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Wednesday
Feb252015

The Rio 2016 Olympics: A Window into Our World (Part Five, conc.)

Developing nations like Brazil devote huge sums of public money to construct the stadiums and other works necessary for sporting mega-events. These works are used for a few weeks or months, and then too often, usage declines. Brazil has already experienced this pain once in hosting the World Cup in 2014, and hopes to not revisit this pain with the 2016 Olympics.

Initially, the Brazilian government forecasted spending $14 billion to host the World Cup. At the end of the tournament and after auditing, the Games were a staggering 327% over budget, making Brazil's World Cup the most expensive in history.

That trend may continue with spending for the 2016 Olympic Games in Rio.  According to the transparency link provided by the Olympic Games, the private resource budget has swelled for the Games overall from $1.46 billion in 2009 to $2.4 billion in 2013. The Olympic Delivery Authority states that the overall cost for the Games will exceed $13.25 billion, over $3 billion more than was estimated in the 2008 initial projections. Other sources speculate that the Games are expected to run 50% over budget.

Where the budget has swelled, the Organizing Committee’s stated reasons are inflation for services, rising salaries in Brazil, and the addition of golf and and rugby. However, the public eye is turned towards corruption by current events like the Petrobras scandal, and the resignations of both Jorge Hage, Brazil’s anti-corruption comptroller, and General Fernando e Silva, the head of the Olympic Delivery Authority. While budget increases are the norm for mega-events, media portrayals of these events can further exacerbate corruption perceptions and make the public skeptical of the stated reasons for budget inflation.

It’s not too late for Brazil to correct these potential misperceptions. The country now has the unique opportunity to bolster its image as a transparent government in the realm of sporting mega-events. Over the past year, Brazilian prosecutors have targeted Queiroz Galvão, Construtora OAS, and Odebrecht (all implicated in the Petrobras scandal), who together were set to gain billions of dollars from Olympic construction projects. After an investigation, Rio Mayor Eduardo Paes attempted to clear the air, saying that, “There are no suspicions concerning the contracts of the Olympics”.  We hope he’s right.

Will Brazil be able to tighten its belt and reign in the bad actors? How much of this overspending is attributable to corruption, and how much is run-of-the-mill bureaucratic inefficiency? Our research team from the University of Richmond wants to find out first hand.

You can read our preliminary paper on the subject and our proposed research here If you have insight or experience with these issues, we would love to hear from you. We are also seeking donations, whether in-kind or cash, to help defray the students’ travel and research expenses. If you want to support our work, please contact Prof. Andy Spalding at aspaldin@richmond.edu, or follow this link. We greatly appreciate your help!

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Tyler Klink is a second-year law student at the University of Richmond, where he works with the Carrico Center for Pro Bono Services. He received his B.A. in Political Science from Ohio University and is the past Director of Leadership Programming at the American Leadership Academy in Cabo San Lucas, Mexico.

Kat Gavin is a second-year law student at the University of Richmond, where she is pursuing a Certificate in Intellectual Property law. She received a B.A. in Russian and Post-Soviet Studies from the College of William & Mary, and previously worked as a translator for the School of Russian & Asian studies while studying in Moscow, Russia.

The authors thank Shaun Freiman for his comments.