News 16th December 2014

FIVB President denies corruption allegations

Ary Graça, President of the Fédération Internationale de Volleyball (FIVB), has denied allegations that he was involved with 13 contracts identified as ‘irregular’ by Brazil’s Controladoria-Geral da União (CGU), resulting in R$30 million (€8.75 million) being paid to people with ‘family ties’ to ‘leaders and former leaders’ of the Confederação Brasileira de Voleibol (CBV). The CGU, which carried out an audit of the CBV accounts, said that the payments were made between 2010 and 2013, whilst Graça was President of the CBV. In a statement, the FIVB confirmed that Graça and others from the former CBV management team have mounted legal proceedings ‘against the organisations and individuals for making false accusations’.

‘The FIVB is fully aware of the allegations against the former President and management of the Brazilian Volleyball Confederation and it is important to point out that Ary Graça, and others accused, have rigorously and consistently denied any wrongdoing and have openly explained how, at all times, they acted in the best interests of Brazilian Volleyball,’ read a statement from the FIVB. ‘In particular; the recent external auditing conducted by PWC and supported by independent legal experts, confirmed that all contracts questioned by media were legally binding and no evidence of any malpractice was found’.

The CGU audit found that part of a performance bonus offered by the Bank of Brazil was not being paid to athletes and coaching staff, as intended. It found that when part of the bonus ceased to be distributed, the CBV reported an increase in administrative and operating expenses that was much bigger than the inflationary rates for the period. This also coincided with when the CBV began to conclude business contracts with leaders, former leaders and their relatives. The press release based on the CGU audit contains a detailed breakdown of where the money went, and alleges that many of the companies involved did not exist. It also accuses a former Director General at the CBV, Fábio Azevedo, of illegal hiring of employees.

‘Payments with administrative expenditure went to companies such as LG Video Film Productions Ltd., which received R$1.1 million in 2013, and the Aquatic Articles Clothing Manufacturing Ltd., to which the CBV paid R$1.6 million’, reads the release. ‘There is evidence – such as issuing sequential invoices – that the two companies may not even exist. The owners are sons in law of the former President of the CBV, Ary Graça’.

The state-run Bank of Brazil has suspended payments to the CBV as a result of the CGU’s investigations. ‘The Bank of Brazil has suspended payments to the CBV relating to sponsorship contracts and the resumption of payments – and its continued sponsorship – are conditional on the immediate adoption by CBV of all corrective measures identified by the CGU, and others identified by the Bank, as necessary’, it said in a statement. These include reimbursement of all funds unless the fulfilment of services provided in the contracts can be proven; regulations setting out minimum standards of governance; and the appointment of an independent ombudsman.

‘Under Ary Graça’s leadership and through these legally contracted commercial services, Brazilian volleyball benefitted by R$350 million (€102 million) for the period 2012-17 and several commercial relationships have continued successfully to this day, well after Ary Graca left the CBV’, read the FIVB’s statement. ‘Furthermore, under the Presidency of Ary Graça, Brazil were World Champions three times, won three Olympic Gold Medals and won eight World League titles’.

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