November 21, 2022
TOKYO – Some companies whose officials were arrested in the bribery scandal involving the Tokyo Olympics and Paralympics have told the Tokyo District Public Prosecutors Office that “there was bid-rigging” for projects ordered by the Games organizing committee, it was learned from sources.
Major advertising company Dentsu Inc. was among nine companies and one organization that made successful bids for pre-Olympic and Paralympic test events. The special investigation squad of the prosecutor’s office is investigating the case in cooperation with the Fair Trade Commission on suspicion of infringing on the Antimonopoly Law, which regulates unreasonable restraint of trade.
Haruyuki Takahashi, 78, a former director of the Tokyo Olympic and Paralympic organizing committee, has been indicted four times for accepting bribes totaling nearly ¥200 million from five companies, including sponsors. The new allegations of unfair trade practices have surfaced in connection with competition-related projects, further shaking trust in the Games.
Test events in each of the Olympic and Paralympic sports serve as run-throughs at the same venues as those used for the Games to confirm the flow of athletes and spectators, security arrangements and other operational aspects. A total of 56 were held between 2018 and 2021.
According to sources, the suspected collusion occurred in bidding conducted in 2018 by the organizing committee for contractors to do the planning of the test events.
For every one or two venues where competition was to be held, a total of 26 bids were submitted in the competitive process in which the winners would be determined on the general evaluation method. Nine companies, including Dentsu and other advertising companies, and one organization won the bids.
The amount of each contract ranged from about ¥5 million to ¥60 million, with the total reaching about ¥500 million.
During the investigation of the bribery cases, some of the five companies whose executives were indicted for giving bribes, told investigators that there was bid-rigging in the bidding for the planning work of the test events, according to the sources.
Based on evidence seized thus far, investigators suspect that several companies, including Dentsu, rigged bids by coordinating in advance which one of them would make the successful bid for each venue.
According to the organizing committee, which is in the process of liquidation, the nine companies and one organization that received orders for the planning work concluded negotiated contracts with the committee to administer the test events and run events during the Games. The total value of the contracts is estimated to have reached tens of billions of yen.
The investigation squad, together with the Fair Trade Commission, will move ahead with its probe into the possibility that bid-rigging took place with an intention of also gaining contracts to operate events at the Games.
The Antimonopoly Law prohibits as “unreasonable restraint of trade” businesses from coordinating in advance to decide the winner of a bid and cartels that agree on set prices.
In addition to being subject to administrative action such as fines, particularly malicious cases are subject to criminal penalties, with the Fair Trade Commission filing an accusation with the Prosecutor General over the matter.
Penalties include imprisonment for up to five years or a fine of up to ¥5 million for individuals, and a fine of up to ¥500 million for corporations.