Rio ticket-touting scandal an expensive business for OCI

Even with her promise of transparency, there was no hiding the unease with which Sarah Keane, recently elected president of the Olympic Council of Ireland (OCI), presented the still spiralling costs of the Rio ticket-touting scandal.

It has already consumed €1.5 million of the OCI’s reserves, leaving them with a deficit of €826,000 for 2016 – although the final legal costs, €1.04m to date, are far from finished yet.

Without their ample cash reserves, the OCI would likely have been bankrupted by the controversy, sparked by former OCI president Pat Hickey's arrest during the Rio Games.

Hickey, now back in Ireland on bail, is still awaiting a court date in Rio to face various charges for what has been termed ambush marketing, theft, tax evasion, money-laundering and criminal association.

Rio scandal has cost the OCI €1.5 million - and counting

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Speaking ahead of their AGM, Keane, who succeeded Hickey at an EGM last February, described the past year as “chaotic, dramatic, traumatic, and extremely costly”.

Had the Rio controversy not occurred, the OCI would have recorded a surplus of €633,000 for 2016.

“It is a significant amount of money, and nobody is happy it’s gone the way it is,” said Keane. “But it was a criminal matter, significant for everyone involved. We had board members stuck out in Rio with no passport, and they are entitled to get advice and support around that.

“And there have been a lot of individuals who have suffered personally and deeply as a result of what happened in the last year. So the past year has been extremely damaging, financially, as well as reputationally, and the final figure will not be known until after all the legal proceedings in Rio are brought to conclusion.

“We landed where we were, had to deal with, and if the organisation is fundamentally changed for the better, and everybody over time feels that it is, then I would hope it’s not completely wasted money.”

That legal figure of €1.04m included 10-15 different sets of lawyers, legal representation to all OCI staff, including those requiring legal representation in Rio, and former OCI president Hickey, who under the existing articles of the OCI, is entitled to have his legal fees covered.

The controversy has also cost the OCI another €214,000 to pay for the yet to be completed Grant Thornton Report, which looked at their own ticketing arrangements; they've also paid out €84,000 in public relations fees, €70,000 in data protection, consultancy, IT, €31,000 in accommodation, travel and subsistence, and €18,000 on the Deloitte Report, which examined the OCI's governance in light of the Rio controversy.

Reform agenda

Keane indicated the OCI have recouped some €200,000-€300,000 of that, under various insurance policies. She also confirmed Hickey had withdrawn his OCI honorarium award, worth €60,000, each year since 2009, but that the OCI “board agreed that no honorariums would be paid for 2016, and no honorariums would be paid going forward.”

The AGM unanimously adopted 12 of the 25 Deloitte recommendations; five have already been approved at board level, all centred on good governance and financial processes.

Keane also confirmed Sport Ireland have yet to release their OCI funding for 2017 (€390,000 was drawn down last year), but that that International Olympic Committee (IOC) have confirmed funding up to Tokyo 2020, worth around €933,000 last year. The latter remains their primary source of income.

"The IOC put in more money than anyone else, even though we are very grateful for any taxpayers money. That was concern, pre-election, would the new board be able to maintain those relations (with the IOC). We met with Thomas Bach, IOC president, in Lausanne, for two days last week, and they are very conscious of the challenges we face, are very supportive of our reform agenda."

On the hopes of Sport Ireland funding for 2017, she said: “We are developing relationships, and they have committed to giving us funding related to Games expenditure last year. And we understand we will get funding this year.”

Asked if there was any indication of if or when Hickey’s case might be concluded, Keane replied: “The legal system in Rio has lots of delays, there are lots of questions about how well it is functioning, so from that perspective we have no knowledge or information or expectation over when the case will be done.

“That is obviously very difficult for our former president, and his family. But it does mean from our perspective there won’t be any conclusion for sure, in terms of finances, until after that.”

Keane also confirmed the current OCI board, plus the previous board under then acting president Willie O'Brien, had fully co-operated with the Moran Report, the non-statutory State inquiry being conducted by former High Court judge Mr Justice Carroll Moran, and would welcome the publication of that.

Authorised Ticket Reseller

The Hospitality Group (THG) continues to be the Authorised Ticket Reseller (ATR) for the OCI, despite being central to the ticket-touting controversy of the Rio Games. THG wasn't approved by the Rio organising committee, the OCI appointed Pro10 Sports Management instead, but Pat Hickey was still found to have alleged links with THG after his arrest in Rio.

As things stand, however, THG who previously acted as the ATR for the OCI at London 2012 and the Winter Olympics in Sochi in 2014, keep their links with the OCI.

“Ticketing was totally unsatisfactory last year,” said Sarah Keane, OCI president. “We do have legal contractual arrangements with our authorised ticket reseller, it is relatively complex, which we’re reviewing at the moment. We haven’t formally announced a replacement, and also we don’t have the final say.

“Any authorised ticket reseller we want for has to be approved by the local organising committee of the relevant Games. So that will all play out over the next year or more, but those decisions have not been made by the board yet. Those contracts don’t necessarily end after the Games. But we definitely have to do a better job than we did last year.”

As things stand, therefore, THG will be the reseller for next year’s Winter Games in Pyeongchang, unless that contract is cancelled.