Qualicorp Founder Arrested in Investigation of Slush Fund for ex-São Paulo Governor

RIO DE JANEIRO, BRAZIL – On Tuesday morning, the Federal Police launched Operation Paralelo 23 , the third stage of Lava Jato in partnership with the São Paulo Electoral Court. The investigations involve Senator José Serra (PSDB-SP) – a former governor of the State of São Paulo – who is suspected of having received some R$5 million in unaccounted-for campaign donations (slush fund) in the 2014 elections.

The investigators pointed to evidence that Qualicorp, a group that sells and manages collective health insurance plans, has defrauded contracts to conceal transfers to the senator’s campaign. Yesterday morning, the Federal Police arrested entrepreneur José Seripieri Filho, Qualicorp’s founder and former CEO, known as Júnior, who was also the target of a search and seizure operation at his home. His detention is temporary, while he is being interrogated.

The Court ordered the execution of four temporary arrest warrants and 15 for search and seizure related to the case. The operation included serving a search and seizure warrant at Serra’s Senate office in Brasília, but the proceeding was blocked by the Senate and suspended by Federal Supreme Court (STF) Chief Justice Dias Toffoli. According to him, the search would have been undue due to the fact that this was an investigation prior to the expiration of the legislator’s current term.

In a note, the Senator said that “he has never received undue advantages during his 40 years of public life and has always guided his political career in honesty and austerity regarding public spending,” He also pointed out that his campaign accounts were approved by the Electoral Court. Serra, who was the target of another operation by Lava Jato earlier this month on charges of money laundering, lamented the action’s “spectacularization”.

In a statement, Qualicorp confirmed that a search and seizure was conducted at its administrative headquarters and said that “the new management of the company will thoroughly ascertain the facts reported in the press and is cooperating with the relevant public authorities.” Seripieri’s attorney said he would comment as soon as he had access to the case file.

According to the investigator in charge of the operation, Milton Fornazari, the relationship between Serra and Seripieri Filho is due to the fact that both are linked to the private health sector. “The candidate [who was Minister of Health in former President Fernando Henrique Cardoso’s government] has a notorious performance in the area,” Fornazari said at a press conference. “We are now going to deepen this investigation to determine if the transfers were intended only as electoral donations or as a counterpart”. Serra will be interviewed about the case, he said.

In total, four temporary arrest warrants and 15 search and seizure warrants were issued in the cities of São Paulo, Itatiba and Itu, in addition to Brasília. Other temporary arrest targets are entrepreneur Mino Mattos Mazzamati (Titans Group), Rosa Maria Garcia and Arthur Azevedo Filho. The Electoral Court ordered the judicial blocking of the suspects’ bank accounts.

The Federal Police said the police inquiry was referred to the São Paulo Electoral Court in mid-2019, with the voluntary cooperation of people who claimed to have been hired in 2014 to structure and operate the payments of unaccounted-for election donations, which were allegedly made at the behest of a controlling shareholder of a major business group in the health insurance business.

According to the Federal Police, the investigations point to “other payments, also in large amounts, made by large companies, one of them in the nutrition sector and another in the building industry, all of which were intended for one of the companies presumed to be used by the then candidate to conceal the collection of donations.” The facts also occurred close to the 2014 elections.

The suspects may be held accountable for crimes of criminal association, electoral misrepresentation and money laundering, with sentences of three to ten years in prison. “Because he’s a legislator in the exercise of his mandate as a Federal Senator, the first instance investigations are limited to the facts established in 2014,” the Federal Police note. Because he is in office in the Senate, Serra is entitled to legislative privilege of immunity to prosecution during his term in office.

Money laundering

Senator José Serra was indicted earlier this month by the Operation task force in São Paulo for the crime of money laundering. His daughter Verônica was also the target of charges, which involved eight search and seizure warrants at addresses linked to the legislator. According to the Federal Prosecutor’s Office, the legislator “used his position and political influence to receive, from Odebrecht, undue payments in exchange for benefits related to the Rodoanel Sul {ring road) works,” facts that are alleged to have originated in 2006. The amounts allegedly paid may exceed R$4.5 million.