Brazilian police arrest seven over Fonte Nova construction corruption

Arena-Fonte-Nova-Rendering

March 1 – Brazil’s Federal Police are claiming the price tag of Salvador’s Fonte Nova stadium, a 2014 World Cup venue, was inflated by as much as $130 million. Seven arrest warrants have been issued in connection to the investigation, including for the former governor of Bahia Jaques Wagner.

The Fonte Nova Stadium hosted six matches at the 2014 World Cup, including Netherlands’ 5-1 demolition of Spain. Built on the site of the old stadium the state-of-the-art new venue construction costs were estimated at $250 million. But in a police probe called ‘Operation Red Card’ irregularities in construction and management have been found.

The investigation includes findings that the tender process was rigged in favor of construction behemoths Odebrecht and OAS. Those companies have already been implicated in the wider Brazilian ‘Lavo Jato’ corruption scandal. Lavo Jato is the name given to the ongoing money laundering investigation in Brazil where executives allegedly accepted bribes in return for awarding contracts to construction firms at inflated prices.

“A great part of [the inflated price] was channeled to bribe payments and the financing of electoral campaigns,” read a police statement regarding the Fonte Nova Stadium. The probe highlights bidding fraud, overbilling, misuse of public funds, corruption and money laundering all as part of how the stadium construction was tendered and the venue built. Fonte Nova’s private administrators issued a statement saying they are “waiting for official notification” regarding the investigation.

Of the seven arrest warrants issued, one was for Wagner whose house was raided by police, according to news agency Agencia Brasil. Wagner governed Bahia between 2007 and 2015 and is affliated with the left leaning Worker’s Party of former embattled president Luis Inacio Lula da Silva. Wagner is accused of having received about $25 million in illegal payments.

In a press release, the Worker’s Party called the raid at Wagner’s house an “invasion” and accused Brazil’s judiciary of “abusing its authority to criminalize the Worker’s Party.”

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