Yesterday’s announcement that the 2028 Summer Olympics have been awarded to Los Angeles has an underappreciated significance for the anti-corruption movement. It is the first Olympic Games in which the host city will be under a contractual obligation to prevent corruption.
With each Olympic Games, the International Olympic Committee enters into an omnibus contract with the host city. That contract covers a variety of issues: the provision of services, the distribution of revenues, advertising rights, dispute resolution, etc. The 46-page Los Angeles 2028 contract can be found here (pdf).
But for the first time in history, the latest host-city contract contains a provision obligating the host city to prevent corruption in the preparation of the Games. Specifically, at page 17, the contract provides that the host city, the host National Olympic Committee, and the host’s Organizing Committee for the Olympic Games, shall:
refrain from any act involving fraud or corruption, in a manner consistent with any international agreements, laws and regulations applicable in the Host Country and all internationally-recognized anti-corruption standards applicable in the Host Country, including by establishing and maintaining effective reporting and compliance.
This step is several years in the making. Transparency International has been working with the IOC to insert such language into the host-city contract. Last year they finally succeeded, thanks in very large part to the efforts of German lawyer Sylvia Schenk, a former Olympic track runner who today volunteers a great deal of her time and energy to the Olympic anti-corruption effort. This new contractual language may be Sylvia’s greatest Olympic achievement.
Though the LA 2028 contract is the first with anti-corruption language, 2028 will probably not be the first Games that are subject to such a provision. In an unprecedented move, the IOC has publicly awarded the 2028 Games before the 2024 Games. LA and Paris were the last cities standing in pursuing the 2024 bid, and the IOC reached an agreement with both cities in which it would give 2024 to Paris and 2028 to LA.
The Paris 2024 announcement should be made shortly, and that contract should also contain the same or similar anti-corruption language. Assuming it does, 2024 will be the first Olympic Games in which the host city is under a contractual obligation to prevent corruption. The 2026 Winter Games, which will likely not be awarded for two more years, will presumably be governed by a similar provision.
Since the Salt Lake City bribery scandal of the 1990s, the IOC has been addressing corruption in the bidding process. But the corruption scandals of Sochi 2014, Rio 2016, and Pyeongchang 2018 mainly concerned post-bid corruption — that is, corruption occurring in the seven-year period of preparation between the awarding of the bid and the opening ceremony.
In the coming months, and years, we’ll discuss at some length the significance of this historic step.
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Andy Spalding is a lecturer at the International Anti-Corruption Academy, Professor at the University of Richmond School of Law, and Senior Editor of the FCPA Blog.
6 Comments
Congratulations. This is a good step forward, but it is only one step. Another key is making sure they actually implement an effective anti-corruption compliance program. Just having it in the contract does not mean it will happen. There needs to be some serious checking and evaluation of the compliance program steps, and consequences for failure to implement such a program, for this to be really meaningful. Cheers, Joe
There needs to be an examination of the relationship between the USOC and CoSport, the firm that manages the sale and distribution of tickets in the USA. There were several articles about CoSport during the recent Olympics in Rio.
http://www.reuters.com/article/us-olympics-rio-tickets-insight-idUSKCN10F1YI
Another aspect to ponder is around Olympic sponsorships. Major sponsorship packages include, for example, tickets to the various 'waves' of the Olympics, the first wave including the Opening Ceremony and the final (fourth?) wave including the Closing Ceremony. These tickets are generally highly prized. Plus there are various hospitality packages.
So, what does a sponsor do with these tickets? Of course, it makes sense to invite their best customers with whom they want to continue to do business and government officials that they would like to influence – it obviously doesn't make sense to invite commercial, government or other guests who are of little or no interest to the sponsor from a business point of view. At what point does this entertainment step over the line into an FCPA, UK Bribery Act or other corruption violation?
It is no doubt a great effort for an anti corruption clause being inserted in the Olympic contract , however it is essential as stated in an earlier post , there needs to be monitoring done and to ensure that the anti corruption rules are complied and if is not done , thereafter the corrupt should be prosecuted .
What form will the penalties take if leaders of any organization be sublect to prison terms or will they be subjected only to financial penalties the quantum of which may be not be compatible with the profits and thus ineffective?
Banning or black listing for may also have little deterrent effect.
Finally who benefits from the financial benefits? By right the penalties should be credited to public revenues which can then be used for common good.
I doubt if there will be any fair response to my comments.
Andy,
Looks like you have your work cut out for you. Does this make your effort to clarify the intent of the contracts easier or harder? Any idea of whether the monitoring efforts will be more effective? Do you expect the more corrupt nations to reconsider their participation in the games?
Great article Andy, even for those of us who do not understand the complexities of the issues.
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