The bus to Krasnaya Polyana wound through a craggy gorge and up into the clouds. Construction crews worked far below on a new rail line. When the clouds fell away, I could see the snowcapped peaks of the mountains looming far above. At the bobsled track in the town, Russian skeleton athletes trained on a run that produces speeds of up to 84 miles per hour. Farther up the valley, at the Laura ski resort, owned by Gazprom, several dozen military officers in camouflage fatigues emerged from a conference and filtered through the pro shop. Looking across the Mzymta River, I could see Potanin’s sprawling Rosa Khutor resort; should there be no snow at all during the Olympics, there are storage facilities at Rosa Khutor for 700,000 cubic meters of it.

I was unable to visit the ski jump, whose history has been troubled. A year ago, Vladimir Putin came to Sochi and inspected several projects that were running behind schedule. The ski jump came under particular scrutiny. Engineers had had to shift the jump’s placement several times, after it was discovered that initial sites were geologically unstable. Then a new road had to be built up into the mountains, at a cost of $200 million. Akhmed Bilalov, a vice president of the Russian Olympic Committee, was in charge of all this. Bilalov was also the president of Northern Caucasus Resorts, a state-owned company responsible for building tourist facilities in the region. Putin put on a show for the cameras, asking his assistants for the amount of the original budget: $40 million. When Putin’s lieutenants then informed him that the ski jump’s cost had reached $265 million, Putin arched his eyebrows. “Nice work,” he said. The following day, Bilalov was relieved of his duties, and he apparently fled the country. Northern Caucasus Resorts is now controlled by Sberbank, a state-owned financial institution. Sberbank’s chairman is German Gref, who, needless to say, had worked with Putin in the St. Petersburg city administration.

Demotions, Bilalov-style, are common in Russia, where the whimsy of power may undercut anyone’s standing, anytime. On the menu at the Platan Yuzhny Hotel, in Krasnodar, the administrative capital of the region that includes Sochi, there is an item called “Disgraced Oligarch Salad” (grilled scallops, with mixed lettuce and extra-virgin olive oil).

The Sochi Internal Affairs department has conducted numerous investigations into Olympstroy and filed criminal complaints, alleging that the Olympic agency and its contractors operated a kickback scheme related to the construction of the Olympic stadium, the main hockey rink, and various other properties. The total in stolen funds, according to prosecutors, approaches $800 million. Not a single case related to Sochi development has made its way into court. There is speculation that, when the Olympics are over, the state will launch a series of court cases designed to transfer the ownership of several large construction companies to people close to the Kremlin. This type of state-sponsored theft is routine in Russia.

Sochi had bid for the Olympics twice before, in 1998 and 2002. These were not serious efforts, and they foundered on the fundamental challenge of creating a suitable transport link between the coastline and the mountains. There was an existing road, but it could not accommodate Olympic traffic. Paul Mathews remembers looking over some of the early bid plans. “ They had a gondola running for 50 miles across the sky,” he told me. “It looked like a child had drawn them.”

This time, taking the problem seriously, Russian officials devised a combined rail line and highway link to connect Adler and Krasnaya Polyana. It is a complex undertaking, requiring 45 bridges and 12 tunnels, along challenging mountain and river terrain. This would become the largest construction contract in Russian history—initially estimated at $2.85 billion and now pegged at $9.4 billion—a lot of money for a 30-mile road that in all likelihood will rarely be used once the Olympics are over. Naturally, Russian Railways, the state railroad monopoly, would lead the project. The president of Russian Railways, Vladimir Yakunin, had once been the first secretary of the Soviet Mission to the U.N. In 1991 he entered private business in St. Petersburg, where he bought a dacha next door to one owned by Putin, beginning a long association. Yakunin returned to government only when public life had proved itself to be a reliable path to wealth. There has been speculation that he will succeed Putin as Russian president.