Former Rio Governors Garotinho and Rosinha Arrested on Suspicion of Overbilling

RIO DE JANEIRO, BRAZIL – The state Prosecutor’s Office (MPRJ) arrested this Tuesday, September 3rd, former governors Anthony Garotinho and Rosinha Matheus during an operation investigating the overbilling of R$62 (US$15.5) million in contracts for the construction of low-income housing signed with construction company Odebrecht in Campos dos Goytacazes, in the north part of the state of Rio de Janeiro.

Both are alleged to have received R$25 million in bribes.

Garotinho and Rosinha were arrested at home, in Flamengo, in Rio’s South Zone. They were taken to a precinct in Jacaré, in the North Zone, to testify.

In addition to the former governors, the “Secretum Domus” operation is also looking for Sérgio dos Santos Barcelos, Ângelo Alvarenga Cardoso Gomes and Gabriela Trindade Quintanilha, all of whom are also the targets of search and seizure warrants, which are being executed in Campos and the state capital.

The MPRJ requested the freezing of R$140 million from Construsan, hired by Odebrecht to carry out part of the works.

According to the MPRJ, one of the overpriced bids was for the construction of 5,100 houses of ‘Morar Feliz I’ in October 2009 (contract No. 306/2009), in addition to the urban development of the respective lots. The contract was signed for R$ 57,497,893.43, plus additives.

During Rosinha’s second mandate, a new bid was made along the lines of the first for the construction of 4,574 houses for the initial amount of R$476,519,379.31, for the ‘Morar Feliz II’, in February 2013 (85/2013).

Furthermore, according to the MPRJ, both public notices contained extremely restrictive clauses to ensure that Odebrecht would be the winner.

The MPRJ found overbilling int he amount of R$29,197,561.07 for ‘Morar Feliz I’ and R$33,368,648.18 for ‘Morar Feliz II’, totaling over R$60 million.

Odebrecht as far as the eye can see

Odebrecht had a sophisticated scheme for paying its bribes through a so-called Structured Operations sector. Spreadsheets extracted from their internal system had the codename of the direct beneficiary of the amounts, the amounts, the payment date and, in some cases, the related work, such as ‘Casas Campos II’.