Tokyo prosecutors target 3 individuals in bid rigging probe

An investigation into suspected bid rigging of Olympics test events led investigators to focus on three individuals, according to sources.

Officials from the Tokyo District Public Prosecutors Office and the Japan Fair Trade Commission searched several locations on Nov. 25, including offices of advertising giant Dentsu Inc., for evidence of bid rigging on contracts to plan and conduct test events for the 2020 summer Games in violation of the Anti-Monopoly Law.

The sources said that two of the three individuals had ties to Dentsu.

Decisions on which companies would win the contracts to hold Olympic test events were made in the Tokyo Olympic organizing committee's games operation bureau.

The second in command of the bureau was formerly associated with the Japan Association of Athletics Federations while another member was sent from Dentsu to the bureau. The two are believed to have kept in close contact with a Dentsu official who oversaw tenders for test events the advertising giant was interested in.

Three people are believed to have been central to coordinating which company would bid for the 26 test events.

A Dentsu employee sent to the games operation bureau contacted those in charge of entering bids at other companies to get a feel for the events they were interested in, the sources said.

Many of the bids came from only one company, which was concluded by the Fair Trade Commission and prosecutors as evidence of a lack of competition for a bid.

A former executive of the Olympic organizing committee pointed out that companies often develop niche expertise for certain sports that leave them with a virtual monopoly over such events.

A source with a company that won a bid said there was no sense that bid rigging took place. We have the know-how and experience that no other company has and we feel that background was fair in awarding the contract.

Another source pointed out the unique nature of the Olympics during which events are held simultaneously over a two-week period.

The source said that it is impossible for one company to handle everything. If coordinating with other companies is described as bid rigging, then such actions took place to a certain extent. Without such actions, it would have been impossible to carry out the Olympics. A Dentsu source said that since the company was involved in handling a number of events, it could not do everything, which led to the result that prior coordination with other companies was necessary.