Play the GamePlay the Game, June 8, June 8--12, 2009, 12, 2009,

CoventryCoventry: : ““Visions for sport in times Visions for sport in times

of crisisof crisis””

The Hidden 4The Hidden 4thth Pillar of Pillar of

OlympismOlympism: Privatized Profit, : Privatized Profit,

Socialized DebtSocialized Debt

Christopher A. ShawChristopher A. Shaw

The The ““44thth PillarPillar””

�� 1. Sports1. Sports

�� 2. Culture2. Culture

�� 3. Environmental conservation3. Environmental conservation

andand……

�� 4. 4. ““Privatized profit, socialized debtPrivatized profit, socialized debt””�� Corruption can be more than match fixing, doping, or Corruption can be more than match fixing, doping, or

bribery.bribery.

�� What can happen to a host city overall can be What can happen to a host city overall can be considered to be a form of corruption if Bid considered to be a form of corruption if Bid organizers/politicians have misled the public.organizers/politicians have misled the public.

Key Topics Key Topics

�� Do the Olympics (or other mega sporting events) Do the Olympics (or other mega sporting events) contribute in a positive way to the economy of the host contribute in a positive way to the economy of the host city/region/country?city/region/country?�� Are they an economic boon to the host city or generally?Are they an economic boon to the host city or generally?

�� What about during periods of recession/depression?What about during periods of recession/depression?

�� Lessons from the current economic crisis.Lessons from the current economic crisis.

�� Shifting the Olympic Shifting the Olympic ““frameframe””: maybe it: maybe it’’s not really about s not really about the improving the economy (or even sports for that the improving the economy (or even sports for that matter)?matter)?�� Who really profits?Who really profits?

�� VancouverVancouver’’s experience with the 2010 Winter Games, s experience with the 2010 Winter Games, costs and benefits?costs and benefits?�� Financial dreams vs. reality.Financial dreams vs. reality.

�� Social Social ““inclusivityinclusivity””. .

�� Greenest Games ever or Greenest Games ever or ““greenwashgreenwash””..

�� Security vs. civil rights.Security vs. civil rights.

�� London 2012, or that was then, this is now and how do London 2012, or that was then, this is now and how do you like it so far?you like it so far?

�� Conclusions and summary.Conclusions and summary.

Does hosting the Olympics help or hurt an Does hosting the Olympics help or hurt an

economy in recession/depressioneconomy in recession/depression??

�� Some general questions:Some general questions:

�� ObamaObama’’ss stimulus package, is it working? (Too early to stimulus package, is it working? (Too early to tell).tell).

�� Even if it is, is hosting the Olympic Games the functional Even if it is, is hosting the Olympic Games the functional equivalent of this? equivalent of this?

�� What about other infrastructure instead?What about other infrastructure instead?

�� Who benefits in either case? (Private sector vs. society).Who benefits in either case? (Private sector vs. society).

�� A big issue in hard economic times is job creation. Is A big issue in hard economic times is job creation. Is building the Olympic infrastructure the most labor intensive building the Olympic infrastructure the most labor intensive set of public works one could do. set of public works one could do.

�� Restoring old buildings as in historic preservation or Restoring old buildings as in historic preservation or repaving highways or fixing rail beds or making existing repaving highways or fixing rail beds or making existing houses green are in general more labor intensive than houses green are in general more labor intensive than new constructionnew construction..

More questionsMore questions�� More questions for Vancouver and London:More questions for Vancouver and London:

�� How will the centralized Olympics in How will the centralized Olympics in Vancouver/London help the rest of the Vancouver/London help the rest of the region/country? region/country?

�� Or will the bulk of increased economic activity happen Or will the bulk of increased economic activity happen in just or mostly around the host city?in just or mostly around the host city?

�� The Olympics may give a boost to tourism, but is it The Olympics may give a boost to tourism, but is it sustainable? Will tourist assets be built only to lie empty sustainable? Will tourist assets be built only to lie empty after the Olympics? after the Olympics?

�� Potential for pandemics and terrorism? Will this have the Potential for pandemics and terrorism? Will this have the opposite on tourism, actually decreasing tourism.opposite on tourism, actually decreasing tourism.

�� Spending more during low levels of economic activity Spending more during low levels of economic activity may be sound but could lead to decreasing economic may be sound but could lead to decreasing economic growth in the future if the expenditures are wasted on growth in the future if the expenditures are wasted on low rate of return activities. low rate of return activities.

�� Spending on health care and education would yield Spending on health care and education would yield higher rates of return than for sporting venues. higher rates of return than for sporting venues.

Scams large and smallScams large and smallDear beloved friend,Dear beloved friend,

I know that this letter may be a very big surprise to you, I know that this letter may be a very big surprise to you, I came across your email contact from my I came across your email contact from my personal search and I instructed the doctor here in this hospitapersonal search and I instructed the doctor here in this hospital to help me email you and I believe l to help me email you and I believe that you will be honest to fulfill my final wish before I will dthat you will be honest to fulfill my final wish before I will dieie. .

I am Mrs. Gloria Caldwell from LONDON, I am 58 years old, I am I am Mrs. Gloria Caldwell from LONDON, I am 58 years old, I am deaf and suffering from a long deaf and suffering from a long time cancer of the breast, which also affected my brain. From altime cancer of the breast, which also affected my brain. From all indication my condition is really l indication my condition is really deteriorating, and my doctors have courageously advised me that deteriorating, and my doctors have courageously advised me that I may not live beyond the next two I may not live beyond the next two months, this is because the cancer stage has reached a critical months, this is because the cancer stage has reached a critical stage. I was brought up in a stage. I was brought up in a motherless babymotherless baby’’s home, and was married to my late husband for twenty years withs home, and was married to my late husband for twenty years without a child. out a child. My My husband and I are true Christianshusband and I are true Christians, but quite unfortunately, he died in a fatal motor accident., but quite unfortunately, he died in a fatal motor accident.

Since his death I decided not to reSince his death I decided not to re--marry, I sold all my inherited belongings and deposited all the marry, I sold all my inherited belongings and deposited all the sum of $3.2million dollars with a BANKsum of $3.2million dollars with a BANK. Presently, this money is still in their custody, and the . Presently, this money is still in their custody, and the management just wrote me as the Legitimate beneficiary to come fmanagement just wrote me as the Legitimate beneficiary to come forward to receive the money after orward to receive the money after keeping it for so long or rather issue a letter of authorizationkeeping it for so long or rather issue a letter of authorization to somebody to receive it on my behalf to somebody to receive it on my behalf since I can not come over as a result of my illness, or they getsince I can not come over as a result of my illness, or they get it confiscated. Presently, I'm with my it confiscated. Presently, I'm with my laptop in a hospital where I have been undergoing treatment. I hlaptop in a hospital where I have been undergoing treatment. I have since lost my ability to talk and ave since lost my ability to talk and my doctors have told me that I have only a few months to live.my doctors have told me that I have only a few months to live.

It is my last wish to see that this money is invested in any orgIt is my last wish to see that this money is invested in any organization of your choice and anization of your choice and distributed each year among the charity organization, the poor adistributed each year among the charity organization, the poor and the motherless babynd the motherless baby’’s home s home where I come from. I want your good humanitarian, to also use thwhere I come from. I want your good humanitarian, to also use this money to fund churches, is money to fund churches, orphanages and widows around. I must let you know that this was orphanages and widows around. I must let you know that this was a very hard decision, but I had to a very hard decision, but I had to take a bold step towards this issue because I have no further optake a bold step towards this issue because I have no further option. I hope you will help see my last tion. I hope you will help see my last wishes come true.wishes come true.

As soon as I receive your reply I shall give you the contact ofAs soon as I receive your reply I shall give you the contact of the BANK. I will also issue you a letter the BANK. I will also issue you a letter of authority, which will prove that you are the new beneficiary of authority, which will prove that you are the new beneficiary of my funds. Please assure me that of my funds. Please assure me that you will act accordingly as I stated herein. Hope to hear from yyou will act accordingly as I stated herein. Hope to hear from you soonest. ou soonest.

Awaiting your replyAwaiting your reply

Yours in Christ,Yours in Christ,

Mrs. Gloria CaldwellMrs. Gloria Caldwell

The Olympic ideals meetThe Olympic ideals meet……the Nigerian the Nigerian

banking scam?banking scam?

�� What are the ideals the Olympic movement/industry What are the ideals the Olympic movement/industry promote?promote?�� World peace, brotherhood/sisterhood of humankind.World peace, brotherhood/sisterhood of humankind.

�� Pure, elite sports to achieve it.Pure, elite sports to achieve it.

�� What do IOC/local Bid supporters/politicians promise to What do IOC/local Bid supporters/politicians promise to host cities?host cities?�� Your city in the glare of worldYour city in the glare of world--wide TV for weeks.wide TV for weeks.

�� Financial windfalls for all. Financial windfalls for all.

�� Is there a different, more realityIs there a different, more reality--based, frame?based, frame?�� Local developers and their pet projects.Local developers and their pet projects.

�� Make up of VancouverMake up of Vancouver’’s Bid Corp.s Bid Corp.

�� IOC profits and tax free status.IOC profits and tax free status.

WhatWhat’’s in it for Vancouvers in it for Vancouver’’s organizers?s organizers?�� ““If the Games werenIf the Games weren’’t coming, wet coming, we’’d have to d have to

invent somethinginvent something”…”…Jack Poole, 2002, Jack Poole, 2002, speaking to developers and quoted in the speaking to developers and quoted in the Western InvestorWestern Investor..

�� Real estate dealsReal estate deals

�� History of Concert Properties (History of Concert Properties (GreystoneGreystone, VLC)., VLC).

�� Concert Properties and what it wanted:Concert Properties and what it wanted:

�� New convention centreNew convention centre

?? Ski resort development (Callaghan Valley)Ski resort development (Callaghan Valley)

�� Developments along the Developments along the Sea to Sky Highway Sea to Sky Highway

corridor to Whistlercorridor to Whistler

�� AthletesAthletes’’ VillageVillage (tried, now controlling)(tried, now controlling)

�� Other developers:Other developers:

�� gentrification of Downtown Eastsidegentrification of Downtown Eastside

�� Sea to Sky corridor Sea to Sky corridor

?? Ski Resort attempts: Melvin Creek, Cheam, Ski Resort attempts: Melvin Creek, Cheam,

BrohmBrohm Ridge.Ridge.

�� Airport to Vancouver connector (RAV)Airport to Vancouver connector (RAV)

WhatWhat’’s in it for the IOC?s in it for the IOC?

�� No income taxes paid on the planetNo income taxes paid on the planet

�� Billions of $ (TV and marketing)Billions of $ (TV and marketing)

�� Privilege: the new royalty (read Andrew Privilege: the new royalty (read Andrew

JenningsJennings’’ books if you have any doubts about books if you have any doubts about

this)this)

VancouverVancouver’’s promised financial s promised financial

windfall:windfall: the the InterVISTASInterVISTAS studystudy�� January 2002 original Economic Impact Study of hosting 2010 WintJanuary 2002 original Economic Impact Study of hosting 2010 Winter er

Olympics Prepared by the Ministry of Competition, Science & EnteOlympics Prepared by the Ministry of Competition, Science & Enterprise : rprise : ““What economic impacts funded by nonresidents of B.C. What economic impacts funded by nonresidents of B.C. couldcould flow to B.C. flow to B.C. as a consequence of hosting the Games?as a consequence of hosting the Games?””

�� InterVISTASInterVISTAS Consulting Inc. was selected to review that study, make Consulting Inc. was selected to review that study, make modifications as appropriate, and update the study with more recmodifications as appropriate, and update the study with more recent data.ent data.�� Their conclusions for Economic Impacts?Their conclusions for Economic Impacts?

Med-High: $3.3 bn, 77,000, $2.5 bn, $863 mn

�� Projected Olympic stimulation to B.C. economy from Projected Olympic stimulation to B.C. economy from venue/infrastructure construction problematic since a basic venue/infrastructure construction problematic since a basic assumption is that local building might not occur in the absenceassumption is that local building might not occur in the absence of of the Games.the Games.

�� Two other organizations at the opposite end of the political Two other organizations at the opposite end of the political spectrum, Canadian Centre for Policy Alternatives and Fraser Insspectrum, Canadian Centre for Policy Alternatives and Fraser Inst., t., did not think hosting 2010 Games would help the B.C. economy did not think hosting 2010 Games would help the B.C. economy overall.overall.

VancouverVancouver’’s 2010 reality checks 2010 reality check�� The promises in 2002:The promises in 2002:

�� Overall costs to taxpayers (provincial and federal: $660 millionOverall costs to taxpayers (provincial and federal: $660 million).).

�� ““The Games wonThe Games won’’t cost Vancouverites one pennyt cost Vancouverites one penny”…”…Mayor Larry Campbell in Mayor Larry Campbell in 2002 during the plebiscite.2002 during the plebiscite.

�� VANOC business plan had as a fundamental assumption that VANOC business plan had as a fundamental assumption that ““the economy will the economy will continue to be strong through 2010continue to be strong through 2010”” (May, 2007)(May, 2007)

�� ““Irrational exuberance" of Federal Reserve Chairman Alan GreenspaIrrational exuberance" of Federal Reserve Chairman Alan Greenspan (December n (December 5, 1996) 5, 1996)

�� Infrastructure: the new convention centre and airport connector Infrastructure: the new convention centre and airport connector were essential were essential for getting the Bid.for getting the Bid.

�� Mega construction projects will boost the economy.Mega construction projects will boost the economy.

�� Will help the poor, the homeless.Will help the poor, the homeless.

�� Security: trivial costs: Security: trivial costs: $175 million.$175 million.

�� Incorporate Native symbols and culture into the Games as an inteIncorporate Native symbols and culture into the Games as an integral part.gral part.

�� 7 years later, the reality:7 years later, the reality:

�� Costs overall, Costs overall, $6 billion to taxpayers$6 billion to taxpayers, with Vancouver, with Vancouver’’s Athletess Athletes’’ Village mess and Village mess and all security costs mess not factored in.all security costs mess not factored in.

�� Infrastructure: Convention centre doubled in projected cost, alrInfrastructure: Convention centre doubled in projected cost, already flooded, not eady flooded, not even needed.even needed.

�� Mitt Romney to Vancouver Board of Trade: Mitt Romney to Vancouver Board of Trade: ““DonDon’’t count on the Games to t count on the Games to stimulate the economy or increase tourismstimulate the economy or increase tourism…”…”

�� RAV line: massive disruption, closing businesses.RAV line: massive disruption, closing businesses.

�� Homeless population went from approx. Homeless population went from approx. 600 in 2002 to over 3,000 in 2009.600 in 2002 to over 3,000 in 2009.

�� Security, massive costs (Security, massive costs ($1 $1 bnbn), massive disruption.), massive disruption.

�� Exploited Native culture.Exploited Native culture.

Not the headline British Columbians Not the headline British Columbians

really wanted to seereally wanted to see

The promises of accountability by Bid Corp, The promises of accountability by Bid Corp,

VANOC, and three levels of government: VANOC, and three levels of government:

Forget itForget it

�� No audited financials to date from Bid Corp or No audited financials to date from Bid Corp or

VANOCVANOC

�� In cameraIn camera meetings, no reporting to B.C meetings, no reporting to B.C

Secretariat for the Olympic Games.Secretariat for the Olympic Games.

�� Outright deception on security costs.Outright deception on security costs.

�� Active blocking by all levels of government to Active blocking by all levels of government to

requests for information.requests for information.

�� Deception/fraud in venue construction.Deception/fraud in venue construction.

�� AthletesAthletes’’ VillageVillage--MillenniumMillennium--ArmecoArmeco Construction.Construction.

Vancouver 2010: Social Vancouver 2010: Social ““inclusivityinclusivity””

�� The promises:The promises:

�� Social housing (min. 250 units in Village).Social housing (min. 250 units in Village).

�� Jobs.Jobs.

�� Community involvement in planning.Community involvement in planning.

�� The reality:The reality:

�� Loss of net housing for poor (no. in Village?).Loss of net housing for poor (no. in Village?).

�� Increased homelessness.Increased homelessness.

�� No concerted job creation strategy for Downtown No concerted job creation strategy for Downtown Eastside.Eastside.

�� Communities were never consulted, but instead had Communities were never consulted, but instead had ““information sessionsinformation sessions”” after plans for transportation after plans for transportation and security were already in place.and security were already in place.

Faces of the legions of homeless Faces of the legions of homeless

(3,000 and counting) (3,000 and counting)

The The ““Greenest GamesGreenest Games”” ever?ever?�� EagleridgeEagleridge Bluffs: Bluffs:

�� >5000 trees, mostly old growth, one of last arbutus >5000 trees, mostly old growth, one of last arbutus

forests on south coast cut down, lost forever.forests on south coast cut down, lost forever.

�� Endangered species habitat destroyed (Larson Creek Endangered species habitat destroyed (Larson Creek

wetlands).wetlands).

�� Sea to Sky Highway: thousands more trees cut down.Sea to Sky Highway: thousands more trees cut down.

�� Cyprus Mt.: thousands of more trees down.Cyprus Mt.: thousands of more trees down.

�� Callaghan Valley:Callaghan Valley:

�� Biathlon trails and Biathlon trails and ““legacy trailslegacy trails””: >40,000 to 100,000 : >40,000 to 100,000

trees cut down, much of it old growth.trees cut down, much of it old growth.

�� Habitat destruction. Habitat destruction.

�� RedRed--listed species at listed species at EagleridgeEagleridge and the Callaghan.and the Callaghan.

�� COCO22

�� 3.5 3.5 megatonnesmegatonnes (>Armenia and 77 countries on the planet; (>Armenia and 77 countries on the planet;

5% of B.C.5% of B.C.’’s annual output).s annual output).

Part of the environmental Part of the environmental ““butcherbutcher’’s s

billbill””

Vancouver 2010: security costs and civil Vancouver 2010: security costs and civil

libertiesliberties�� The promises:The promises:

�� Only Only $175$175 million for the entire security package.million for the entire security package.

�� No disruption for people and businesses.No disruption for people and businesses.

�� No civil rights violations.No civil rights violations.

�� The reality:The reality:

�� $1 billion$1 billion or more (Bid Corpor more (Bid Corp’’s original budget was derived s original budget was derived ““without consultation with RCMPwithout consultation with RCMP”” and wasand was ““conceptualconceptual””). ).

�� One reporter with contacts in ISU says, One reporter with contacts in ISU says, ““they have no bottom they have no bottom line and donline and don’’t know what it will really costt know what it will really cost””..

�� City of Vancouver security budget remains hidden.City of Vancouver security budget remains hidden.

�� Stupidity or blatant deceit?Stupidity or blatant deceit?

�� Massive disruption to peoples lives for 51 days.Massive disruption to peoples lives for 51 days.

�� 13,000 to 15,000 police and soldiers; 13,000 to 15,000 police and soldiers; unkunk. numbers of private . numbers of private security.security.

�� Large areas of Vancouver inaccessible to public, streets closed Large areas of Vancouver inaccessible to public, streets closed for events, Olympic only lanes for IOC and athletesfor events, Olympic only lanes for IOC and athletes..

�� CCTV cameras to be a permanent fixture in Vancouver.CCTV cameras to be a permanent fixture in Vancouver.

�� Active VISU campaign to target Active VISU campaign to target ““activistsactivists”” (visits and identity (visits and identity checks).checks).

�� ““Ambush marketingAmbush marketing”” bylaws infringe Charter of Rights and bylaws infringe Charter of Rights and Freedoms.Freedoms.

Graphing Olympic security costsGraphing Olympic security costs

0

200

400

600

800

1000

1200

1400

1600

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Million $

Summer

Winter

More headlines we didnMore headlines we didn’’t want to t want to

seesee

The AthletesThe Athletes’’ Village dream: the deal of Village dream: the deal of

the century goes off the railsthe century goes off the rails

Village fact sheet: how not to construct a dealVillage fact sheet: how not to construct a deal

�� The AthletesThe Athletes’’ Village players:Village players:

�� Relatively obscure company (Relatively obscure company (MillenniumMillennium) run by ) run by ShahramShahram and Peter and Peter

Malek(yazdiMalek(yazdi) brothers wins the Village deal over 4 others, most much better) brothers wins the Village deal over 4 others, most much better

known (April 2006).known (April 2006).

�� History, capitalization, and structure not clear.History, capitalization, and structure not clear.

�� Links to shell company (Links to shell company (ArmecoArmeco ConstructionConstruction) whose sole current director ) whose sole current director

had been the President of the ruling had been the President of the ruling NonNon--Partisan AssociationPartisan Association civic party; civic party;

MalekMalek brothers were former directors.brothers were former directors.

�� City staff denied knowing this connection.City staff denied knowing this connection.

�� MaleksMaleks denied any conflict of interest.denied any conflict of interest.

�� What the deal looks likeWhat the deal looks like::

�� $193 million for land$193 million for land paid by Millennium to City of Vancouver 15% down paid by Millennium to City of Vancouver 15% down

($30 million)($30 million), but Vancouver pays:, but Vancouver pays:

�� All site remediation and preparations (All site remediation and preparations ($159.4 million$159.4 million))

�� $82.5$82.5 million for 250 units.million for 250 units.

�� CityCity’’s agreement with Millennium calls for s agreement with Millennium calls for $$$$ if project is late to pay for if project is late to pay for

extra workers and equipment: blank extra workers and equipment: blank chequecheque..

�� Millennium can preMillennium can pre--sell units.sell units.

Deal part 2 and VancouverDeal part 2 and Vancouver’’s financial s financial

exposureexposure

Millennium:Millennium:

�� Mortgage held by Fortress Credit (a hedge fund).Mortgage held by Fortress Credit (a hedge fund).

�� City provides City provides $190$190 million in loan guarantees.million in loan guarantees.

�� City pumps in an additional City pumps in an additional $100$100 million.million.

City of Vancouver risk?City of Vancouver risk?

�� Millennium in trouble (other projects halted or not Millennium in trouble (other projects halted or not started) with cost overruns.started) with cost overruns.

�� City takes over mortgage from Fortress for a City takes over mortgage from Fortress for a $1.1 billion$1.1 billionproject.project.

�� City refuses to release details of City refuses to release details of in camerain camera meetings.meetings.

�� City CFO City CFO ““resignsresigns””, City manager fired, project manager , City manager fired, project manager (who promoted the deal with Millennium) fired.(who promoted the deal with Millennium) fired.

�� Property Endowment Fund falling. Property Endowment Fund falling.

�� Any future possibility for the City to recoup $ depends on Any future possibility for the City to recoup $ depends on what happens to the market.what happens to the market.

�� City claims there will be profits when Village sold (but, if City claims there will be profits when Village sold (but, if so, what happened to social housing?).so, what happened to social housing?).

VancouverVancouver’’s weary taxpayers: What is their s weary taxpayers: What is their

exposure to the Olympic adventure?exposure to the Olympic adventure?

�� Venues: approx. Venues: approx. $30$30 millionmillion of additional costs.of additional costs.

�� AthletesAthletes’’ Village: total exposure of the City to a project Village: total exposure of the City to a project estimated to be worth estimated to be worth $1.1$1.1 billionbillion..

�� Infrastructure: VancouverInfrastructure: Vancouver’’s share of RAV: s share of RAV: $320 million$320 million..

�� Security: unknown (information blocked).Security: unknown (information blocked).

�� Odds and sods: millions more every time City Council Odds and sods: millions more every time City Council meets.meets.

�� Final tab for Vancouver alone: could approach Final tab for Vancouver alone: could approach $1.5 $1.5 billionbillion..

�� Considering the Property Endowment Fund is worth Considering the Property Endowment Fund is worth somewhere between somewhere between $1.4 billion and $2.7$1.4 billion and $2.7 billionbillion (at the (at the height of the market), is Vancouver in trouble?height of the market), is Vancouver in trouble?

Maybe we wish we had the $ spent Maybe we wish we had the $ spent

on the Olympics back?on the Olympics back?

�� Current projected Federal deficit 2009: Current projected Federal deficit 2009:

$50 billion$50 billion..

�� Province of B.C. 2009: Province of B.C. 2009: $2 billion$2 billion..

The predictable outcomeThe predictable outcome……so farso far

Differences: Vancouver 2010 and London Differences: Vancouver 2010 and London

20122012�� Winter vs. SummerWinter vs. Summer

�� Scale, costsScale, costs� Structure and funding models� VANOC (Vancouver Organizing Committee):� $1.7 bn operating costs (75% private, but doesn’t

include new government tranches for things like the opening and closing ceremonies.

� Governments pay all venue, mega-project, and security costs ($1 bn security alone).

� City of Vancouver financing the Athletes’ Village.

�� LOCOG (London Organizing Committee)LOCOG (London Organizing Committee)��Operating costs, Operating costs, £2 2 bnbn, private sector contribution?, private sector contribution?��Olympic Development Authority (ODA): Olympic Development Authority (ODA): £9.325 bn

($16.6 ($16.6 bnbn))�Security costs? £600 million? How much for the

military?

London 2012: what should have been London 2012: what should have been

done to estimate costs/benefitsdone to estimate costs/benefits�� Rand Corporate studyRand Corporate study (2007) (65 pg meta analysis) (2007) (65 pg meta analysis) “Setting the Agenda for an

Evidence-based Olympics”

� Key points:� “Although every successful Olympic bid since 1984 has been the subject of a cost-

benefit analysis, these analyses are often based on greatly simplified models of the economy in question that may rest on unsound assumptions or limited information – for example, a lack of clarity over the exact direct spending on the event.

� “In fact, it is surprising how little research has revisited ex-ante studies to assess their predictions in the light of actual events.

� “Those projects that do address this issue often conclude that benefits were over-estimated, to the extent that some reviewers believe that it is now ‘fairly predictable’ that there will be ‘significant gaps between the benefits forecast for sports mega-projects, and the ensuing legacies’”.

� Other points for London (and Vancouver) to consider from the Rand study:� “…in Barcelona,tourism rose from 2% of the city’s GDP pre-Games to 12.5% of

the GDP post-Games, and continued to grow to 15% by 2005. The Olympics put Barcelona ‘on the map’ internationally.

� “But London is already on the map. London, as a top-tier world city, is unlikely to reap as much benefit as Barcelona did from the Olympic Games. Several recent impact studies have suggested only modest generative effects on employment.”

Some interesting quotes for London Some interesting quotes for London

20122012

� “The list of benefits for the rest of the UK are endless.”, Tessa Jowell.

� “The big picture is benefits right across the board.” Sebastian Coe.

� “These will not just be London’s Games.”, Tessa Jowell.

London headlines that you probably London headlines that you probably

didndidn’’t want to seet want to see

�� 'White elephant' stadium will drain public cash 'White elephant' stadium will drain public cash years after Olympics, years after Olympics, AshlingAshling O'Connor, Times, O'Connor, Times, Feb. 11, 2009. Feb. 11, 2009.

�� Olympics venue bill Olympics venue bill ££196m over budget, Roger 196m over budget, Roger Blitz, Leisure Industries Correspondent, FT, Feb. Blitz, Leisure Industries Correspondent, FT, Feb. 6, 2009.6, 2009.

�� Taxpayers to fund cost of Olympics, Roger Blitz, Taxpayers to fund cost of Olympics, Roger Blitz, May 14, 2009.May 14, 2009.

From From DispatchesDispatches (Channel 4): (Channel 4): ““The Olympics Cash The Olympics Cash

MachineMachine””, Anthony Barnett), Anthony Barnett)

� THE GOVERNMENT AND THE GREATER LONDON AUTHORITY COMMISSIONED THE ECONOMIST, DR ADAM BLAKE, TO EXAMINE THE ECONOMIC IMPACT OF THE OLYMPICS. BUT IF THEY WERE HOPING HE WOULD BRING THEM JUST POSITIVE NEWS, THEY WERE IN FOR A NASTY SURPRISE. BLAKE’S STUDY CONTAINED SOME EXPLOSIVE FINDINGS THAT HAVE LARGELY BEEN BURIEDUNTIL NOW.UNTIL NOW.

�� Dr Adam Blake (Assoc. Prof., Nottingham Dr Adam Blake (Assoc. Prof., Nottingham UnivUniv): ): ““Now those Now those differences between the UK and London essentially mean that GDP differences between the UK and London essentially mean that GDP outside London in the regions has a negative effect from the outside London in the regions has a negative effect from the Olympics.Olympics.””

�� Dispatches: So thatDispatches: So that’’s quite a dramatic finding really isns quite a dramatic finding really isn’’t it, that while t it, that while London is going to benefit to six billion pounds, London is going to benefit to six billion pounds, the rest of the the rest of the country outside London is actually going to be worse off by fourcountry outside London is actually going to be worse off by fourbillion pounds?billion pounds?

�� Blake: Blake: ““Yes. In terms of the flow of money, the money is going from Yes. In terms of the flow of money, the money is going from outside London into London.outside London into London.””

More from More from DispatchesDispatches�� ONE OF DR BLAKEONE OF DR BLAKE’’S CONCLUSIONS WAS THAT WHILE LONDON S CONCLUSIONS WAS THAT WHILE LONDON

WOULD ENJOY MASSIVE ECONOMIC BENEFITS FROM THE WOULD ENJOY MASSIVE ECONOMIC BENEFITS FROM THE OLYMPICS, TOTALLING OLYMPICS, TOTALLING ££5.9 BILLION5.9 BILLION, THE REST OF THE COUNTRY , THE REST OF THE COUNTRY WOULD LOSE OUT TO THE TUNE OF WOULD LOSE OUT TO THE TUNE OF ££4 BILLION.4 BILLION.

�� DR BLAKEDR BLAKE’’S REPORT ALSO PREDICTED THAT WHILE THERE S REPORT ALSO PREDICTED THAT WHILE THERE WOULD BE A SMALL NET INCREASE IN JOBS, SOME KEY SECTORS WOULD BE A SMALL NET INCREASE IN JOBS, SOME KEY SECTORS OF THE UK WOULD SUFFER: HARDEST HIT WOULD BE OF THE UK WOULD SUFFER: HARDEST HIT WOULD BE MANUFACTURING WITH THE LOSS OF 31,500 JOBS.MANUFACTURING WITH THE LOSS OF 31,500 JOBS.

�� Dispatches: Dispatches: ““Before the bid went in, part of the, the way it was sold Before the bid went in, part of the, the way it was sold to the public I would suggest was that this is not just going toto the public I would suggest was that this is not just going tobenefit London.benefit London. ItIt’’s going to benefit the entire country.s going to benefit the entire country. Clearly Clearly thatthat’’s not the case.s not the case.

�� Blake: Blake: ““No, well in terms of economics, itNo, well in terms of economics, it’’s not the case. Thats not the case. That’’s s what I found here.what I found here.””

�� DR. BLAKEDR. BLAKE’’S REPORT ALSO PREDICTED THAT THE OLYMPICS WILL S REPORT ALSO PREDICTED THAT THE OLYMPICS WILL SUCK IN HUGE AMOUNTS OF LOTTERY FUNDS, GOVERNMENT SUCK IN HUGE AMOUNTS OF LOTTERY FUNDS, GOVERNMENT MONEY AND JOBS TO LONDON AND SO COULD CAUSE A MONEY AND JOBS TO LONDON AND SO COULD CAUSE A DAMAGING ECONOMIC DRAIN ON THE REST OF THE COUNTRY.DAMAGING ECONOMIC DRAIN ON THE REST OF THE COUNTRY.

and moreand more

�� DR. BLAKE COMPLETED HIS REPORT IN OCTOBER 2004, NINE DR. BLAKE COMPLETED HIS REPORT IN OCTOBER 2004, NINE MONTHS BEFORE THE SUCCESSFUL OLYMPIC BID. BUT THE MONTHS BEFORE THE SUCCESSFUL OLYMPIC BID. BUT THE GOVERNMENT DID NOT MAKE IT PUBLIC UNTIL DECEMBER 2005, GOVERNMENT DID NOT MAKE IT PUBLIC UNTIL DECEMBER 2005, SIX MONTHS AFTER LONDON WONSIX MONTHS AFTER LONDON WON. AND YOU WOULD HAVE BEEN . AND YOU WOULD HAVE BEEN HARD PRESSED TO NOTICE IT.HARD PRESSED TO NOTICE IT.

�� WHEN THE GOVERNMENT DID AUTHORISE THE PUBLICATION WHEN THE GOVERNMENT DID AUTHORISE THE PUBLICATION BLAKEBLAKE’’S RESEARCH, IT WAS CONTAINED IN ANOTHER REPORT. IT S RESEARCH, IT WAS CONTAINED IN ANOTHER REPORT. IT WAS PRESS RELEASED UNDER THE HEADLINE WAS PRESS RELEASED UNDER THE HEADLINE ‘‘EVERY CORNER OF EVERY CORNER OF THE COUNTRY TO FEEL THE 2012 EFFECTTHE COUNTRY TO FEEL THE 2012 EFFECT’’.. BUT WHAT IT DIDNBUT WHAT IT DIDN’’T T MAKE CLEAR WAS WHAT THE FULL EFFECT MIGHT BE.MAKE CLEAR WAS WHAT THE FULL EFFECT MIGHT BE.

�� WHILE THE GOVERNMENT CONTINUED TO PRESS THE ECONOMIC WHILE THE GOVERNMENT CONTINUED TO PRESS THE ECONOMIC BENEFITS OF THE GAMES, IT COULDNBENEFITS OF THE GAMES, IT COULDN’’T AVOID THE SPIRALLING T AVOID THE SPIRALLING COSTS. COSTS. IN MARCH THIS YEAR, OLYMPICS MINISTER TESSA IN MARCH THIS YEAR, OLYMPICS MINISTER TESSA JOWELL ADMITTED THAT THE ORIGINAL JOWELL ADMITTED THAT THE ORIGINAL ££2.4 BILLION BUDGET 2.4 BILLION BUDGET HAD NOW SOARED TO HAD NOW SOARED TO ££9.3 BILLION, OF WHICH BRITISH 9.3 BILLION, OF WHICH BRITISH TAXPAYERS WOULD PAY UP TO TWO THIRDSTAXPAYERS WOULD PAY UP TO TWO THIRDS..

still morestill more……�� IN THE COURSE OF OUR INVESTIGATION WE HAVE OBTAINED IN THE COURSE OF OUR INVESTIGATION WE HAVE OBTAINED

CONFIDENTIAL DOCUMENTS THAT WERE NEVER MEANT TO BE MADE CONFIDENTIAL DOCUMENTS THAT WERE NEVER MEANT TO BE MADE PUBLIC. THEY CONTAIN WARNINGS THAT THE BUDGET WAS PUBLIC. THEY CONTAIN WARNINGS THAT THE BUDGET WAS SIGNIFICANTLY SHORT LONG BEFORE THE GOVERNMENT TOLD THE SIGNIFICANTLY SHORT LONG BEFORE THE GOVERNMENT TOLD THE PUBLIC.PUBLIC.

�� THE FIRST DOCUMENT CONTAINS THE MINUTES OF A HIGH LEVEL THE FIRST DOCUMENT CONTAINS THE MINUTES OF A HIGH LEVEL WHITEHALL MEETING. AT 3 PM ON NOVEMBER 29, 2005, 12 SENIOR WHITEHALL MEETING. AT 3 PM ON NOVEMBER 29, 2005, 12 SENIOR OFFICIALS FROM THE TREASURY, THE DEPARTMENT OF CULTURE MEDIA OFFICIALS FROM THE TREASURY, THE DEPARTMENT OF CULTURE MEDIA AND SPORT AND THE MAYOR OF LONDONAND SPORT AND THE MAYOR OF LONDON’’S OFFICE MET TO DISCUSS THE S OFFICE MET TO DISCUSS THE OLYMPICS. THE MEETING WAS CONFIDENTIAL AND GIVEN A OLYMPICS. THE MEETING WAS CONFIDENTIAL AND GIVEN A CODENAME:CODENAME:PROJECT RAVEN. ONE SENTENCE IN THE DOCUMENT STANDS OUT PROJECT RAVEN. ONE SENTENCE IN THE DOCUMENT STANDS OUT –– IT IT REVEALS THAT BY SEPTEMBER 2004 THEY KNEW THAT THE BID WAS REVEALS THAT BY SEPTEMBER 2004 THEY KNEW THAT THE BID WAS LIGHT BY ONE BILLION POUNDS.LIGHT BY ONE BILLION POUNDS. LEADER OF THE LIBERAL DEMOCRATS LEADER OF THE LIBERAL DEMOCRATS SIR MING CAMPBELL IS A FORMER OLYMPIC SPRINTER.SIR MING CAMPBELL IS A FORMER OLYMPIC SPRINTER.

�� FOR THE FIRST TIME DISPATCHES CAN REVEAL THAT FOR THE FIRST TIME DISPATCHES CAN REVEAL THAT TESSA JOWELL TESSA JOWELL WAS PERSONALLY WARNED THAT THE OLYMPIC BUDGET WAS MASSIVELY WAS PERSONALLY WARNED THAT THE OLYMPIC BUDGET WAS MASSIVELY INADEQUATE, 16 MONTHS BEFORE SHE WENT TO PARLIAMENT.THIS INADEQUATE, 16 MONTHS BEFORE SHE WENT TO PARLIAMENT.THIS DOCUMENT SHOWS THAT THE ORIGINAL OLYMPIC BUDGET WAS SHORT DOCUMENT SHOWS THAT THE ORIGINAL OLYMPIC BUDGET WAS SHORT BY SEVERAL BILLION POUNDS BY SEVERAL BILLION POUNDS –– IN AREAS SUCH AS INFRASTRUCTURE, IN AREAS SUCH AS INFRASTRUCTURE, ENVIRONMENTAL COMMITMENTS AND SECURITY.ENVIRONMENTAL COMMITMENTS AND SECURITY.

�� Who else in government knew? Gordon Brown? (Who else in government knew? Gordon Brown? (Chancellor of the Chancellor of the ExchequerExchequer at the time of the bid and itat the time of the bid and it’’s aftermath).s aftermath).

And where is the nearly £6 billion short fall

coming from?

� From the LOTTERY, for example:

Arts and Culture £161 million

Heritage £161 million

Sport £124 million

Big Lottery Fund £900 million

Similarities: Vancouver 2010 and London 2012Similarities: Vancouver 2010 and London 2012

�� Both had Both had ““low balllow ball”” budgets that were rapidly shown (known) to be budgets that were rapidly shown (known) to be inadequate.inadequate.

�� Both made financial and other promises that were unrealistic/knoBoth made financial and other promises that were unrealistic/known wn to be untrue (e.g., benefits for other parts of the country).to be untrue (e.g., benefits for other parts of the country).

�� Vancouver: $660 million to $6 billionVancouver: $660 million to $6 billion (likely a low estimate).(likely a low estimate).

�� For the predicted profit to B.C of: For the predicted profit to B.C of: $3.3 bn GDP, $2.5 bn wages, $863 mn taxes (taxes (InterVISTASInterVISTAS) (not counting B.C. generated $).) (not counting B.C. generated $).

�� London: London: £3.4 to 3.4 to £9.325 billion (so far).� Contrast the supposed outcomes of ££5.9 billion5.9 billion for London for London

alone (Blake study) vs. alone (Blake study) vs. ££9.325 billion.9.325 billion.� Both hid true costs from the media/public.

� Cost escalation not due to changing costs of steel and concrete.

� Why? Didn’t want to panic IOC or public during the bid phase or have a pubic outcry after?

� VANOC simply deceived the public about true security costs; the federal and provincial governments continued the deception.

� The City of Vancouver hid Athletes’ Village costs.

� LOCOG/ODA/Government?

Does hosting the Olympics help or hurt an Does hosting the Olympics help or hurt an

economy in recession/depression?economy in recession/depression?�� Things an economic recovery package needs to do:Things an economic recovery package needs to do:

�� Employing people in longEmploying people in long--term jobs is key for a stimulus term jobs is key for a stimulus expenditure. expenditure.

�� Development of infrastructure with longDevelopment of infrastructure with long--term, wideterm, wide--spread spread benefits for all is essential.benefits for all is essential.

�� Questions:Questions:

�� Are the jobs created for Olympic venue construction high Are the jobs created for Olympic venue construction high labourlabourintensive projects or high capital intensive projects?intensive projects or high capital intensive projects?

�� The latter, that do neither of the above.The latter, that do neither of the above.

�� What is the impact of Olympic construction and later security onWhat is the impact of Olympic construction and later security on““ordinaryordinary”” businesses in host cities/regions?businesses in host cities/regions?

�� During construction, hurts small business.During construction, hurts small business.

�� During Games, security closures negatively impact many During Games, security closures negatively impact many businesses, often with no compensation to those affected.businesses, often with no compensation to those affected.

�� Will Vancouver/B.C/London/U.K residents stay in Vancouver or Will Vancouver/B.C/London/U.K residents stay in Vancouver or London during the Olympics or will they leave, i.e., will outfloLondon during the Olympics or will they leave, i.e., will outflow of w of people and $ negate incoming tourist $.people and $ negate incoming tourist $.

�� What happens to the trade balance in the latter case?What happens to the trade balance in the latter case?

Calculating lost Calculating lost ““opportunityopportunity”” costs, or, what costs, or, what

would $6 billion or would $6 billion or £9.325 9.325 bnbn ($16.6 ($16.6 bnbn

CdnCdn) buy you instead?) buy you instead?�� Pine beetle catastrophe in B.C. averted or halted.Pine beetle catastrophe in B.C. averted or halted.

�� Fishery restored.Fishery restored.

�� Alternative energy industry created.Alternative energy industry created.

�� Education subsidies, buildings, etc.Education subsidies, buildings, etc.

�� Jump starting real solutions to poverty and homelessness.Jump starting real solutions to poverty and homelessness.

�� Creating longCreating long--term opportunities for Native peoples, esp. term opportunities for Native peoples, esp. youth.youth.

�� Disease prevention and cure (in Canada, this is equivalent Disease prevention and cure (in Canada, this is equivalent to to 10 years of national health research funding10 years of national health research funding).).

�� Cardiovascular, diabetes, cancer, neurological diseaseCardiovascular, diabetes, cancer, neurological disease……

�� Neurological diseases alone cost N. American economy Neurological diseases alone cost N. American economy $500 billion/year.$500 billion/year.

Summary and conclusionsSummary and conclusions�� Who really benefits? Who really benefits?

�� The private sector, and a limited one at that.The private sector, and a limited one at that.

�� The IOC. The IOC.

�� Who really loses?Who really loses?

�� Olympics will be a mixed blessing for local shops, expert Olympics will be a mixed blessing for local shops, expert sayssays By BRUCE CONSTANTINEAU, By BRUCE CONSTANTINEAU, CanwestCanwest News Service, June 8, News Service, June 8, 2009 11:54 PM2009 11:54 PM

�� Taxpayers, Taxpayers, small businesses, businesses not in the hospitality small businesses, businesses not in the hospitality sectorsector, areas outside the host city, the poor, areas outside the host city, the poor……

�� The environment.The environment.

�� Civil liberties, emerging as major concern (police surveillance,Civil liberties, emerging as major concern (police surveillance,ambush marketing bylawsambush marketing bylaws……))

�� Democratic governance (accountability and transparency).Democratic governance (accountability and transparency).

�� Do Olympics help or hurt an economy? (Or rephrasing, the Do Olympics help or hurt an economy? (Or rephrasing, the question: question: ““Is the recession killing sport, Is the recession killing sport, ““are sports a killer during a are sports a killer during a recession?) recession?)

�� Answer: Hosting the Olympic Games often generate debt; in hard Answer: Hosting the Olympic Games often generate debt; in hard economic times, may make the situation worse complete with lost economic times, may make the situation worse complete with lost opportunities for real, longopportunities for real, long--term economic recovery.term economic recovery.

““We have it in our power to begin the We have it in our power to begin the

world over again.world over again.”” Thomas Paine, Thomas Paine, Common SenseCommon Sense

�� We seem to have a gap between the ideals of We seem to have a gap between the ideals of the Olympic movement and the realities for host the Olympic movement and the realities for host cities.cities.

�� Acknowledging this gap will help decide if the Acknowledging this gap will help decide if the Olympics can be reformed in order to be what Olympics can be reformed in order to be what they claim to be:they claim to be:�� IOC internal reform?IOC internal reform?

�� Athlete control?Athlete control?

�� Rebuild from scratch?Rebuild from scratch?

�� Create parallel sports structures?Create parallel sports structures?

�� Other?Other?

�� A challenge for us to take home from Coventry.A challenge for us to take home from Coventry.

AcknowledgementsAcknowledgements

�� Andrew Jennings, Martin Andrew Jennings, Martin SlavinSlavin, Prof. Helen , Prof. Helen LenskyjLenskyj, Bob , Bob QuellosQuellos (No Games Chicago), Oriel (No Games Chicago), Oriel VargaVarga......

�� Members of the Olympic Resistance Network, Members of the Olympic Resistance Network, Vancouver, 2010 Watch and other Olympic Vancouver, 2010 Watch and other Olympic watchdog groups. watchdog groups.

�� Organizers of Organizers of Play the Game Play the Game and many of this and many of this weekweek’’s speakers who helped us search for the s speakers who helped us search for the truth: Laura, Declan, Nikki, Ted, Erin, others truth: Laura, Declan, Nikki, Ted, Erin, others who taught me that sport really matterswho taught me that sport really matters……LetLet’’s s take it back!take it back!

Lord CoeLord Coe’’s business dealings as s business dealings as

reported by Dispatchesreported by Dispatches

�� DISPATCHES HAS DISCOVERED THAT IN LATE 2005 WHILE MINISTERS AND DISPATCHES HAS DISCOVERED THAT IN LATE 2005 WHILE MINISTERS AND OFFICIALS WERE FACED WITH THE SPIRALLING OLYMPIC COSTS, LORD COEOFFICIALS WERE FACED WITH THE SPIRALLING OLYMPIC COSTS, LORD COE WAS WAS SETTING UP A NEW BUSINESS VENTURE THAT WOULD POTENTIALLY MAKE HISETTING UP A NEW BUSINESS VENTURE THAT WOULD POTENTIALLY MAKE HIM A M A VERY WEALTHY MAN.VERY WEALTHY MAN.

�� CommComm: :

�� ON 26TH OCTOBER 2005, JUST THREE WEEKS AFTER LORD COE WAS MADE ON 26TH OCTOBER 2005, JUST THREE WEEKS AFTER LORD COE WAS MADE CHAIRMAN OF LOCOG, HE SET UP A SPORTS AND ENTERTAINMENT COMPANY CHAIRMAN OF LOCOG, HE SET UP A SPORTS AND ENTERTAINMENT COMPANY LATER KNOWN AS THE COMPLETE LEISURE GROUP. THIS ACQUIRED A FIRM LATER KNOWN AS THE COMPLETE LEISURE GROUP. THIS ACQUIRED A FIRM CALLED SEBASTIAN COE LTD, SET UP IN MARCH 2005 BY LORD COE TO EACALLED SEBASTIAN COE LTD, SET UP IN MARCH 2005 BY LORD COE TO EARN RN MONEY FROM HIS MONEY FROM HIS ‘‘SPEAKING ARANGEMENTS, PRODUCT ENDORSEMENTS AND SPEAKING ARANGEMENTS, PRODUCT ENDORSEMENTS AND CONSULTANCY ADVICE ON SPORTS RELATED ACTIVITIES.CONSULTANCY ADVICE ON SPORTS RELATED ACTIVITIES.’’

�� CommComm::

�� OUR INVESTIGATION HAS SHOWN THAT IN LATE 2005 LORD COE ACQUIRED OUR INVESTIGATION HAS SHOWN THAT IN LATE 2005 LORD COE ACQUIRED HUNDRED OF THOUSANDS OF SHARES IN THE COMPLETE LEISURE GROUP HUNDRED OF THOUSANDS OF SHARES IN THE COMPLETE LEISURE GROUP –– CLG CLG ––FOR A TENTH OF A PENNY EACH. WITH THE HELP OF MONACOFOR A TENTH OF A PENNY EACH. WITH THE HELP OF MONACO--BASED PETER BASED PETER ABBEY LORD COE SET ABOUT SELLING MILLIONS MORE SHARES AT ABBEY LORD COE SET ABOUT SELLING MILLIONS MORE SHARES AT ££1 A TIME TO 1 A TIME TO PRIVATE INVESTORS. JUST SIX MONTHS AFTER LONDONPRIVATE INVESTORS. JUST SIX MONTHS AFTER LONDON’’S VICTORY, COE HAD S VICTORY, COE HAD RAISED ALMOST A MILLION POUNDS RAISED ALMOST A MILLION POUNDS -- AND SAW THE VALUE OF HIS INITIAL AND SAW THE VALUE OF HIS INITIAL INVESTMENT GO THROUGH THE ROOF. INVESTMENT GO THROUGH THE ROOF.

Who profits? (From Who profits? (From DispatchesDispatches (Channel 4): (Channel 4):

““The Olympics Cash MachineThe Olympics Cash Machine””, Anthony , Anthony

Barnett)Barnett)� Tessa Jowell� The list of benefits for the rest of the UK are endless� Seb Coe� The big picture is benefits right across the board� Tessa Jowell� These will not just be London’s Games.� THE GOVERNMENT AND THE GREATER LONDON AUTHORITY COMMISSIONED THE ECONOMIST, DR ADAM

BLAKE, TO EXAMINE THE ECONOMIC IMPACT OF THE OLYMPICS. BUT IF THEY WERE HOPING HE WOULD BRING THEM JUST POSITIVE NEWS, THEY WERE IN FOR A NASTY SURPRISE.

� BLAKE’S STUDY CONTAINED SOME EXPLOSIVE FINDINGS THAT HAVE LARGELY BEEN BURIED UNTIL NOWUNTIL NOW

�� Dr Adam Blake (Assoc. Prof., Nottingham Dr Adam Blake (Assoc. Prof., Nottingham UnivUniv))

�� Now those differences between the UK and London essentially meanNow those differences between the UK and London essentially mean that GDP outside London in the regions is, that GDP outside London in the regions is, has a negative effect from the Olympics.has a negative effect from the Olympics.

�� AntonyAntony

�� So thatSo that’’s quite a dramatic finding really isns quite a dramatic finding really isn’’t it, that while London is going to benefit to six, six billion t it, that while London is going to benefit to six, six billion pounds, the pounds, the rest of the country outside London is actually going to be worserest of the country outside London is actually going to be worse off by four billion pounds?off by four billion pounds?

�� BlakeBlake

�� Yes. In terms of the flow of money, the money is going from outsYes. In terms of the flow of money, the money is going from outside London into London.ide London into London.�� CommONECommONE OF DR BLAKEOF DR BLAKE’’S CONCLUSIONS WAS THAT WHILE LONDON WOULD ENJOY MASSIVE ECONOMICS CONCLUSIONS WAS THAT WHILE LONDON WOULD ENJOY MASSIVE ECONOMIC

BENEFITS FROM THE OLYMPICS, TOTALLING BENEFITS FROM THE OLYMPICS, TOTALLING ££5.9 BILLION, THE REST OF THE COUNTRY WOULD LOSE OUT TO 5.9 BILLION, THE REST OF THE COUNTRY WOULD LOSE OUT TO THE TUNE OF THE TUNE OF ££4 BILLION.4 BILLION.

�� DR BLAKEDR BLAKE’’S REPORT ALSO PREDICTED THAT WHILE THERE WOULD BE A SMALL NET INS REPORT ALSO PREDICTED THAT WHILE THERE WOULD BE A SMALL NET INCREASE IN JOBS, SOME CREASE IN JOBS, SOME KEY SECTORS OF THE UK WOULD SUFFER: HARDEST HIT WOULD BE MANUFACKEY SECTORS OF THE UK WOULD SUFFER: HARDEST HIT WOULD BE MANUFACTURING WITH THE LOSS OF TURING WITH THE LOSS OF 31,500 JOBS.31,500 JOBS.

�� AntonyAntony

�� Before the bid went in, part of the, the way it was sold to the Before the bid went in, part of the, the way it was sold to the public I would suggest was that this is not just public I would suggest was that this is not just going to benefit London. Itgoing to benefit London. It’’s going to benefit the entire country. Clearly thats going to benefit the entire country. Clearly that’’s not the case.s not the case.

�� BlakeBlake

�� No, well in terms of economics, itNo, well in terms of economics, it’’s not the case. Thats not the case. That’’s what I found here.s what I found here.

ii�� WE WENT TO PROFESSOR STEFAN SYZMANSKI FOR A SECOND OPINION ABOUWE WENT TO PROFESSOR STEFAN SYZMANSKI FOR A SECOND OPINION ABOUT DR BLAKET DR BLAKE’’S RESEARCH.S RESEARCH.

�� SzymanskiSzymanski

�� II’’ve read Dr Blakeve read Dr Blake’’s report in some detail and I think its report in some detail and I think it’’s a very credible piece of economic research, and I think his fis a very credible piece of economic research, and I think his findings really reflect ndings really reflect economic common sense. If you decide to engage in a major consteconomic common sense. If you decide to engage in a major construction project in one part of the country, itruction project in one part of the country, it’’s clear that you have to s clear that you have to suck in resources from somewhere else. DR BLAKE COMPLETED HIS REsuck in resources from somewhere else. DR BLAKE COMPLETED HIS REPORT IN OCTOBER 2004, NINE MONTHS BEFORE THE PORT IN OCTOBER 2004, NINE MONTHS BEFORE THE SUCCESSFUL OLYMPIC BID. BUT THE GOVERNMENT DID NOT MAKE IT PUBLISUCCESSFUL OLYMPIC BID. BUT THE GOVERNMENT DID NOT MAKE IT PUBLIC UNTIL DECEMBER 2005, SIX MONTHS AFTER LONDON C UNTIL DECEMBER 2005, SIX MONTHS AFTER LONDON WON. AND YOU WOULD HAVE BEEN HARD PRESSED TO NOTICE IT.WON. AND YOU WOULD HAVE BEEN HARD PRESSED TO NOTICE IT.

�� WHEN THE GOVERNMENT DID AUTHORISE THE PUBLICATION BLAKEWHEN THE GOVERNMENT DID AUTHORISE THE PUBLICATION BLAKE’’S RESEARCH, IT WAS CONTAINED IN ANOTHER REPORT. IT S RESEARCH, IT WAS CONTAINED IN ANOTHER REPORT. IT WAS PRESS RELEASED UNDER THE HEADLINE WAS PRESS RELEASED UNDER THE HEADLINE ‘‘EVERY CORNER OF THE COUNTRY TO FEEL THE 2012 EFFECTEVERY CORNER OF THE COUNTRY TO FEEL THE 2012 EFFECT’’. BUT WHAT IT DIDN. BUT WHAT IT DIDN’’T T MAKE CLEAR WAS WHAT THE FULL EFFECT MIGHT BE.MAKE CLEAR WAS WHAT THE FULL EFFECT MIGHT BE.

�� CommWHILECommWHILE THE GOVERNMENT CONTINUED TO PRESS THE ECONOMIC BENEFITS OF THE THE GOVERNMENT CONTINUED TO PRESS THE ECONOMIC BENEFITS OF THE GAMES, IT COULDNGAMES, IT COULDN’’T AVOID THE T AVOID THE SPIRALLING COSTS.IN MARCH THIS YEAR, OLYMPICS MINISTER TESSA JOWSPIRALLING COSTS.IN MARCH THIS YEAR, OLYMPICS MINISTER TESSA JOWELL ADMITTED THAT THE ORIGINAL ELL ADMITTED THAT THE ORIGINAL ££2.4 BILLION 2.4 BILLION BUDGET HAD NOW SOARED TO BUDGET HAD NOW SOARED TO ££9.3 BILLION, OF WHICH BRITISH TAXPAYERS WOULD PAY UP TO TWO THIR9.3 BILLION, OF WHICH BRITISH TAXPAYERS WOULD PAY UP TO TWO THIRDS.DS.

�� PTC PTC

�� MINISTERS HAVE ALWAYS DEFENDED THE ESCALATING OLYMPIC COSTS BY CMINISTERS HAVE ALWAYS DEFENDED THE ESCALATING OLYMPIC COSTS BY CLAIMING IT WAS ALWAYS THEIR INTENTION TO LAIMING IT WAS ALWAYS THEIR INTENTION TO REVIEW THEM AFTER WE GOT THE GAMES. BUT EVIDENCE THAT DISPATCHEREVIEW THEM AFTER WE GOT THE GAMES. BUT EVIDENCE THAT DISPATCHES HAS UNCOVERED SUGGEST THAT LONG BEFORE WE S HAS UNCOVERED SUGGEST THAT LONG BEFORE WE WON THE BID MINISTERS HAD RECEIVED WARNINGS THAT THE BUDGET WAS WON THE BID MINISTERS HAD RECEIVED WARNINGS THAT THE BUDGET WAS WRONG. WRONG.

�� CommComm

�� PY GERBEAU WAS AN AMBASSADOR FOR THE LONDON 2012 BID TEAM. PY GERBEAU WAS AN AMBASSADOR FOR THE LONDON 2012 BID TEAM.

�� PYPY

�� It was completely unrealistic. the budget was always going to beIt was completely unrealistic. the budget was always going to be six billion which I said publicly on the record about three andsix billion which I said publicly on the record about three and a half a half years ago, You look at the French bid which was already done foryears ago, You look at the French bid which was already done for 2008 where they had a stadium, they had a transport system and 2008 where they had a stadium, they had a transport system and the the entire infrastructure around the Olympic village was already buientire infrastructure around the Olympic village was already built and, and with a fairly limited amount of money to be investedlt and, and with a fairly limited amount of money to be invested. And . And they were at 2.2, 2.4 billion so if you go back here, therethey were at 2.2, 2.4 billion so if you go back here, there’’s no stadium, theres no stadium, there’’s no transport system and, theres no transport system and, there’’s no infrastructure around s no infrastructure around it and you calculate how much each item is going to cost and youit and you calculate how much each item is going to cost and you know itknow it’’s got to be about three times that. Thats got to be about three times that. That’’s how we came up s how we came up with six billion.with six billion.

�� WHEN LONDON WON THE 2012 OLYMPICS, WE WERE TOLD THAT THE GAMES WWHEN LONDON WON THE 2012 OLYMPICS, WE WERE TOLD THAT THE GAMES WOULD ONLY COST 2.4 BILLION POUNDS. PLUS OULD ONLY COST 2.4 BILLION POUNDS. PLUS ANOTHER BILLION FOR REGENERATION. ANOTHER BILLION FOR REGENERATION.

�� CommINCommIN THE COURSE OF OUR INVESTIGATION WE HAVE OBTAINED CONFIDENTIAL DTHE COURSE OF OUR INVESTIGATION WE HAVE OBTAINED CONFIDENTIAL DOCUMENTS THAT WERE NEVER MEANT TO BE OCUMENTS THAT WERE NEVER MEANT TO BE MADE PUBLIC. THEY CONTAIN WARNINGS THAT THE BUDGET WAS SIGNIFICAMADE PUBLIC. THEY CONTAIN WARNINGS THAT THE BUDGET WAS SIGNIFICANTLY SHORT LONG BEFORE THE GOVERNMENT TOLD NTLY SHORT LONG BEFORE THE GOVERNMENT TOLD THE THE PUBLIC.CommTHEPUBLIC.CommTHE FIRST DOCUMENT CONTAINS THE MINUTES OF A HIGH LEVEL WHITEHALL MFIRST DOCUMENT CONTAINS THE MINUTES OF A HIGH LEVEL WHITEHALL MEETING. AT 3PM ON NOVEMBER EETING. AT 3PM ON NOVEMBER 29 2005, 12 SENIOR OFFICIALS FROM THE TREASURY, THE DEPARTMENT O29 2005, 12 SENIOR OFFICIALS FROM THE TREASURY, THE DEPARTMENT OF CULTURE MEDIA AND SPORT AND THE MAYOR OF F CULTURE MEDIA AND SPORT AND THE MAYOR OF LONDONLONDON’’S OFFICE MET TO DISCUSS THE OLYMPICS. THE MEETING WAS CONFIDENTIS OFFICE MET TO DISCUSS THE OLYMPICS. THE MEETING WAS CONFIDENTIAL AND GIVEN A CODENAME: PROJECT RAVEN. AL AND GIVEN A CODENAME: PROJECT RAVEN. ONE SENTENCE IN THE DOCUMENT STANDS OUT ONE SENTENCE IN THE DOCUMENT STANDS OUT –– IT REVEALS THAT BY SEPTEMBER 2004 THEY KNEW THAT THE BID WAS LIIT REVEALS THAT BY SEPTEMBER 2004 THEY KNEW THAT THE BID WAS LIGHT GHT BY ONE BILLION POUNDS.LEADER OF THE LIBERAL DEMOCRATS SIR MING CBY ONE BILLION POUNDS.LEADER OF THE LIBERAL DEMOCRATS SIR MING CAMPBELL IS A FORMER OLYMPIC SPRINTER.AMPBELL IS A FORMER OLYMPIC SPRINTER.

�� FOR THE FIRST TIME DISPATCHES CAN REVEAL THAT TESSA JOWELL WAS PFOR THE FIRST TIME DISPATCHES CAN REVEAL THAT TESSA JOWELL WAS PERSONALLY WARNED THAT THE OLYMPIC BUDGET WAS ERSONALLY WARNED THAT THE OLYMPIC BUDGET WAS MASSIVELY INADEQUATE, 16 MONTHS BEFORE SHE WENT TO PARLIAMENT.THMASSIVELY INADEQUATE, 16 MONTHS BEFORE SHE WENT TO PARLIAMENT.THIS DOCUMENT SHOWS THAT THE ORIGINAL OLYMPIC IS DOCUMENT SHOWS THAT THE ORIGINAL OLYMPIC BUDGET WAS SHORT BY SEVERAL BILLION POUNDS BUDGET WAS SHORT BY SEVERAL BILLION POUNDS –– IN AREAS SUCH AS INFRASTRUCTURE, ENVIRONMENTAL COMMITMENTS AND IN AREAS SUCH AS INFRASTRUCTURE, ENVIRONMENTAL COMMITMENTS AND SECURITY. SECURITY.

�� 2.4 BILLION POUNDS. PLUS ANOTHER BILLION FOR REGENERATION. (almo2.4 BILLION POUNDS. PLUS ANOTHER BILLION FOR REGENERATION. (almost 3 x more, not st 3 x more, not counting security)counting security)

� The £1.972bn Programme Contingency potentially available to the Olympic Delivery Authority (within the £8.099bn

� maximum funding potentially available to the ODA) includes provision for two types of contingency:

� Programme Contingency is for programme-wide risks managed by the ODA. These risks principally relate to the risks

� inherent in delivering a programme of projects on this scale, on a tightly constrained site against an immovable

� deadline – as opposed to the risks that affect individual projects delivered in isolation (which are covered through

� project contingency).� In addition to the £1.972bn contingency at programme level, there is £973m,within the ODA’s

base budget of� £6.127bn,for contingency at project level. Project level contingency relates to risks on individual

projects as if they� were being carried out in isolation,such as design and contracting uncertainties.� Funders’ Group Contingency is for other risks beyond the Project and Programme level –

principally relating

IntervistasIntervistas notesnotes

�� 2010 Economic Impact Summary2010 Economic Impact 2010 Economic Impact Summary2010 Economic Impact SummaryMediumSummaryMedium--High High ScenarioMediumScenarioMedium--High High ScenarioTotalScenarioTotal Impacts Impacts 2010 Games 2010 Games

�� Only Only

�� 2010 Games 2010 Games

�� With VCEC With VCEC

�� Impact Due to Impact Due to

�� Games Games

�� 2010 Games 2010 Games

�� With Total With Total

�� VCEC Impact VCEC Impact

�� GDP $3.3 Billion $4.1 Billion $8.4 Billion GDP $3.3 Billion $4.1 Billion $8.4 Billion

�� Person Years 77,000 100,000 187,000 Person Years 77,000 100,000 187,000

Key findings from Key findings from InterVISTASInterVISTAS on projected on projected

range of benefits to B.C.range of benefits to B.C.�� InterVISTASInterVISTAS updated figures for projections 2002updated figures for projections 2002--2020:2020:

�� GDP, Direct Person Years, Direct Wages, Direct Tax Revenues GDP, Direct Person Years, Direct Wages, Direct Tax Revenues � Low: $2.0 bn, 45,000, $1.5 bn, $444 mn� Med: $2.4 bn, 54,000, $1.8 bn, $562 mn� Med-High: $3.3 bn, 77,000, $2.5 bn, $863 mn� High: $4.2 bn, 99,000, $3.3 bn, $1,150 mn

� These are the updated total economic impacts - including indirect and induced (multiplier) impacts on the provincial economy.

�� Tourism (2002Tourism (2002--2015) Low (1.1 million) , Medium (1.7 million), 2015) Low (1.1 million) , Medium (1.7 million), Medium High (2.7 million),Medium High (2.7 million), High (4.3 million)High (4.3 million)�� A gross measure of employment and wages A gross measure of employment and wages

�� Gross domestic productGross domestic product

�� Tax revenuesTax revenues

�� Three categories of impacts Three categories of impacts

�� Direct (construction, tourism, operations) Direct (construction, tourism, operations)

�� Indirect (e.g., supplier industries) Indirect (e.g., supplier industries)

�� Induced (general economic stimulation)Induced (general economic stimulation)

�� Gross versus incremental impacts Gross versus incremental impacts

�� Only incremental benefits (generated by inbound spending Only incremental benefits (generated by inbound spending

20022002--2020 (tourism only to 2015)2020 (tourism only to 2015)�� How Are Impacts Estimated? How Are Impacts Estimated?

�� Gross Games Expenditures Gross Games Expenditures

�� Incremental Incremental

�� Games Expenditures Games Expenditures

�� Ex) Ex)

�� excludes all BCexcludes all BC--

�� based spending based spending

�� There are three broad types of Games expenditures that generate There are three broad types of Games expenditures that generate

�� impacts: impacts:

�� •• Capital/Construction expenditures Capital/Construction expenditures

�� •• Operating expenditures Operating expenditures

�� •• Tourism/visitation expenditures Tourism/visitation expenditures

�� Incremental tourists Incremental tourists -- entire period entire period

�� Low Medium Low Medium MediumMedium

�� High High HighHigh

�� 6 years 7 years 7 years 18 years 6 years 7 years 7 years 18 years

�� 1.1 million 1.7 million 2.7 million 4.3 million 1.1 million 1.7 million 2.7 million 4.3 million

�� Updated Direct Economic Impact Updated Direct Economic Impact

�� Scenario Direct Scenario Direct

�� GDP GDP

�� Direct Direct

�� Person Person

�� Years Years

�� Direct Direct

�� Wages Wages

�� Direct Direct

�� Tax Tax

�� Revenues Revenues

�� Low Low –– Updated $1.3 Billion 32,000 $1.1 Billion $291 Million Updated $1.3 Billion 32,000 $1.1 Billion $291 Million

�� Med Med –– Update $1.5 Billion 39,000 $1.3 Billion $379 Million Update $1.5 Billion 39,000 $1.3 Billion $379 Million

�� MedMed--High High –– Update $2.1 Billion 55,000 $1.9 Billion $606 Million Update $2.1 Billion 55,000 $1.9 Billion $606 Million

�� High High –– Update $2.7 Billion 71,000 $2.4 Billion $819 Million Update $2.7 Billion 71,000 $2.4 Billion $819 Million

13 UpdatedUpdated TotalTotal Economic ImpactEconomicImpactScenario Direct GDP Direct Person Years Direct Wages Direct Tax Revenues Low – Updated $2.0 Billion 45,000 $1.5 Billion $444 Million Med – Update $2.4 Billion 54,000 $1.8 Billion $562 Million Med-High – Update $3.3 Billion 77,000 $2.5 Billion $863 Million High – Update $4.2 Billion 99,000 $3.3 Billion $1,150 Million These are the updated total economic impacts - including indirect and induced (multiplier) impacts on the provincial economy.

Comparison of Preliminary andComparison of Preliminary andUpdatedUpdated TotalTotalEconomic ImpactsEconomic ImpactsSource: IVC 2010 Olympic Economic Impact Update Scenario GDP Person Years

ODA Budget, last quarter Sept. 2008ODA Budget, last quarter Sept. 2008� Table 2:Detailed breakdown of the ODA budget at September 2008 (£m)� Original Nov 2007Budget £m Change£m Sept 2008 Budget£m Potential Changes£m Sept 2008

potential cost to the public sector taking into account cost pressures and opportunities £m††� Site Preparation and Infrastructure Powerlines 282 16 298 4 302

� Utilities 256 0 256 0 256� Enabling Works 364 (47) 317 0 317� F10 Bridge 89 (27) 62 0 62� Other Structures,Bridges and Highways 740 (45) 695 10 705� Prescott Lock 5 0 5 0 5� Other infrastructure(Greenway,landscaping)* 243 (11) 232 2 235

� Total Site Preparationand Infrastructure 1,979 (114) 1,865 16 1,881� Venues Stadium 496 8 504 43 547� Aquatics 214 32 246 5 251� Other Olympic Park venues 360 61 421 25 446� Non-Olympic Park venues 101 (2) 99 24 123� Total Venues 1,171 99 1,270 97 1,367� Transport Stratford Regional Station 119 0 119 0 119� DLR 86 0 86 0 86� Thorntons Field 47 (24) 23 0 23� North London Line 110 (3) 107 0 107� Other transport capital projects 178 (8) 170 (7) 163� Other transport operating expenditure 357 2 359 (40) 319� Total Transport projects 897 (33) 864 (47) 817� Other Parkwide projects Logistics for site construction 337 (14) 323 0 323

� Section 106 and Master Planning 127 0 127 0 127� Insurance50 0 50 0 50� Security for park construction 354 0 354 0 354� Total Other Parkwide projects 868 (14) 854 0 854� ***Media Centre and Olympic Village 492 99 591 255 846� Programme Delivery 647 17 664 13 677� Taxation and interest 73 (1) 72 20 92� Total baseline budget before Programme Contingency 6,127 53 6,180 354 6,534

� ODA Programme ContingencyRetained savings† 968 (21)63 94763 0 94763

� Total after ODA Programme Contingency 7,095 95 7,190 354 7,544� **Available Programme ContingencyRetained savings†Total Potential Anticipated Final Cost (AFC) (68)(63)7,413†††

� Remaining contingency 1,004� Maximum available for ODA 8,099 0 8,099 0 8,099

Variants Variants (complete with errors)(complete with errors)

vHellovHello friend,friend,

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Caveats to Caveats to InterVISTASInterVISTAS studystudy

� Only impacts of dollars from out of province sources (a conservative approach ?)� Gross economic impacts would be larger, due to the impact of spending

financed from within B.C

� An economic impact study measures the size of employment generated, GDP generated, etc. � It does not weigh these positive impacts against the costs required to

obtain them as a cost-benefit study would do. A cost benefit study evaluates if it is worthwhile and is much more complex to do.

� In contrast, a cost-benefit study of the Olympics would measure the dollar value of benefits from the Olympics and subtract from them the costs required to obtain them (organizing, marketing, facility costs, etc.)

� InterVISTAS only asked to do an economic impact measurement.

Other parts of the security picture for 2010Other parts of the security picture for 2010

�� Lies and deceptions in costs ($175 million vs. > $1 Lies and deceptions in costs ($175 million vs. > $1 bnbn))

�� Different agencies and budgets in V2010 ISUDifferent agencies and budgets in V2010 ISU

�� RCMPRCMP

�� VPD: blocked FOI requestsVPD: blocked FOI requests

�� Other police agencies from across CanadaOther police agencies from across Canada

�� DND/CSIS: blocked FOIDND/CSIS: blocked FOI

�� Other federal agenciesOther federal agencies

�� Participation by U.S. and other foreign forcesParticipation by U.S. and other foreign forces

�� Impact of SPPImpact of SPP

�� OP Top OffOP Top Off

VANOCVANOC’’ss responseresponse

�� LEEDsLEEDs standards for venue construction.standards for venue construction.

�� Environmentally friendlier disposal of Environmentally friendlier disposal of ““woody debriswoody debris””..

�� Carbon dioxide offsetting of Games emissions, 110,000 Carbon dioxide offsetting of Games emissions, 110,000 tonnestonnes, and , and aim for another 190,000 aim for another 190,000 tonnestonnes of indirect emissions.of indirect emissions.

�� Happily ignoring 90% of all GamesHappily ignoring 90% of all Games--related emissions!related emissions!

�� The destruction at The destruction at EagleridgeEagleridge Bluffs: someone else did it. Etc.Bluffs: someone else did it. Etc.

�� VANOCVANOC’’ss press release: press release: ““Under the agreement, Under the agreement, OffsettersOffsetters will provide the Vancouver will provide the Vancouver Organizing Committee for the 2010 Olympic and Organizing Committee for the 2010 Olympic and ParalympicParalympic Winter Games (VANOC) Winter Games (VANOC) with a portfolio of offset projects created through local expertwith a portfolio of offset projects created through local expertise in new, clean energy ise in new, clean energy technologiestechnologies. The projects will reduce a minimum of 110,000 . The projects will reduce a minimum of 110,000 tonnestonnes of carbon of carbon emissions into the atmosphere, thereby offsetting direct emissioemissions into the atmosphere, thereby offsetting direct emissions from the Games ns from the Games by the same amount. by the same amount. VANOC and VANOC and OffsettersOffsetters will also work together with interested will also work together with interested Games partners, sponsors and participantsGames partners, sponsors and participants to offset an additional estimated 190,000 to offset an additional estimated 190,000 tonnestonnes of indirect carbon emissions from the Games caused by activitieof indirect carbon emissions from the Games caused by activities such as air s such as air travel.travel.””