CWG financial scandal widens as CAG investigates 60 bids

It’s not just the Commonwealth Games Organising Committee (OC) that is being investigated for financial irregularities. For the first time, the Comptroller and Auditor General of India (CAG) has named Commonwealth Games Federation president Mike Fennel and CEO Mike Hooper, besides OC chairman Suresh Kalmadi, as party to a dubious selection process for consultants for international broadcasting rights.

This, the national auditor says in its internal report, led to a loss of R24.6 crore for the OC. It has also come across fresh cases of financial wrongdoings by the OC, resulting in a total loss of R66.49 crore.

Dubious appointment

The CAG report, based on a February-April audit, says the OC skipped a detailed technical evaluation of bidders before picking a consultant for international broadcast rights. “The OC executive board in principal approved M/s Fast Track Sales Ltd only on the basis of suggestions made by the CGF president and CEO and the OC chairman,” it says.
  
Not only did the OC pay Fast Track a higher commission than the other bidders, resulting in a loss of R5.20 crore, the firm’s failure to finalise a broadcasting rights agreement on time led to a further loss of R19 crore.

Hooper, however, told HT: “We recommended Fast Track on the basis of its record. They have also performed and brought revenue for the Games. OC was the agency that decided on the deal, not us. Fast Track also exceeded the revenue target. We stand by the decision.”



High commission to SMAM

The CAG found that the OC showed undue favour while appointing Australia-based Sports Marketing and Management (SMAM) to procure sponsorship and licensing rights. "Due diligence wasn't observed by OC, which resulted in insufficient competition for selection of consultant for marketing of sponsorship and commercial rights," the report states. The OC also agreed to pay SMAM an extra R 25.31 crore commission - even for sponsorships it didn't garner.

R 5.55 cr wasted on old HQ

While the OC eventually shifted to a new address, it spent R 4.11 crore to renovate Indian Olympic Association Bhawan, where it was based earlier. Also, while at IOA Bhawan, it paid R 1.44 crore as rent and maintenance for the entire building though it occupied 34 per cent of the space.

Extravagant lawyer fees

The OC paid professional charges between R 5,000 and R 77,000 per hearing to lawyers, between R 5,000 and R 22,000 per conference and between R 25,000 and R 50,000 per drafting. It also paid a retainership fee of R 9,90,000 in 2008-09. This despite the law ministry fixing maximum fees of Rs 3,000 per case per day for hearings, Rs 750 for drafting and Rs 300 per conference.

R 3.11 cr rent for office space

The OC paid R 3.11 crore as rent for office space in Pallika Place occupied by various sports federations that are independent organizations responsible for their own expenses.

Non-recovery of R 20.46 lakh

Of the R 38.11 lakh the OC has to recover from various Commonwealth Games associations towards hotel and travel grants given to them during the Commonwealth Youth Games 2008 in Pune, it has recovered only R 17.65 lakh.

Dismissing the CAG charges as non-issue, OC secretary general Lalit Bhanot said: "They are just objections raised by CAG; these are old issues. We have replied to them. We have already terminated SMAM's contract for non-performance."