Oiling the wheels in Turkmenistan

Monday, 16 April 2012

In March this blog looked at the award of the 2013 track world championships to Belarus, a decision taken with input from a senior UCI official with a significant financial interest in a giant construction project in the capital, Minsk. Whether coincidental or not, the awarding of the worlds served to highlight the significant conflict of interest between the UCI’s sporting interests and the business activities of Igor Makarov, the Russian oligarch behind the Katusha team who now sits at the UCI’s top table, the Management Committee.

Now it’s time to take another look because sadly the overlap between sport and business is not restricted to one case. In another example here is a tale from Turkmenistan.

Turkmenistan is a tough place. Political opposition to the ruling party does not exist… because it is illegal and in the last elections the President won with 97% of the vote, the others who stood in the election were candidates standing in support, not opposition. It’s rated the third last on the index run by Reporters Without Borders.

But Turkmenistan scores high in other areas, notably with world’s fourth-largest reserves of natural gas. It’s also got some quirky architecture. The capital city Ashgabat features a giant construction called the Arch of Neutrality that is topped with a golden statue of the country’s President that rotates to follow the sun. There’s a photo essay if you want a bigger picture.

The Arch of Neutrality

In 2010 Turkmenistan announced a project to build an Olympic village full of world-class sporting venues. Only the country is not on the IOC’s long list of candidate bids for the summer or winter games this side of 2028. The idea is to offer sports facilities for all, a bold project ordered by President Gurbanguly Berdimuhamedov, often known as Arkadag, “The Patron”.

The budget is estimated at $2 billion and when built the facilities will host the 2017 Asian Indoor and Martial Arts Games but the longer term viability remains to be seen given no other sports contests are planned and previous construction efforts for an ice-rink and other facilities have seen the installations left crumbling according to a leaked US diplomatic cable. It looks like the kind of folly only an oil-rich dictator would try.

So what’s this got to do with cycling?
It turns out current UCI President Pat McQuaid has been a visitor to Turkmenistan. That’s all good, he’s supporting cycling all around the world and encouraging new facilities to be built. He went in 2008 and came back as one of three guests of honour in 2010 to attend the ceremony marking the start of the olympian construction ceremonies, here’s the official account:

The President noted that at the first stage of the Olympic Village Project about 30 sports and social facilities would be constructed… …About US$ 2 billion would be allocated for construction of the first facilities in the Olympic Village, said the President expressing belief that this would profoundly contribute to promoting different sports in our country, bringing up a physically strong and spiritually healthy generation, holding large-scale international competitions and achieving high results on the sports arena.

The Turkmen leader’s speech was greeted with the storm of applause. Then the Turkmen leader affixed his signature to the message to descendants and put it into a golden ball. Then the guests of honour addressed ceremony participants and organizers. The floor was given to Patrick McQuaid, President of the International Cycling Union, a member of the International Olympic Committee, Dr. Santiparb Pantija Wanija, Advisor to the President of the Olympic Council of Asia and Igor Makarov, CEO of the Itera International Group of companies, who had been recently appointed Chairman of the Russian Cycling Federation.

Note Igor Makarov pops up again as one of the other guests of honour. A Russian, he was born in Turkmenistan and today he is the head of Russian Cycling and has recently become one of the UCI’s most senior officials. But he is also Chairman of Itera, a gas trading company that was founded in Turkmenistan. Itera remains true to its roots and has extensive operations in Turkmenistan, indeed it recently trumped oil majors Lukoil and ConocoPhilips to win the oil and gas extraction rights in a large block of the Caspian Sea in Turkmen waters, a project involving billions of dollars.

Arkadag and The President

Indeed as McQuaid was praising his hosts and declaring he hoped to return one day to see the Olympics taking part, Makarov was busy lobbying for a slice of the action. Here’s Turkmenistan Magazine reporting:

The President and his guest also discussed a number of major projects entrusted to Itera in Turkmenistan, including the construction of a modern equestrian complex in Balkan province and others. Igor Makarov also expressed willingness of Itera to take part in the construction of the Olympic village in Ashgabat.

So it seems Mr Makarov has a dual role. One minute he’s got his Russian Cycling hat on… the next he’s fishing for oil or construction contacts. Igor Makarov started Itera and has impeccable connections in the country so he already has his foot in the door if you like, indeed there are stories he gifted a yacht to the Turkmen President but they are denied. But his business is bidding for valuable construction projects and has even thwarted bigger oil companies for exploration and extraction licences in the Caspian Sea.

Temporary suspension
Things have not been so rosy between the UCI and Turmenistan. Last September the Turkmenistan federation was suspended from the UCI because of arrears in paying membership fees to the UCI. But this was resolved in December.

Conclusion
A follow up to last March’s piece on Belarus, again we see an overlap between noble ideas of promoting sport and the commercial imperatives of construction contracts and energy deals. A concern is that the UCI is attending sporting ceremonies for all the right reasons, namely to promote cycling but unwittingly its presence generates goodwill and publicity for those chasing business deals whether Makarov and Itera or more broadly the commercial interests of Russia.

Once again the UCI probably has to think about ways to protect itself from governance hiccups, to ensure its most senior officials can be seen to separate business and sport. Better governance means a stronger UCI.

Ken April 16, 2012 at 2:48 pm

Tell me again why cycling needs the UCI? These are the folks telling competitors they must ride clean and not disgrace the sport? Outrageous!

The Inner Ring April 16, 2012 at 2:55 pm

The UCI hasn’t necessarily done anything wrong here, it’s more they safeguards to stop any abuse by some who might try to use it as a means to help smooth things along for business.

More than ever the sport needs a healthy, confident and strong governing body. The stronger the UCI, the more it can rule on doping and anything else with authority.

Ken April 17, 2012 at 3:30 am

Most ethical guidelines regard creating the appearance of conflict of interest almost as seriously as an actual conflict. The UCI has to clean up its act.

TheDude April 16, 2012 at 3:20 pm

Does the UCI implode if McQuaid is bounced? This guy seems to be suffering from acute megalomania. I can appreciate the dichotomy of promoting the sport and governing it. However, strong policy and procedure controls along with improved transparency might be worth the effort for the UCI. Cheers.

Ankush April 16, 2012 at 3:53 pm

Another piece of brilliant investigative journalism. I hope the UCI approved journalists follow up on this report and ask some tough questions to the President

karsten April 16, 2012 at 4:21 pm

Hang on a mintute – Igor Makarov is head of Russian Cycling, at UCI’s top table and behind Katusha and now Denis Galimzyanov (Katusha) has been provisionally suspended after returning an adverse analytical finding for EPO and the case will be heard by the Russian Cycling Federation headed by Igor Makarov.

Larry T. April 16, 2012 at 6:01 pm

karsten- and we wonder why so many corporations want NOTHING to do with pro cycling? Cheating (doping) and corruption (UCI and their cronyism) are the two biggest reasons I can think of – it’s especially sad when the Olympics get mixed into the sewage as well. When will sanctioning of cheaters finally be taken away from national federations? And when will the International Olympic folks finally say, “your sport seems impossible to clean up, so maybe we don’t want you folks at our Games in the future”? Then the entire rotten mess can be handed off to a corporation and run like the WWE or NFL, purely for entertainment purposes…SPORT will no longer be a part of it.

Big Mikey April 16, 2012 at 6:47 pm

Wait, a sport governing body acting in the interest of its own? Say it ain’t so…..UCI, IOC, F1,MLB, NBA, NHL, MLB, US Congress……the list is endless.

Replacing McQuaid would do what exactly, other than putting in another guy just as prone to putting his compatriots’ interest ahead of the sport’s? It’s not like anyone in the organization was hired for their honesty and willingness to buck the good ol’ boy system in place.

Larry T. April 16, 2012 at 6:53 pm

Two things Big Mikey- WHY couldn’t someone be hired for their honesty and willingness to buck the good ol’boy system? The other is, being married to an Olympic scholar I have to point out those folks do a bit more than simply sell sports for profit like the others you listed. The International Olympic Academy in Greece for example, where she teaches young scholars, has nothing to do with making money, it’s all about the values of sport and ethics.

karsten April 16, 2012 at 7:19 pm

However, the UCI seems to be heading in a certain direction – Eastern Europe.

I can’t help but think that if Contador was still at Astana, he wouldn’t be in the situation he is now.

Big Mikey April 16, 2012 at 7:25 pm

Larry T – Sure, the UCI could hire someone focused on fixing the corruption within the UCI, but its hardly likely they would, isn’t it? The surest way to NOT get ahead in a good ol’boy system is to oppose the good ol’ boys.

The IOC is as corrupt as any of the governing bodies – see the awarding of venues, kickbacks to board members…..it’s actually the same kind of corruption, and it’s well-documented.

Larry T. April 16, 2012 at 9:26 pm

Using your arguments one could say since so many seem to get away with doping, why should anyone compete cleanly? Must EVERYTHING run on a corrupt model? Last time I looked at a dictionary, unlikely and impossible were not the same thing. If the rules are not followed SPORT simply does not exist. I made no claim the IOC was free from corruption, far from it. But unlike most of the other sport governing bodies you listed the IOC does spend some of their profits for genuine educational purposes in sport and ethics rather than just lining the fat-cats pockets. I believe this is an important difference.

Big Mikey April 17, 2012 at 7:05 pm

Larry T – can you name something in our world that IS FREE of corruption? Politics, religion, sport or even international aid providers.
Power and money bring greed, and greed brings corruption. Expecting anything different flirts with naivete.

I admire your wish for cleaner sport, but the foxes are watching the hen house.

Steve April 16, 2012 at 7:43 pm

All very good posts.

Simply stated “follow the money”. We are talking about Professional Cycling.
Unfortunately, we don’t have amateur sports teams any longer, that includes cycling

AP April 17, 2012 at 2:09 am

Cycling does seem to be an unusual sport in that it attracts an extraordinary degree of self-criticism compared to other international level sports. Is anyone applying the same level of interrogation to athletics, swimming, football (all coded) etc or are we the only ones? I’m not suggesting that this is a bad thing though, rigorous is very good but it does present a lopsided impression of our sport.

Also, i think Makarov might have more of a ‘dual’ role rather than a ‘duel’ role.

The Inner Ring April 17, 2012 at 8:10 am

I haven’t surveyed every sport but I’ve seen stories looking into the money behind some soccer clubs, yes. A handful of Russian oligarchs and multi-millionaires have bought football clubs in the English Premier League over the years. Sometimes for fun but also other times as a means of taking money out of their country and beyond the reach of politicians and in one or two examples, to assist in laundering money. We’ve also seen a lot of money from Qatar and other Gulf states go into a range of sports. But few soccer fans are bothered about where the money comes from and I suspect most cycling fans aren’t too fussed with these details either. But I’m interested in these things.

Cat4Fodder April 17, 2012 at 4:35 am

I really enjoy the fact that the only action of any note taken by the UCI was to suspect the Turkmenistan Cycling Federation due to failure to…..pay the UCI.

Blithely ignoring WADA rules for political pressures (i.e.- Spain and Contador) or clearly exhibiting extensive conflicts of interest (i.e. – Russians) are a-okay for Mr. McQuaid. But failure to distribute the payola…and good riddance. What a clusterf&%k!

Beth Leasure-Hudson April 17, 2012 at 2:56 pm

Excellent piece. Great dialogue.

Cgb November 12, 2012 at 1:36 pm

I’m unable to see smoke or fire here

The Inner Ring November 12, 2012 at 1:48 pm

It’s more about keeping your eyes open for future concerns. The UCI should not be used to please governments when its senior staff are actively bidding for work in the country. Care needs to be taken to ensure business and sport don’t overlap.

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