A stadium built for the 2014 World Cup and the 2016 Summer Olympics had construction prices inflated by as much as $140 million, Brazilian Federal Police announced on Monday. Seven arrest warrants were issued as part of the investigation into irregularities in the construction and management of Fonte Nova Arena in the northeastern state of Bahia.
Findings of “Operation Red Card,” as it’s been dubbed by police, include that the bidding process was rigged to benefit giant construction companies Odebrecht and OAS – both already implicated in massive bidding corruption scandals across Latin America.
According to a statement from police, “a great part of [the inflated price] was channeled to bribe payments and the financing of electoral campaigns.”
Bidding fraud, overbilling, misuse of public funds, corruption and money laundering are all under the investigation’s umbrella, and one of the arrest warrants was issued to a former governor of Bahia, Jaques Wagner.
According to state-run news agency Agencia Brasil, Wagner’s house was raided by police on Monday morning.
Wagner was governor of Bahia between 2007 and 2015, and is affiliated with the same party as embattled former President Luis Inácio Lula da Silva – the left-of-center Worker’s Party.
In a press release, the Worker’s Party called the raid at Wagner’s house an “invasion,” and accused Brazil’s judiciary of “abusing its authority to criminalize the Worker’s Party.”
This is not the first time corruption allegations threaten to taint the Olympic legacy of Rio 2016. In October 2017, Brazilian Olympic Committee President Carlos Nuzman was arrested for his alleged involvement in an operation to buy jurors’ votes during Rio’s bid to host the Olympic Games in 2016.