Brazil Federal Police launches operation over alleged museum project graft

Brazil's Federal Police (PF) and the Office of the Comptroller-General (CGU) today (Dec. 13) launched an operation against suspects of embezzling funds from the construction of a Museum of Labour in São Bernardo do Campo, São Paulo state. Thirty-two warrants were issued by a federal court in the city, including eight temporary arrests, eight bench warrants, and 16 searches. Besides São Bernardo do Campo, there were crackdowns in São Paulo, Santos, and Barueri (São Paulo state), Rio de Janeiro, and the Federal District.

The Comptroller-General's Office (CGU) estimates $3.8 million has been embezzled from the museum construction. The project is a collaboration between the São Bernardo city administration and the Brazilian government. The CGU says it has detected irregularities around contract execution, including bidding issues, outsourcing miscompliances, overcharges, and payment for services that were never provided.

Investigators also found evidence the local government has fraudulently misrepresented information and made unauthorized changes to the project, increasing its costs. According to the CGU, the scheme involved business executives and public officials.

Construction of the museum began in 2012. The project had originally been planned to last nine months, but it is still incomplete and has been put on hold. The contract between the Ministry of Culture and the São Bernardo administration totals $6.4 million. Out of this amount, $3.3 million has been transferred from the National Culture Fund.

Translated by Mayra Borges