In the annals of contemporary Brazilian bribery scandals, probably none are more painful than the saga of the public works contractor Delta and its ties to organized crime boss Carlinhos Cachoeira — Charlie Waterfall, whose principal business is the murky world of smuggling, numbers racketeering, and “nickel-hunter” gambling machines.
One of Brazil’s largest contractors, Delta had been a star player in the PAC — the federal growth acceleration program — and was afforded the honor of joining the consortium to rebuild the Maracanã Stadium in Rio de Janeiro.
Now, it would be difficult for it to obtain a bicycle-powered newspaper route.
Delta has since voluntarily withdrawn from Maracanã and most other projects.
A congressional investigation is underway — wrapping up early, actually, after company officials and other parties took the local equivalent of the Fifth — but federal police say they have ample evidence of wrongdoing — including the involvement of journalists in character assassinations of Mr. Waterfall’s enemies..
Delta executives appeared on court-ordered wiretaps discussing how to cheat federal contract bidding procedures and infiltrate regulatory agencies, among other things.
And so the rise and fall of Delta turns out to be a textbook case of moral hazard.
Delta intends to pay its non-financial creditors with equipment. Its plan is to reduce its inventory of idle equipment by reducing the number of projects contracted for since January 2012 by 50%. Banks and financial institutions will receive payment starting in June 2014, payable in 72 monthly installments and corrected by CDI+1%, according to a recovery plan filed yesterday in a Rio de Janeiro court. The creditors assembly is scheduled for December 7. Bradesco is the company’s largest creditor. (more…)
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