‘Rough Estimate’

Russia in September doubled its forecast for spending on the 2018 soccer World Cup to almost $20 billion, a figure Sports Minister Vitaly Mutko called a “rough estimate,” according to state news service RIA Novosti. Brazil’s Sports Ministry last year said it planned to spend 30 billion reais ($15.1 billion) on projects linked to its staging of the 2014 World Cup.

Putin, who has repeatedly vowed to crack down on corruption, last month fired the vice president of the Russian Olympic Committee, Akhmed Bilalov, saying his brother’s company, which had the contract for the ski-jumping complex, was over budget by a factor of seven and behind schedule.

“The main issue is to be sure nobody steals anything,” Putin said Feb. 6 before the announcement of Bilalov’s dismissal.

Three days earlier, Rotenberg’s Mostotrest said it would seek to sell its Engtransstroy unit, which has at least four unfinished Olympics contracts, including the Formula One track.

Bilalov, who has since left Russia, started having trouble in 2011, when organizers told him to spend what would amount to $200 million on roads and other works that weren’t in the contract once held by his family’s company, according to his representative in Moscow. Bilalov denies costs jumped sevenfold, saying they only increased 60 percent, according to the representative, who asked not to be identified because of the sensitivity of the matter.

Interior Ministry

Police have announced one major case of financial fraud related to the Olympics. That was last August, when the Interior Ministry put out a brief statement saying investigators had foiled a plot to embezzle 8 billion rubles. No details were provided. The ministry and the Prosecutor General’s Office in Moscow didn’t respond to requests for comment on corruption in Sochi.

“The cost overruns are due to corruption, the clan system and a lack of competition,” said Sochi native Boris Nemtsov, a deputy prime minister under Yeltsin and a political opposition leader who tracks government spending. “All the main contractors in the Olympics are people close to Putin.”

Sochi Mayor Anatoly Pakhomov, who defeated Nemtsov in his 2009 election with 77 percent of the vote versus 14 percent, said spending concerns are unfounded because any “wrongdoing” is quickly discovered and halted by authorities.