5 September 2017

Rio 2016: investigation alleges vote buying & corruption

An investigation involving prosecutors in five countries has exposed bribes paid in return for votes to appoint the host of the Rio 2016 Olympic Games, bribes connected to the hiring of contractors as well as fictitious service contracts and personal expenses connected to the Games. The investigation found that former governor of Rio de Janeiro, Sergio Cabral, operated in concert with businessman Arthur César de Menezes Soares Filho (known as ‘King Arthur’) to pay US$2 million to Lamine Diack, former President of the International Association of Athletics Federations (IAAF) in return for his vote to appoint Rio as 2016 Olympic host. Cabral was jailed for 14 years in June this year, after accusations that he ran a criminal organisation and accepted bribes.

Brazil’s Federal Public Ministry (MPF) said that the $2 million came from Matlock Capital Group, a company owned by ‘King Arthur’ based in the British Virgin Islands. ‘He did nothing more than pass on the fee that would Sergio Cabral would pay directly to the Senegalese in exchange for votes to choose the host city of the 2016 Olympics’, read a statement. The MPF alleges that the payment to Lamine Diack was arranged through Papa Massata Diack, his son. The MPF said that preventative arrest warrants have been issued against ‘King Arthur’ and his partner, Eliane Pereira Cavalcante.

The head of the Brazilian Olympic Committee (COB), Carlos Arhtur Nuzman, has also been detained on suspicion of involvement by Brazil’s Federal Police, who deployed 70 officers in today’s raids. ‘As there are suspicions that the President of the COB has Russian citizenship, he is not allowed to leave the country and must hand over all his passports’, reads the MPF statement. It is reported that US$153,000 in five different currencies was found in Nuzman’s home.

‘Search and Seizure warrants were dispatched in the homes of those involved, the headquarters of the COB [Brazilian Olympic Committee], the organising committee of the Olympic Games 2016 and at the companies AS Patrimonial, Pulse Participações, Laborvida Laboratórios Farmacêuticos, LHS Barra Empreendimentos Imobiliários, Grupo Prol, NZ Palestras, Conferências e Estuados Eireli’, continues the MPF statement. ‘In addition, the assets of many of those involved were blocked, including apartments in prime areas of Rio de Janeiro, luxury cars and aircraft’.

Brazil’s Federal Police said that the investigation encompasses bribes paid in return for the hiring of contractors by the State Government of Rio de Janeiro. ‘Payments have been made either directly through the delivery of cash, through the awarding of fictitious service contracts and also through the payment of personal expenses’, read a statement. It said it could not rule out the possibility that State money had been siphoned out of Brazil through such subcontractor agreements in order to buy votes to appoint Rio as host of the 2016 Games. It is understood that ‘King Arthur’ specialised in such sub-contracting agreements and was involved in many construction deals relating to the Games through his Grupo Facility company.

The arrests are part of Operation Unfair Play, a new phase of Operation Lava Jato (car wash), which was launched by Brazilian authorities to investigate allegations of corruption connected to the Rio 2016 Olympics. It involves the MPF, the Federal Police, and the Federal Reserve of Brazil. The investigation also involved prosecution bodies in Antigua and Barbuda, the US and the UK, as well as France’s Parquet National Financier (PNF).

The PNF said that it opened ‘several investigations’ after being passed information by the World Anti-Doping Agency (WADA) on 4 August 2015, which resulted in the arrest of Lamine Diack. In December 2015, it widened the scope of its investigation to include the awarding of the Tokyo 2020 Olympic Games. In March 2016, the scope of the investigation was widened to include awarding of the Rio 2016 Olympics; to include the award of the the 2021 World Athletics Championships to Eugene, Oregon; to include allegations of corruption in connection to the 2006 IAAF Athletics World Cup; allegations concerning the award of the 2017 World Athletics Championships to London and the 2019 edition to Doha.

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