Email hints Games committee was involved in bid-rigging

Yomiuri Shimbun file photo
Tokyo District Public Prosecutors Office officials enter Dentsu Inc.’s headquarters in Minato Ward, Tokyo, on Nov. 25.
Yomiuri Shimbun file photo
Dentsu Inc.’s head office, which has been searched by prosecutors and other authorities, is seen in Minato Ward, Tokyo, on Nov. 25.

The investigation of suspected bid-rigging for contracts to plan test events for the Tokyo Olympics and Paralympics has found that the organizing committee sent an email to Dentsu Inc. prior to bidding with a list of bidders and a note stating, “We have agreed on them.”

The Tokyo District Public Prosecutors Office’s special investigation squad seized the email and is investigating it on suspicion that several former committee members and Dentsu executives were involved in an advance agreement on which bidders would win.

According to sources, the committee and the major advertising company had been interviewing prospective bidders since around 2017 about their desire to secure contracts to plan test events conducted by the committee, and then shared a list of bidding companies. In the spring of 2018, before the bidding, the committee sent Dentsu an email saying that they had reached an agreement to go with the list, which was attached to the email.

A total of 26 bids were submitted from May to August 2018, with nine companies — including Dentsu — and one joint venture winning the contracts, worth a total of more than ¥500 million. Most of the contracts were only bid on by a single company, and were won by the companies on the list.

The special investigation squad and the Japan Fair Trade Commission (FTC) raided eight of the nine companies suspected of being involved in the bid-rigging, including Dentsu, on suspicion of violating the Antimonopoly Law.

The prosecutors seized the email and the list, and also obtained emails suggesting that Dentsu had asked some companies not to participate in bidding. The squad and the FTC are questioning the parties involved based on this evidence, which appears to show that the committee and Dentsu actively arranged which bidders would be successful.

Under pressure

Testimony from related parties raises the possibility that the Tokyo organizing committee, under pressure from the International Olympic Committee prior to the major global sporting event, may have pushed forward with bid-rigging out of impatience and anxiety.

According to a source, the IOC was raising concerns with the committee in early 2017 about the progress of the test events. The objective of the test events is to identify operational problems by using the same venues as the actual Games. Lacking know-how, the committee relied on Dentsu, which has extensive administrative experience in large-scale sporting events.

Upon receiving the committee’s request, Dentsu researched the intentions of potential bidders and shared and updated a list with the committee.

The IOC intermittently continued pressing the committee. The implementation plans for many of the test events were behind schedule, and there were several events whose details were still undecided around spring 2018. The IOC urged the committee to submit the plans as soon as possible, saying that it was being too slow to decide on contractors.

Venue management know-how differs from event to event, and each company has its own strengths and weaknesses depending on the sport.

The IOC requested that contracts be entrusted to companies with a proven track record in the management of the venues. At the same time, sports associations also requested that the contractors be ones with which they have a regular business relationship.

“The committee might have wanted to get rid of companies with no experience,” an investigative source said. “But, since this was [supposed to be] competitive bidding, it would be unfair and unacceptable to impede competition.”

On Monday, former Prime Minister Yoshiro Mori, who was the committee’s president, apologized in connection with the corruption scandal surrounding the Tokyo Games.

“I am sorry that we have caused suffering to everyone who loves and values sports,” Mori said at a sports event in Tokyo.

He also said the scandal “was not a problem for the organizing committee nor anyone involved with the Games, but rather one involving individuals.”