Olympic Security Firm Under Fire Days Before Games

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How is this for a corporate calamity? You land a huge and prestigious contract to guard the Olympics, then you fail to come up with the goods. That's what happened with the security giant G4S and it's all been revealed just 10 days before the Olympics' opening ceremony in London.

NPR's Philip Reeves has this story on what's become a British national scandal.

PHILIP REEVES, BYLINE: Let's wind the clock back, just a few weeks. Back then, G4S was doing just fine. Security is a growth industry. Britain's G4S is the world's largest security company, operating in half the world's nations with more than 650,000 employees. That's more than the number on active duty with the U.S. army.

Investors liked G4S. So did governments. That's why it has some very big contracts. In Britain, G4S staff run prisons and training centers for unemployed kids, and build police stations. The company, just a short while ago, was upbeat and feisty - much like its corporate song.

(SOUNDBITE OF G4S CORPORATE SONG)

UNIDENTIFIED MAN: (Singing) G4S securing your world...

REEVES: No one in the G4S boardroom is singing anymore. The chief executive, Nick Buckles, today had the air of a man trapped in a nightmare as he appeared before a panel of British parliamentarians. Parliament's Home Affairs Committee had summoned him to explain why his company has messed up over the Olympics.

G4S has a contract worth $450 million to provide 10,400 guards. Just days before the games begin the company admitted it was short by several thousand. Committee member David Winnick didn't pull any punches.

DAVID WINNICK: Mr. Buckles, it's a humiliating shambles, isn't it?

NICK BUCKLES: It's not where we'd want to be. That is certain.

WINNICK: It's a humiliating shambles for the company, yes or no?

BUCKLES: I cannot disagree with you.

REEVES: Buckles was apologetic and said he wished G4S hadn't taken the contract. He said he only found out there was a problem two weeks ago. Parliamentarian James Clappison asked him what that discovery felt like.

BUCKLES: Complete and utter shock, completely out of the blue, had no idea that we were going to expect operational difficulties on this contract

JAMES CLAPPISON: Where were you when you found this out?

BUCKLES: I was on holiday, in the U.S.

CLAPPISON: When did you return from the holiday?

BUCKLES: Same day.

CLAPPISON: Same day.

REEVES: To make up the shortfall in guards, the British Defense Ministry is deploying 3,500 extra troops. G4S is taking a pounding over that in Britain for spoiling the vacations of soldiers, some of whom have recently served in Afghanistan.

But its nightmare keeps getting worse. Now there are accounts of some G4S staff just not showing up to guard Olympic venues. They've had to be replaced by police.

Buckles says G4S will lose up to $75 million on the Olympic contract. Still, he says, it will not be waiving its management fee, worth some $88 million. Committee chair, Keith Vaz, said he was astonished by that and described Buckles' performance in blunt language.

KEITH VAZ: I have to say, I asked the members of the committee to sum up your performance and the performance of your company so far. And they've used these terms: unacceptable, incompetent and amateurish.

REEVES: Incompetent and amateurish are not words anyone wants to hear about the people providing security to the world's most prestigious sporting event. Olympic officials are in a damage control mode.

Sebastian Coe, former Olympic gold medallist and chair of Britain's Olympics organizing body, insists the games will be safe and that one way or another there will be enough guards.

SEBASTIAN COE: We should put this into proportion. You know, this has not, nor will it impact on the safety or security of the games. That, of course, is our number - you know, our number one objective.

REEVES: Philip Reeves, NPR News, London. Transcript provided by NPR, Copyright NPR.