USA TODAY International Edition
PUTIN’S OLYMPIC CORRUPTION
Weird toilets and brown water are just signs of a bigger rot in Russia
As the high- speed downhill drama of the Winter Olympic Games wraps up in Sochi, one issue has faded from public view amid the spectacle: Russia’s corrosive culture of corruption.
This is notable because before the Opening Ceremony, the Sochi Games had come under unflattering scrutiny. Myriad mishaps that have accompanied the Games — from bizarre toilets to brown water to malfunctioning door locks — went viral. Now those issues have disappeared.
That is a shame because corruption has far more to say about Russia’s troubled future — and its increasingly belligerent stance toward the United States — than anything that happened in the Games, including Russia’s embarrassing hockey loss to neighboring Finland.
GIANT WASTE
In the neighborhood of $ 50 billion or more, the price tag for the Sochi Games is higher than that of all other winter Olympiads to date combined. Moreover, a third or more of that sum was lost to rampant corruption, embezzlement and kickbacks. These excesses are outlined in damning detail by the Institute of Modern Russia, in a new online project dubbed “Sochi 2014: The Reverse Side of the Medal.”
Nor is Sochi an anomaly. The extensive graft that has surrounded the 2014 Winter Olympics since Sochi’s selection some six- and- a- half years ago is simply the most visible part of a pervasive pattern of corruption that permeates virtually every economic sector and business dealing in Vladimir Putin’s Russia. BLACK MARKET It is a dynamic that has been aided and abetted by the Kremlin as a way of strengthening its hold on power, with disastrous consequences for Russian prosperity.
Just how disastrous was detailed in a February 2013 study by Global Financial Integrity ( GFI), a research group that found Russia lost upwards of $ 200 billion in illicit financial outflows stemming from crime, corruption and tax evasion from 1994 to 2011.
All told, the study estimated that the size of Russia’s underground economy — which includes, among other things, drug smuggling, arms trafficking and human trafficking — at nearly half of GDP over the period.
Not surprisingly, investors have been voting with their feet. Recent years have seen massive capital flight from the Russian Federation, as multinational corporations have abandoned the country’s frigid economic climate. Last year alone, Russia lost a staggering $ 63 billion in capital outflows, according to the estimates of the country’s central bank. Since the global economic downturn in 2008, an estimated $ 350 billion has left Russia — a sign investors see the country as a bad economic bet. GLOBAL PROBLEM This represent nothing less than a tragedy for ordinary Russians. “Hundreds of billions of dollars have been lost that could have been used to invest in Russian health care, education and infrastructure,” GFI Director Raymond Baker pointed out at the time.
It could also become a tragedy for the world. As the Russian economy continues to stagnate, starved of investment and robbed of its own wealth, Russia’s international role in places like Syria and Ukraine has turned increasingly destructive.
What is perhaps the most brazen example of Russian rot exists right in Sochi: a sprawling Italian- style palace on the Black Sea coast owned by none other than Putin. As The Washington Post’s David Ignatius first detailed back in 2010 in an exposé made possible by Putin’s onetime business partner- turned- whistle- blower Sergei Kolesnikov, the $ 1 billion monstrosity — paid for by the diversion of commercial profits — is nothing less than a “21st century czar’s palace.” It is also a monument to the corrupt business practices that have come to define modern Russia.
Journalists now have their hands full covering the latest exploits of German luge racers and Norwegian cross- country skiers. But before we lower the curtain on Sochi, perhaps some intrepid reporters might make time to pay a visit to Putin’s nearby Sochi palace. The story that they find there is liable to tell the world a great deal more about today’s — and tomorrow’s — Russia than the Olympic proceedings ever could.