The Charlie Waterfall affair — so dubbed by the New York Times — proceeds in fits and starts, as the history of government contracts with a major government contractor is subjected to stricter application of sunshine rules.
Item, on the same topic:
Technical experts working for the parliamentary commission on Carlinhos Cachoeira [– «Charlie Waterfall», the Goiás-based numbers racketeer and Abramoffian lobbyist –] have just finished a complete survey of all contracts signed by the São Paulo state and municipal governments and Delta, linked to the criminal organization headed by the numbers racketeer. The scheme totals R$ 1.2 billion.
The company also booked R$ 885 million in federal contracts in 2011 and R$ 4 billion in the last 12 years.
The results of the survey reveal the relationship of PSDB governments with the parent organization of the Cachoeira gang and cast suspicion on seven-figure contracts awared to civil engineering firm Delta, negotiated by the Kassab municipal government and allegedly influenced by the former DEM senator for Goias, Demóstenes Torres.
Delta is the largest beneficiary of federal building contracts for the PAC — economic development acceleration program — and the Olympics and World Cup events.
It’s rumored that it is discreetly liquidating its entire portfolio of government contracts and preparing for the worst. It abandoned Cup-related urban transportation improvements in Fortaleza in May.
The company also reportedly hired «big monthly allowance» defendant José Dirceu, a founding figure of the ruling PT, as a consultant and lobbyist. This needs checking.
This political payola scandal — or at least that portion of the scheme involving the PT — is said to have emerged as a counteroffensive by Cachoeira in response to the 2004 CPI of Bingos — a parliamentary commission of inquiry into the organizations behind illegal electronic one-armed bandit parlors, once a common sight all over the city, including the city’s Avenue of the Americas, the Av. Paulista.
Who’s Who. Delta received the contract for the urban renewal of the Paraisópolis shantytown under the Kassab government. The indefatigable Paulo Preto puts in an appearance as well.
A federal police telephone wiretap conducted during Operation Monte Carlo captured a conversation between Cachoeira and Cláudio Abreu, Delta’s regional director for the Brazilian Center-West, in which the two men discuss Delta’s contracts with the São Paulo city government.
Dated January 31, 2012, the wiretap captures the numbers boss asking Abreu about a conversation between Delta’s former CEO, Fernando Cavendish and Mayor Kassab about an as yet unidentified contract. The Delta director makes a revelation: as a favor to Senator Torres, São Paulo’s mayor supposedly tripled the value of said contract. The converation runs as follows, transcribed from an audio file to which CartaCapital had access:
Carlinhos Cachoeira: One other thing, Cláudio, Did you speak to Fernando (Cavendish) about that thing with Kassab?
Cláudio Abreu: … I am going to meet with him later, I am going over there to give him an answer. But tell me, what’s the deal over there? The contract, right? He did the thing, didn’t he? He did it for the Professor (Demóstenes Torres), right?
Cachoeira: He (Kassab) said he tripled the contract for him (Demóstenes).
Former Senator Torres of the DEM-PFL — Kassab’s party at the time — exchanged nearly 300 telephone calls with Charlie Waterfall over a six-month period, recorded by court-sanctioned wiretaps. He claims that he did not know his close friend — he received a top of the line refrigerator from Waterfall as a wedding gift and had private jet travel paid for by his friend — was involved in illegal gambling.
A survey conducted by the CPI indicates that São Paulo city hall signed three contracts with Delta between 2004 and 2012, worth a total of 307.6 million. A contract with the Companhia de Limpeza Urbana (Comlurb) was worth R$ 93.7 million. A contract for the urban renewal of the Paraisópolis shantytown, signed with the city housing authority, was worth R$ 15.4 million.
A contract with São Paulo Transporte S.A. (SPTrans) — public transportation — was worth R$ 12.2 million.
Given the dates of the police surveillance, it is not possible to deduce exactly which of the contracts was allegedly tripled, since all three were continued into 2012.
City hall spokesman Emerson Figueiredo said that Kassab “is unaware of this dialogue and its supposed protagonists and considers its content groundless.”
Relations between Delta and the São Paulo state government involve larger sums, totaling R$ 943 million, in today’s reais. The contracts were signed under state governors José Serra (R$ 765 million) and Geraldo Alckmin (R$ 178 million) between 2002 and 2012. The deals were signed at the instance of five state-owned firms: Dersa and DER (roads and highways), Daee (water and power), Sabesp (sanitation) and Unicamp (state university).
The most significant project for which the state hired Delta was as part of the New Tiete Consortium, which undertook to widen the Tiete beltway for R$ 150 million. The contract ran from June 22, 2009 to Abril 10, 2002.
Based on an analysis of the transfer of consortium funds to Delta’s accounts, the CPI’s technicians concluded that the companies involved had not implemented controls over the allocation of credits and debits. In this way, one firm could subcontract another and pay it the entire amount of the service rendered. Using this subterfuge, and based on overbilling or falsified receipts of services rendered, the difference between the stated and the real amount is returned to the subcontractor with absolutely no oversight.
Delta may have mounted a money laundering scheme using bureaucratic subterfuges. Further, the experts say, Delta’s subcontractors have contracts with one another … and transfer funds to one another without accounting for the sums transferred.
The congressional inquiry into São Paulo public works contracts coincides with the results of an earlier survey by Conceição Lemes, of Viomundo, based on data from the Transparência São Paulo Web log, which specializes in the analyis of public spending.
Based on this information, it was possible to detect that the contract with Dersa with respect to the Tiete project (R$ 415 million) was signed by Paulo Vieira de Souza, aka «Paulo Preto», Dersa’s director of engineering until April 2010, and by Dersa CEO and superintendent Delson Amador
With intimate ties to the PSDB, «Black Paulo» was reputedly a fundraiser for party election campaigns and at one point was accused of making off with R$ 4 million supposedly earmarked for the Serra for President campaign. Black Peter and Amador also figure in the federal police Operation Sandcastle in which executives of public works contractor Camargo Corrêa were accused of mounting a bribery scheme in public works projects.
In 1997, when Andrea Matarazzo of the PSDB presided over the company, Delson Amador was named CEO of the state electricity company (Cesp),which was later privatized. He was responsible for auditing the projects involving Camargo Corrêa, such as the Porto Primavera generation plant and the Ponte Pauliceia, a bridge over the Paraná River lilnking Pauliceia, São Paulo to Brasilândia, Mato Grosso do Sul. Amador was Matarazzo’s chief of staff when Matarazzo headed the Sé subprefecture in metro São Paulo.
A certificate issued by the São Paulo Junta Comercial — corporations registry — indicates that Heraldo Puccini Neto, Delta’s regional director for São Paulo and the Brazilian South, is also the legal representative of the Nova Tietê consortium.
Federal police wiretaps show that Puccini is one of the closest confidants of Carlinhos Cachoeira. Documents from federal police Operation Monte Carlo point to to Puccini as one of the persons used by the scheme to prepare bids for public works projects.
- The apparent uptick in corruption cases is most probably an artifact of more intense investigation and prosecution over the past decade.
- The zombie ghost of the «payola of the PT» is having little political impact, just as foreign observers like the NY Times predicted; pro-PT journalists are availing themselves successfully a non-fallacious use of the «tu quoque» fallacy, known locally as the «ladrão chamando ladrão de ladrão» — a thief calling a thief a thief. «State public works use the same crooked contractors as federal public works and therefore cannot be criticized».
- The net result is that this process is as healthy for Brazil as it is for foreign investors: recovering lost tax revenues and building stronger regulators mitigates the risco-Brasil — the risk factors inherent to in-country investments.
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