Gazette - Building an Olympic legacy

COVER SECTION

Unit targets construction fraud for Vancouver 2010

By Caroline Ross

VANOC
The Whistler Nordic Centre ski jump area is just one of the new venues under construction for the Vancouver 2010 Winter Olympic Games.

Nine competition venues, two athletes’ villages, significant highway upgrades, and new urban rail lines. Total projected cost of construction: over $3.1 billion, most of it public funds.

Infrastructure development for the 2010 Winter Olympic Games and Paralympic Games in Vancouver, British Columbia, is lucrative business — but it’s not always construction companies and communities that benefit. Fraudsters and organized crime groups may also be rubbing their hands together with glee.

Whispers of corruption certainly overshadowed the Montreal 1976 Games. There, false billing and crooked contractors allegedly contributed to a massive $3 billion Games deficit, which tax payers spent 30 years paying down. The original Games budget was $300 million.

To prevent similar corruption from marring Vancouver’s Olympic legacy, Vancouver 2010’s RCMP-led Integrated Security Unit (ISU) formed a special financial intelligence unit charged with forestalling fraudulent activity and safeguarding the public (and private) funds implicated in Games construction.

“It comes to about $4.5 billion worth of infrastructure development that we’re actually providing some level of economic integrity intelligence support to,” says Insp Alex Graham, the RCMP officer in charge of the ISU joint intelligence group (JIG), under which the financial intelligence unit operates.

Established in May 2005, the JIG is the first group of its kind to target financial intelligence issues within the context of a major sporting event. The group combines traditional intelligence-gathering techniques with financial expertise to uncover illegal economic activities like price-fixing, overcharging, bribery, contract fraud and theft of materials. Labour shortages in British Columbia’s construction industry have also prompted the group to investigate potential links to illegal immigration.

The group has passed some investigations over to municipal police forces or federal partners for further action, but criminal prosecution is not necessarily the ultimate goal.

“In a lot of instances, what we’re seeking to do is mitigate the matter before it ends up in a prosecution,” says Graham.

Mitigation strategies include advising construction companies and project managers of potential pitfalls and areas for improvement — such as opportunities to enhance quality monitoring or shore up on-site security — and working with partners to include specific access-to-information clauses in key construction contracts.

“That (contract language) allows us to have access to information that normally would require a search warrant,” says Graham, who notes that reviewing a company’s financial records, management structure and other tombstone data can help investigators determine links to organized crime.

The measures are designed to stop fraudulent activity before it starts, says Graham, and most contractors approve of the arrangement. “The vast majority of business people and corporate entities involved in these projects are honest and not associated with organized crime. . . . They don’t want to hire a sub-sub-contractor that is going to cause them some concerns.”

The JIG’s activities complement other measures implemented by partner agencies in charge of Olympic construction. The Vancouver Olympic Organizing Committee (VANOC), the British Columbia Ministry of Transportation and Canada Line Rapid Transit Inc., for example, utilize ISO9000-certified quality management systems. VANOC requires contractors to regularly test construction materials and submit the results for comparison against the committee’s own independent test data.

“That way, we ensure we get a quality product,” says Dan Doyle, executive vice-president of construction with VANOC.

Doyle says that VANOC’s construction managers haven’t uncovered “any scent of fraudulent activity” to date, but if they did, he says, “we wouldn’t hesitate a millisecond to bring the RCMP ISU in.”

With infrastructure development well under way and most construction contracts for Vancouver 2010 already awarded, the JIG will begin monitoring the large number of service contracts required to feed, transport, entertain and clean up after Games participants.

The work to date has also become a best practice for future Olympic Games, such as London 2012. “They’ve looked to us for some direction” says Graham. “They’re improving on what we have.”