Taxpayers Bear a Heavy Burden

Two billion dollars.

That’s the federal government’s preliminary estimate of the total it put out to help put on the Los Angeles and Atlanta Olympic Games combined with its projected expenditures for the 2002 Winter Games in Salt Lake City.

By far the bulk of the amount, about $1.4 billion, is headed for Salt Lake City. Atlanta’s 1996 Summer Games got $605 million and the 1984 Summer Games in Los Angeles drew a mere $75 million, according to the study, released by the General Accounting Office.

The report marks the first attempt by the federal government to document how much taxpayer support is involved in underwriting recent Games in the United States--which, following the lead of the Los Angeles Games, are primarily staged by private committees.

The report does not attempt to judge whether $2 billion in federal funds is a worthwhile investment for three sporting spectacles.

Nor does it answer the obvious follow-on questions: How much economic activity do the Games generate? And, how much did the federal government recoup (or in the case of Salt Lake City, does it foresee recouping) in tax revenues linked to the Games?

Instead, in documenting the vast--and escalating--sums it takes to put on Games in the United States, the report sets the stage for further study and for a fundamental debate about the Olympics in an era of competing budget priorities: Are the Games worth it?

“These funds are spent whether the Games have been won by legitimate efforts or the questionable practices of payoffs and special favors that have already been amply documented,” Rep. John D. Dingell (D-Mich.) said in a statement issued Tuesday in Washington, referring to Salt Lake City’s scandal-tainted winning bid for the 2002 Games.

“Some of these federal expenditures may well be necessary but there may also be a fair amount of gold-plating,” the statement said, adding that Dingell had asked the GAO to “monitor this spending closely.”

Dingell, the ranking minority member of the U.S. House Commerce Committee, and Sen. John McCain (R-Ariz.), who chairs the Senate’s Commerce Committee, commissioned the report earlier this year in the wake of the Salt Lake City corruption scandal. A final GAO report is due to be issued next year.

In Salt Lake City, bidders showered more than $1 million in cash, gifts, scholarships and other inducements on International Olympic Committee members and their relatives. Six IOC members were expelled. Four others resigned.

A U.S. Justice Dept. investigation into the scandal is ongoing. Federal prosecutors already have filed two criminal cases.

Earlier this year, the scandal prompted $200 million in cuts in the Salt Lake Organizing Committee’s budget for the Games, down from an original bottom-line of $1.453 billion, according to Shelley Thomas, a SLOC spokeswoman. More cuts are likely, she said.

Nonetheless, it’s simple math to figure out that the 2002 Games is currently a combined $2.7 billion proposition.

Of the roughly $1.4 billion the federal government anticipates spending, $1.1 billion is planned for highway and transit projects in and around Salt Lake City. Most of these projects would have been funded whether the Olympics came to town, the report notes, but their “completion generally had to be accelerated” to be ready by February 2002.

About $272 million is planned for activities “solely related” to the Games. Most of that amount, nearly $200 million, is detailed for “safety and security activities,” including anti-terrorism plans.

The Atlanta Committee for the Olympic Games raised and spent more than $1.7 billion to put on the 1996 Games, more or less breaking even.

The federal government pitched in an additional $605 million, the GAO says. Of that amount, $184 million went to activities “solely related” to the Games; half of that sum, or $92 million, was spent on security.

About $421 million was provided for highway and transit projects. As it was with Salt Lake City, most of that money would have been provided regardless of the Games but came through to help get Atlanta ready for the 1996 Games.

The figures the GAO report provides for the Los Angeles Games underscore the difference in scale between then and now--a difference attributable to perhaps the key figure in Olympic economics, the $232-million profit turned by organizers of the 1984 Games.

The GAO report does not mention that figure. But, after the U.S.-led boycott of the 1980 Moscow Games and the financial debacle of the 1976 Montreal Games, the L.A. Games announced to would-be bidders worldwide that the Olympics could, indeed, be profitable.

Budget figures for the Los Angeles Games were in the range of $400 million to $500 million.

Of the $75 million the government chipped in, $68 million went for security, the GAO report says.

Unlike the situations in Atlanta and Salt Lake City, the Los Angeles Games drew “little funding and support” for capital projects that “would have benefited Los Angeles after the Olympic Games were held,” the GAO report says.