• July 2013
    M T W T F S S
    « Jun   Aug »
  • Pages

  • Marginalia

  • Accumulations

  • Advertisements

Toucans | “20 Years of Fraudulent Contracts”?


Source: Jornal do Brasil | ISTOÉ Independente — the newsweekly makes an explicit connection between corruption schemes and the PSDB-run state government.

This is a rare occurrence: news organizations generally labor mightily to keep the spotlight on corruption scandals affecting the federal situation.

In this week’s edition, ISTOÉ magazine reveals a grand scheme to divert money from São Paulo’s subway construction project and  commuter railway, organized during PSDB-run state  governments. Lobbyists and public officials with ties to the PSDB operated through shell companies, the magazine said.

“When it signed an agreement with CADE, the federal antitrust regulator, the German multinational Siemens shed light on a huge bribery scheme that lasted nearly 20 years under PSDB governments in São Paulo. The scheme diverted money from subway and commuter rail projects. In exchange for civil and criminal immunity, the community revealed how it and other companies formed cartels in the pursuit of public contracts in the area of rail transportation.

In order to obtain overpriced contracts for maintenance, acquisition of trains, and construction of railways and  subways during the Toucan goverments of São Paulo — the CEO of the German group confessed it — the participants manipulated the voting process and corrupted high ranking politicians and officials with ties to the PSDB,” he told ISTOÉ.

The problem is that this criminal conduct, which continued without restrictions during the state governments of Mario Covas, José Serra and Geraldo Alckmin, has already been subject to investigation both at home and abroad, since 2008, and no Toucan government has taken steps to put an end to this conduct. On the contrary: Since the first investigations were undertaken in São Paulo and Europe, no Toucan government has taken steps to remedy the situation. The companies involved continue to prevail in public tenders and sign contracts with the PSDB government of  São Paulo.

Again according to ISTOÉ, a Swiss  prosecutor identified payments to persons related to the PSDB inside the French company Alstom, a company that competes with Siemens in the areas of machinery and energy — in exchange for contracts obtained. The state prosecutor of São Paulo along has 15 open cases on this subject.

ISTOÉ also says that the criminal network has connections in fiscal paradises and that it has drained at least US$ 50 million from the public treasury to supply the “bribery “pipeline” of the PSDB, according to investigations undertaken in Europe.

The evidence offered by Siemens and its executives to CADE is scathing. Among the documents handed over is a spectacular interview with a Siemens employee in Germany in June 2008.  ISTOÉ had access to seven pages of the document.

The ex-employee volunteered details of how money was diverted from the public coffers and supplies names of authorities and business figures who partricipated in the swindle. The source, whose name is not revealed, say that after gaining a public tender, Siemens would subcontract a company to simulate the provision of the services, through which the bribe would be processed.

That was the case in June 2002, during the Geraldo Alckmin government, when the German company won the right to provide prevetive maintenance on Series 3000 trains of the communter rail service, the CPTM. At the time, Siemens subcontracted the job to MGE Transportes.

siemens table

According to a Siemens pricing table obtained by ISTOÉ, the German company paid MGE R$ 2.8 million up until June 2006. Of this total, at least R$ 2.1 million  were taken out as cash withdrawals by MGE employees and distributed to politicians and executives of the CPTM, according to the Siemens confession. To leave no trace of the transactions, the case withdrawals were “smurfed” — taken out in quantities less than R$ 10,000.

“MGE is frequently used by  Siemens to pay bribes. In this case, as usual, MGE was put in charge in paying a bribe of 5% to executives of the CPTM,” the source told the São Paulo prosecutor and the Siemens ombudsman in German. Also involved, according to Siemens, was MGE CEO Ronaldo Moriyama, who was “known in the highway construction world for his agressive treatment of his subordinates in the Metro and CPTM” …

The model adopted by Siemens through MGE Transportes was repeated by another firm,  the Japanese Mitsui, according to a  Siemens employee.  Sought for comment by  ISTOÉ, none of the participants in the scheme were located. MGE said it will not comment on investigations, in which which it collaborating with authorities.