Brazil’s Odebrecht Paid US$2.3MM in Bribes for Maracanã Renovation

By Nelson Belen, Contributing Reporter

RIO DE JANEIRO, BRAZIL – According to court documents just released to the public, executives of embattled Brazilian construction giant Odebrecht admitted to paying some US$2.3 million in bribes to win the contract to renovate Maracanã Stadium ahead of the 2014 World Cup.

The iconic Maracanã’s renovation ahead of the 2014 World Cup began in September 2010 and it remained closed until mid-2013. The contract for the renovation was initially set at US$228 million but eventually ballooned to over US$388 million, an estimated R$1 billion at the time.

The latest bribery revelations come by way of sworn statements made by several Odebrecht executives seeking plea bargain agreements, including Benedito Barbosa da Silva Junior, Marcos Vidigal do Amaral, Leandro Andrade Azevedo and Joao Borba.

According to their testimonies, the majority of the bribes were directed at former Rio de Janeiro Governor Sérgio Cabral. Da Silva Junior, head of Odebrecht’s “Structural Operations,” the department which initiated the bribes, admitted to paying US$2.03 million to ex-Governor Cabral.

Cabral had been arrested last November, accused of receiving kickbacks from state construction works totaling approximately US$70 million. In addition to Cabral, the court documents revealed that US$320,000 was paid to Jonas Lopes, former head of Rio de Janeiro’s Court of Accounts, whose main function, ironically, is to ensure that public contracts are legally awarded.

The executives admitted that the payment to Lopes would have been much larger as it only represented the first of what was to be four payments. Yet with the start of the massive Lava Jato (Carwash) corruption scandal and investigation, the remaining three payments were never made.

Startling testimony from Azevedo revealed that even amidst the Lava Jato investigation, Lopes still contacted the executive to demand payment of the balance of the kickbacks. “Late in [2014], I was called by [Lopes] and he demanded the payments resume,” Azevedo testified. “I felt embarrassed, we were in the middle of Lava Jato.”

Azevedo added, “I asked him politely to read the first page of the O Globo newspaper lying on the table [reporting the arrest of construction executives]. He was extremely embarrassed, and he told me he understood the situation perfectly but added he was being strongly pressed by other advisors.”

Earlier this month, French media conglomerate Lagardère reached an agreement to acquire the operating rights to Maracanã from the Maracanã SA consortium, led by Odebrecht.

Details of the deal are murky but various reports indicate that Lagardère will pay upwards of R$500 million (US$159 million) to assume control until 2048.

Lagardère is also expected to invest an additional R$20 million (US$6.38 million) for emergency repairs to the famous but recently neglected venue.