The outlook for the 2016 Summer Olympics in Rio de Janeiro is clouded with more bad news. Brazil is grappling with an impeachment crisis and government meltdown. These also led to the resignation of both the current sports minister, George Hilton, and Adilson Moreira, head of Brazil’s National Force for Public Security, last week. Moreira had been designated the leader of the inter-agency security force responsible for all security policies at the 2016 Summer Olympic Games. Even if the interim replacements for Hilton and Moreira are well trained and well qualified, the resignations were so abrupt that there could not possibly have been time for comprehensive briefings and transition meetings with their successors.
The context of these challenges appears impossible to get under control before the Games start on August 5. Several political parties which were part of the governing coalition in Brazil have left the federal government, in the wake of corruption and accounting fraud scandals which have current President Dilma Rousseff facing impeachment. Last month, 99% of the representatives in Brazil’s lower house voted to establish a commission to probe grounds for impeachment of Brazil’s current President, Dilma Rouseff. The focus of the investigation is alleged accounting fraud that understated Brazil’s economic problems as a ploy to help Rousseff get re-elected in 2014. Rousseff was also Chairwoman of state owned oil and gas giant Petrobras, which has been mired in a web of corruption scandals in which construction companies and other suppliers arranged large kickbacks or shady campaign contributions to politicians in exchange for securing overpriced business contracts.
The corruption scandals have spilled over to plans for completion of Olympic facilities, because financial institutions that are holding funds in escrow usually cannot release the funds if there is any pending litigation. In addition, the City Council of Rio de Janeiro established an inquiry commission to evaluate whether corruption tainted any of the contracts awarded for construction of Olympic facilities and whether taxpayers could have any recourse to get their money back.
The chaos is having a ripple effect as a cast of thousands tries with increasing difficulty to secure facilities to support standard sports event function like business hospitality and broadcast studios outside the Main Press Center – or get their money back after a breach of contract. Here is a reflective opinion from local attorney Alessandro Alves in dealing with a typical breach of contract: “Even though the contract stablished the impossibility of refund in case of unilateral termination, in this particular situation the clause is abusive, since the agency had provided an unsuitable unit, putting the client in a unbearable situation. In relation to coercive conduction to the police station carried by the agency manager without a warrant is unacceptable, it is in disagreement with Brazilian law, which would render a prosecution.”
That said, detention without a warrant cannot be ruled out in this chaotic situation where the government officials in charge are changing faster than the score in a basketball game. Several South American embassies have circulated internal reports mentioning the possibility of a coup.
Last week, President Rousseff cancelled a planned trip to Washington D.C. so that current Vice President Michel Temer could not become President while political opponents might keep Rousseff from returning. If the President of the country cannot carry out scheduled travel plans, that means everybody else, athletes, journalists, torch relay support staff, sponsors and spectators included, simply cannot be sure if they can come or go as they had planned. This is more than inconvenient. This also reduces the obstacles to match fixing at a time that the Olympic sport of tennis has already been overwhelmed with the volume of cases.
Is there a silver lining? This chaotic situation does present an opportunity for event planners to hone their skills at contingency planning. The Olympic torch relay will probably be a classic example. Hilton and other local leaders had been included in planned events in accordance with standard protocol will have new roles, new titles and might not be able to participate if they are required to give testimony. So the best available understudies will need to get ready for their fifteen minutes of fame. The contingency that 100% of the Olympic facilities might not be 100% complete should not be all that daunting. New Orleans had to manage a power outage during its NFL SuperBowl and Dallas had to deal with crippling ice storms which prevented some key personnel from reaching work on time. As the saying goes, “it goes with the territory.”