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Probe launched into Rio 2016 construction legislation

Brazil Attorney General Rodrigo Janot has launched an investigation over alleged bribes that were paid to a lawmaker to help secure contracts for the construction of venues and facilities for the 2016 summer Olympic Games in Rio de Janeiro.

In documents seen by the Associated Press news agency, Janot accuses Eduardo Cunha, speaker of the lower house of Brazil’s legislature, of receiving a payment of R1.9m (€439,300/$479,200) from construction company OAS to create legislation that would favour the company.

OAS is involved in the construction of BMX, mountain bike and canoe venues in the Rio district of Deodoro, the second-largest cluster of Games venues. The firm is also working on high-speed bus lanes in Rio, as well as efforts to renovate the city’s port and clean polluted waters in the Barra da Tijuca, the site of the main Olympic Park.

According to the 190-page report, Cunha allegedly guided legislation that was approved in 2012 to permit tax exemptions for all Olympic-related construction work, as well as exempting import taxes on certain foreign goods required for the Games. The tax breaks are estimated to have amounted to R3.8bn.

Janot said that Cunha “treated the lower house as a centre for trading bribes for bills” and used his position as a lawmaker to “craft business-friendly legislation that was against the public interest.” The Attorney General also accused Cunha and an OAS executive of being part of a “criminal organisation.”

The report added: “At least since 2012, Eduardo Cunha has been illegally acting on the behalf of corporations, ‘selling’ legislation to benefit them. That shows he can no longer remain in office.”
Cunha, who was elevated to speaker earlier this year, told Brazilian media that the allegations are “ridiculous”. OAS has refused to comment on the speculation.

The report also quotes Cunha as telling a top OAS official that Rio Mayor Eduardo Paes was “happy” with the legislation as it “reaches every construction project in Rio”. The Attorney General has not made any accusations against Paes.

The allegations have emerged at a time when Cunha is leading an impeachment effort against Brazilian President Dilma Rousseff, while an investigation into bribes and corruption surrounding state-run oil company Petrobras is ongoing.

Separately, organisers are currently attempting to cut approximately R2bn from the R7.4bn operating budget for the Games. The Rio 2016 has pledged to trim non-essential, “behind-the-scenes” costs before the sporting spectacle begins on August 5 next year.