Brazil’s federal police "raided the offices of the consortium building the second-largest Olympics complex in Rio de Janeiro, clouding the run-up to the mega-event whose chief advocate will also face investigation in a separate case," according to David Biller of BLOOMBERG.
Police said that authorities "executed a search-and-seizure warrant at the headquarters of the Deodoro Sports Complex’s northern section, which was built by Queiroz Galvao SA and OAS SA, after investigations signaled fraud." Deodoro -- the first Olympic venue facing fraud allegations -- "will host events including slalom canoe, rugby, equestrian competitions and the pentathlon." The Comptroller General’s Office "found over-billing, falsification of receipts, and the hiring of a shell company to simulate transport and disposal of material required for works," according to a statement from Brazil’s Ministry of Transparency, Oversight and Control. The consortium of the two builders said that "higher costs were justified" (BLOOMBERG, 6/7). REUTERS' Brad Brooks reported the police "also raided the offices of two companies they did not name, that worked with the consortium."
The raid "marked an escalation of an investigation into suspected corruption involving venues and legacy projects for the Olympics due to start on Aug. 5, the first Games to be held in South America."
Previously, federal prosecutors said that they "found evidence of fraud in earth-moving services at the Deodoro venue."
Queiroz Galvao said in an emailed statement it "was fully cooperating with authorities." It said that the increased cost for earth-moving at the site "was because the amount of material transported exceeded the contract's original estimates."
The Rio mayor's office said in an emailed statement that "it was following the investigation at Deodoro and that all payments to the consortium remained suspended until the probe is completed" (REUTERS, 6/7).
