Though Olympic construction projects frequently cost more than expected, Sochi's overrun was dramatic even by Olympian standards. Much of it was attributed to corruption and cronyism.
Not all the games at the Winter Olympics in Sochi, Russia, were on the slopes and in the ice pavilions. Some were quietly played in backrooms, where palms were greased and eyes winked. Fraud was the game and the players were construction contractors.
The winter games in February were the most expensive in history—costing a cool, so to speak, $50 billion, which was about $38 billion more than anticipated. Though Olympic construction projects frequently cost more than expected, Sochi’s overrun was dramatic even by Olympian standards. Much of it was attributed to corruption and cronyism.
Before we break our tongues tut-tutting the situation, consider this: Transparency International, a global agency that trots out national corruption rankings and the like, calls the construction industry “the most corrupt segment of the world economy.”
That stings a little. You like to think when you climb in the cab of your excavator or sell a truckload of asphalt that you are part of an industry making the world a better place. You like to think of yourself as part of a proud building brotherhood (and sisterhood) rather than a front man for a mob job.
Construction’s many access points for corruption are blamed for the situation. When slick dealers do the bidding, procure the materials and equipment, and subcontract the work, you can bet that graft, bribery, skimming, padding, and collusion follow. And that’s before politicians get involved.
The United States is not Russia, but neither is it an ethical paradise. Though our culture and laws mitigate against wholesale corruption in the industry, there is still a lot of it being retailed. Corrupt bidding and billing are the two most common ethical lapses, industry officials say, and tips from whistleblowers are the single best weapon against them.
What can we do? Be honest if you are in the position to bid and bill. Be a tipster if you are in a position to blow the whistle. We don’t want to be mentioned in the same sentence with Sochi.