Venue construction for the 2014 Winter Games in Sochi, Russia, is well underway, and U.S. anti-corruption authorities are watching closely for compliance with the Foreign Corrupt Practices Act. From law firm Saul Ewing:
“Two factors, in particular, indicate that the Sochi Olympics will be on federal prosecutors’ radar screens between now and 2014. First, the infrastructure required to make Sochi ready to host the Games is massive and costly…The estimated cost of construction has exploded to over $35 billion, far beyond the $11 billion that was initially budgeted. U.S.-based multinational companies have won, or are angling to win, contracts for these projects. For example, GE has already provided turbines that will provide electrical power at the Sochi Olympic sites, and a spokesperson for Dow Chemical has announced that Dow has won contracts for work at every single competition venue being constructed there.
The second factor that will lead to scrutiny of companies doing business associated with the Sochi Olympics is Russia’s pervasive atmosphere of corruption. Russia has consistently ranked low on well-respected international surveys of corruption, such as the Transparency International Corruption Perceptions Index, on which it ranked 143rd out of 182 countries in 2011. There have also been allegations of corruption specifically related to the infrastructure projects being undertaken for the 2014 Games.”
Read the full update, Winter Olympics in Russia Set Stage for FCPA Scrutiny - Saul Ewing LLP»