“I GO TO RIO…”

9/22/09

Way back in February of this year, Pat Ryan, chairman of both insurance giant AON and the Chicago 2016 Committee, stated that “there is no insurance product for cost overruns of construction.” Since then, after the heat was turned up on the city and Mayor Daley for so cavalierly putting the citizens on the line for the financial consequences of the Mayor’s 21st century edition of bread (for favored contractors; this is Chicago, after all) and circuses (for those with the spondulicks, and the desire, to buy overpriced tickets for events in which we normally show not even the slightest interest), Mr. Ryan has miraculously found such insurance, or, more properly, according to the Chicago Tribune, Mr. Ryan believes he can arrange such insurance. However, there is a catch; the insurance, in which I guess we just gotta believe, will only cover cost overruns attributable to circumstances beyond the Chicago Olympic team’s control, like inflation. Such insurance will not cover cost overruns due to changes in construction plans, a common, perhaps the most common, source of cost overruns. Such insurance, if indeed it is any more than a figment of Mr. Ryan’s, and the Mayor’s, team’s febrile imagination, would not cover shortfalls due to, according to the Civic Federation of Chicago, unsold tickets or donation shortfalls. The Tribune also points out that such insurance won’t cover such quaint Chicago customs as bribes, bid-rigging, and political cronyism. So it looks very much like this “insurance,” which Mr. Daley assures us will protect the taxpayers from his impetuousness, would cover everything but those things that are most likely to occur. Selling such insurance sounds like a great deal.

Another eventuality (certainty, really) that insurance will not cover (and that may fall under the Tribune’s “political cronyism” category) is what I will call “back scratching” insurance or “we’ll make it up to you” insurance. Contractors and/or contributors will be coaxed into “contributing” to the Olympic effort, either through direct contributions or through eating cost overruns, by, when outright bullying doesn’t work, assurance that whatever is lost on the Olympics will be made up through the awarding of contracts for other city business. That way, the Olympics don’t show a loss because costs are kept low and/or hefty contributions miraculously appear. The taxpayers, the Mayor will be happy to report, will not have to come up with any dough to cover losses for the Olympics. However, taxpayers will be on the hook for the sub-rosa “make whole” deals reached with favored city contractors. And there will be no insurance for that. And, given the way things are done in this city, few people will notice.

Oh, well. Perhaps the Mayor can sell off the traffic lights. Or the naming rights to Chicago streets. Or the parks. Or the lake front (Oh, wait, the lakefront will be cluttered with Olympics detritus…okay the river front.) Or the schools. Or the police stations. Or….