Canadian Olympic Committee spent $2.9-million on new boardroom

theglobeandmail.com
Feb. 26, 2016
By Daniel Leblanc and Sean Gordon

The Canadian Olympic Committee spent $2.9-million on a new boardroom, hundreds of thousands of dollars on outside lighting, and more than $1-million on a launch party for its new headquarters in Montreal.

The spending is highlighted in an audit of the COC’s $10-million plan for a headquarters in Montreal that would include an interactive museum and a high-tech office. The audit done by Deloitte, and reviewed by The Globe and Mail, has found that the project, which is still under construction, is over budget and behind schedule.

Some officials within the Canadian Olympic community argue that the money for the move would have been better spent on funding for athletes heading to the Summer Games in Rio. The project received $3.5-million from the government of Quebec, $3-million from the Canadian government and $2-million from the City of Montreal, in addition to private sponsorships and other revenues.

When Marcel Aubut was elected as the first francophone president of the COC in 2009, he promised to shake up and modernize the organization and to give the Olympic movement a bigger presence in Quebec. Under Mr. Aubut’s direction, the COC consolidated all of its sporting staff in Ottawa and Montreal into an office building in downtown Montreal. He drew on his network of business and political connections to create the highly visible office space.

The COC held a lavish opening ceremony for the new headquarters, called the Canada Olympic House, on July 9, 2015.

Sources in the sports establishment said they believe the new office site was a vanity project for Mr. Aubut, who resigned last year as the COC’s president after a sexual-harassment complaint.

The Olympic organization is still reeling from the sexual harassment complaint, and the audit now raises questions about some of the financial decisions made on Mr. Aubut’s watch.

“Who puts $3-million into a boardroom?” asked a senior sports official, who discussed the numbers on condition of anonymity. “This wasn’t done for the good of the athletes.”

The project is continuing, as the opening of an interactive sports museum, a main component of the headquarters, was postponed from last fall to an unspecified date later this year because it was not ready. The audit covers expenses to date, not the entire project.

Still, the audit found the project was facing a shortfall of nearly $1-million at the end of 2015. In addition, the budget included revenue of $1.6-million from unspecified sources that the COC has yet to receive, raising questions about the solidity of the project’s financial structure.

When the Olympic rings were unveiled at the top of the offices last July, Mr. Aubut said the Canada Olympic House would “inspire” a new generation of athletes.

But a source familiar with Olympic and amateur sport fundraising said the audit raises pointed questions that need to be addressed by the COC’s current management and board of directors. The source said more information must be divulged about how and where the money for the July 9 event was spent, because the longer the organization takes to deliver on promises of transparency “the greater the long-term damage to [the COC’s] brand.”

Mr. Aubut could not be reached for comment.

The CEO of the Canadian Olympic Committee, Chris Overholt, has yet to publicly address the issue of harassment at the COC. He also refused an interview request to speak about the Deloitte audit of the Olympic House project.

In a statement in response to questions about the audit, the COC said Deloitte was hired “as part of our commitment to ensuring resources are used responsibly.”

“Our intention is for the capital project to ultimately be revenue neutral. The current financial position is not a reflection of the final outcome, but rather also reflects expense elements associated with [completing the rest of] of the project,” the COC said.

The COC added it has recently met with officials from all three levels of government to ensure it has “their ongoing support for the completion of the project in 2016.”

The COC said the $2.9-million “Lausanne room” is a multifunctional centre that can be used for meetings, news conferences and multimedia productions.

The organization of the Canada Olympic Excellence Day in Montreal on July 9 was overseen by Mr. Aubut, who had to lobby the International Olympic Committee for permission to showcase the Olympic rings on the building. The president of the IOC, Thomas Bach, was at the event.

Ticket sales to the event and sponsorships raised more than $1.5-million for the Canadian Olympic Foundation, which offers funding to Olympic athletes.

However, a sports official said it remains unclear “how much did the COC have to spend to raise that money.” The COC spent $160,000 on a cocktail reception and $400,000 on a luncheon for the opening ceremony, the audit found. There were also fireworks, and an elaborate lighting ceremony for the public event that featured hundreds of athletes. The detailed cost of all of these items was not included in the audit.

A spokeswoman for the COC refused on Wednesday to provide “further details” on the expenditures related to the $10-million project.

Deloitte also found expenditures of more than $600,000 in “other” spending related to the project, without giving additional details on the goods or services obtained by the COC.

In a news release last May, the COC said the interactive museum would become a “major tourist attraction” offering “unique Olympic-like experiences” to users.

At this point, the public does not have access to the COC’s new offices, which occupy the ground floor and mezzanine of the office tower. The are no outward signs the Olympic Experience museum is near completion. One part of the sidewalk-level space, which features large floor-to-ceiling windows, was home to stacked boxes on a recent visit; an open-plan area adjacent to the street entrance is mostly empty but for a few Muskoka chairs and other furniture.

After Mr. Aubut resigned last September, the COC commissioned an outside investigation that found a majority of COC employees reported “experiencing or witnessing harassment (both sexual and personal) during the president’s tenure.”