Putin's Games Panorama

President Putin wants the Winter Olympics to showcase modern Russia.

We pledge to make the stay of Olympians, journalists, guests in

Sochi a safe, enjoyable and memorable experience.

But what do the Sochi Games really tell us about Putin's Russia?

I'm afraid the Olympics are happening, so we have a right to

film and broadcast what is happening.

We find an Olympics where workers have been cheated and terrorised.

TRANSLATION: They must have heard my screams from the street.

Where half of the Games' $50 billion budget may have been stolen.

It's a great example of Putin corruption.

And where whistle-blowers are threatened with execution.

In Russian they said... HE SPEAKS RUSSIAN. That means, you will be

drowned in blood. With days to go until the Olympics

begin, I'm in Russia to investigate the truth about Putin's Games.

Welcome to Sochi. Welcome to the Winter Olympics.

It's a spectacular sporting event that will enthral viewers around the

world. The authorities here say millions of Russians are united by

the Olympic dream. But here in Vladimir Putin's Russia, nothing is

quite what it seems. Forget the millions of Russians.

These Games are really the pet project of just one man, the

President. Vladimir Putin loves Sochi. It's where he holidays and

entertains world leaders by the Black Sea. Winning the Games for

Sochi wasn't just business, it was personal. It is a great honour for

me to address you today and to present the bid of Sochi to host the

Olympic Winter Games 2014. Putin hopes that the Games will project

Russia's image as a great power. The Olympic torch has gone to the Arctic

and up in a rocket. And they're currently 261 miles

above the earth. But not everyone is happy about the Olympics. Meet the

Games' number-one critic, Boris Nemtsov, Russia's former Deputy

Prime Minister and now a high-profile opposition politician.

He ran for Mayor of Sochi, but lost. In Russia, politics can be rough,

and over the years, Boris' campaigning has angered the police,

and other politicians. That's Boris on the right. Now, he's questioning

the soaring cost of the Games. Putin said the cost will be about 12

billion, right? Putin spent more than $50 billion, which is huge

money, which is the most expensive for Olympics.

$50 billion is 30 billion quid. That's 25 times the cost of the

previous Winter Games in Vancouver, and far more than any Summer

Olympics too. Boris says that's partly because they're in the wrong

place. Well, the problem is that there are

two parts of Sochi, one is in the mountain. But most games will be

organised not in the mountain but in the subtropical area in the

embankment of the Black Sea. They've built this new resort in the

mountains. But most of the venues are on the coast, where it's warm

enough for palm trees. Putting ice rinks in the subtropics has helped

Sochi become the most expensive Olympics ever. It's as if no-one in

the Kremlin dare say, Mr Putin, are you sure about this? It's also in

the most volatile part of Russia, close to its troubled Muslim

republics such as Chechnya and Dagestan. Four weeks ago, suicide

bombers killed 34 people in the southern city of Volgograd.

A Jihadi terrorist leader has ordered his followers to attack the

Games. They should put maximum effort in

the ways of Allah to prevent these Satanic dances on the bones of our

land and the bones of our ancestors. TRANSLATION:

Now, a police poster in Sochi names seven women who may launch suicide

attacks. UK officials say more attacks in Russia are very likely in

the run-up to the Games. For many years, Putin has cultivated

his image as a strong man. On his watch, the economy has grown, and

many Russians feel their country is stronger and more stable. Putin's

response to the bombers was blunt. TRANSLATION:

But are the police using security to stop journalists from reporting on

Olympic problems? We're going to a village which, we've been told, has

been very badly affected by the Olympics. The other day, we sent our

researcher along there, and she was stopped and ordered to go back by

armed soldiers. So, we're going to have a go and see if we can get

there. We want to meet the villagers. But

the FSB, what used to be known as the KGB, have other ideas.

To Akhshtyr. Talk to people, film... I'm afraid the Olympics are

happening, so we have the right to film and broadcast what's happening.

The FSB aren't happy with our paperwork.

Can we all get out of the car? He can't see us through the... Right,

OK, let's do that, yeah? President Putin has said journalists are

welcome to the Sochi Olympics, so we want to go up there and talk to the

local people on the other side of the village.

This checkpoint is new. It's only been here a few weeks. The FSB take

our passports and say we can't go any further into the village. But

the locals manage to find us. Villagers are upset about a new

quarry that provided stone for Olympic construction.

The quarry is owned by Russian Railways, which is run by Vladimir

Yakunin, said to be a close chum of Mr Putin.

Russian Railways says it paid for piped water to be brought to the

village for the first time. It also built this water pump three years

ago. There's only one problem. It doesn't work. The company says the

Sochi authorities are responsible. Water is now being brought in by

tanker. Overlooking the Olympic Park, other residents have been

badly affected by the Games too. Please don't adjust your set, these

houses really are at a crazy angle. But Tatiana Skiba and her family

still live here. She's absolutely right, it feels

like... It's making me seasick just to be in this.

The damage was caused by a landslip, and the family blame that on

contractors illegally dumping Olympic waste on the hillside above

their house. The Sochi authorities deny this.

Since Putin came to power, the Russian economy has grown tenfold.

In 2000, there were no billionaires in Russia. Now, there are more than

100. But critics say the system is stacked against ordinary people.

Putin's man in Sochi is Anatoly Pakhomov. The Mayor says many

problems will be sorted out after the Games, but not all claims are

genuine. TRANSLATION: Just like in any of

your cities, you can find in our town a building which isn't so good.

The owner of that building will tell you that its poor condition has been

caused by preparations for the Olympic Games.

He's met the residents at the village where we were stopped by the

FSB and says the problems are being resolved. The Olympic billions have

transformed Sochi. Tens of thousands of workers have built roads, a new

railway, hotels and the gleaming new sports facilities.

But many workers haven't been paid for months. TRANSLATION: Thousands

of workers have been cheated in Sochi, that's more than half of the

workers who have worked on Olympic sites. It's hard for me to say how

much they are owed. I think tens of millions of roubles.

In Russia, it's a crime to cheat people out of their wages. This

worker only got paid after he sewed his lips together in protest. And

when Mardiros Demerchan complained, he says the police arrested him on a

trumped-up charge. TRANSLATION: They started to beat

me, one from one side and one from the other. I fell like that to the

floor, and I started losing consciousness, and they hauled me

back up and sat me on the chair. One of them said, have you had enough or

do we have to beat you some more? He says the police then sexually

assaulted him, injuring him so badly he can no longer work or even lift

up his son. He's now trying to bring charges against the police. They are

suing him for libel. The Mayor denies there has been any brutality

and says workers who don't get paid can take their case directly to city

hall. TRANSLATION: When we've been

approached, the prosecutor took action and the workers were paid

their salaries. Semyon filed a complaint to the

prosecutor about workers being cheated. The very next day, the

authorities raided his office. He was later called in for questioning

by Putin's political police. TRANSLATION: The head of that

department told me they are not pleased, and if I continue doing

this, I might face problems. In the run-up to the Games, Putin

tried to improve his country's image. He released 2,000 prisoners,

including former oil tycoon Mikhail Khodorkovsky and the feminist punk

band Pussy Riot. They were jailed after a protest in a cathedral. Now,

they're calling for an Olympic boycott.

In Sochi, ordinary people are still facing jail for speaking out.

Conservationist Yevgeny Vitishko was arrested after protesting about

environmental damage. TRANSLATION: The impact of these

Olympic Games will be felt by the country for years to come. Most of

the buildings that have been constructed are on what used to be

Sochi National Park. The organisers told us they've

planted one and a half million trees, and after the Games, 20,000

hectares will be added to the National Park. But it's hard to see

how all this building in the mountains is good for the

environment. And Putin himself may be part of the problem. The word on

the piste is that somewhere up in the mountains, there's a secret

base. Its name? Moonglade. Officially, it's a scientific

research station. But campaigners say it's yet another luxury home for

the President. TRANSLATION: Putin decided to build

himself a country house there. This holiday-home fever is something that

really must be fought. That's what we're doing, and why the court found

us guilty. Yevgeny has now been sentenced to

three years for spraying graffiti on a fence, a crime he says he didn't

commit. And he's not the only person who says he's been arrested for

doing his job. If there was something like Panorama

in Russia, freelance TV reporter Nicolai Yarst would work for it.

Instead, this is what happened to him.

Nikolai says the drugs, synthetic cannabis, were planted by the

police. This was a set-up to stop him investigating corruption and to

intimidate other journalists. TRANSLATION: Lots of people are

frightened to write about the other side of the Olympics. I was rung

several times by people who wanted to tell me about what was happening

on the Olympic construction sites. He was locked up, then held under

house arrest for six months. But tests showed there were no drugs in

his system and the prosecutor now says there's insufficient evidence

against him. Do you think that what happened to

you is in part related to your work on Olympic corruption? TRANSLATION:

Unfortunately everything here is linked to the Olympics. In one sense

Nikolai was lucky. 25 journalists have been killed in Russia since

Putin came to power 14 years ago. For an Olympic village, you need

electricity. But in Sochi, there's not enough power to go around. In

2012, we're told, there were a thousand power cuts. And the problem

hasn't gone away. The reason I'm holding a candle in our hotel is

because there's been a power cut and reception says it's because of the

Olympic Games. Officially, there's no problem with the power supply.

But remember, nothing in Putin's Russia is quite what it seems. It's

a big question for some Olympians and Paralympians as to how they'll

be treated in Russia. And to find out more, we're going to a place

with no name and no sign above the door. The reason? It's a gay bar.

In June, Russia passed a law banning the promotion of "non-traditional"

sexuality to minors - widely seen as an attack on gay rights. Most people

here don't want to be filmed. Those that do are cautious about what they

say. Since the law was passed, gay rights

protesters have had a hard time. Not least from the police. Gay Olympians

and visitors are worried about how they'll be treated. The Sochi

organising committee told us it's working hard to ensure the Games

will be remembered for their diversity. So how does the Mayor

feel about gay people in Sochi? Do gay people have to hide their

sexuality when they're in your town? TRANSLATION: No, we just say that it

is your business, it's your life, but it's not accepted here in the

Caucuses where we live. We do not have them in our town. You don't

have them in the town. Are you sure? I am not sure, I don't bloody know

them. I went to a gay bar last night. Will gay people be welcome to

the Sochi Olympics? Our hospitality will be extended to everyone who

respects the laws of the Russian Federation and doesn't impose their

habits and their will on others. But, yes, everyone is welcome.

The Mayor told me there were no gays in Sochi. No gays? No homosexuals.

HE LAUGHS As far as I know there are several gay clubs in Sochi.

How they survive, why they are not bankrupt?

Another grave charge levelled against these Olympics is that they

are the most corrupt in history. Nemtsov has compared Sochi contracts

with previous Games. For example, Sochi Olympics with Vancouver, with

Salt Lake City, with London, and that's why I estimate how they, how

much money they steal. Nemtsov and other opposition figures estimate

that 25 billion dollars - that's half the budget - has been trousered

by the wrong people. And they're not the only ones who say the Games are

corrupt. Valery Morozov used to be a favourite Kremlin contractor. Now?

He's in hiding in Surrey. He says officials asked him for huge

kickbacks on Olympic building projects. It is very difficult for

foreigners to understand this system. Say for example you start a

business, you're opening a shop in London, and then somebody comes and

says "now you are paying 30% of the revenue of your shop to me". Because

he comes from the authorities of London Mayor. He says, "Either I

close down the shop or restaurant or you pay 30%." You have no choice.

Yes. Leshchevsky has been named in

connection with alleged corruption in at least three newspaper

articles. Vladymyr Leshchevsky asked him for millions of pounds of

kickbacks. He started paying, but eventually went to the police, and

they set up a sting. So you wore a wire? Yes. And you

handed over ?100,000 in roubles? Yes. Who did you hand that over

money to? To Leshchevsky. But the police destroyed the tapes and the

case was later dropped for lack of evidence. Vladymyr Leshchevsky

strongly denies these allegations. Morozov also says that his wife was

threatened by another corrupt official. In Russian they said: You

will be drowned in blood. You will be washed with blood.

Later, he discovered there was a contract out on his life. He's been

given asylum in Britain. So, corruption, cronyism, mismanagement

- how strong is the evidence? To find out, I'm taking an Olympic

tour. First stop, downtown Sochi. This is the headquarters of

Olympstroy, the Olympic delivery agency, responsible for a

multi-billion pound budget. But it's been dogged by controversy. Thus

far, it's lost three bosses and there have been multiple allegations

of corruption. Six fraud investigations were launched against

senior Olympstroy officials. But then something odd happened to the

cases. All of them disappeared. All of them disappeared. Putin wants to

show the world that this is the most transparent, most honest, but -

nobody knows why - most expensive Olympic Games, without any criminal

cases with very clean rules, with very transparent rules, etc. Three

heads of Olympstroy have been sacked for corruption, correct? No, this is

not true. The three bosses resigned of their own free will. They simply

miscalculated their strengths including their physical health.

Next stop, the mountains. Behind me, the Sochi ski jump -

possibly the most mismanaged Olympic project ever - and there's some

serious competition for that title. It was finished two years late

because of problems with landslides. The cost increased seven-fold. The

boss was sacked and later accused of corruption on another project.

But the most expensive of all is not a ski jump or bobsleigh track, it's

this new Olympic road and railway, linking Sochi with the mountains. It

cost $8 billion. One sceptic said at that price it would have been

cheaper to pave the road with Louis Vuitton handbags. It was built by

Russian Railways, the company run by Putin's friend Vladimir Yakunin. It

says the cost is comparable to similar transport projects

elsewhere. But he's not the only friend of the President accused of

cronyism. Businesses connected to Arkady and Boris Rotenberg were

given contracts worth $7 billion. They've reportedly known Putin since

childhood. The Rotenbergs and Yakunin declined to comment. The

President says the cost of the Games has increased because of the

difficulties of building in the mountains.

Others disagree. One International Olympic Committee member, Gian

Franco Kasper, says a third of Sochi spending disappeared because of

corruption, and contracts went to a construction mafia of businessmen

closely linked to Putin. Critics say the truth about Olympic costs and

corruption will only come out when Putin leaves the Kremlin. I think

that in the future we will of course investigate what's happened.

Unfortunately in Putin Russia, there is no independent court at all, and

there is no real investigation and criminal investigation against

criminals. But the Winter Olympics aren't the only big sporting event

Russia is hosting. 2018 FIFA World Cup, ladies and gentlemen, will be

organised in Russia. Not that we're bitter, mind. Russia has promised

world-class football stadiums in 11 cities for the 2018 World Cup. I

just can promise, we all can promise, you will never regret. Let

us make history together. Do you think the same problems will happen

for the World Cup? How can these two events be any different? It's the

same people, the same management set-up. Nothing will change, and it

will all be the same. Putin is gambling billions that hosting

global sporting events will restore pride to Russia. But with the Games

just days away, not a single Western leader has said they'll attend. And

most of the people we've met in Sochi aren't buying it at all.

There's little doubt that the Sochi Olympics will be full of sporting

triumphs, enjoyed by millions of people around the world. And the

Kremlin will claim the credit. But the run up to these Games reveals

something else too - the dark heart of Vladimir Putin's Russia. And when

the Olympic circus leaves town, the ordinary people of Sochi will be

left paying the price of Putin's Games.

Next week: Panorama is inside North Korea with unique access to a

western funded university designed to open the minds of the secretive

state's future elite.