Will Rio be remembered as the ‘anti-corruption Olympics’?
01 Oct 2019 9:05 am by Mark Dunn
The Rio 2016 Olympic Games came to a close with a spectacular ceremony, and the Paralympics will begin next month. The historic achievements of Usain Bolt and Michael Phelps have grabbed most of the headlines over the last month. But alongside the sport, the Games will be remembered for numerous allegations of bribery and corruption.
Events in Rio have led to further scrutiny over the role of the International Olympic Committee (IOC), the Swiss-based organisation that organises the competition. Pat Hickey, a senior member of the IOC, was arrested in Brazil over allegations of illegal ticket sales. He is accused by the Brazilian authorities of being involved in a scheme to resell Olympic tickets at an inflated price.
The International Olympic Committee (IOC) said it would co-operate with any police investigation and stressed that Mr Hickey should be presumed innocent until proved otherwise.
But his arrest could add to the calls for changes in the way the Olympics are organised. The IOC handles vast sums of money from broadcasting rights to the Games, sponsorships, licensing, and ticket sales. It is now facing accusations in the media of a lack of transparency and accountability.
In a blog post following Mr Hickey's arrest, Rio Olympics Neighbourhood Watch, a project run by a non-governmental organisation in Rio, asked: "How much is known about the inner workings of the IOC and its finances? Who is this elite clique of decision makers who each receive US$900 per diem spending allowances during the Games and whose choices permanently affect urban fabrics around the world?"
FIFA, the governing body for world football, has faced similar criticisms in recent years, culminating in the arrest of fourteen officials in May 2015. Mr Hickey's arrest will add further pressure on these organisations to reform. Companies that choose to associate with the Olympics or the World Cup, either by sponsorship or bidding for contracts, should monitor the media coverage of the IOC and FIFA. They might also consider using their influence to lobby these organisations to reform their governance structures.
Doping and bribery accusations
The Rio Olympics have also been marred by allegations of doping and bribery. Before the Games even began, 118 Russian athletes were banned from competing after allegations of a state-sponsored doping regime. A weightlifter from Kyrgyzstan was stripped of a bronze medal and a number of other athletes were sent home because of doping allegations. There were many cases of athletes accusing fellow competitors of doping – one swimmer said that a rival "pisses purple".
Previous Olympic Games have seen accusations of bribery in the awarding of tenders to build Olympic stadia and infrastructure; in deciding which country should host the Olympics; and in using access to events to bribe prospective clients or politically-exposed persons. But in Rio, boxers from Ireland and the USA have even accused the judges of taking bribes to influence their decisions, leading to some of the judges being sent home from the Games.
Rather than seeing these cases as damaging to the Olympic brand, it could be argued the decision to send home judges and athletes shows that anti-corruption measures in sport are working. Andy Spalding, Associate Professor at the University of Richmond School of Law, wrote in a post for the FCPA blog: 'The Rio 2016 Summer Games may go down in history - nay, should go down in history - as the anti-corruption games. We may never have talked so much about cheating, or punishing cheating, or how to design an effective anti-cheating regime, as we are now.'
Spotlight on corruption in Brazil
Before the Olympics began, corruption was already a major talking point in Brazil. President Dilma Rousseff has been suspended from office over allegations she manipulated government accounts, which she denies. This week she faces a vote which could result in her impeachment. There are also allegations that oil firm Petrobras colluded with government officials to pay them for their help in securing building contracts.
With the Olympics bringing the world's attention to these cases in Brazil, some observers might have gained the impression the country has a poor record on corruption. But a report by the University of Richmond Law School Anti-Corruption team said "these scandals are actually evidence of newly enacted corruption laws taking effect". A new law, the Clean Company Act of 2014, aims to crack down on bribery in the awarding of contracts. Bid rigging and fraud are now prohibited in public procurement, as well as bribery of Brazilian public officials.
Professor Spalding said these high-profile cases of corruption at the top levels of business and government in Brazil show that the country has now set up effective tools to fight bribery and corruption. Breaches of corruption laws can be evidence that these laws are working and create confidence in a country's commitment to taking enforcement action against bribery and corruption. So although Rio 2016 will be known for the sporting heroics of Bolt and Phelps in years to come, perhaps it should also be remembered as the "anti-corruption games".
3 ways you can apply this information right now
- To protect your business and reputation you need to better understand your customers, employees and vendors. Lexis Diligence brings together all the intelligence you need in one place to conduct consistent due diligence and comply with anti-money laundering and anti-bribery regulatory requirements.
- Keep up to speed on developing news and expert opinion with our regular posts on Anti-Bribery & Corruption and Anti Money Laundering.
- Subscribe to our blog to have updates delivered directly to your inbox.