Source: Terra Brasil
- Topic: Auditors from Kassab administration arrested for defrauding the city of an estimated R$ 200 million
There is some initial confusion as other news services speak of R$ 500 million.
Four civil servants of the São Paulo city government were arrested this morning during a joint action by the state Public Ministry (PM) and the Comptroller-General of the Municipality. Among those detained were persons with ties to the Undersecretary of Revenue during the administration of Gilberto Kassab (PSD): an undersecretary, two former directors, and a fiscal examiner.
The MP-SP says that the four were members of an enormous corruption scheme that caused estimated damages to the public coffers in the last three months alone. The four are all being investigated for crimes of corruption, money laundering, advocating in the private interest of self or others, and criminal conspiracy.
Investigations indicate that the four auditors set up a grand corruption scheme involving the Tax on Services of Any Nature (ISS) paid by real-estate developers.
MP did not release the names of the suspects, but said that it had arrested R.B.R., former Undersecretary of Municipal Revenue (fired from his post on December 19, 2002); E.H.B., a former director of the Department of Collections (relieved of his post on January 21 of this year); C.d.L.L.A., ex-director of the Real Estate Registry (relieved of his post on February 5 of this year), and the fiscal controller L.A.C. de M.
In coverage by the Estado de S. Paulo, the current mayor calls the case «one of the greatest scandals ever uncovered in this city.”
Another cites a state prosecutor to the effect that there are no indications that the scheme was used for illegal campaign finance or involved senior authorities. That is to say, this is not a mensalão, or political slush fund scheme. Let me find that source.
Veteran columnist Monica Bergamo, meanwhile, assesses the political damage:
Former civil servants in the administration of his predecessor, Kassab, are accused of causing a R$ 500 million loss to the city of São Paulo.
Haddad and the MP are scheduled to detail the operation sometime this morning.
The potential political blowback is considerable: Kassab is allied with President Rousseff, like Haddad a Workers Party member, and is working toward her reelection.
Yesterday, city legislators of his party, the PSD, broke ranks and voted against an increase of property taxes, a sign that the two groups may be headed for a falling out.
Kicking Down the Door
Along with the arrests, search and seizure warrants are being served at the residents of the suspects and third parties, as well as at the headquarters of the companies with ties to the scheme.
The operation took place in São Paulo, Santos and Cataguases (MG). Nearly 40 persons took part, ranging prosecutors and agents of the Comptroller General to state judicial police in São Paulo and Minas Gerais. A court also ordered the seizer of the assets of those involved and the companies they operate.
The MP reports that investigations began six months ago and were supported by the municipal Secretary of Finance and Economic Development and Agency for Integrated Action against Organized Crime (a partnership of the state public safety secretary, the state judicial police and the federal police.)
The MP says the group came to be investigated after the city Controller-General, created during the city administration of Fernando Haddad (PT), identified incompatible rates of self-enrichment among the group. Also identified was that the analysis of ISS charged to major real estate developers were directed to the group.
The collection of the ISS — based on the total cost of a project — must be paid before the development can be inhabited. Fiscal auditors issue guides reflecting tiny contributions and demand that developers deposit large sums of money into their bank accounts. If not, the certificates of payment of ISS are not issued and the development cannot be occupied.
Using statistical analysis, the CGM discovered that in projects overseen by the group arrested today, the amount of ISS collected was less than the average percentage charged by other civil servants working in the same area.
In one case, a developer set aside R$ 17,900 for ISS and then, the following day, deposited R$ 630,000 in the account of a company belonging to one of the auditors, a value 35 times greater than the ISS deposited to the city coffers.
Investigations also discovered that one of the builders deposited more than R$ 2 million in the same bank account in less than 6 months.
The scheme focused on high-end residential and commercial buildings, with construction costs exceeding R$ 50 million. The PM is looking to define whether the companies were victims of abuse of power — because they had no other way to obtain the certificate of payment of their ISS — or whether this is a case of active corruption, depositing to the public coffers less than the amount to be received.
Much of the money illegally obtained was deposited in the account of an asset manager in the name of L. A. C. de M. and his wife. The deposit of checks were also observed.
One member of the group, R. B. R., maintained an office on the Largo da Misericórdia, 300 meters from City Hall. The office was used to further the interests of the group.
The special anti-cartel and money laundering group (GEDEC) discovered that the four auditors had achieved a joint net worth of more than R$ 20 millions with money diverted from the public coffers.
“Embora desconheça a investigação em curso na Secretaria das Finanças, o ex-prefeito apoia integralmente a apuração e, se comprovada qualquer irregularidade, defende a punição exemplar de todos os evolvidos. O ex-prefeito de São Paulo, como é de conhecimento público, quando alertado sobre qualquer suspeita, mesmo que por denúncia anônima, encaminhou para apuração da Corregedoria-Geral do Município e ciência do Ministério Público, com qual manteve total colaboração”.
I always thought Kassab and his inner circle would get themselves into trouble one day. Kassab is the Kátia Abreu of real estate speculation. As for Haddad, this implementation of the city comptroller-general mimics the federal government under Lula, with the CGU, a notably proactive auditor of auditors.
After all, Robson Marinho was a magistrate on the State Accounting Tribunal during the time he allegedly took part in a slush fund scheme involving bribery.