The Brazilian General Accounting Office (TCU, in Portuguese) found evidence of fraud in contracts for the Development Company of the São Francisco and Parnaíba Valleys (Codevasf, in Portuguese), which amounts to 1 billion reais in Jair Bolsonaro's government (Liberal Party). The Accounting Office’s audit found evidence of a contractor cartel manipulating the result of bidding processes.
The report written by the technical staff of TCU suggested the interruption of new works related to the suspicious bids. However, the suggestion was not followed by the case’s rapporteur, minister Jorge Oliveira. He was appointed to TCU by Jair Bolsonaro, with whom he is a friend.
According to the survey, which began after reports published by the Brazilian newspaper Folha de São Paulo, the main beneficiary of the scheme is probably Engefort contractor, from Maranhão state. The company won bidding processes with evidence of fraud that amount to 892.8 million reais. Engefort dominated Codevasf’s biddings in 2021, using shell company Del to manipulate part of the processes.
TCU’s audit found a drastic reduction from 24.5% to 5.32% in the average discount of bids between 2019 and 2021. Again, the pieces of evidence point toward Engefort: in the 50 bidding processes the company won in 2021, it gave an average discount of just 1%, which is well below the industry standard.
Under Centrão control
It was not the first case of corruption allegations involving Codevasf. Last Tuesday (4), operation Odoacro, by the Brazilian Federal Police, showed evidence of fraud in bidding processes, plus embezzlement in the company’s works. The operation led to the removal of a Codevasf manager, accused of receiving about 250,000 reais as a result of these schemes.
Bolsonaro moved the management of the state-owned billion-dollar company to federal deputies from the Centrão caucus (the Chamber of Deputies’ biggest group) in exchange for political support.
Data from the Brazilian NGO Contas Abertas (Open Accounts, in English) sent to the Brazilian website G1 point out that, since 2019, the Jair Bolsonaro government has authorized a total budget of almost 9 billion reais for Codevasf. Of this amount, more than 7 billion reais were committed and almost 5 billion reais were paid.
Moreover, the data indicates that the company served as an effective channel for draining resources from the rapporteur-designated budgetary grants, also known as “Secret Budget”. Contas Abertas estimates the resources for the rapporteur's amendments for Codevasf at almost 2.8 billion reais.
