Effects of Bribery and Terrorism to 2002 Salt Lake City Olympics' Profitability

The purpose of this paper is to analyze effects that bribery and the 9/11 terrorist attacks had on the 2002 Salt Lake City Winter Olympic games' profitability. More specifically in terms of the Salt Lake Olympic Committee's (SLOC) operating budget and how the two events affected committee actions to generate a budget surplus. Although the 2002 games were riddled with intrigue and trials before its commencement, it was nevertheless heralded as one of the few games in Olympic history to generate a profit. In response to initial setbacks, a newly reorganized SLOC turned the tide of the games to create a worthy Olympic experience. These causes are most directly linked to robust sponsorship and fiscal discipline relating to budget items. Although there were various sources contributing to Olympic revenue, this paper will focus on sponsorship and government funding specifically. The research used to develop this thesis drew from federal court cases, scholarly journals, data from the U.S. General Accounting Office, statements from SLOC members, International Olympic Committee (IOC) documents, and news articles. The sources reveal that the bid scandal and the September 11 terrorist attacks did not compromise the games' profitability in the long run.

EFFECTS OF BRIBERY AND TERRORISM TO 2002 SALT LAKE CITY OLYMPICS' PROFITABILITY by Samantha Thorne A Senior Honors Thesis Submitted to the Faculty of The University of Utah In Partial Fulfillment of the Requirements for the Honors Degree in Bachelor of Arts In International Studies Approved: ___________________________________ Professor Matthew Burbank Thesis Faculty Supervisor __________________________________ Professor Hugh Cagle Chair, Department of International Studies ____________________________________ __________________________________ Professor Hugh Cagle Sylvia D. Torti, PhD Honors Faculty Advisor Dean, Honors College July 2019 Copyright © 2019 All Rights Reserved TABLE OF CONTENTS ABSTRACT iii INTRODUCTION 1 THE SALT LAKE OLYMPIC COMMITTEE 2 BRIBERY CONTEXT 3 IMPROVING PUBLIC PERCEPTION OF THE SLOC 6 EFFECTS ON SPONSORSHIP 7 9/11 CONTEXT 10 EFFECTS OF 9/11 ON PROFITABILITY 12 SECURITY CHALLENGES 15 ECONOMIC AND OLYMPIC LEGACY 15 CONCLUSION 17 REFERENCES 18 ABSTRACT The purpose of this paper is to analyze effects that bribery and the 9/11 terrorist attacks had on the 2002 Salt Lake City Winter Olympic games' profitability. More specifically in terms of the Salt Lake Olympic Committee's (SLOC) operating budget and how the two events affected committee actions to generate a budget surplus. Although the 2002 games were riddled with intrigue and trials before its commencement, it was nevertheless heralded as one of the few games in Olympic history to generate a profit. In response to initial setbacks, a newly reorganized SLOC turned the tide of the games to create a worthy Olympic experience. These causes are most directly linked to robust sponsorship and fiscal discipline relating to budget items. Although there were various sources contributing to Olympic revenue, this paper will focus on sponsorship and government funding specifically. The research used to develop this thesis drew from federal court cases, scholarly journals, data from the U.S. General Accounting Office, statements from SLOC members, International Olympic Committee (IOC) documents, and news articles. The sources reveal that the bid scandal and the September 11 terrorist attacks did not compromise the games' profitability in the long run. Introduction Mega events are risky. Increasingly, more cities are acknowledging the economic and planning challenges that accompany hosting a mega event such as the Olympic games- unconvinced that the Olympics' benefits of international prestige and attention outweigh the sheer cost of infrastructural projects. Although Olympic history is ripe with examples of large budgetary deficits, corruption, and unused venues, there are a few host cities that stand out as successes in terms of finishing the Olympics with a budget surplus and using the games as a launchpad for city-wide camaraderie and creating an Olympic legacy (McBride, 2016). The Salt Lake Winter Olympic games, specifically, witnessed uncertainties that often plague events of high caliber and large scope. But unlike most mega events hosted both before and after the 2002 games, the SLC Olympics withstood and overcame its risks to ultimately yield a profit within the SLOC budget. Acknowledging that "profit" is used somewhat loosely (since the SLOC was a nonprofit organization), the term is essentially synonymous to a "budgetary surplus" within the confines of this thesis and is used for readability purposes. This paper will discuss the specific risks that the SLOC faced and measures the committee pursued to overcome such dilemmas. The Salt Lake Winter Olympic games took place from February 8 through 24 in 2002 across ten venues located in Salt Lake City, Provo, West Valley, Ogden, and Park City, Utah (Ski City, 2017). As 3,500 athletes from 80 countries competed in 77 different sporting events, the world turned its eyes to Salt Lake City, questioning whether the host city could overcome setbacks inherent to hosting mega events (Baumann, Engelhardt, & Matheson, 2010). By the end of the 17-day period, the host city made a profit of $163.4 million within the SLOC budget (Gochnour, Tennert, Leaver, & King, 2018). It is important to note that an overall game profitability does not equate to all economic sectors benefiting. McBride argues that the Olympics produce "substitution effects" in which profitability and spending merely shifts to different sectors without actually increasing overall economic activity in the host city (2016, para. 22). However, the profits garnered by the 2002 Salt Lake Winter games nonetheless stand out due to the immense costs required for security measures after the 9/11 attacks, as well as the early deficit caused by fraud and bribery. Despite these setbacks, the SLOC adopted cost-cutting and revenue-generating methods in order to attract sponsorship and receive government funding. This eventually led to the games' profitability. Ultimately, while the bid scandal and September 11 terrorist attacks amassed significant costs initially, the two events provided opportunities for more diverse and ample sources of revenue. The Salt Lake Olympic Committee To properly understand the nature of an Olympic budget surplus, one must first understand the organizing committee itself. The SLOC was created for the sole purpose of planning and organizing the Salt Lake City Winter Olympic games-independent of municipal, state, and national governments, but also heavily supported by these government levels. To depict such government support, the State of Utah diverted "a portion of future sales tax receipts that would otherwise have gone to the state government and to Utah cities and towns" to finance the construction of a bobsled track, ski jump, and speed-skating oval (Andranovich & Burbank, 2011, p. 834). Meanwhile, Utah cities (West Valley, Salt Lake, Ogden, and Park City) agreed to build various venues while the U.S. federal government, though historically less involved in the matters of host city organizing committees, assumed a more proactive role in the 2002 games due to increased security threats in the aftermath of September 11, 2001. The SLOC, a private nonprofit organization, replaced the bid committee that brought the games to Salt Lake City. Legally, "the bid committee ceased to exist after the city's selection by the IOC and the creation of an Olympic organizing committee"-essentially dissolving upon fulfilling its purpose of winning the bid (Burbank, Andranovich, & Heying, 2001, p. 138). The SLOC maintained the same structure as the bid committee: different entities legally, but in practice almost the same organization with the same people. This formality would play a role in the bid scandal and SLOC's profitability. Financing an Olympic games is difficult. As a nonprofit organization, the SLOC could not generate its own funding to finance the 2002 games, adding further to the committee's complexity. Instead, the committee served as an organizing and fundraising middleman between sponsors, other organizations, the IOC, USOC, and municipal, state, and federal governments. While the SLOC could generate a budget surplus, it could not technically make a profit under its tax and legal status. Additionally, a SLOC budget surplus did not equate to the city of Salt Lake or the State of Utah making a profit, even though they contributed significant funding to the committee and the SLOC is tied to the host city itself. Bribery Context Salt Lake City officially won the Olympic bid on June 16, 1995 in Budapest after attempting to do so on-and-off since 1965 (Girginov, Parry, & Reedie, 2005, p. 192). In an effort to oust Quebec, Canada, Ostersund, Sweden, and Sion, Switzerland as host city, Salt Lake Olympic Committee members-notably Thomas Welch and David Johnson-were accused of bribing IOC members, but were not convicted. The SLOC president and vice president were accused of making "direct and indirect payments of money and other things of substantial value to IOC members" by paying for tuition and living expenses of IOC member relatives, among other bribery charges brought forth by federal indictments (Hamilton, 2010, p. 222). Such bribery expenditures were as follows: $320,000 to Jean Claude Ganga of the Congo; (2) $ 91,000 to Bashir Attarabulsi of Libya; (3) $42,000 to Charles Mukora of Kenya; (4) $20,000 to Zen Gadir of the Sudan; (5) $78,000 to Un Yong Kim of South Korea; (6) $195,000 to Rene Essomba of Cameroon; (7) $3,000 to Austin Sealy of Barbados; (8) $30,000 to Augustin Arroyo of Ecuador; (9) $1,200 to Slobodan Filopovic of Yugoslavia; (10) $99,000 to David Sibandze of Swaziland; (11) $107,000 to Lamine Keita of Mali; (12) $33,750 to Pirjo Haggman of Finland; (13) $8,000 to Guirandou N'Daiye of the Ivory Coast; (14) $5,000 to Anton Geesink of the Netherlands; and (15) $20,000 to Sergio Santander-Fantini of Chile. (United States of America v. Thomas K. Welch and David R. Johnson, 2003, para. 13) Influencing IOC members to vote for Salt Lake City to host the 2002 games went against the International Olympic charter (Hamilton, 2010, p. 221). The charter limits "expenditures by candidate cities, [creates] rules concerning visits by IOC members to candidate cities, and [places] limitations on the value of gifts and other benefits given to IOC members" (Jennings & Sambrook, 2000, p. 85). The allegations originated in a local television station report, stating that the SLOC provided Sonia Essomba (daughter of IOC member from Cameroon, René Essomba) with a substantial scholarship to attend the American University in Washington, D.C. (Mallon, 2000). Welch and Johnson were discharged from the organizing committee on ethics allegations in 1999. Although Welch and Johnson were arrested for "numerous bribery offenses, unlawful use of communications in interstate and foreign commerce, mail fraud, wire fraud, and conspiracy to perform each of these unlawful acts," neither SLOC administrator was convicted of a crime-all 15 criminal charges related to providing $1.2 million in bribes to IOC members were dismissed in 2003 by federal judge David Sam in United States vs. Welch (Dodds, 2016, p. 2). The dismissal of these charges is in part related to the bid committee having been dissolved as a legal entity and being replaced by the SLOC. It is important to note that many argued that Welch and Johnson simply played the game necessary to attract the Olympics to Salt Lake City and that bribery was an accepted part of the bidding process. They argued that Welch and Johnson's actions lacked "criminal intent or evil purpose" as Judge Sam stated in his legal opinion when dismissing the charges. The bid scandal, however, negatively affected the games' projection for profitability as funds used to attract the games were funneled from the bid committee budget to more than 15 private IOC members. The 2002 bribery scandal led to leadership upheaval within both Salt Lake and International Olympic committees. When Welch and Johnson were suspected of concealing expenditures to IOC members in public documents through inaccurate bookkeeping, the IOC and United States government reacted. The IOC established the Ethics Commission in an effort to "wipe out corruption within the IOC once and for all" although each member of the commission was also a member of the IOC (Hamilton, 2010, p. 223). The soundness and credibility of the Ethics Commission was suspect, as it was comprised of members of the organization being accused of corruption, causing many to question whether the IOC could really police itself. Three IOC members resigned, six were expelled, and an additional nine members were investigated. The president, Juan Antonio Samaranch, was suspect of receiving expensive gifts and later stepped down as president in 2001 (Dodds, 2016). The U.S. House of Representatives Subcommittee on Oversight and Investigations of the Committee on Commerce, meanwhile, held a hearing on October 14, 1999 to investigate the IOC's site selection process. Although the House prescribed changes to IOC decision-making, the U.S. federal government lacked jurisdiction over the international body (The Olympics Site Selection Process, 1999). However, this hearing and also the federal court case, United States v. Welch, affected the United States Olympic Committee (USOC) and the SLOC. Both led to Welch and Johnson stepping down as committee administrators and the SLOC's restructuring. As a result, Mitt Romney became chief executive of the committee as he left Boston, Massachusetts and his private equity company, Bain Capital-bringing with him his fiscal discipline (Gold, 2012). Improving Public Perception of the SLOC Since Olympic games always accumulate significant expenditures, adding bribery allegations complicated an already difficult task. But it is necessary to acknowledge that the bribes were expenditures made by the bid committee-the committee that dissolved once Salt Lake was declared host city-not the SLOC. While the bid scandal did not directly affect the SLOC's operating budget in terms of using committee funds to allegedly bribe IOC members, it did worsen the SLOC's public image. This is due to average citizens not recognizing the legal nuances differentiating the bid committee from the SLOC. Additionally, although the bid committee and the SLOC had different organizational purposes and responsibilities, in practice both organizations had similar goals and were comprised of essentially the same individuals. The bid scandal led to new SLOC leadership and with it, budget austerity practices. Not only did the bid scandal warrant such actions, but also the $379 million deficit that the reorganized committee inherited (Litsky, 2002). Thus, actions moving forward revolved around improving the SLOC's public image and financial trustworthiness. Tom Welch's SLOC replacement, Mitt Romney, "cut the budget by $200 million" by launching a strategic audit and eliminating non-essential items (para. 4). Specifically, free lunches were no longer offered to volunteers, SLOC headquarters were downsized, board members supplied their own funds for food at meetings, travel accommodations became more modest, colored brochures for opening and closing ceremonies were exchanged with cheaper black-and-white copies, and torchbearers' uniform production was outsourced to Burma (Altman, 2012). Although the individual austerity measures seem insignificant, their accumulation revealed that the reorganized committee was committed to fiscal transparency. Effects of Bribery on Sponsorship The bribery allegations put sponsorships at risk. Once bribery charges were made public, it affected corporations' willingness to sponsor the 2002 games since doing so was seen as endorsing both bribery and an unfair bidding process. As specific bribery information was disclosed, public awareness and corporate distrust in the 2002 Olympics as a whole worsened the SLOC's chances of making a profit. By placing "false, fraudulent, and misleading information in Salt Lake Bid Committee financial records and statements" the bid scandal caused sponsors to withdraw funding for SLOC activities (Hamilton, 2010, p. 223). As of January 1999, the SLOC had only raised 75 percent of the $1. 3 billion in revenues needed for its operating budget, largely due to the scandal's effect to sponsorship (Roston, 1999). This is because marketers avoid sponsoring a disgraced event if millions of dollars are at risk and doing so would harm their company's image. As the SLOC struggled to raise money from corporate sponsors, the fundraising difficulties resulted in "a sizable reduction to the Olympic operating budget, which exacerbated tensions between the venue communities and the organizing committee over the cost and delivery of services" (Burbank, Andranovich, & Heying, 2002, p. 179). As Olympic organizing committees are privately run, investors and sponsors play a vital role in financing the games. In the 2002 specifically, the total operating budget was $1.9 billion, with 68 percent ($1.3 billion) coming from private sources collected by the SLOC (Janofsky, 2002). Other forms of funding came from the federal government, the State of Utah, and local government. These public institutions spent $342 million, $150 million, and $75 million, respectively (Baade, Baumann, & Matheson, 2008, p. 6). Thus, due to the scandal compromising both the SLOC's reputation and millions worth of assets, corporate sponsors' confidence in the organization wavered and worsened chances of the committee acquiring a profit as revenues declined. It is important to recognize that sponsorship is a defining aspect within sport economics. Sporting events and sponsors establish a quasi-symbiotic relation of both contributing and benefiting through association with one another. While sponsors provide financial backing needed to facilitate athletic games, the sporting event provides corporate sponsors with significant exposure through marketing. The association "creates mutual brand and business value for both the sponsor and the sponsored activity" (Cruyff, 2017, para. 2). The bid scandal, however, threatened to disrupt the relationship by compromising the prestige of Olympic sponsorship. The IOC and SLOC saw finding sufficient sponsorship as a priority, but both committees were confronted with sponsors who were afraid that association with Salt Lake City or the IOC would tarnish their company's brand rather than bolster it (Black, 1999). Specifically, the United Parcel Service (UPS) withdrew sponsorship from the IOC in 2000 following the bribery scandal (Abrahamson, 2000). Although UPS sponsorship related to the IOC budget rather than the SLOC's, losing the large company's funding harmed logistics behind the 2002 Olympics and caused other SLOC sponsors to waver. Securing and attaining sponsorship improved once the SLOC was reorganized. Following the scandal, notable Olympic supporters such as the CEOs of UPS and John Hancock underscored the importance of establishing procedures and processes to ensure that a bid scandal did not occur again in the future. Sponsors continued to call for committee members to "clean up their act or there [would] be no Olympics [since] without sponsorship money, the production of the games is virtually impossible" ("It's Nervous Time For Olympic Sponsors," 1999, para. 3). Once "the tsunami of financial, banking, legal, government, morale, and sponsor problems" hit following the bid scandal's revelation, the newly reorganized SLOC strove to win over previous and new sponsors by heeding the words of credible corporations (Romney & Robinson, 2004, p. 52). Specifically, upon replacing Welch, Romney endeavored to "crisscross the country to soothe rattled sponsors and sell new ones" and also answer sponsors' call for increased and unapologetic financial transparency (Altman, 2012, para. 7). Romney's efforts to reassure sponsors, specifically in terms of his frugality, transparency, and a willingness to meet personally with corporate sponsors restored confidence in the committee and raised millions in sponsorship (Berkes, 2012). More critical voices have asserted that Romney claimed credit for what would have happened anyways in regard to restoring sponsorship confidence (Berkes, 2012). However, Romney's reputation was instrumental to securing SLOC credibility in the eyes of government and business leaders in the state. Since Romney had run a large company that was involved in multiple other enterprises and activities, state leaders viewed him capable of hosting an event as large and complex as the Olympics in a short time frame. Romney and especially his reputation were exactly what the SLOC and State of Utah needed at the time. Following the bribery allegations, the SLOC members not only needed to raise more than $179 million from sponsors, but they had to convince the 12 sponsors acquired before the scandal to not withdraw their earlier funding (Roche, 1999). By the games' commencement, the SLOC acquired 17 sponsors to supplement the IOC's eight including AT&T, Bank of America, Budweiser, General Motors, Nu Skin Enterprises, Home Depot, and Delta (International Olympic Committee, 2001). Thus, ending revenues from sponsorship summed to $730.5 million-$131.5 million from sponsorship coordinated by the IOC and $599 million collect by the SLOC. The SLOC's Olympic marketing revenue totaled $1.391 billion by the end of the 2002 Salt Lake Winter games (Girginov, Parry, & Reedie, 2005, p. 195). This amount exceeded the SLOC's goal of $1.3 billion from private investors within its budget. Although the bid scandal put SLOC's proposed budget at risk because it compromised corporate sponsorship trust, efforts undertaken by the restructured Salt Lake Olympic Committee counteracted previous bribery setbacks. The SLOC claimed that their changes to make transparency a priority, adopt more frugal budget practices, and actively appeal to investors enabled the committee to overcome obstructions that the scandal posed to its proposed budget. As a normative claim, it is hard to judge these assertions with standard criteria. It is important to note that the games' potential for making a profit was not compromised by the scandal, even though it did require the SLOC to make sacrifices and become more proactive in attracting and maintaining sponsorship. 9/11 Context On September 11, 2001, al-Qaeda extremists hijacked four American airliners and attacked the World Trade Center, the Pentagon, and ultimately, Americans' sense of security. In the wake of the attacks, many wondered if a mega event as extensive as the Olympics would be a target for terrorism. In any case, the SLOC determined both Americans and global citizens needed a cause to unify and prove they had "found The Fire Within" following the devastating events of 9/11 (Schwarz-Primer, 2014, p. 90). Members of the Utah Olympic Public Safety Command convened on September 12, 2001 to review security measures, making safety precautions in game preparation even more of a priority. Olympic organizers strove to prevent terrorist attacks simulating those seen in New York and Washington, D.C., in addition to the terrorist bombings that occurred at the 1996 Summer Olympic games in Atlanta. For example, biometric scanners were used to identify approved athletes and officials in an effort to combat bioterrorism. Search and screenings, magnetometers, and 10,000 Secret Service agents and National Guard members secured the 12 Olympic sites, plus the Salt Lake City International Airport, Hill Air Force Base, Olympic Medals Plaza, and Olympic Village (Berkes, 2002). As airport security became heightened and airspace dramatically restricted, securing the Salt Lake International Airport was a vital safety precaution (Toohey & Taylor, 2008). The legacy of 9/11 was not only apparent in the 2002 Olympics' preparation and securitization of the various sporting events, but also a defining aspect during the Opening Ceremony. The American flag that flew at the World Trade Center on September 11 was displayed at Rice-Eccles Olympic Stadium to start the games, as a way to honor victims of alQaeda terrorism (Schwarz-Primer, 2014, p. 89). Prior to the games' commencement, however, IOC members and the international community perceived inclusion of the flag from ground zero as a form of nationalism and political symbolism, which contradicted the International Olympic Committee's charter of "no kind of demonstration or political, religious or racial propaganda is permitted in any Olympic sites, venues or other areas" (International Olympic Committee, 2015, p. 93). Ultimately, the flag was allowed because it depicted America's cultural narrative at the time of the 2002 Olympics and was "a form of commemoration and a way of helping the international community better understand post-9/11 American culture" (Schwarz-Primer, 2014, p. 93). Effects of 9/11 on Profitability The SLOC budget was further assailed by the devastating attacks to the United States' national security. Following the Utah Olympic Public Safety Committee's plan for increased safety measures, security expenditures rose to $310 million from $265 million (Weiner, 2002). This increase in costs flowed from the increase in military and law enforcement personnel from 6,500 to 10,100-2,400 of which were Utah National Guards (Gorrell, 2011). Furthermore, U.S. Air Force fighter jets enforced "a 45-mile-radius restricted flight zone over Salt Lake City and nine Olympic venues throughout the games," chain-link fences and motion detectors surrounded the Olympic Village and Medals Plaza, and flights were banned from landing or taking off during the opening and closing ceremonies (Berkes, 2002, para. 5). These efforts further contributed to the $45 million expenditure increase in security budget items (Weiner, 2002). Although the SLOC accounted for higher security costs following the 1996 Atlanta Olympics, the unanticipated terrorist attacks accrued significantly more costs. This caused the SLOC to seek new sources of security funding. The 9/11 terrorist attacks led the United States federal government to contribute more funding to finance the 2002 Salt Lake Winter Olympics. Prior to the attacks, "about 15 federal agencies spent or planned to spend about $161 million to ensure the safety and security of the Olympic spectators, officials, and athletes" (United States General Accounting Office, 2000, p. 37). Afterwards, the federal government committed $225 million to safety precautions-more than doubling the $101 million federal security costs of the 1996 Atlanta games (Janofsky, 2002). Such measures were linked to the United States government wanting to prove it could overcome terrorist attacks and create a safe environment. As governments have a monopoly over military personnel, the 2002 Olympics' call for greater security was accompanied by a call for greater government involvement. Since security is considered a public good, governments provide such goods most effectively and prevent freerider problems. Public goods specifically relate to non-excludability and non-rivalrous consumption (Cowen, 2008). Non-rivalrous consumption entails goods being consumed by many actors simultaneously, without additional cost of further consumption. Non-excludability, meanwhile, includes the free-rider problem in which non-payers cannot be excluded from the good's consumption. National security fulfills both criteria of non-rivalry and non-exclusion since "it is difficult to exclude people within the country from the safety and security generated" and multiple individuals can reap security benefits without limiting others from receiving safety as well (Suranovic, 2007, para. 98). Consequently, governments are considered the sole suppliers of public goods since markets fail to supply them and public policy is needed to alleviate market failures (Anomaly, 2015, p. 110). Thus, since terrorist attacks increased the demand for security, the supply of security additionally increased. As the U.S. federal government is the only seller of national security within its borders, increased supply signified increased governmental presence and with it increased federal spending. While the Utah state government can be viewed as a military supplier in terms of the Utah National Guard, the scope of the games required further military and federal presence. Although the federal funding increase affected American taxpayers, it contributed to the SLOC balancing its Olympic budget. The day of the September 11 attacks, Romney was in Washington, D.C. to lobby Congress for "$12.5 million to balance the $200 million security plan" and request further government aid (Gorrell, 2011, para. 11). Romney and Robert Flowers, the head of the Utah Olympic Public Safety Command, were told by Congress that "nobody is going to tell you no today" due to the vulnerable state of the nation (Gorrell, 2011, para. 13). This increase in federal spending led the 2002 Winter Olympics to have the most government funding used to finance an Olympic game hosted in the United States-revealing a trend that the more modern the Olympic game and the higher the threat of terrorism, the more government assistance needed to finance them. The 1984 Summer Olympic games in L.A., California received $78 million from the federal government, while the 1996 Summer Atlanta games received $191 million. Similarly, the 1980 Olympics in Lake Placid, New York received $179 million, while the 2002 Salt Lake Winter Olympics received $342 million prior to the acts of terrorism (United States General Accounting Office, 2001). When including additional government spending for increased security at the 2002 games following 9/11 attacks (about $70 million), the amount of total federal spending for the game totaled to approximately $412 million. The additional government revenue provided after the terrorist attacks promoted a safer Olympic environment and gave the federal government a greater Olympic role. As the mega event was a huge international event on American soil, the SLOC endeavored to secure the various Olympic venues to prevent terrorist attacks as witnessed the previous year and also in 1996 at the Atlanta games. SLOC security costs increased by $45 million to total $310 million, but revenues from the American federal government rose as well by approximately $70 million-contributing $225 million for security and safety purposes. Thus, while the terrorist attacks increased costs initially, the SLOC endeavored to find funding to match and exceed those costs, with the most significant support coming from the U.S. federal government. Security Challenges Other challenges accompany increased security measures, such as surveillance and privacy issues. In the context of the 2002 Olympic games, a Wall Street Journal article revealed that the NSA and FBI made arrangements with Qwest Communications Inc. to monitor "the content of all email and text communications in the Salt Lake City area" for about six months around the time of the 2002 Olympics (Gorman & Valentino-DeVries, 2013, para. 36). Rocky Anderson, the Salt Lake City mayor during the games, viewed this federal government action as a betrayal to Utahns and Americans alike. Anderson stated that "security was [his] number one concern, but never at the expense of the fundamental freedoms or right of privacy of the people of this community" (2013). Meanwhile, Governor Herbert and Senator Bennett, along with various Utah citizens, felt the NSA and FBI were justified in their actions due to the Olympics occurring promptly after 9/11 attacks (Davidson, 2013, para. 7). Although Anderson's lawsuit against the NSA occurred years after the incident, the former mayor keyed in on another struggle of hosting mega events: heightened security often comes at the cost of citizen privacy. Economic and Olympic Legacy The committee set forth to establish an Olympic legacy when it became apparent that the SLOC garnered a budget surplus. Of the $163.4 million surplus, $59.0 million went towards paying back the State of Utah for previous agreements made in the 1990s, $11.2 million went to charity, $10.2 million went towards building Olympic legacy plazas, and $7 million was allocated to USOC business credits (Gochnour et al., 2018). The remaining $76 million "was placed in an endowment for the Utah Athletic Foundation [doing business as ‘Utah Olympic Legacy Foundation'] to maintain and operate Olympic facilities" (pg. 1). Since the close of the 2002 Olympics, the Utah Olympic Legacy Foundation has endeavored not only to maintain and enhance existing Olympic venues, but has also engaged more Utahns and world citizens in winter sport. This endowment has improved the quality and quantity of youth and athlete training programs, grown Utah's ski and snowboarding industry, and has ultimately enabled Salt Lake City to be an enduring winter sport capital of the world ("About the Living Legacy," 2017). Furthermore, the Kem C. Gardner Policy Institute confirms that the 2002 Olympics had an overwhelming positive impact on the Utah economy by increasing the amount of tourism, global awareness, and business development in the state (Gochnour et al., 2018). Additionally, the 2002 games and its profit served to strengthen venue and transport infrastructure and "created total economic impacts in Utah equivalent to approximately $6.1 billion in economic output" within the SLOC's 1996 to 2003 life span (p. 1). There is a new Olympic organizing movement to make the games less economically burdensome moving forward. Thus, the 2002 Salt Lake Olympics and its smaller economic footprint compared to essentially all other Olympic host cities positions Salt Lake to be a viable host city in the future. In December 2018, Salt Lake City was chosen by the USOC for a potential bid to host the Winter Olympics in 2030. Since the 2002 games proved that SLC can host a very efficient games from a budgeting perspective-despite challenges of bribery and security needs-the city has a very convincing bid for 2030. With the 2002 venues in pristine condition by means of the SLOC's budget surplus, the Kem C. Gardner Institute estimates the organizing committee budget to be "9.8 percent less in 2030 than in 2002 because of less infrastructure spending" (2018, p. 7). Conclusion Overall, the effects of bribery and terrorism to 2002 Salt Lake Winter Olympic profitability were negligible. While both events negatively affected the 2002 Winter Olympics' chances of profitability initially-bribery and fraudulent accounting helped dig a $379 million deficit, while the 9/11 terrorists caused security costs to increase by almost $50 million-they were solved through active fundraising and transparent bookkeeping after the SLOC reorganization. The legal distinction between the bid committee and SLOC also helped mitigate bribery's adverse effect on the SLOC's operating budget. Although many may argue that profits would have been greater if the bid scandal and 9/11 attacks did not occur and create setbacks, such arguments are counterfactual and cannot be tested empirically. Salt Lake Olympic Committee efforts account for the initial deficit and increased security costs becoming negligible. The Olympics is heralded as a venue for various individuals, with different aptitudes and backgrounds, to come together in order to push limits. Not only was this Olympic spirit evident during the sporting events, but also in its preparation and facilitation. When the bribery scandal displaced earlier SLOC leadership, a new group of individuals combined their talents to prove to the world that they could conquer obstacles. 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