Dentsu Fined, Questions Remain About Corruption and Former Executives' Role

A Grim Reminder of Corruption

The January 30th court ruling on the bid-rigging scandal surrounding the 2020 Tokyo Olympics serves as a stark reminder of the corrupt practices that plagued the event. The Tokyo District Court found that collusive behavior among companies to secure contracts related to the Games "significantly hindered fair and free competition."

Advertising giant Dentsu Group Inc., the exclusive marketing agency for the Games, was fined 300 million yen for violating the Anti-Monopoly Law. The court also handed a suspended prison sentence to a former Dentsu official who conspired with others to rig bids.

The conspiracy involved bid-rigging for test event planning and contracts for the main event operations, which were awarded without bidding, effectively restricting competition. While Dentsu admitted to collusion in the test events, it denied wrongdoing regarding the no-bid contracts. However, the court rejected this argument.

Dentsu's significant influence over the Games' planning and operations, including seconding personnel to the organizing committee, played a central role in the collusion. The court found Dentsu bears substantial responsibility for the scandal.

The ruling also raises questions about the role of former top organizing committee executives, including Yoshiro Mori and Toshiro Muto, who have an obligation to explain their involvement.

To prevent future corruption, the Japan Sports Agency has developed governance guidelines for organizing committees. However, a thorough investigation into this scandal is crucial to ensure the effectiveness of these guidelines.

The reliance on advertising and event production companies like Dentsu for everything from sponsorships to event operations needs to be re-evaluated. More transparent and appropriate mechanisms for organizing sporting events are essential.

Encouragingly, preparations for upcoming events like the World Athletics Championships and the 2026 Asian Games are proceeding without relying heavily on major advertising agencies. Developing professionals with the necessary skills to manage such events independently is crucial for a transition away from traditional approaches.