Salt Lake officials are concerned the devil may be in the details of an agreement with the state indemnifying the city for any financial losses from the 2002 Winter Olympic Games.
That fear comes from a suggestion by at least one Salt Lake Organizing Committee member to legislators that the state would not be liable for losses from the Games, despite a contract to the contrary. The notion stems from a provision in the state constitution prohibiting Utah from lending credit to any "private individual or corporate enterprise or undertaking."Since hosting the Olympics is a joint public-private effort, some say the state's indemnification agreement with Salt Lake City is unenforceable.
That should not be a worry. The state's position of backing is clearly on record. It is not merely a legal, but also a moral obligation. In other words, a deal's a deal. And this one was made in the light of day with approval of Gov. Norm Bangerter and other state leaders. Gov. Mike Leavitt has added his unqualified endorsement.
There are no secrets or surprises.
Drafters of the 1991 indemnification agreement were mindful of the constitutional provision in question and were careful to circumvent it. The contract between the city, state, Utah Sports Authority and SLOC does not bind the taxing power of the state, nor "require the state to assume debt or lend the state's credit in contravention of any constitutional provision or laws of the state of Utah."
Besides that, the beneficiary of the state's indemnification guarantee is a public municipality, Salt Lake City, and not a private individual or corporate enterprise. This is not the first time Utah has placed its credit, bond rating and backing on the line for the benefit of another government entity. While a formal opinion regarding the contract's legality has not been rendered, it seems clear the city is the primary beneficiary here.
Another assurance Salt Lake City has is the fact it has clearly subjugated SLOC supervisory and oversight rights to the state. The legal principal of estoppel should ensure it would not forfeit those rights yet still be liable financially for any SLOC losses later on.
What is most disturbing about the indemnification issue is the manner it has been raised. It appears some SLOC member or members are trying to brush off state oversight by suggesting that legislators need not worry about holding the bag financially if there should be a problem.
"Your contract with the city is unconstitutional, so don't sweat it," they appear to be saying. "The city would have to pick up any leftover tab."
On the other hand, the line to city leaders appears to be: "You've got a deal with the state, so they have the liability. You can leave us alone."
If such double-dealing games are being played, they had better stop. This gets back to the concept, seemingly unacceptable to the SLOC, that this mammoth undertaking requires public and private sponsorship and a reasonable amount of public oversight. Salt Lake City would obviously not be host to the 2002 Winter Games without extensive involvement and commitment by city and state governments.
Of course, the way to make the financial liability issue a moot point is for the SLOC to bring the Games in under budget. But the larger philosophical issue of public accountability and trust still begs addressing.
Leavitt has called for putting the summer's SLOC problems behind and moving forward in unified fashion across the board. That cannot happen if the SLOC plays divisive political games it appears to be instigating by pitting Salt Lake City against the state.