing degrees is a common form of corruption in Russia following the defunding of the prestigious Soviet education system. If the president of the country cannot be counted upon to have earned the credentials required for his job, who can? Is it any wonder that Sochi has been as memorable for its toilets as its triumphs?

Sarah is a 2015 REECAS MAIS student. Read more of her stories on Sochi here. 

Works Cited

Dominic Basulto. “The Sochi Olympics are Too Big to Fail,” Russia Direct, November 25, 2013.

Castles in the Sand,” The Economist, July 13, 2013.

Danchenko, I and Gaddy, C. (2006). “The Mystery of Vladimir Putin’s Dissertation.” The Brookings Institute.

Lukas I. Alpert, “Putin Fires Official Over Olympic Delays,” Wall Street Journal, 7 Feb 2013.

Tourism Council Tells Sochi to Shape Up.” (February 19, 2014). The Moscow Times.