Delta and the CPMI

Amid the controversial Joint Parliamentary Inquiry Commission investigating the connections between illegal gambling operator Carlinhos Cachoeira and Brazilian politics, evidence of corruption is emerging involving the Delta Construction Company, owned by Fernando Cavendish, and the various construction contracts it holds with several federal entities, including the Union.

According to a report published in Veja magazine on June 6, 2012, the Financial Activities Control Council (COAF) detected numerous atypical financial transactions, such as the transfer of funds from Delta to shell companies whose partners are straw men, commonly known as "front men." This money is subsequently withdrawn in cash at bank tellers, in amounts below R$ 100.000,00 to avoid scrutiny. These transfers occurred with greater frequency during election years.

In another episode, brought to light by the G1 portal of the Globo.com website, the Federal Court of Accounts (TCU) detected several irregularities in Delta's construction projects in Mato Grosso. There are numerous indications of overpricing, which led the TCU to freeze approximately R$ 4.000.000,00 in payments to the construction company.

Politics, elections, campaign financing, and public contracts. Ultimately, all these issues converge on a single common denominator: public money.

Despite all the efforts to raise revenue and the exorbitant tax burden, Brazil is unable to make the infrastructure investments necessary for the growth rate the country could achieve. And this is all because a large portion of the resources are lost due to corruption. Such a scenario seems apocalyptic. But some simple measures can bring a solution to this chaos. And it comes from the bottom up.

It is up to civil servants, most of whom are committed to providing good public service, to do their part. Rest assured that, without the complicity of those working at the lower levels, it will be difficult for the bigwigs to carry out their embezzlement schemes.

Initially, the problem can be addressed at the source of the contracting process. Every project to be tendered has a preliminary budget that will guide the contracting. This budget adheres to pre-defined prices in tables, such as SINAPI, provided by Caixa Econômica Federal, and SICRO, provided by the National Department of Transport Infrastructure. And, in the absence of a table applicable to the project to be tendered, it will be up to the interested Administration to conduct price research to determine the costs.

So, if all projects have their budgets set, how can overbilling occur? It happens because of a lack of knowledge on the part of those who prepare the projects, regarding all the details involved in contracting engineering works and services. Many civil servants are unaware of the obligation to use these official benchmarks and accept the inflated budgets prepared by the government's partner construction companies throughout Brazil.

Secondly, the problem arises from a lack of oversight during the execution of the works. It is during the execution phase that the overpricing becomes glaringly obvious. Numerous services are planned but not performed. Half-finished projects are received as fully completed. Once again, those who truly benefit from the misappropriation of public funds rely on the complicity, due to a lack of knowledge, of those tax officials who, often, have nothing to do with the scheme.

Because of this, scandals like the one involving the Delta Construction Company are surfacing across the country.

Public servants, committed to serving the taxpayer, must be aware of their important role in combating corruption. They must seek qualifications and not be intimidated by pressure from above. For the job security guarantees that the Constitution establishes for those who provide public service serve precisely to prevent the rivers of public resources from being lost in their deltas and waterfalls before reaching their destination: to make this country fertile ground for democratic prosperity.

OSVIR GUIMARÃES THOMAZ – SENIOR CONSULTANT AND SPEAKER FOR B&B SOLUÇÃO EM GESTÃO PÚBLICA COURSES.