Cost to Host Olympic Games Skyrockets

N E W   Y O R K, Sept. 25, 2000 -- In 1984, Peter V. Ueberroth made it seem possible that the Olympic dream of hosting the perfect Olympic Games — and one that didn’t bankrupt a city — could come true.

The California investor found a way to meld public money with corporate sponsors to put on the games in a way that actually made money — more than $100 million — for Los Angeles, the host city.

The success of the L.A. games, some say, kicked off an enthusiasm in this country for hosting the games and spending big money to do it, a trend that has increased federal government spending on the Olympics more than tenfold.

Since 1904, the United States has hosted the Olympic games eight times, more than any other country. Unlike in other countries, the host cities, not the federal government, are generally responsible for hosting the games. But, according to a report released by the General Accounting Office, the federal government has played an increasingly expensive role.

Pork-Barrel Spending?

The federal government will pay nearly half of the $2.7 billion it is expected to cost to host the 2002 Winter Olympics in Salt Lake City, Utah, according to the report.

The $1.3 billion in federal spending is more than double the amount of federal funds —$609 million— that supported the 1996 summer Olympics in Atlanta. The Atlanta games cost the city a total of $2 billion, the report said.

In contrast, the federal government spent just $75 million (in 1999 dollars) to support the 1984 Olympics in L.A.

Since the 1984 Olympics, only a quarter of the federal money used to fund the Olympics has gone to projects relating to planning and staging the Olympics, according to the report. The remaining funds have been spent on infrastructure projects such as highway improvements, mass transit and capital improvements.

“I think it is a disgrace,” said Sen. John McCain, R-Ariz., who, along with U.S. Rep. John Dingell, D-Mich., asked the government agency to investigate the escalating expenditures for hosting the Olympic games in American cities.“But this is a logical extension of what you get when you start pork-barrel spending.”

But others say that federal spending on the Olympic games is justified because the games help bring together people from many nations.

“Recognizing that our government spends billions of dollars to maintain wartime capability, it is entirely appropriate to invest several hundred millions to promote peace,” Mitt Romney, the president of the Salt Lake City Organizing Committee, wrote in a letter in August to the GAO.

Is the Spending Necessary?

Officials in Utah argue that the largest expense of putting on the Olympic games is the construction of a mass transit system in downtown Salt Lake City and the renovation of one of the state’s freeways, I-15. The officials say these two projects were already in the pipeline to receive federal funding.

“There is absolutely no question that the money would have been spent even if the Olympics had not come to Salt Lake City,” said Sen. Bob Bennett, R-Utah, said in a Senate floor session. “It may not have been spent as wisely or as prudently as if we had not had the pressure of the Olympics.”

While the government report acknowledges that certain infrastructure projects funded in preparation for the Olympics did or will benefit the host cities, the report says that it was difficult to determine which of the projects would or would not have been funded if the cities did not host the games.

The report mentions a federally-funded sewer construction project in Salt Lake City which the Environmental Protection Agency has said would not be neccessary without the games.

The project became the subject of a bitter political tiff between Sens. Bennett and McCain last year. McCain charged that soft-money political donations had been used to buy Bennett’s support for the project, which cost the federal government $2.2 million. When challenged, McCain was unable to prove his allegations.

Funds Improperly SpentBut the GAO report did find that in two of five Olympic-related projects it reviewed federal funds may not have been spent wisely.

In the 1996 Atlanta games, the federal government improperly paid $2 million on salaries for organizers of the Paralympics, a competition for disabled athletes held in conjunction with the Olympics, the report found. It also said the Department of Veterans Affairs improperly spent $2 million on equipment and services for the disabled, most of whom were not veterans.

It is important to note, McCain says, that the report found that the federal government has no policy that defines its role in financing the Olympics and that there has been no provisions for oversight and monitoring the money spent. A good portion of the funding, he says, was added piecemeal to different appropriation bills passed by Congress.

“They just stuck it in there,” McCain said. “It’s outrageous and it’s got to stop.” McCain said he would filibuster any unuathorized spending that Sen. Bennett tries to propose.

Bennett said on the Senate floor last week that he agrees that federal spending on the Olympics needs to be monitored. But he also said that he believes that the federal government has to play an important role in the Olympics and help support cities faced with dramatically increasing costs of hosting the games.

“Somewhere along the line, someone lost track of what happens to all of this,” Sen. Bennett said. If Congress decides that it should not help fund the Olympic games, “then no American City will ever host the Olympic games again because no American city can ever afford the thing kinds of things that are required.