Russian activist publishes Sochi corruption file

2014-01-27 19:40
The website of Alexei Navalny.

The website of Alexei Navalny.

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

kalahari.com

Sochi - An interactive website launched on Monday by anti-corruption activist Alexei Navalny paints a vivid picture of suspected cost overruns and conflicts of interest at the Sochi Winter Olympics.

Russia has spent about $51bn to deliver the Olympics in Sochi, which run 7 February - 23 February, making them the most expensive Olympics ever even though winter games have fewer athletes competing than summer games do.

Navalny claims that Russia spent twice as much as necessary to build at least 10 of the Olympic venues - including the Bolshoi Ice Palace, the Fisht Stadium for the opening/closing ceremonies and the speed-skating arena.

Allegations of corruption have dogged preparations for the Sochi Games for years, as reported by The Associated Press and others. Navalny's new website - sochi.fbk.info - combines data gathered during his own investigations along with media reports and other activists' analysis.

The website makes a wide range of data accessible in English and Russian.

"Athletes are not the only people who compete in Sochi," Navalny, who finished a strong second in Moscow's mayoral election last year, wrote on the website. "Officials and businessmen also took part in the games and turned them into a source of income."

Rampant corruption

President Vladimir Putin has rejected claims about rampant corruption in Sochi, saying the inflated prices were due to the honest mistakes of investors who underestimated the costs.

"If anybody has got this information, please show this to us," Putin said in a recent television interview. "But so far we haven't seen anything except speculation."

A 2012 report by the government's Audit Chamber found about 15 billion rubles (about $500m) in "unreasonable" cost overruns in the preparations for the Sochi Olympics.

Auditors found that the work of some staff members at Olympstroi, the state company in charge of Sochi construction, between 2008 and 2010 was "conducive to incurring unreasonable cost overruns".

At least three criminal investigations against Olympstroi employees have been opened, but none of them has reached court. Olympstroi has since changed its management.

The Sochi Organising Committee would not comment on Monday on Navalny's new website.

Fertile ground for corruption 

Navalny does not seem to provide solid evidence of how money was stolen during the many Sochi construction projects. This has proven extremely difficult to do because the games were not covered by Russian laws on tenders and procurement, making officials unaccountable for the money spent.

Olympstroi was given free rein by Putin to "determine the ground rules for selecting investors and contractors" for Olympic venues. This created fertile ground for corruption in the allocation of funds, according to Ivan Ninenko, deputy director of Transparency International in Moscow.

Olympstroi "is even less transparent than companies in [Russia's] state-owned sector, where corruption is rife," he told AP.

The total amount of state contracts overseen by Olympstroi was about 700 billion rubles, or $22bn, according to Deputy Prime Minister Dmitry Kozak, the government official in charge of the games.

A website Navalny set up in 2010, called Rospil, has monitored thousands of Russian state contracts and appealed to law enforcement agencies to get the murky ones annulled. Rospil has been successful in overturning nearly 130 contracts worth nearly $2bn in taxpayer money. Not for the Sochi Games, though.

"Opportunities for public control are very limited" for Sochi contracts, said Konstantin Kalmykov, who works for Navalny. All it takes is a presidential or government decree to award a contract to a specific firm.

"If there were regular public control in place, that would be a big factor in saving funds and increasing efficiency of spending," Kalmykov said.

Conflict of interest

Navalny's new website lists several Sochi construction projects with evident conflicts of interest.

In one of the most glaring examples, the Ice Cube curling stadium was built by a company controlled by businessman Alexander Svishchev, the father of Dmitry Svishchev, president of the Russian curling federation, the website said, citing public records.

One of the key beneficiaries of lucrative Olympic contracts was Putin's childhood friend Arkady Rotenberg. Through a majority-owned subsidiary, Rotenberg holds nearly 39% of the Mostotrest company, which amassed a dozen Olympics-related state contracts to build nearly all of the highways in the area.

Mostotrest's contracts in Sochi amounted to $3.1bn, including a $1.6bn bypass for Sochi, as well as tunnels, bridges and railroads, the company confirmed to the AP.

The Russian business daily Vedomosti in 2009 analysed scores of tenders for Olympic contracts and discovered that the majority of bids were very close to the maximum the state said it would pay, and in many cases bidders were barred from running, leaving one company to claim the contract.

Mostotrest won the $1.6bn bypass contract after firms owned by tycoons Oleg Deripaska and Roman Abramovich dropped out of the competition in 2009. Mostotrest offered to build the road for 59.36 billion rubles, just barely below the maximum state price of 60.9 billion rubles.

- AP
Read more on:    sochi olympics  |  alexei navalny  |  vladimir putin  |  russia  |  sochi 2014
NEXT ON NEWS24X
SHARE:

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
1 comment
Add your comment
Comment 0 characters remaining
 

Inside News24

 
/Travel

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Magical Massinga

Spend 5 nights at the gorgeous Massinga Beach Lodge in Mozambique and only pay for 4 from R13 220 per person sharing. Includes return flights, accommodation, transfers and romantic turndown. Book now!

Kalahari.com - shop online today

Up to 40% off fashion accessories

Save up to 40% on selected handbags, purses, watches, jewellery and more. Offer valid while stocks last. Shop now!

Save up to R2000 on top electronics

Get every day mind bowing savings on top electronics. Offer valid while stocks last. Shop now!

As seen on TV - New book releases at only R199 each

Get mind blowing book savings on new titles. Offer valid while stocks last. Shop now!

Save up to 50% on Women’s month treats!

Celebrate the awesome women in your life with awesome treats like beauty products, fashion accessories, bestselling books, electronics and more. Offer valid while stocks last. Shop now!

Up to 60% off - clearance sale!

Save up to 60% on appliances, books, electronics, toys, movies and more. Offer valid while stocks last. Shop now!

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

Horoscopes
Aquarius
Aquarius

There is an emphasis on work. There may be some restrictions, or delays or extra responsibilities. It is all about rhythm and...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.