Corruption in Russian Sport: How It Works?

Oh sport, you are peace! (And a lot of money)
15.11.2017
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Sport is a expensive pleasure. Corrupt people are in for a treat in this sphere: the construction of Olympic venues, trips to competitions, fixed matches, non-existent publications in the media about the benefits of a healthy lifestyle, bribes for help in obtaining subsidies and even banal theft in the purchase of sports equipment. Russiangate looked into how sports officials are appropriating money.


FIXED MATCHES

The Russian Criminal Code has an article related to corruption in sport: Art. 184 sets a penalty for unlawfully influencing the outcome of a sporting event. In fact, it regulates the punishment for fixed matches, both for those who give bribes, and for those who take; for example, athletes, judges, coaches and team leaders.

If it’s a bribe-giving, one can get away with a fine (from 300 thousand to 1 million rubles), or can be sentenced to community services, prohibition to occupy certain positions or engage in certain activities and even imprisonment up to seven years. For taking a bribe, one would be punished in approximately the same way: an athlete or coach will receive a fine of up to 700 thousand rubles, community services or imprisonment up to five years, whereas a judge or jury member – a fine of up to 1 million rubles, community services or imprisonment up to seven years.

This article is very popular with legislators: it is constantly supplemented and amended. However, it is unclear why: according to court statistics, since 2009, the courts have not delivered a single verdict on the Art. 184.

Athletes and even sports officials talk a lot on the existence of match-fixing. For example, the former Minister of Sports Vitaly Mutko repeatedly spoke about the problem of the fixed matches. As the minister put it, “there are two problems in Russian football: fans and fixed matches.” In an interview with RBC, the minister said that the fixed matches are inseparable from the Russian society, but the problem is concentrated at the level of team managers, not the heads of sports departments.

BRIBERY

There is practically no information on the cases intiated for organizing contractual matches in the media. In July 2013, while receiving bribes, deputy head of the Football Federation of Moscow region Alexander Yevstigneyev was detained, but in fact this is an isolated case. Only for 110 thousand rubles, the chairman of the sports and technical committee agreed to organize a contractual match between the teams; according to the investigation, the money was transferred by representatives of the team Olimp. Yevstigneyev himself denied his guilt, saying he was framed up and linked the case to the upcoming elections of the Federation’s president. As a result, Yevstigneyev was sentenced to 3.5 years on probation, although not under the Art. 184, but for fraud.

Former Minister of Physical Culture, Sports and Tourism of the Chelyabinsk Region Yuri Serebrennikov also received bribes, however, he was paid for helping sports clubs to receive subsidies from the regional budget. As the investigation found out, from 2011 to 2013, Serebrennikov received more than 35 million rubles from the directors of sports clubs of the region. In 2014, Serebrennikov was charged with bribe-taking on a large and especially large amount under the Art. 290 of the Criminal Code of the Russian Federation. In March 2016, the former minister was sentenced to five years in a strict-regime colony. 

CORRUPT. COOL. YOURS

However, bribes for fixed matches is not the most ambitious example of corruption in sports. The Olympic Games in Sochi, according to the estimates of the Anti-Corruption Foundation (FBK), cost almost 1.5 trillion rubles. Of that money, 206 billion rubles were spent on the construction of sports facilities: as FBK wrote, prices for many construction materials were overstated. For example according to Boris Nemtsov’s report, the main stadium of the Olympics, which was built by the state corporation Olimpstroy, cost 2.5 times more expensive than similar facilities. The buildings built by the Russian Railways were also not cheap: the roads cost about 250 billion rubles.

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The unfolded ring. Photo: Yuri Kadobnov / AFP / Getty Images

Despite the information that transpired in the media about the corruption cases that were initiated during the preparations for the Olympics, officials denied the fact of corruption. In February 2011, Vice-Premier Dmitry Kozak said that there were no “kickbacks” in Olimpstroy. At the same time, the Investigative Committee for the Krasnodar Region reported embezzlement in the amount of 23 million rubles at the Olympic construction. Kozak also explained that it was an attempt to get into the state corporation using forged documents, which was detected by Olimpstroy itself.

Later, the Russian Audit Chamber reported on the inspection that revealed embezzlement at the Olympics: initially, the amount was 17 billion rubles, then, the figure changed by 15.5 billion. Two criminal cases were initiated based on the results of the inspection. The first one was initiated against the CEO Mostovik, Oleg Shishov, who was eventually sentenced to four years in prison as the result of the embezzlement during the construction of the bobsleigh track. The second one is related to the top managers of Olimpstroy, who attempted to cheat with the appropriation of the company's funds in the construction of the central stadium.

In 2014, the Prosecutor General's Office told that 55 criminal cases were initiated in connection with the violations in preparation for the Olympics, while 710 officials and legal entities were brought to administrative responsibility and 350 persons to disciplinary responsibility.

HOTELS AND TRIPS

In 2010, the Audit Chamber published yet another report on the results of the inspection of preparations for the Olympic and Paralympic Games in Vancouver. During the audit, it was found that the funds were not spent too rationally: for example, the number of Minister of Sports Vitaly Mutko at the Fairmont Hotel Vancouver cost 1.5 Canadian dollars per night. In the same hotel, the other officials from the Russian delegation lived. Also, the tickets were sold to fans more than ten times more expensive than the nominal, as well as people who had nothing to do with sports went to Vancouver as part of the team.

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The hotel number in which the delegation from Russia lived. The Fairmont Hotel Vancouver. Photo: www.luxuryhotelexperts.com

SPORTS PROPAGANDA

In October 2013, the Russian Ministry of Internal Affairs found that the Ministry of Transport allocates tens of millions of rubles for the promotion of a healthy lifestyle and sport in the media, which in fact does not exist. The money was received by the partner of the Ministry of Sport, the company PR + Sport, which was supposed to publish features on healthy lifestyle in the media. The founders of the company wrote off money for payment of journalists’ services and placing materials in the mass-media in their own pockets, and for the reporting, they selected articles of a suitable subject which had already been published.

As a result, the MIA instituted criminal case under an article on fraud. The money spent on that amounted to 60 million rubles annually. The CEO of the company was Maxim Maksakov, the brother of former State Duma deputy Maria Maksakova. As a result, Maksakov and another founder of the company Vasily Kolodny were sentenced to three years in a general regime colony, but since the investigation was conducted for more than three years, the time the fraudsters’ spent in the pre-detention facility during the investigation was counted in, and they were released in the courtroom right after the verdict was delvered.

During the Vancouver games, they also stole from the money allocated for the information support: despite Mutko's bold statement that in preparation for the Olympics, for which he was personally responsible, not a single case will not be instituted, in 2012, the Investigative Committee initiated a fraud case. CEO and founder of the company Europroject Valery Uskov and Dmitry Artyukhovsky, head of Everest LLC Artem Yefimtsev and head of Aktiv-Tsentr Andrei Kiselev were accused of rendering fictitious services for issuing visas to athletes and fictitious information support of sports competitions.

EQUIPMENT

While preparing for the trip to Vancouver, they did not save money on the purchase of equipment: implements were purchased without holding a tender, at that, according to the report of the Audit Chamber, the prices for sports equipment were overstated up to 66%.

A little later, in 2012, Minister of Sports of the Kamchatka Territory Viktor Kravchenko was caught on embezzlement during the purchase of equipment. The former minister was accused of embezzling 7 million rubles; the deficit in budget funds was revealed during the inspection of the region’s Ministry of Finance. However, Kravchenko was engaged not in the equipment for Olympic athletes, but only sports equipment for children's hockey teams of his region. As a result, the ex-minister was sentenced to four years in a general-regime colony under an article on embezzlement.

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