Is it a vaccine against Delta?

247 - Geraldo Alckmin and José Serra were never exactly great friends. In 2006, when Alckmin was a presidential candidate, Serra felt betrayed. Later, once in the São Paulo state government, Serra sidelined Alckmin's former allies – who retaliated four years later. This Saturday, in the midst of an election campaign, Alckmin decided to vaccinate Serra against the flu. But the most dangerous virus approaching the Palácio dos Bandeirantes (São Paulo state government headquarters) is called Construtora Delta (a construction company).

A report in this weekend's Istoé magazine indicates that Delta began operating in São Paulo when José Serra became mayor of the city in January 2005. Two years later, Fernando Cavendish's construction company was brought to the Palácio dos Bandeirantes (São Paulo state government headquarters), often through emergency contracts awarded without bidding. Last week, Alckmin sounded the alarm, saying that Delta's contracts in São Paulo could be reviewed – but if he does, the decision will create a problem for Serra's candidacy in São Paulo.

The issue is that the Public Prosecutor's Office has already decided to open an investigation to determine how Delta's growth occurred in São Paulo. And the problem is that, even though the construction company is trying to limit Operation Monte Carlo to the Midwest, the illegal gambling operator Carlos Cachoeira was caught on phone conversations discussing Delta's business in São Paulo.

Read the report from Istoé magazine this weekend below:

The Cachoeira scheme and the Serra government.

The Parliamentary Commission of Inquiry (CPI) and the Public Prosecutor's Office are investigating how the group of illegal gambling operator Carlinhos Cachoeira operated in São Paulo through contracts between the construction company Delta and the City Hall and the State for works on the Tietê Marginal Highway.

Pedro Marcondes de Moura

The unfolding events of Operation Monte Carlo, which investigates the relationship between illegal gambling kingpin Carlinhos Cachoeira and state and municipal governments, have reached the opposition's main stronghold: the state of São Paulo. In Brasília, parliamentarians who make up the "Cachoeira Parliamentary Inquiry Commission" have already had access to telephone conversations recorded with judicial authorization between June of last year and January of this year. These conversations indicate that the construction company Delta, the operational and financial arm of the gambling kingpin's group, was favored during the administrations of José Serra (PSDB) and his political protégé Gilberto Kassab (PSD) in the city hall, and also when the latter occupied the state government. On January 31 of this year, for example, Carlinhos Cachoeira called Cláudio Abreu, the construction company's representative in the Central-West region, currently imprisoned on charges of bid rigging and overpricing public works. In the phone call (see box on page 43), the illegal gambling operator asks if Abreu had spoken with Fernando Cavendish, officially the owner of the construction company, about "Kassab's deal." He then tells Abreu that the mayor of São Paulo "tripled the contract." This conversation, according to members of the Parliamentary Commission of Inquiry (CPI) and the Public Prosecutor's Office of São Paulo, is one of the indications that Cachoeira's organization also acted with the PSDB party and its allies in São Paulo. "The testimonies of Cachoeira and Abreu will be fundamental in discovering the extent of the relationships between the construction company and politicians," says the CPI rapporteur, Deputy Odair Cunha (PT-MG).

Delta began providing services to the city of São Paulo in 2005, when Serra took over as mayor. Initially, the contracts totaled R$ 11 million. From 2006 onwards, when Serra left the mayor's office and won the gubernatorial election, the contractor's business with the municipality multiplied, in many cases without bidding. In 2010, the year Serra ran for president, payments reached R$ 36,4 million. Between 2008 and 2011, payments from the city to Delta exceeded R$ 167 million. What most attracts the attention of the Parliamentary Commission of Inquiry (CPI) and the Public Prosecutor's Office of São Paulo, however, is the fact that Delta won a bid for urban cleaning services worth R$ 1,1 billion last October. The Public Prosecutor's Office opened an investigation to determine if there was fraud in the bidding process. There are suspicions of the use of falsified documents and a rigged tender. “If Delta committed these irregularities in other states and municipalities, we need to investigate whether this also occurred in São Paulo,” says prosecutor Silvio Marques, from the Public Assets division. On Wednesday, February 2nd, he sent an official letter to the Federal Police, requesting access to the investigations of Operation Monte Carlo.

Among the paperwork, the prosecutor will receive a transcript of a conversation recorded with judicial authorization that took place on August 4th of last year. In the dialogue, which ISTOÉ had access to, a man identified as Jorge asks Gleyb Ferreira, according to the Federal Police a kind of "fixer" for Cachoeira, about the bidding process. "So, how did that thing progress?", Jorge asks. "We expect to have the bidding documents this afternoon. Carlinhos (Cachoeira) wants us to talk to Heraldo (Puccini Neto, Delta's representative in the Southeast region). We're already getting an extension from the secretary until the 31st instead of the 15th," Gleyb replies. For the Federal Police, the dialogue refers to the R$ 1,1 billion tender won by the company linked to the illegal gambling operator. The Public Prosecutor's Office has already determined that two bidding processes were necessary for the tender. In the first one, Delta was disqualified.

If Delta multiplied its contracts with the city government between 2005 and 2011, a similar movement occurred with the São Paulo state government when Serra arrived at the Palácio dos Bandeirantes in January 2007. During the governor's term, the construction company received R$ 664 million from the São Paulo government. This amount corresponds to 83% of all 27 agreements signed by Delta with the State of São Paulo in the last decade. The most controversial project is the expansion of the Marginal Tietê highway, one of the calling cards of Serra's 2010 presidential campaign. In addition to numerous problems, such as delays and lack of environmental compensation, the amount paid to the Nova Tietê consortium, led by Delta, suffered a 75% readjustment. On Wednesday the 2nd, the Public Prosecutor's Office of São Paulo opened a Civil Inquiry to investigate the existence of irregularities in the bidding process, overpricing, and collusion between public agents.

According to documents obtained by ISTOÉ, the Marginal Tietê highway project was overseen within the São Paulo state government by Delson José Amador and Paulo Vieira de Souza, known as Paulo Preto, who is identified within the PSDB party as one of the fundraisers for Serra's election campaigns. Both Paulo Preto and Amador are cited in the Federal Police's Operation Sandcastle for alleged involvement with construction companies. On Delta's side, the person responsible for managing the project was the company's director for the Southeast region, Heraldo Puccini Neto. He is currently a fugitive, having had a preventive arrest warrant issued against him for alleged involvement in a bid-rigging scheme in the public transportation sector of the Federal District. "The investigation into Delta's contracts with the São Paulo government could lead to the discovery of illegal campaign contributions by PSDB members in São Paulo," states state deputy João Paulo Rillo (PT). "We cannot limit ourselves to a political analysis," says PSDB leader Álvaro Dias (PR). “We must check all of Delta’s contracts to find out how they were made and whether the prices charged were fair. After all, the company was the main sponsor of the relationship between the illegal gambling operator Cachoeira and public funds.”