Despite Ongoing Scandal, Utah Olympics Preparations Well On Way
By Stateline Staff
Olympic boosters spread across Salt Lake City's Capitol Hill this week to replant trees uprooted in the August 11 tornado and attempt to lay a new foundation of goodwill toward the Games. Despite months of scandal and an ongoing Justice Department investigation, Olympic organizers are still confident they can deliver the "best games ever."
"It is our hope that these trees will be an essential part of the area's rebirth and will contribute to our post Games legacy," said SLOC President Mitt Romney.
But beyond this latest in a series of public outreach efforts lies an ongoing Justice Department investigation that threatens to make the Salt Lake City games' legacy one of scandal instead of athletic achievement.
The probe so far has resulted in only one guilty plea by Utah businessman David E. Simmons to a misdemeanor tax violation for his role in hiring the son of an International Olympic Committee (IOC) member and illegally deducting the salary as a business expense.
The plea agreement filed in U.S. District Court calls for Simmons to provide federal investigators with information, documents and records, and requires him to testify before the grand jury, his lawyer said in a statement.
John Kim, the man hired by Simmons, was indicted Wednesday on charges that he lied to the FBI and fraudelently obtained a green card.
Salt Lake City newspapers have reported that the investigation into more than $1 million in inducements offered to IOC members is aimed primarily at former bid leader Tom Welch. But according to the reports, investigators are looking to broaden their scope.
Spokesmen for the Justice Department investigation and a Congressional investigating committee declined to comment specifically on the ongoing investigations. When asked directly about the investigation last Thursday, Governor Leavitt said that the Department of Justice had not contacted him.
But Leavitt did acknowledge that the stain of the scandal has hurt the state's image.
"It has been a bruising experience to the whole state. The only way we'll ultimately redeem that experience is to put on the best games that have happened," Leavitt said. "The Olympics are a very powerful force for good. If it wasn't, the things that have happened here would have been seen as virtually nonconsequential."
Unfortunately for the Games' organizers, the investigation has been very consequential.
The scandal has had negative effects on the organizers' efforts to raise funds and has SLOC president Romney seeking to make up a budgetary shortfall of $179 million from corporate sponsors.
With just over two years left to raise the funds, SLOC on Tuesday announced the creation of a 20 member steering group consisting of, among others, Gov. Leavitt, San Francisco 49ers quarterback Steve Young and Utah Jazz owner Larry Miller.
Romney is currently in the midst of a major fund-raising campaign that involves personal appeals to corporate boards of directors. He is asking them to contribute $1 million, $5 million, or even up to $20 million to the Games.
But with allegations and investigations continuing, raising the funds won't be easy.
"This kind of stuff continually being dredged up hurts sponsors," said Randy Lynch of USWEST communications, one of 13 national sponsors of the Games. "It distracts from the purpose and intent of the Olympics."
United States Olympic Committee officials said that legal bills from the probe were likely to range from $990,000 to $1.5 million.
Concerns are also being raised about the SLOC's ability to repay all of the $59 million in local option sales taxes that were used to build Olympic facilities. Currently, SLOC must repay the state and local governments by January 2002. But SLOC officials want the deadline extended to March of 2002, when their cash flow problems will be alleviated by initial television rights payments from NBC.
"The question is not how much we'll leave them in debt but how much we can repay," Romney told the Salt Lake Tribune last month.
But funding questions aren't the only issues on the mind of critics of the Games.
Impact 2002 and Beyond, a coalition representing low-income, disabled and minority groups, convened a forum last week with the seven candidates for Salt Lake City mayor and brought up questions regarding public safety, accessibility, environmental impact mitigation and fair housing.
"Having the Olympics is a foregone conclusion, and obviously we can't go back down that road. What we can do is continue pushing ways that the Olympics will do less harm to low income people," said Impact 2002 spokesman Glen Bailey.
Impact 2002 previously wrote unsuccessfully to Gov. Leavitt demanding the resignations of SLOC members standing to make money from the 2002 Games.
Despite the probe and funding worries, preparations for the Games continue on pace. Though the games are still 891 days away, the state is ahead of schedule, Leavitt said.
He pointed out that construction to improve and widen Interstate 15, the state's main north-south route, has experienced only one delay in two years. A federally-funded light rail system in Salt Lake City passed its first major test last week, and is expected to open on time this December.
According to Utah Department of Revenue officials, the 2002 Games will provide $2.8 billion in economic activity and $970 million in income to Utah workers and businesses. Those figures include jobs and residual benefits from construction and preparations.
State and local governments are expected to generate $236 million in sales, income, property and fuel taxes as a direct result of the Games.
Owners of hotels, condominiums and private homes are expecting windfall rentals during the Games. Indeed, according to guidelines established at the urging of the SLOC, property owners can rent at a rate approximately 50 percent higher than peak charges for the previous winter ski season.
Block deals by large out-of-state entities have helped fuel the push for rooms. The entire Heber Valley Holiday Inn has been rented by the Olympic security contingent at twice its usual winter rate, said manager Richard McGuffie.
And all but 30 rooms of the Park City Marriot have been snatched up by the IOC. In addition to these contracts, SLOC officials have reserved between 80 and 85 percent of the hotel rooms in Park City.
But some hotel and restaurant owners are worried about the impact of Utah's notoriously strict liquor laws on visitors for the Games.
Utah law mandates that restaurants, "private clubs," and "taverns" all operate under different rules. And if a visitor doesn't know what those rules are, finding a drink could be difficult.
Restaurant patrons cannot consume beer without a food order; tavern customers can order beer only, no liquor; and to enter a private club that can sell liquor and beer, a visitor must purchase a two-week, $10 membership.
Even if a visitor masters these laws, it will be difficult to locate any of the establishments. State advertising laws prohibit mentions of alcohol in newspapers, on billboards and in phone books.
One example: a convenience store billboard on the main route from the airport to downtown pokes fun at the law by advertising "COLD BEE?" on one side and "COLD BEER (Nuts)" on the other.
There are no plans to loosen the restrictions during the Games period, said a spokesperson for the state Alcohol Beverage Control Commission.