There is no incentive to break the links between politicians, building firms and organised crime, writes TOM HENNIGANin Manaus
WHEN FORMER Brazilian president Luiz Inácio Lula da Silva secured the right for Brazil to host the 2014 World Cup, it was a victory for a passionate football fan and a leader keen to announce Brazil’s arrival among the world’s leading nations.
Despite no known interest in her country’s favourite pastime, Lula’s successor, Dilma Rousseff, has nonetheless promised that the 2014 version of the world’s biggest sporting event will be “the best ever”, reflecting an increasingly wealthy and confident nation.
To do so Brazil is spending on the tournament like never before. None of its 12 stadiums are ready but the budget now stands at €2.6 billion, triple early estimates and with state auditors struggling to hold construction companies from demanding even more.
Most observers expect the final bill to be higher still, pushing up the overall total of €10 billion in public money that the government has earmarked for getting infrastructure in shape before hundreds of thousands of fans descend on the country in two years’ time.
This will make the 2014 event the costliest World Cup yet. Brazil’s total spend on stadiums alone is set to come in well over the €1.7 billion South Africa spent getting 10 grounds ready to host the tournament two years ago. It is also closing in on double the €1.4 billion it cost Germany to have 12 grounds ready in 2006.
Though Brazil’s football stadiums were typically antiquated hulks back in 2007 when the country was awarded the right to stage the 2014 tournament, many engineers and fans wanted them to be upgraded on grounds of cost and sentiment. But in almost every case the government has instead opted for the far more costly option of building new venues or gutting existing ones for complete refits.
In the city of São Paulo, the venue for the opening ceremony, a modest €60 million proposal to modernise its biggest stadium was overlooked in favour of a brand new arena for Lula’s club, Corinthians. The federal government’s estimate for the new stadium is €322 million.
In Rio de Janeiro all but the outer wall of the legendary Maracanã stadium has been demolished. The venue of the 1950 and 2014 finals, it is undergoing a €318 million upgrade just five years after a refurbishment turned it into a modern, 80,000 all-seater venue for the Pan-American Games.
For many Brazilians, this apparent profligacy is being fuelled by the addiction of many of the country’s biggest construction companies to public contracts, where cost controls are weak, allowing them to deliver projects far over budget.
“In Brazil we say there is a difference between being hungry and having the desire to eat,” says José Álvaro Moisés, who heads the public policy research centre at the University of São Paulo.
“Lula wanted to bring the World Cup to Brazil because Brazilians are fanatical about football. It is a huge part of our identity. This is the hunger. But many powerful interests encouraged him because they knew it would provide many opportunities to make a lot of money. This is the desire to eat.”
For anti-corruption campaigners the World Cup is providing an opportunity to supercharge the so-called “propinoducto” (bribery pipeline), whereby companies that win public contracts routinely over-bill the state but in return funnel a portion of the funds back to politicians as personal payoffs or illegal campaign financing.
“Construction companies are looking to make billions, and behind them are the politicians who award contracts in return for favours. It is a permanent vicious circle,” says Hamilton Leão of the Amazonian Citizenship Institute, a local citizens’ rights group in Manaus.
Leading public officials responsible for rooting out corruption have publicly stated they do not have the instruments necessary to prevent abuses in public works contracts. So despite the accusations of corruption, few criminal cases are brought before the courts.
But every so often evidence emerges that exposes the nexus between Brazil’s politicians, construction companies and organised crime.
Earlier this year Delta, one of the companies involved in the refurbishment of the Maracanã stadium, was forced to quit the consortium after it was revealed it was being used as a front company for underworld figure Carlinhos Cachoeira.
According to police phone-taps, Cachoeira, an illegal bookie, targeted politicians to direct lucrative public works contracts towards Delta. The investigation has so far implicated both government and opposition politicians.
No evidence of wrongdoing has been proved in Delta’s participation in the Maracanã project. However, the links between Cachoeira and Rio governor Sérgio Cabral were highlighted when the girlfriend of the governor’s son died after a helicopter owned by Delta crashed while bringing her to a party to celebrate Cachoeira’s birthday. Cabral was also due to attend the celebrations.
“The Cachoeira case shows how organised crime has penetrated into the political system,” says Moisés.
“But until politicians provide the relevant public organs with the proper instruments to control how public money is spent, then such cases will likely continue to emerge. The problem is the politicians do not have an incentive to do so.”