Brazil finds itself in yet another political bribery scandal, this time one that could have grave consequences for projects ranging from 2016 Summer Olympics and World Cup 2014 development to the massive public infrastructure elements of the government's Growth Acceleration Program (PAC).
In February, Carlinhos Cachoeira (translated as Charlie Waterfall) was arrested on charges of illegal gambling, money laundering, smuggling and corruption. In Brazil, such charges are not uncommon among white collar criminals, but Charlie Waterfall has unusually high-placed friends, including politicians within President Dilma Rouseff's ruling political party PT (Workers Party) and its main partner, the PMDB (Democratic Movement Party). Cachoeira is allegedly a kingpin behind under-the-table slot machine and bingo racketeering and "jogo do bichos," a longstanding Brazilian betting game that is illegal, but so widely-played that its existence precipitates a "look the other way" attitude from officials and public alike. Since the beginning of the year, an investigative sting called Operation Monte Carlo routed Cachoeira's activities and plunged its trail of paid-off senators, ministers and other political flunkies into a widening morass. A parliamentary investigation (CPMI) looking into the relationships between Cachoeira and government figures has begun to sniff out connections that lead directly to the highest office.
Yesterday, Fernando Cavendish and Carlos Pacheco, the owner and director respectively of Delta Construcoes, one of Brazil's largest construction companies with an estimated 195 public works contracts in 23 states, resigned their duties as federal police jailed a former company director, Claudio Abreu, and detained a rash of other company executives (as well as politicians and civil servants in Goias, Anapolis and the capital, Brasilia). Delta, whose known links include members of PT and the PMDB governor of Rio de Janeiro, Sergio Cabral, is suspected of being deeply enmeshed in Cachoeira's graft schemes. According to Brazilian newsweekly Veja, Delta's federal government business rose by an extraordinary 1635% in the last three years as it was handed such prized contracts as the refurbishment of Rio's Maracana Stadium, the TransCarioca rapid transit bus line and Petrobras' Comperj refinery complex. While officials have assured the smooth transition of Delta's responsibilities as doubters worry about on-time completion of World Cup and Olympic infrastructure, the reality is that the work, already far behind, won't be helped by having such massive swaths of public and private sector individuals embroiled in the scandal.
While Lula and President Rousseff met yesterday to formulate the official PT stance on the shenanigans, they must surely be formulating a response to the lurking problem of the former national director of infrastructure and transport, Luiz Antonio Pagot, who was forced out last year under suspicion of bribery. In an interview last week, Pagot insisted that he was made a fall guy to protect Charlie Waterfall and Delta's owner Cavendish. Surely more muck will rise to the surface in the next few weeks. Stay tuned...
