Brazil police raid World Cup arena, Odebrecht offices in fraud probe
RIO DE JANEIRO (Reuters) - Police raided a stadium in the northeastern city of Recife and other offices around Brazil on Friday as part of an investigation into fraud in contracting for the arena, which was built for the 2014 FIFA World Cup soccer tournament.
In a statement, federal police said contracts for the Arena Pernambuco, built and operated by a consortium led by contractor Odebrecht SA [ODBES.UL], were overpriced by as much as 42.8 million reais ($12.26 million) in 2010, when the project was being developed.
With inflation and including additional costs that eventually worked their way into the project, the fraud today would total more than 70 million reais, police said.
Investigators said the overpriced contracts amounted to fraud and a lack of transparency meant to distort bidding among competitors in the stadium project. Odebrecht also enjoyed more time to prepare its bid for the project than other competitors who sought to take part, investigators said.
The company on Friday confirmed the raids, but in a statement called them "unjustified." Odebrecht has "full faith in the norms and legality" of the stadium project, it added.
Odebrecht took part in four of the projects to build or modernize 12 stadiums that hosted the World Cup, an event whose cost was widely criticized in Brazil, despite its success as a spectacle.
The full price tag for many of the projects built for the World Cup was still unclear because of cost overruns, contract disputes and other uncertainties. The Arena Pernambuco alone is believed to have cost well more than the already over-budget 533 million reais calculated by the federal government.
Police said they were conducting searches at the stadium, corporate offices and homes of consortium executives in the states of Pernambuco, Bahia, Minas Gerais, Sao Paulo, Rio de Janeiro and Brasilia, Brazil's capital.
Odebrecht, Latin America's biggest builder and a company with a long history of major infrastructure and other public construction projects, was also at the center of a corruption probe into state-run oil company Petroleo Brasileiro SA, or Petrobras. Continued...