Popular housing program buried in corruption and spending of public money

Minha Casa, Minha Vida housesAlong the lines of the corruption scheme revealed by Operação Lava-Jato, Brazil’s most popular housing program, Minha Casa Minha Vida, has suffered from criminal organizations to mid-sized contractors who are associated in cartels to circumvent bids, overpaying building works, pay bribes to public officials and irrigate political campaigns with public funds diversion.

The Brazilian Federal Police, the Federal Public Ministry and the Controller General have discovered many such cases in many of the brazilian states. Fraud to the program, whose budget has already reached R$ 278 billion, are so many that led to the opening of more than 300 law suits, according to a survey by a group devoted to the subject. Complaints still involve irregularities in the selection of beneficiaries, excessive cost, low quality housing, transfers of public money without performing the services or even unwarranted.

When the envelopes in a tender for construction of 336 homes in the Rio Grande do Sul city of Novo Hamburgo were opened in August 2012, prosecutors already knew who would win. In the months before the bid, they accompanied the negotiations by wiretapping six contractors who formed cartel and organized the fraud of public competition. One of them claimed to be willing to “buy the bride” – which, according to the researchers, meant to pay between R$ 60,000 and R$ 80,000 for the other companies to desist from the R$ 18 million deal. Others celebrated the fact that the price per square meter would be above average, and decided that the amount offered would only be about R$ 1000 below the established ceiling.

At that time, the then mayor was running for reelection. The entrepreneur “winner” of the competition gave R$ 300,000 to the then director of Bids of that city hall, which would guarantee the favorable conditions of the contract in exchange for the transfer to the municipal campaign. The investigation is still without a trial.

Minha Casa, Minha Vida houses

The residents of the 400 homes in the mining towns of Durandé and Martins Soares reported that the material of their homes was terrible. That caught the attention of prosecutors, who have just discovered that the entity responsible for housing operated in collusion with a cartel of construction companies that provided the worst products at a cost at least 10% higher than those seen in the market. The recipients were chosen from voters and campaign workers for city councellors, who ignored the social vulnerability criteria established by the Ministry of Cities, which manages the program. The gang also charged an illegal fee of two minimum wages as if they were financing costs.

Also in Minas, further investigation revealed the cartel of three contractors who worked on the program in Lavras. The gang was made up of businessmen from construction and municipal civil servants, as well as employees from Caixa, the official bank. The investigations, who happen as secret of Justice have indicated that the suspects directed bids and made the works more expensive.

Sources: http://oglobo.globo.com/brasil/minha-casa-minha-vida-alvo-de-mais-de-300-inqueritos-18172897, http://www.correiodopovo-al.com.br/index.php/noticia/2015/11/29/mais-de-300-acoes-do-mpf-apuram-fraudes-no-minha-casa-minha-vida, http://zh.clicrbs.com.br/rs/noticias/noticia/2015/03/mpf-recebe-mil-queixas-contra-o-minha-casa-minha-vida-4723835.html
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Joe Conno
Dutch, American, Brazilian... lived there for 5 years and owns property in Brazil. Out of the country for a few years now and would like to go back, however current circumstances tell me it's not the right time.