The Olympics
June 2012 Issue

Jumping Through Hoops

When London threw its name into the hat for the 2012 Olympics, many had doubts. Not former sport minister Tessa Jowell. Interviewing Tony Blair, Ken Livingstone, and others Jowell recruited to her cause, Michael Joseph Gross details the grueling, often farcical campaign that won the city its prize—plus a $14.5 billion tab.
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On July 5, 2005, the mayor of London, Ken Livingstone, took up his pen to make official his city’s agreement with the International Olympic Committee. The 2012 Olympics had not yet been awarded to London—it would be, the following day—but the I.O.C. insists that candidate cities sign an official Olympic contract before the vote is taken, while all the leverage remains on the committee’s side. The contract is an epic masterpiece of micro-management. Its supporting materials, a set of 33 “Technical Manuals,” take up more than four feet of bookshelf space.

As Livingstone prepared to sign, he paused for a moment. Then he looked up at the I.O.C.’s executive director, Gilbert Felli, who was standing by his side, and said, “My lawyers advised me not to sign this contract. But I don’t suppose I’ve got any choice, have I?”

“No,” Felli answered, “you haven’t, really.”

Livingstone told me later that he had just been joking, but second thoughts would have been understandable. The full stipulations of the Olympic contract, which were made public in December 2010 by an East London activist and researcher named Paul Charman, following two years of Freedom of Information requests, contain tens of thousands of binding commitments. To comply with its terms, London must designate 250 miles of dedicated traffic lanes for the exclusive use of athletes and “the Olympic Family,” including I.O.C. members, honorary members, and “such other persons as may be designated by the IOC.” (These traffic lanes are sometimes called “Zil lanes,” alluding to the Soviet-era express lanes in Moscow reserved for the politburo’s favorite limousines.) Members of the Olympic Family must also have at their disposal at least 500 air-conditioned limousines with chauffeurs wearing uniforms and caps. London must set aside, and pay for, 40,000 hotel rooms, including 1,800 four- and five-star rooms for the I.O.C. and its associates, for the entire period of the Games. London must cede to the I.O.C. the rights to all intellectual property relating to the Games, including the international trademark on the phrase “London 2012.” Although mail service and the issuance of currency are among any nation’s sovereign rights, the contract requires the British government to obtain the I.O.C.’s “prior written approval” for virtually any symbolic commemoration of the Games, including Olympic-themed postage stamps, coins, and banknotes.

Bending Blair’s Ear

In the beginning, almost everyone agreed that it would be a terrible idea for London to host the 2012 Olympic Games. In 2002, with the next year’s 2012 bid-deadline looming, the United Kingdom’s minister for culture, media, and sport, Tessa Jowell, received a one-page memo from an aide who argued strongly against it. If London lost, the country would be humiliated. (Paris, which had lost its last two bids to host the Games, was favored to win for 2012.) If London succeeded, the costs would outweigh the benefits and divert funding from other priorities.

But Jowell was coming off a happy summer. She had helped coordinate the Commonwealth Games (a kind of mini-Olympics for Britain’s former colonies) and also the Queen’s Golden Jubilee. Both were so successful that, as she recalled when I sat down with her in London, “when I got this advice, I thought, Hmm, I’m not sure that we’re just going to say that we can’t bid to host the Olympics. Look what we’ve just done.”

She arranged a series of one-on-one meetings with the other 22 members of Prime Minister Tony Blair’s Cabinet. They were, she recalled, “profoundly skeptical and hostile,” and indeed unanimous in their opposition. They feared a repeat of the swelling budgets and poor management that turned the building of the Millennium Dome into a public-relations fiasco. Jowell said that Gordon Brown, Blair’s chancellor of the Exchequer, told her, “We’re not going to be able to build schools or hospitals if you do these Olympic Games.” (Brown declined to be interviewed for this story.) When she hired economists to conduct a full-scale feasibility study, they too shot her down. “The quantifiable evidence to support each of the perceived benefits for mega-events is weak,” the study concluded. “They appear to be more about celebration than economic return.”

Of the cities that have hosted the Olympics in the past 30 years, Barcelona is one of the few for which the Games created an unambiguously positive economic legacy. The 1992 Summer Games revitalized the city’s waterfront, which has improved the quality of life for everyone there and Barcelona has been a magnet for tourists ever since. Jowell made a trip to Spain to see what the Games had done for the city, and she returned home believing the Olympics could have a similar effect on run-down East London neighborhoods such as Stratford and Hackney. She made that pitch to Ken Livingstone, who has less than zero interest in sports. (“I once went to a cricket match, in 1972, and fell asleep,” he told me.) Livingstone saw the bid—whether London won or lost—as a way to get money for East London infrastructure that might otherwise take decades to secure.

Most important, Jowell needed to persuade Prime Minister Tony Blair, whom she had known for 15 years, and for whom, she had once declared, she would “jump under a bus.” One of Blair’s biggest questions about the bid for 2012 concerned not economics but public image. He did not want to lose face to French president Jacques Chirac by entering a contest that Paris was bound to win.

So, in January 2003, Jowell made a special trip to the I.O.C.’s immaculate white-marble and glass headquarters on a grassy hill by Lake Geneva, in Lausanne, Switzerland. She went there to ask the committee’s dour and sphinx-like president, the Belgian count Jacques Rogge, an orthopedic surgeon and former Olympic yachtsman, whether London would be entering a fair race. Rogge told her what Blair wanted to hear.

With this news—and with a relatively modest budget estimate for the Games of $3.9 billion, which was to be drawn not from the national treasury but from the National Lottery and London’s council taxpayers—Jowell had enough leverage to persuade the majority of the Cabinet, in February, to give the go-ahead. To be sure, there was worry that the budget estimate was a complete fantasy. Blair himself remained hesitant. According to some accounts, he thought it would be unseemly to announce an Olympic bid just as Britain was preparing to join the United States in an invasion of Iraq. Asked about this in a telephone interview, Blair more or less confirmed that assessment. “You wouldn’t want literally at the moment you were going into battle to be talking about bits of the Olympics,” he said.

In early May, after two months of fighting in Iraq, President George W. Bush gave his “Mission Accomplished” speech, announcing that major combat operations were over. For the Olympic campaign, the speech could not have come at a better time: the deadline for applications to host the 2012 Games was nearing. On May 15, Jowell put on a new suit from Liberty, purchased specially for the occasion, and set out for a private meeting with the prime minister. Jowell, who is short, with a broad, determined face, rehearsed her argument all the way to No. 10 Downing Street, where she was shown to the veranda outside the Cabinet Room. The wisteria was in full bloom. According to Jowell, Blair said, “Look, this is very difficult, and I don’t know if we can win it—there are too many uncertainties.” Plus, he didn’t want to have another fight with Gordon Brown.

In his memoir, Blair recalls that Jowell lectured him to man up:

“I really didn’t think that was your attitude to leadership. I thought you were prepared to take a risk. And it is a big risk. Of course we may not win but at least we will have had the courage to try.” When Tessa says this, you feel a complete wimp and rather ashamed. You know she is manipulating you, but you also know it’s a successful manipulation.

As Jowell recalled the exchange, “He looked at me with his lilac eyes and he said—it was an absolute turning point—he said, ‘I see what you mean. O.K., darling, I’ll think about it and I’ll let you know.’ And the next day he said, ‘We’ll go for it.’ ”

Given the concerns about the cost and the project’s uncertain economic return, it’s hard to understand exactly why Blair said yes to Jowell. Some have suggested a cynical motive: that Blair saw the London 2012 bid as bread and circuses, holding out the prospect of a national pick-me-up after the country’s controversial involvement in Iraq. Blair began to snicker before I was halfway finished posing the question. “No,” he said curtly, “that’s total bullshit.”

Viagra for Two

So, enough of that. But if the possible need of a national pick-me-up had been Blair’s rationale, it would have been consistent with a venerable Olympic tradition. The modern Olympic movement was conceived as a way to build national pride, in the aftermath of bad experiences on the battlefield. The movement’s founder, Baron Pierre de Coubertin, a French nobleman born in 1863, grew up feeling shamed by his country’s defeat in the Franco-Prussian War of 1870–71. On a visit to England as a young man, de Coubertin was impressed by the Rugby School’s physical-education program and considered it an example of one of the critical factors in the 19th-century expansion of British power. “Organized sport,” he came to believe, “can create moral and social strength”—and make men more likely to win wars than lose them. De Coubertin tried to start physical-education programs in French schools, with the goal of restoring his country’s honor. When that effort failed, he set out to organize an international competition, based on the ancient games near Mount Olympus, that would take place in a different country every four years. The first competition was held in Athens in 1896. The “Fundamental Principles of Olympism” are today embodied in the Olympic Charter, which explains that “Olympism is a philosophy of life, exalting and combining in a balanced whole the qualities of body, will and mind.” Writing about the Olympic Charter, Matthew Syed, a former Ping-Pong champion who competed for Great Britain in two Olympic Games, posed a question: “Is there, in the history of human literature, a document more spuriously idealistic, more breathtakingly drunk on its own self-importance?”

The Olympics as we know them today were most profoundly shaped by the late Juan Antonio Samaranch, first Marquis of Samaranch, Grandee of Spain. Samaranch began his career as an official in the authoritarian government of General Francisco Franco and ended it as president of the International Olympic Committee. Under Samaranch, the I.O.C. was transformed from an amateur athletics organization with only $200,000 in cash reserves into a celebrity showcase with tax-free annual revenues running into the billions. Samaranch engineered the Olympics’ first international corporate-sponsorship deals. He also opened the Games to professional athletes—allowing superstars such as Michael Jordan and Lance Armstrong to compete. The value of the television rights to the Olympics went through the roof. (The TV rights to the 2010 Winter Games and this summer’s Olympics were bought by 29 different networks worldwide, for a total of $4 billion.)

Yet scandal haunted his tenure. Repeatedly, I.O.C. members were found to be accepting bribes from cities wanting to host the Olympic Games. Amsterdam’s bid committee for the 1992 Games allegedly procured prostitutes for two I.O.C. members. The Atlanta 1996 committee doled out invitations to the Oscars, “free” shopping sprees, and lavish vacations by chartered jet for members. The Salt Lake City 2002 committee bought a violin for one member, gave $320,000 to another, and obtained immense amounts of Viagra for two more. Salt Lake City also paid $17,000 worth of tuition bills at the University of Southern Mississippi for the son of a Sudanese general, Zein El Abdin M.A. Abdel Gadir, an I.O.C. member, and sent a $1,000-a-month stipend to a bank account in London for the general’s daughter—who does not exist but whose name appears to be an abbreviation of the general’s own. Just before his expulsion from the I.O.C., General Gadir said, “It never occurred to me that there was the slightest link between this ... and the bidding of Salt Lake.”

Samaranch denied knowledge of any such deals notwithstanding his tight control over the organization. He implemented stringent new ethics guidelines and several I.O.C. members resigned or were expelled from their positions. Yet Samaranch also continued appointing unsavory characters to the I.O.C., such as the former defense minister for Ugandan dictator Idi Amin.

The Master Plan

Samaranch loved athletes, and Sebastian Coe was one of his special favorites. In the 1980 and 1984 Games, Coe won four Olympic medals, including two gold medals, for middle-distance running. Uncommonly charismatic and exotically handsome (his mother was half Punjabi), with longish hair and a graceful stride, Coe in his prime was labeled by one sportswriter “the young Lord Byron of the track.” Samaranch invited Coe to set up and lead the first Athletes’ Commission at the International Olympic Congress, in Baden-Baden, in 1981. The two subsequently became so close that, Coe told me, Samaranch “was as instrumental in what I went on to do in sport as my father was.” (Coe’s father was his running coach.)

Coe later served as a Nike global adviser, built a chain of health clubs, became a Tory member of Parliament (1992 to 1997), and was eventually made a life peer—the Right Honourable Lord Coe. In May of 2004, when he was invited to lead the London bid committee, Coe flew to Madrid to have lunch with his mentor and give him the news. Coe remembers Samaranch being “very complimentary for about 15 or 20 minutes, and then he said, ‘But of course you won’t win.’ ” Samaranch himself was helping Madrid steer its own candidacy for 2012. The old man’s warning to his protégé, though friendly, was an early sign of how intense this fight would be.

I.O.C. ethics rules forbid most forms of direct lobbying, in the common-sense definition of the term. A bid committee cannot make special trips to visit I.O.C. members in the members’ home cities, nor can bid committees invite I.O.C. members to visit them in their own city. Gifts of any kind are banned and “a sense of moderation must be respected, particularly concerning hospitality and accommodation,” according to I.O.C. ethics guidelines—one bid-committee member received a written warning from Lausanne after purchasing a cup of coffee for an I.O.C. member in Moscow. As a result, bid committees engineer all manner of ingenious ways around the rules: for instance, traveling constantly so as to contrive “accidental” encounters with I.O.C. members at public events where they are likely to appear.

According to Tessa Jowell, London’s original bid chairman, the American businesswoman Barbara Cassani—previously the C.E.O. of British Airways’ budget airline, Go Fly—lost the stomach for campaigning after just one year on the job. As Jowell recalls, Cassani said, “ ‘I can’t win this,’ because she said she didn’t like the I.O.C. people. She is not somebody who liked hanging around in bars waiting, which is what you do. You wait to catch somebody as they’re walking past you and then you kind of trip up and, you know, you say, Oh, hello, Mr. Jacques Rogge.” Cassani, however, counters that “Tessa Jowell’s memory isn’t correct.” In an e-mail, Cassani explained that she resigned in part because of the logistical difficulties of campaigning, and in part because “national loyalties are extremely strong in the I.O.C. and I was troubled that an elderly I.O.C. member had heard my accent and mistakenly assumed I was with the New York bid. I was concerned that this type of confusion might cost London even a single vote.”

Sebastian Coe was hampered by no such ambivalence. Coe—still fit and photogenic at 55—brought Olympic celebrity and athletic discipline and stamina to the campaign. C.E.O. of the bid committee at the time was Sir Keith Mills, a skilled salesman and marketing genius. (He created the world’s first frequent-flier programs.) Mills conscripted Coe as the face man for more than 100 separate marketing plans, individually tailored for each member of the I.O.C. Members on the current roster hail from 78 countries. Among them are dozens of former athletes, current and former athletics officials, and royals and aristocrats from Saudi Arabia, Monaco, Liechtenstein, Qatar, and many other nations. One former London bid official says that I.O.C. members, in general, have the character of “trust-fund babies.”

Mills, the son of a factory worker, is a portly, graying, unpretentious man whose twinkly eyes miss nothing. He tracked the committee’s progress in longhand in a plain Parker Pad notebook that he referred to as “my intelligence book,” which he kept on his person at all times. On his orders, all detailed discussions of the campaign took place in a single room that was swept for listening devices by a private surveillance company.

Helping execute the Mills master plan were a handful of consultants—members of a small, nomadic fraternity of well-connected sports executives who lobby on behalf of cities eager to host events such as the Olympic Games and the World Cup. London’s top consultants included Andrew Craig and John Boulter. Both had worked for companies owned by the late Horst Dassler, during the period when Dassler’s organization, which included Adidas and the sports marketing company I.S.L., allegedly laundered bribes for cities bidding to host World Cup soccer championships. (Neither was implicated in the scandal.) Private Eye magazine reported earlier this year that the bid committee paid Craig $34,000 per month, plus expenses, for at least a year’s worth of consulting.

Officials defend such payments as reasonable and necessary, given the close relationships consultants maintain with I.O.C. members. “They were simply our eyes and ears,” said Mills. Given the I.O.C.’s history of corruption, I asked Blair if he had made any special arrangements to be sure the London bid process did not involve brown envelopes. He answered, “We would never engage in anything that fell into the category of bribery or corruption.” (Blair’s press secretary, also on the phone, took this opportunity to say that there would be time for only one more question.)

Even while lobbying the I.O.C., London’s bid committee was also negotiating to raise $1.1 billion in domestic corporate sponsorships. “People would do anything for the Olympics, because of the nature of the brand,” Mills said. Mills, like almost everyone in charge of London 2012, speaks of the Olympic brand with almost religious awe. Conversation on this topic often verges into humid, inadvertently revealing territory. One former committee member told me that the Olympic brand stands for “the world coming together to celebrate humanity.... In an Olympic Village, you see it. These are the most beautiful people in the world in the prime of their lives, dedicating their lives to excellence. And they’re all taut, and they’re all fit, and they’re all excited, you know. The youth of the world coming together to celebrate beauty and their athleticism. There’s a lot of shagging gets done in the Olympic Village. A lot of shagging, I’m telling you.”

Near the end of the application process, an I.O.C. evaluation committee was permitted to visit London. Bid-committee officials knew that London’s transportation system was a weak spot on the city’s application. “Our nightmare was it would take forever to get to the venues,” Mills recalled. A bid-committee team planned the routes that I.O.C. members would travel around the city, and G.P.S. transmitters were planted in all of the I.O.C. members’ vehicles so they could be tracked. From the London Traffic Control Center, near Victoria Station, where hundreds of monitors display live feeds from London’s comprehensive CCTV surveillance system, each vehicle was followed, from camera to camera, “and when they came up to traffic lights,” Mills said, “we turned them green.”

A Farcical Scene

In July 2005, the I.O.C. converged on Singapore for its annual session meeting, to select the 2012 host city. In the homestretch, London brought out all its big guns. David Beckham flew in on London’s behalf; so did Queen Elizabeth II’s daughter, Princess Anne, an I.O.C. member and former Olympic equestrienne. The bid committee took six suites at the Raffles Hotel, where Tony and Cherie Blair held more than 60 last-minute meetings with individual I.O.C. members whose votes were still in play. It was a farcical scene. Half a dozen security men with walkie-talkies roamed the hallways, running interference to prevent the I.O.C. members from figuring out that they were at a cattle call.

One very senior British-government official who observed the process recalled, “The I.O.C. is split into two groups of members: the really important and famous, and the absolutely nondescript and unimportant. But they all have one vote.” At a party on the eve of the vote, Jacques Chirac, in Singapore to lobby for Paris, arrived and “made a beeline for, you know, the queen of Spain and all the members of the royal families,” the official said. The Blairs, by contrast, worked the party in a calculatedly egalitarian spirit. Tony Blair posed for pictures with all comers; Cherie Blair circumnavigated the room, paying special attention to the nondescript and unimportant.

This same senior government official also recalled that, on a bathroom break, the prime minister struck up a conversation with the man at the next urinal, believing the stranger was an I.O.C. member. Blair asked the man how he was doing and what he was up to that night, chattering suavely until finally the man, who showed no sign of recognizing Blair, apparently concluded that the prime minister was hitting on him, zipped up his fly, blurted in disgust, “Why are you asking me these questions?”—and bolted.

On July 6, each city made its final presentation. London’s featured a cast of more than 30 English schoolchildren of various ethnicities, who’d been flown in to flesh out the argument that London could inspire the children of the world to become athletes. Many of the I.O.C. members were moved to tears, and London beat its competitors—Paris, New York, Moscow, and Madrid—to win the right to host the Games, by a margin of four votes.

“Ping-Pong Is Coming Home”

‘Follow the blond halo,” said the press secretary, Richard Brookes, who, though armless, was frantically tapping out e-mails on his BlackBerry, with one bare foot. “The blond halo” is the messy yellow hair of Boris Johnson, the former journalist and Tory member of Parliament who defeated Ken Livingstone in London’s 2008 mayoral election. Educated at Eton and Oxford, Johnson speaks in plummy, distracted tones, emitting quotable one-liners almost as often as he runs his hammy palms through his hair. At a “hand­over party” following the closing ceremony of the Beijing Olympics, in 2008, he declared, “Ping-Pong is coming home”—to London.

On the 27th of July 2011, I waited for Johnson to arrive at the public opening of the Olympic Park’s Aquatics Centre. Its architect, Zaha Hadid, has said that the undulating roof was “inspired by the fluid geometry of water in motion.” It was paid for by the fluid mechanics of money in motion: budgeted at $118 million, the building in the end cost $434 million. Practically everyone who played a leading role in organizing London 2012 was here—Jacques Rogge, Coe, Jowell, Mills, and many others.

While Johnson mingled outside with the V.I.P.’s, I asked Daniel Ritterband, the slender, handsome former Saatchi & Saatchi executive who ran Johnson’s mayoral campaign and now serves as his marketing director for London 2012, how he sees the relationship between London and the I.O.C. Ritterband answered with a story. Before one of Johnson’s first public appearances with Rogge, the mayor’s staff reviewed “pages and pages of protocol of how ‘the president’ should be addressed, how every detail of the event should be handled, how the Olympic logo can and can’t be presented,” Ritterband said. “It’s all very serious, you know.”

Then Johnson got up in front of the group, gave his speech, and at the end, as Ritterband recalls, said, “Don’t worry, Jacques. We’ll take care of your hoops!” I asked how Rogge reacted, and Ritterband replied, “Well, he just has the one look, doesn’t he?”

We followed the dignitaries into the building, whose swooping curves are clad with long planks of red lauro wood that call to mind baleen. Though it’s known as “the Stingray,” to enter here is to feel as though you’re being swallowed by a whale. Poolside, giving interview after interview, Johnson indulged in punchy free association. “This building is a po-em! A poem in steel and concrete!” “Look at that water! So pure you want to drink it! You’re not going to find any dirty old Band-Aids on the bottom of this pool.” “This is the most exciting thing to happen to East London since the Great Fire of 1666!”

That last remark, which managed to elide the Blitz, was tested about a week later, when riots erupted in Tottenham, North London, and spread to the East London neighborhood of Hackney, which will host several Olympic events. Critics on all sides asked whether Scotland Yard—already racked with crisis over the News Corp. phone-hacking scandal, which had broken just a month earlier—was prepared to reckon with a terrorist attack or other major disturbance during the Games. The London Organising Committee of the Olympic Games (locog) and the I.O.C.—several of whose members were in London that week for various athletic trials, including for women’s beach volleyball—presented a united front on the security question. From Beijing, Jacques Rogge assured reporters that “all the measures put into place will be at the highest level.”

“We’ll Shoot ’em Down”

Security has been fraught for all Olympic host cities ever since the terrorist attacks in Munich in 1972. London may be more sensitive to this concern than any host city ever has been, for reasons that pre-date last summer’s riots. On July 7, 2005, the morning after London won the bid for the Olympics, four suicide bombers attacked the London public-transport system during rush hour, killing 52 people. Investigations turned up no connection between the bid and the bombing. But the whiplash of triumph and tragedy scarred the country, where the bombings are referred to as “7/7.” London had been obsessed with security long before that—it has more surveillance cameras per capita than any other city in the European Union—and 7/7 made it more so. Some $1.6 billion, 12,000 police officers per day, and thousands more military troops and private security guards have been allocated for Olympic security. London bobbies, known for not carrying firearms, will patrol the Underground with semi-automatic weapons. And, reportedly, drones—both armed and not—will patrol the venues from the sky.

As I left the Aquatics Centre with Mayor Johnson, I asked him about security. Some civil-rights watchdog groups claim that London 2012 will be the most thoroughly surveilled and searched event the world has ever seen. Johnson seemed not to want to talk about this. “No,” he teased, “you are going to have a fantastic time. Are we going to subject you to a full-body-cavity search? No. It’s going to be incredibly gentle. You won’t feel a thing.”

How did he feel about the possibility of armed drones being deployed in the skies above his city and the Olympic Stadium? Johnson called out to his Olympic adviser Neale Coleman:

“Neale, what’s our position on Predator drones?”

“Predator drones?”

“Drones,” Johnson repeated.

“Droning on ... ” Coleman said, laughing.

“No,” Johnson answered, in a faux tough-guy tone. “We’ll shoot ’em down.... We don’t intend to police the Olympics with Predator drones.”

Even the 2012 cartoon mascots, Wenlock and Mandeville, have the notion of surveillance built into their design. Wenlock and Mandeville are two slightly different-shaped silver blobs, meant to be drops of steel taken “from the last huge girder of the Olympic Stadium.” Each of their faces is taken up entirely by a single eye, which is meant to be a camera lens. The packaging for the plush-toy versions of both figures explains, “My single eye is like a camera letting me record everything I see.” (locog has also licensed toy versions of London bobbies and Buckingham Palace guards with camera lenses for faces.) Is the idea of giving children a surveillance toy, I asked Johnson, just a little creepy?

“Are you referring to Mandeville and Wenlock?” the mayor replied. “The thing that children up and down the country, indeed across the planet, are crying out to their parents to buy them for Christmas? Are you referring to our national icons as creepy? I think that’s—they will be, if they are not already, as cherished and as sought-after as—uh ... Schtroumpfs. Or Smurfs. They are the Schtroumpfs du jour. They will be infinitely collectible. What to you is a creepy, monocular, Cyclopean android-type thing is to many children a lovable, hilarious, uh, individual—that will comfort them at night.”

“And watch them,” I said.

“And watch them,” he answered. “And look after them.”

Theme Park

Day after day, beneath surveillance cameras, walking in circles around the blue fence surrounding the rising stadium, the long-faced grandfather wonders what it all means. Iain Sinclair is one of Britain’s most revered writers; some critics compare him to the 17th-century diarist Samuel Pepys. He is bald, with spectacles, a very sharp nose, and a mouth that turns down at the corners. Blending combat- and leisurewear—pale green vest, dark shirt, khakis, gray flip-flops too large for his feet—Sinclair’s outfit, like his ideology, is fierce, if perhaps also somewhat ill-fitted to this world. His most popular books, Lights Out for the Territory and Hackney, That Rose-Red Empire, examine the effects of geography on psychology in the East London neighborhoods where he has lived for 40 years. He loves the grimy, decrepit relics of the Industrial Revolution. He loathes changes to this landscape made in the name of “urban regeneration.”

In the past five years, construction has transformed the neighborhoods of East London surrounding the $11.7 billion, 500-acre Olympic Park in Stratford. (The Park includes the Olympic Stadium and eight other newly constructed sports venues, plus the Olympic Village and a 377-foot tower designed by the artist Anish Kapoor called the ArcelorMittal Orbit, which looks like a roller coaster that has been put in a trash compactor.) Sinclair’s book about those changes, Ghost Milk: Calling Time on the Grand Project, was published in Britain last year and will appear in the U.S. this summer.

“Tessa Jowell doesn’t know this part of the world at all,” Sinclair said toward the end of a long stroll through East London. He drew an analogy between the “invasions and enclosures” of the Olympic Park and “foreign-policy ideas where you just whack into someone you don’t know, start putting up fences and deep security, and it’s all for our future good or their future good.” Sinclair called the countdown to the Games “a long march towards a theme park without a theme.”

Some would argue that this theme park does have a theme: ballooning budgets. Less than a year after London won the Games, the Olympic Delivery Authority (O.D.A.), the government body established in 2006 to oversee Olympic-related construction, made a big discovery. The initial cost estimate for reclaiming contaminated land for the Olympic Park—roughly $1.6 billion—was off by a factor of five, according to one former locog member. Overnight, the $3.9 billion price tag for the entire Olympics, the figure that Tessa Jowell had used to persuade her fellow Cabinet members to come on board, was blown away. In fact, it would cost a full $8 billion just to remediate the real estate, before construction could even begin.

At the time, the O.D.A.’s chief executive was Jack Lemley, a straight-talking septuagenarian from Boise, Idaho, who had overseen construction of the Channel Tunnel. In October 2006, as the O.D.A.’s budget was rapidly spiraling out of control, he resigned as chairman and gave a series of newspaper interviews in which he accused Tessa Jowell and Ken Livingstone of ignoring the true cost of building the Olympic Park. “They just did not want to hear bad news,” he told one reporter. “A blind man could see there was a huge environmental problem.”

One former locog member believes the I.O.C. should bear some blame for the O.D.A.’s budget travails. The host-city bid process demands detailed operational budgets for the Games, but it gives cities no incentive to use similar diligence on infrastructure costs. “They honestly don’t give a shit,” this person says, referring to the I.O.C. “It’s not going to cost them a penny. It’s all covered by the government.” The budget has kept on climbing. A recent parliamentary report put the cost of preparing for and producing the Games at $18 billion. Jack Lemley believes it will be more than $19.4 billion.

Moreover, the official budget does not include what may be hundreds of millions more in costs for municipalities, for services such as security and sanitation in various boroughs of London that will host the events held outside the Olympic Park. Nor does it include similar costs to the dozens of cities outside London where national teams will stay for several weeks of pre-Olympic training.

These hidden expenses, like the costs of infrastructure, are immaterial to the I.O.C. The I.O.C. will earn $4 billion in broadcast rights to the 2010 Vancouver Winter Olympics and the 2012 London Summer Olympics and $960 million from corporate sponsorships. Of this, the I.O.C. will contribute a mere $1.6 billion to the cost of putting on the Games. If locog’s budget predictions prove inaccurate, as the O.D.A.’s were, the British taxpayer will have to cover the losses. “Not many people are aware the government’s on the hook for the organizing committee’s losses,” the former locog member told me. “Gordon Brown wrote a letter to Jacques Rogge to say in the event that locog’s revenues are less than locog’s costs, the British government will make up the shortfalls.” To forestall criticism and publicity, he said, Brown waited to send the letter until the last possible moment—five p.m. on the day before the bid had to go to Lausanne.

Paying the Price

There’s a general sense among high-level British politicians that if they had known the true cost back in 2003, London would not be hosting the 2012 Games. Tessa Jowell herself told a reporter in 2008, “Had we known what we know now, would we have bid for the Olympics? Almost certainly not.” (She later said the remark was taken out of context.)

When I asked Tony Blair about this same question, he answered, “If you said to David Cameron, or anyone involved with this, ‘If you could click your fingers, and the Olympics would be held in Paris instead of London, what would you feel: (a) relieved, or (b) Oh, my God, what did we give that up for?,’ it would be b. What you make of the Olympics is in a way up to you. For a country like Britain, it’s a great thing for us to have the Olympics here. We can afford to do the Olympics. We’re Britain. We’re not some Third World country.”

Ken Livingstone, the man who signed the contract with the I.O.C., and who hopes to take back his former office in London’s mayoral election in May, told me that he stands by every line of the agreement. Having such a document will help avoid disagreements later on, he said. It’s also true that, once the Games were awarded to London, the balance of power between the I.O.C. and London slightly shifted in London’s favor. If the McDonald’s counter in the Olympic Village turns out to be a few square meters smaller than the I.O.C. technical manuals decree that it must be, Jacques Rogge is unlikely to call a screeching halt to the Games. Still, one understands why the English magazine The Spectator, which publicized excerpts from the contract, might argue that “British authorities have cravenly agreed to let the I.O.C. create what is, in effect, a state within a state.”

The contract requires British customs officials and London police to confiscate all non-licensed goods bearing the Olympics name or logo, be they fake T-shirts or marzipan renderings of the five Olympic rings on cakes in bakery windows. To help officials do this job, the contract stipulates that “brand protection teams” must be formed to roam the city. Inside Olympic venues, spectators may not “wear clothes or accessories with commercial mes­sages other than the manufacturers’ brand name.” London must ensure that there is no non-official propaganda or advertising in the airspace above the city while the Games are going on, and for two weeks prior. No Olympic venue, and no access routes to any Olympic venue, may be decorated in any way “that would conflict with or cause a breach of any” official Olympic corporate sponsorship. London must “obtain control of all billboard advertising, city transport advertising, airport advertising etc. for the duration of the Games and the month preceding it to support the marketing programme” of the I.O.C.

Tony Blair was right. This isn’t some Third World country—it’s Britain, but with Zil lanes and thousands of other line items in the bill of sale. And at every event where the Olympic flag is displayed, it must fly higher than the Union Jack.