Banks used by Maluf will return R$ 70 million.
The Public Prosecutor's Office and the City Hall of São Paulo reached agreements with Citibank (USA) and UBS (Switzerland) for the financial institutions to pay compensation totaling US$25 million (equivalent to R$71 million) for having been used to move funds that, according to the Prosecutor's Office, were embezzled by the former mayor of São Paulo, Paulo Maluf (PP-SP), between 1993 and 1998; the banks agreed to pay the compensation in exchange for a guarantee that they will not be subject to legal action.
247 - The Public Prosecutor's Office and the City Hall of São Paulo reached agreements with Citibank (USA) and UBS (Switzerland) for the financial institutions to pay compensation totaling US$25 million (equivalent to R$71 million) for having been used to move sums that, according to the Prosecutor's Office, were embezzled by the former mayor of the city of São Paulo, Paulo Maluf (PP-SP), between 1993 and 1998.
The agreement stipulates that the portion of the compensation destined for the city government (US$22,6 million) will be used primarily for the creation of Augusta Park, on the street of the same name, in São Paulo. Since the expropriation of the area could cost up to R$100 million, the funds could also be used for the installation of daycare centers. The banks agreed to pay the compensation in exchange for a guarantee that they will not be subject to legal action.
Financial institutions could be accused of negligence because the Maluf family circulated approximately US$250 million in bank accounts that had been embezzled from public works projects, according to the Public Prosecutor's Office. The compensations awarded amount to 10% of that total.