Olympics 2016

LAUSANNE, Switzerland (CBS) ― Change of plans: You, the taxpayer, will now assume the financial risk in bringing the 2016 Olympic Games to Chicago. Mayor Daley dropped that bombshell during his pitch to the Olympic Committee in Switzerland on Wednesday. CBS 2 Chief Correspondent Jay Levine explains what was behind the mayor's change of heart.

It was politics, pure and simple. Olympic politics. Growing resentment about Chicago trying to escape the same financial responsibility contract everyone else signed.

To the sound of "Sweet Home Chicago" the 2016 delegation celebrated in a lakeside Swiss Garden, in what was by most accounts, a successful presentation to Olympic voters.

Members of the Chicago 2016 Olympic bid team have wrapped up their presentation in Switzerland, along with the other three cities that are competing for the games.

Mayor Richard M. Daley, 2016 Bid Chairman Pat Ryan, and four other bid leaders visited the ornate Olympic Museum in Lausanne, to make their pitch in a closed-door session with 93 of the International Olympic Company's 107 members.

Meanwhile, Mayor Daley has agreed to sign a public financing guarantee for the Olympics. The insistence on private funding had been considered one of the major drawbacks for the Chicago bid.

It's an apparent about-face by the mayor, who's on record as saying no public money will be used for the 2016 Games. But something he said Wednesday could – though it's not likely – leave Chicagoans on the hook for billions of dollars.

Chicago 2016 members were prepared to face scrutiny over the city's plan to rely largely on private financing, but the IOC says when it comes time to pick a host city, economics will take a back seat to creating a legacy for the athletes.

Chicago's presentation to the IOC included a promise normally required of all bidders, a promise to assume financial total responsibility for the games, and one that other countries federal governments readily made. In the past Daley had been very clear.

Three years ago in Beijing, Daley said, "At no time will taxpayer money be used, that is the key."

And repeated at City Hall: "The Olympics must not be a burden to taxpayers," Daley said.

And at an Olympic fundraiser: "There'll be no government money, local government taxpayers' money with regard to the Olympics," Daley said.

But Wednesday in Switzerland, threatened with losing critical votes, Daley did what he pledged not to do: put taxpayers at risk.

Chicago's plan for the games forecast a $500 million profit on games budgeted for $3.8 billion.

But the IOC wants guarantees against cost overruns that are legendary in Olympic history.

City Council had agreed to guarantee the first $500 million. The state and private insurers even more, nearly $2 billion in all.

"We're very comfortable that we have a unique new model and I believe that as they think about it, as they think about it they'll see it's a strong solution, a creative solution," Ryan said.

The mayor seems to think that'll be enough to satisfy the blanket guarantee he apparently agreed to sign.

"To make a different arrangement of the public and private, not-for-profit, together that is a much better system and that's where the rest of the world is going to go in the future," Daley said.

The mayor's former chief of staff, Lori Healey, now a 2016 official, called the risk minimal. The games here would have to run $2.5 billion in the red before taxpayers had to kick in any more than they've already promised. And no Olympic games held in the United States ever lost a dime.

"This new development," Healey said, "will ensure that the mayor of Chicago will be able to sign the host city agreement."

"For the mayor to do this on his own, unilaterally, without the input and approval of City Council is a very dangerous precedent," Ald. Joe Moore said.

Ald. Moore will call for hearings on the issue that's already raising eyebrows among voters.

"I think it has to be put to the people first," one man said.

"It could be a concern, but it could be a good thing as well," another man said.

"As people of the city of Chicago, we want to know how he can be so confident," one woman said.

Chicago 2016 claims there is a built in $2.5 billion dollar, including a $400 million projected surplus, $1 billion in insurance, $500 million from the city and $250 million from the state.

"We talked about a new model to mitigate financial risk and to assure that the Games are delivered," said 2016 CEO Pat Ryan.

The risk to taxpayers, according to the mayor? Extremely remote.

We'll be the judge of that.

"We were told that we didn't have anything to worry about with respect to the parking meters, now we find out that perhaps the city came up short by as much as a billion dollars in that deal," Ald. Moore said. "We're not gonna make the same mistake again."

In other words, fool me once, shame on you. Fool me twice, shame on me. The mayor got a warm welcome in Switzerland, but there are some tough questions waiting for him back home.

Chicago Gets High Marks
The final decision about whether the games will go to Chicago, Tokyo, Rio de Janeiro or Madrid, will not come until Oct. 2. But members of the Chicago delegation know all too well the importance of making a good impression at every opportunity.

In the high-pressure environment that was the Olympic Museum auditorium, each city's bid team was given 45 minutes to make its case, followed by 45 minutes of questions.

For Chicago, the question-and-answer period stretched 15 minutes beyond the allotted slot.

"There were lots of good questions, very healthy dialogue," Ryan said. "We would have been worried if there weren't a lot of questions."

The bid team showed a video featuring Valerie Jarrett, a senior adviser to President Barack Obama, in which she reiterated the chief executive's support for the bid. She highlighted Tuesday's announcement that Obama is forming a White House Office of Olympic, Paralympic and Youth Sport.

Bid officials hope that Obama will travel to Copenhagen for the IOC vote.

Jarrett's appearance "is reflecting the president's commitment," Ryan said. "I thought she expressed the president's thoughts extremely well."

Asked why Obama himself did not appear in Wednesday's video, Chicago venues and operations director Doug Arnot said the IOC had asked the cities not to use "celebrities and dignitaries" in the presentations.

"To be a good partner you have to follow instructions, so we did so," he said.

Chicago delegation member Scherr told CBS 2 that the IOC appears to be considering Chicago's bid very seriously.

"They demonstrated a very broad understanding and knowledge of our bid. They obviously read the bid book," Scherr said. "The questions were broad, and focused on very many of the technical aspects – everything from transportation, through to the (Olympic) Village, to the environmental plans we have, so they were very thorough with their questions, and very professional."

After Chicago's presentation the IOC heard from the Tokyo delegation, then Rio, and finally Madrid. Despite the "celebrities and dignitaries" rule, Tokyo and Madrid showed videos of the Japanese and Spanish prime ministers and Rio from screening a message from the Brazilian president.

For the Rio presentation, Brazilian central bank president Henrique Meirelles gave assurances of the country's financial stability.

"Brazil is expected to come out of this crisis growing, in a sustainable way," he said. "Our investments are coming back to Brazil. All of that provides assurance that Brazil is in a position to entertain this (hosting Olympics) and take advantage of the games economically."

Rio officials showed a world map marking all the places where the Olympics have been held -- with a big blank space for South America. They also stressed that Brazil was capable of hosting the 2014 World Cup and 2016 Olympics back to back.

Tokyo, which staged the Olympics in 1964, emphasized the bid has already secured $4 billion. Tokyo showed a video featuring Prime Minister Taro Aso, who competed in shooting at the 1976 Olympics.

While it's too soon to draw any conclusions, at least one of the deciding committee members gave the Chicago team high marks right after their presentation.

"She came up and gave the video, and gave a very good endorsement of White House interest and concern," said Kevan Gosper, an IOC member from Australia. "I just thought, as I said, it was very professional, very complete and it will be interesting to see the other three."

Mario Pescante, a senior Italian member on the IOC executive board, said the Chicago presentation was a step above previous U.S. bids.

"I have seen lots of presentations by American cities over the years," he said. "This time it was different. They were more accessible and low-profile. It was important to stress the sports issues. In the past, it was more Hollywood style."

While Chicago has long been viewed as a favorite, Ryan downplayed any front-runner status.

"We don't believe it is ours to lose," he said. "We will work hard, assume nothing and stay humble."

It's the first time the IOC has arranged such a forum for bid cities. With IOC delegates barred from visiting bid cities since the Salt Lake City scandal, this gave bid teams a chance to explain their plans directly to the voters and answer their questions.

Anti-Olympic Group Also In Switzerland
Meanwhile, another group in Switzerland hopes the Olympics don't come to Chicago. Members of the group No Games Chicago paid their own way to go to Switzerland and voice their opinions.

Three members of the group set up a stand outside the museum and distributed documents opposing the bid.

They hoped to give each IOC member a 160-page document called "The Book of Evidence." It details their reasons for opposing the games.

"One, we're broke. Two, we are incompetent and corrupt. Three, our infrastructure is falling to pieces, and four, the people of Chicago do not support this project," an organizer said.

The group is also hoping to meet with the head of the IOC, but so far, their requests have been denied.

The Olympic candidate cities' presentations will continue on Thursday, when representatives will show models and videos.

CBS 2 Chief Correspondent Jay Levine and Susan Carlson and the Associated Press contributed to this report.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

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