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Trensalão | Furthering the Plot

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IstoÉ magazine overreaches a bit in selecting a Watergate-themed headline for this week’s issue — All the Toucan Bribery Scheme’s Men. Even so, it continues to lead the way in breaking new aspects of the São Paulo cartel case. I translate because mostly because I found myself with time on my hands.

Source: IstoÉ | Viomundo .

Last week, the investigation by the antitrust authority CADE demonstrated that the formation of cartels in the commuter railway sector is a national phenomenon. This enormous swindle, investigators concluded, was repeated in various regions and was systematically manifest in São Paulo, with bid-rigging, price-fixing and subcontracting of auction losers.

The frauds, spanning the 20 years of the PSDB government of São Paulo, exhibit some peculiarities that differentiate them from  other schemes investigated by CADE, however.  The São Paulo scheme stands out for its pioneering nature (the scheme began operating in 1998, in the middle of the Covas administration), its duration, its dimensions and the sums involved — nearly half a billion reais drained away during the reign of the Toucans

More importantly, however, the S. Paulo Metrô scandal has detected the participation of public agents linked to the PSDB. In exchange for guarantees that enabled the swindle to continue and the profits of the cartel to increase.  Significant figures of the PSDB took bribes and greased the wheels of a bribery scheme that diverted public funds into poltical campaigns.

The magazine offers no conclusive details on who received what, if anything.

Contrary to what former president Fernando Henrique Cardoso and ex-governor José Serra said on August 15, top- and second-level civil servants involved in the scandals have ties to Toucan leadership in the state.  The investigations have already shown this clearly.

Using the outworn political tactic of misdirection, Serra e FHC said the scheme did not involve state employees or benefit successive PSDB governments. This is not what the Public Ministry and CADE have discovered.

At least five authorities involved in the criminal machine,  under investigation for signing irreguar contracts or intermediating the receipt of bribes, operated on the orders of two close collaborators of José Serra and São Paulo governor Geraldo Alckmin: Secretary of Metropolitan Transport José Luiz Portella, appointed by Serra, and Jurandir Fernandes, a secretary in the Alckmin cabinet. The two closely managed and coordinate the activities of the high-ranking executives  involved in the investigation.

The group comprises technocrats Décio Tambelli — a former director of operations at the Metrô who currenty serves as a ccordinator of the Concession Oversight Commission at the Secretariat of Metropolitan Transport; José Luiz Lavorente, CPTM’s director of operations and maintenance; Ademir Venâncio, a former director of engineeing at the state-owned commuter rail company; and two ex-presidents of the Metrô and CPTM, José Jorge Fagali and Sérgio Avelleda.

Documents obtained by CADE and the MP show that these five figures, well known, card-carrying Toucans all, took advantage of their posts in state-owned companies to favor, simultaneously,  the interests of cartel members in the railway sector and the political convience of their bosses.

In exchange for benefits to themselves or to Toucan governments, they supplied privileged information, directed bidding processes or looked the other way as the public coffers were stripped of million in rigged bids leading to overpricing in the contracts signed by the Metrô. Investigations show that these Metrô and CPTM technocrats circulated freely through the Serra and Alckmin admihistrations, to one degree or another, but always in furtherance of the scheme.

Lavorente

One of the most outstanding figures in this quintet is José Luiz Lavorente, CPTM director of operations and maintenance. In a document examined by CADE, dated in 2008, Lavorente is described as the man in charge of receiving bribes from the cartel companies and distributing the money to politicians of the PSDB and allied parties.

The CPTM director is a person extremely close to Alckmin. It was the  São Paulo governor who promoted him to a directorship at the state-owned CPTM in  2003. During the Serra government (2007-2008), Lavorente left  CPTM, but continued to hold executive-level positions in the administrative structure of the government, as part of Alckmin’s quota of discretionary nominations. With the return of Alckmin to the  governorship in 2011, Lavorente resume his post at  CPTM.

Though accused of distributing bribes to politicians, Lavorente is also a defendant in a case brought by the São Paulo prosecutor (MP-SP) that alleges bid-rigging and violation of the law governing public auctions. The case is based on a contract celebrated by means of an amenment that cleared the way for the purchase of an additional 12 trains to the 30 ordered in 1995 for delivery in 2000.

Tambelli

The ex-director of the Metrô current coordinator of Concessions and Permissions Oversight at the Secretariat of Metro Transport, Décio Tambelli, is another notably active player in the São Paulo scheme. Testimony from ex-employees of Siemens to the MP-SP suggests that Tambelli was on the list of civil servants receiving bribes from companies that rigged bids in order to inflate prices.

Tambelli is very close to the Secretary of Transportation, Jurandir Fernandes. It was Fernandes who promoted him to his current position in the Toucan administration. It is Tambelli’s job, despite his status as an investigation target, to accompany and oversee the progress  of the Metrô project, which was the first public work executed by means of a public-private partnership (PPP). E-mails obtained by ISTOÉ show that in 2006,  Tambelli was already defending and intermediating the interests of the cartel members.

In the electronic message, which mentions Tambelli , Siemens executives recount the compromise reached by members of the Federal District cartel. They suggest that the accord reached in the federal capital be tied  “to the subcontracting of Siemens in Lots 1 and 2 of Line 4″ in  São Paulo. “Ramos  (an employee of Alstom) has been going around saying that Décio Tambelli of the Metrô SP, which can no longer subcontract Siemens after the  Taulois/Ben-Hur affair (in which Siemens stole personnel from  Alstom in order to earn points in the technical review and win the bid for maintenance of the Federal District subway),” said the e-mail that circulated among Siemens employees.

Scheme participants occupied strategic posits in the Alckmin and Serra governments

Another operator of the PSDB bribery distribution scheme who enjoyed the trust and confidence of  Jurandir Fernandes and Alckmin is Sérgio Avelleda. He was named CEO of the Metrô in  2011, but hiis mandate lasted  less than 18 months. Avelleda was dismissed after a court accepted his indictment for administrative misconduct. He was suspected of collaborating with a fraud n the competition for Line 5 of the Metrô when he failed to suspend the contracts and additives of a process suspected of bid-rigging by a cartel.

“His remaining in that post at that moment would only have served to demonstate the collusion of the judiciary wth illegal practices by administrators with no respect for law, morality, or  other principals that should orient the activity of a civil servfant,” said judge Simone Gomes Casorretti, as she ordered his dismissal. After leaving his post, Avelleda obtaineed an injunction that would return him to his former post, and then tendered his resignation. Today he is a consultant in the area of rail transport, serving clients interested in doing business with the state government.

Venâncio

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MP-SP investigation examines bribery payments to Metrô public servants … and to Eletropaulo …

According to the investigations, another figure in a strategic role was Ademir Venâncio, former CEO of CPTM. While working at the state-owned firm, Venâncio cultivated the habit of meeting with executives from the cartel  companies at local nightspots in order to pass on internal information and bargain over how the companies would participate in contracts with public companies. After leaving CPTM, in the middle of the last decade, he decided to invest in a new career as an impresario in the engineering sector. He never wandered far from the PSDB establishment, however.

Focco Engenharia, one of the companies in which Venâncio holds a stake … [negotiated] 17 consulting contracts  worth R$ 131 million with São Paulo state-owned firms in return for providing oversight of PPPs and the progress of contracts with the Alckmin government.

Another company in Venâncio’s name, which also maintains ties to the state government, is the Supervisor EPBF consortium, which puzzled investigators due to the fact that its stated capital is only R$ 0.01. The MP suspects that the hiring of Venâncio’s firms by the Toucan administration is nothing more than a smoke screen to guarantee that authorities look the other way in relation to services rendered by companies in the cartel. These are the same companies which Venâncio maintained relations when he was a civil servant.

The importance of the metro transport secretariat and the state-owned firms subordinated to it — Metrô and CPTM — to the bribery scheme is obvious when viewed according to the logic of changes in their chief executives  in the transition between the  Serra and Alckmin governments.

Musical Chairs

Taking over as governor in 2007, José Serra made a point of removing Alckmin allies and replacing them with persons from his own political faction. This process would be inverted with the return of Alckmin in  2011. Despite this game of musical chairs, all the members of the scheme remained in important posts during both administrations. It was José Luiz Portella and Jurandir Fernandes who managed these changes and exchanges in such a way as to ensure the continuity of the cartel.

A powerful figure in the Geraldo Alckmin camp,  Fernandes began his political life in the Workers Party (PT) in Campinas, in inland São Paulo. He rose to the rank of municipal secretary of transportation when the PT ran the city, but was expelled by the party in 1993 and entered the PSDB. Thanks to his ready access to the inner circles of the Cardoso government, Jurandir was made director of Denatran (the National Transportation Deptartment) in 2000. The following year, he approached governor Alckmin  and was named for the first time as state secretary of Metropolitan Transport. During this initial period in command of the secretariat, both the CPTM and the Metrô signed overbilled contracts with cartel members. When Serra took over as governor in 2007, Jurandir was named president of Emplasa, responsible for formulating public policy for the São Paulo metro sector. With the return of Alckmin in 2011, Jurandir Fernandes also returned to his former post, a post coveted by many.

The São Paulo Five

The São Paulo Five

In recent times, the transportation secretary has worked hard to downplay his connections  with persons investigated in the case of the bribery scheme. Photos obtained by ISTOÉ, however, show Jurandir Fernandes in the company of Lavorente and cartel lobbyists during a meeting at the  MGE Transporte plant in Hortolândia, in inland São Paulo. One of the figures photographed with Fernandes was Arthur Teixeira, who, according to the investigation, is part of the money-laundering operation of the bribery scheeme. Teixeira, who attended the ceremony standing next to Secretary Fernandes, owns a company that has never produced so much as a single screw, but is responsible for the opening of offshore companies in Uruguay used by the scheme.

Amother figure photographed alongside Fernandes is Ronaldo Moriyama, a former director of  MGE, a company that intermediated the payment of “commissions” to officials and politicians. Moriyama is well known in the railway sector for his aggressive approach to bribing Metrô and CPTM directors, according to statements collected by the MP-SP.

Here is where the names of bribe recipients would be timely and appropriate.

Jurandir and Portella played the same political role in various Toucan administrations

During the Serra government, it was  José Luiz Portella, secretary of Metropolitan Transport, who played a political role identical to that of   Jurandir Fernandes during the  Alckmin years. A Serra supporter from the get go, Portella entered public service as a secretary in the Covas cabinet. Portelinha, as party members call him, is cited in a series of e-mails among Siemens executives.  In one of these, Portella, as well as Serra, reportedly suggested to the German conglomerate Siemens that it associate itself with the Spanish CAF in a bid for the purchase of 40 new trains.

The encounter reportedly took place during an international congress on railways in 2008,, in Amsterdam. The two men were afraid that legal disputes among the companies would delay completion of the project. Though the deal never came to pass, it is remarkable that the secretary would suggest a practice that would result in losses to the public treasury — as had already occurred  more often than not in contracts won by cartel members,

The man who signed Metrô contracts when Portella ran the place was José Jorge Fagali, chief-executive of the agency at the time. A former accounting manager at the compy, he was forced to live with pointed questions abou the fact that his brother was accused of having received nearly  US$ 10 million from the French firm Alstom. The company, currently investigated, was one of the principal winners of public auctions.