Summer Sports

Rio Olympics tied to accusations of construction bribes

Brazil's attorney general is investigating allegations that bribes were paid to a powerful lawmaker to help secure contracts for the building of venues and other works for next year's Olympics in Rio de Janeiro.

Legislator accused of taking money to craft favourable laws

The president of the Brazilian chamber of deputies, Eduardo Cunha, is accused of taking bribes from a construction company in exchange for crafting favourable legislation related to contracts for the 2106 Rio Olympics. (Evaristo Sa/AFP/Getty Images)

Brazil's attorney general is investigating allegations that bribes were paid to a powerful lawmaker to help secure contracts for the building of venues and other works for next year's Olympics in Rio de Janeiro.

In documents obtained by The Associated Press, Attorney General Rodrigo Janot accuses Eduardo Cunha, speaker of the lower house in Brazil's two-chamber legislature, of receiving 1.9 million Brazilian reals ($475,000 US) from the construction company OAS to craft legislation favourable for the company.

Cunha has called the allegations "ridiculous" in comments to local media, while OAS refused to comment.

The investigation is the first linking corruption to the billions being spent on Olympic building projects.

OAS is involved with building the BMX, mountain bike and canoeing venues at Deodoro in northern Rio, the second-largest cluster of Olympic venues.

The constructor is also involved in work on high-speed bus lanes, the 8 billion reals ($2 billion) renovation of Rio's port, and projects to clean the polluted waters in Barra da Tijuca, the area where the main Olympic Park is being built.

The International Olympic Committee referred an email seeking comment to local organizers, who did not immediately respond.

Under the Brazilian system, the prosecutor is largely an investigator and it's up to the court — in this case Brazil's Supreme Court — to accept a case.

In the 190-page report, Janot says that Cunha "treated the lower house as a center for trading bribes for bills."

The report alleges that Cunha guided legislation approved in 2012 that gave tax exemptions to all Olympic-related construction works, and exempted import taxes on some foreign goods needed for the Olympics.

The Brazilian government's executive branch estimated the tax breaks amounted to 3.8 billion reals ($1 billion).

Janot also said Cunha used "his position as a lawmaker to craft business-friendly legislation that was against the public interest." He described Cunha and an OAS executive of being "part of a criminal organization."

"At least since 2012, Eduardo Cunha has been illegally acting on the behalf of corporations, `selling' legislation to benefit them," the report said. "That shows he can no longer remain in office."

Cunha was elevated to speaker earlier this year.

Cunha is facing calls for his resignation in connection with a series of scandals. At the same time he is leading an impeachment effort against President Dilma Rousseff.

The investigation is more bad news for Brazil.

The country is mired in a deep recession, Rousseff is fighting off impeachment charges, and there is an on-going investigation of massive bribes and corruption surrounding state-run oil company Petrobras.

The Olympics are also taking a beating.

Organizers are trying to cut about 2 billion reals ($500 million) from the 7.4 billion ($1.9 billion) operating budget, promising to trim non-essential "behind-the-scenes costs" for the games that open on Aug. 5.

Rio's severe water pollution is also causing concerns. An AP investigation has shown that about 1,600 athletes competing in sailing, rowing, canoeing, triathlon and distance swimming will compete in waters that present health risks linked to astronomically high virus levels.

Rio de Janeiro Mayor Eduardo Paes is hoping to use the games as a platform for a 2018 presidential run.

In the documents obtained by AP, Cunha is quoted as telling a top OAS official that Paes was "happy" with the legislation he crafted because "it reaches every construction project in Rio."

The attorney general does not make any accusations against Paes.

Sidney Levy, the chief executive officer of Rio's Olympic organizing committee, has repeatedly vowed that the games will be free of corruption and will serve an example of how business in Brazil can be done above board.

IOC President Thomas Bach said earlier this month that the IOC would start auditing the money it gives to international federations, national Olympic bodies and games' organizing committees. Rio is receiving about $1.5 billion from the IOC to help organize the games.


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