Billions stolen in Sochi Olympics preparations- Russian opposition

MOSCOW (Reuters) - Russian businessmen and officials close to President Vladimir Putin have stolen up to $30 billion from funds intended for preparations for next year’s Sochi Winter Olympics, according to a report released on Thursday by opposition leaders.

Russia's President Vladimir Putin (front), International Olympic Committee (IOC) President Jacques Rogge (L) and head of the Sochi 2014 Organizing Committee Dmitry Chernyshenko visit the stand displaying medals for the 2014 Winter Olympic Games in Sochi during the International Olympic Committee's (IOC) Executive Board meeting, which is part of the annual SportAccord convention, in St. Petersburg, May 30, 2013. REUTERS/Kirill Kudryavtsev/Pool

Putin, who has staked his reputation on a successful Games, faces criticism over allegations of corruption and costs overruns that have pushed up the price tag for the event to $50 billion - more than quadruple initial estimates, making them the most costly Olympics ever.

“In preparing for the Olympics $25 to $30 billion was stolen,” Russian opposition leader Boris Nemtsov told reporters.

The report, written by Nemtsov and Leonid Martynyuk, another Putin critic, alleges that the most expensive sports facilities built for the Games were commissioned without competition or public tenders.

“Only oligarchs and companies close to Putin got rich,” he wrote on his blog. “The absence of fair competition, cronyism... have led to a sharp increase in the costs and to the poor quality of the work to prepare for the Games.”

Putin’s spokesman, Dmitry Peskov, declined to comment on the criticism, saying he had not seen the report.

Russian contractors and others who have been involved in the building boom to prepare for the Sochi Games have complained of widespread corruption, but government officials have dismissed such reports and defended the cost overruns.

Comparing Sochi’s price tag with that of previous Games, the report says that the final cost of Olympics over the last 16 years was on average about twice the amount initially planned.

By contrast, it says the Sochi Games - which Russia said in 2007 would cost about $12 billion - is more than four times pricier than planned.

But it does not provide specific detail of how or from which construction projects funds allegedly were embezzled.

“The fact is that almost everything that is related to the cost problems and abuses in preparation for the Olympic Games was carefully concealed and continues to be covered up by the authorities,” Nemtsov wrote on his blog.


Corruption is endemic in Russia’s construction industry, anti-graft activists say.

To create the infrastructure in what was one of Russia’s least developed areas, almost everything had to be built from scratch in Sochi over the last six years.

Thirteen official facilities are being built, including a stadium that can accommodate 40,000 people and venues for ice hockey, skiing, snowboarding and skating.

Nemtsov’s report casts doubt on the wisdom of planning the Winter Games in a subtropical climate and staging ski events in the peaks near the palm-tree lined streets of the Soviet-era resort city on the Black Sea.

Russian Deputy Prime Minister Dmitry Kozak, who is responsible for the 2014 Games, dismissed that criticism on Thursday and vowed the Olympics would be a success.

“In spite of envious people, the Russian Winter Olympic Games will be held in the southern capital - subtropical Sochi,” he told reporters.

Additional reporting by Elizabeth Shockman and Denis Dyomkin; Writing by Alissa de Carbonnel; Editing by Timothy Heritage and Michael Roddy