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The Olympics of corruption: Rio after the Games

The closing ceremony, as seen from the favela.

The closing ceremony, as seen from the favela.

Published in The Age on May 27, 2017.

The Olympic Games in Rio de Janeiro were supposed to signal Brazil’s arrival on the world stage. Nine months after the closing ceremony, the country is engulfed in the biggest political and economic crisis in its history. As a cascading investigation exposes a culture of corruption and impunity, Brazilians are asking who the Games were for.

On April 21, 2016, a torch was lit at the site of the original Olympic Games in Greece, to begin its journey to Rio De Janeiro. Hours later, a wave swept away a section of the brand new oceanfront bike path advertised by Rio’s mayor, Eduardo Paes, as “the most beautiful in the world,” killing two men.

“I almost died,” Guilherme Miranda told Globo News. “Where is the mayor? Where is the engineer who did this work? Someone has to answer for this – it cost R$45 million.” The path was built by Concremat, the family business of Rio’s director of tourism, Antônio Figueira de Mello, a Paes loyalist. The mayor, arriving in Athens to receive the torch, flew home to deal with the crisis.

The Rio Olympics was presented as a transformative project that would leave world class sporting facilities and a modern public transport system as a legacy. Guanabara Bay would be cleaned up, violence brought under control. An R$8.5 billion programme of investment, Morar Carioca, would urbanise Rio’s favelas by 2020, installing running water, drainage systems, paved roads and street lights in the city’s poorest communities.

Nine months after the Games, violent crime is surging, the bay is as polluted as ever, and the arenas are padlocked and deteriorating. New transport networks are poorly integrated and under-used, and favelas remain neglected by the state, lacking the most basic modern conveniences. At best, the Olympics represent a criminal waste of a prosperous decade. The gulf between promises made and change delivered is galling.

“What was the true legacy? Lots of money for developers and construction companies, and for their colonels, the politicians,” says Roberto Marinho, a community leader in Morro da Providência, Rio’s oldest favela. “Where are the basic services in this city? Security is in chaos, the idea of social development has been abandoned… The only legacy is the millions that were pocketed.”

The Museum of Tomorrow, in Rio's revitalised port zone.

The Museum of Tomorrow, in Rio’s revitalised port zone.

Strolling down Olympic Boulevard in Rio’s renovated port zone, at the foot of Providência Hill, the city does indeed appear transformed. Light rail trains with ‘Hello Future’ written on the doors glide past. Santiago Calatrava’s stunning Museum of Tomorrow juts out into the bay, the skeleton of an impossibly elegant dinosaur with rippling ribs of solar panels along its flanks.

Stray off the avenue, into the streets of Saúde, and the colourful facade painted by graffiti artist Kobra is revealed to be just that. The road has been torn up to lay light rail tracks, but the trains are a year late and may never arrive. On the hill, the cable car inaugurated in July 2014 is out of order more often than not. Police incursions and shootouts are routine. This week, photographs posted on social media showed residents taking shelter from a gun battle in a local pharmacy.

“If they hadn’t made so many promises about how people living in the area would benefit, I would say that the port renovation was positive, up to a point,” Marinho says. “It’s always the same story: ‘they can’t do it today, but tomorrow they’ll find some more investment.’ The problem now is there’s no money.”

Brazil’s economy has been in recession for three years. The state of Rio de Janeiro declared itself insolvent seven weeks before the Games and is running a R$19.5 billion annual deficit. Teachers and hospital staff and civil police officers have been paid irregularly, if at all, for months. Collapsing oil revenues are partly to blame, and corporate tax breaks doled out by former Governor Sergio Cabral, but the mismanagement of public funds is staggering. Prosecutors allege Cabral hid R$340 million in offshore accounts.

Operation Car Wash, which began as an investigation into money laundering at a petrol station in Brasilia, has developed into the biggest corruption scandal ever in Brazil. In April, the depositions of executives at giant construction firm Odebrecht were made public, along with a list of politicians implicated, including President Michel Temer’s chief of staff, eight ministers, twenty-four senators, three governors, two mayors and a federal judge.

Hilberto Mascarenhas, who ran the Structured Operations group at Odebrecht – the department of bribes – said the company handed out R$10 billion in kickbacks from 2006-2014: enough to build 5,214 creches or buy 83,944 ambulances, according to transparency watchdog Contas Abertas.

Another Odebrecht executive, Benedicto Júnior, alleged that Eduardo Cunha, former President of Brazil’s Chamber of Deputies, received a R$9.7 million sweetener for approving Rio’s port restoration. Last week, federal prosecutors confirmed that Temer is under investigation, after a tape of him appearing to sanction the payment of hush money to Cunha was leaked to the press.

Cunha is serving a fifteen year prison sentence on corruption charges, Cabral is in prison awaiting trial and Paes is accused of accepting R$15 million for “facilitating contracts related to the Olympic Games” – an allegation he rejects as “absurd and untrue”.

Odebrecht’s bribery team assigned nicknames: Barbie, Fatso, Viagra. Paes was allegedly known as Nervosinho – the Little Nervous one – Cabral as Proximus. At Odebrecht, federal police found a spreadsheet showing five payments of R$500,000 to Proximus related to the construction of Line 4 of the Rio metro, linking the south zone to Barra de Tijuca, home of the Olympic Park.

Seats ripped out at the Maracanã.

Seats ripped out at the Maracanã.

Benedicto Júnior testified that the contract to rebuild Rio’s iconic Maracanã stadium was secured with a R$6.3 million bribe to Cabral. Odebrecht, AEG and IMX, owned by Brazil’s most famous businessman, Eike Batista (himself currently under house arrest) then won the right to administer the stadium, only to let it fall into disrepair and sell the concession on.

“How is it possible that a company admits paying bribes, but continues running the stadium and is allowed to sell the rights? Only in Brazil,” says reporter Leslie Leitão, who has covered Rio’s Olympic development for Veja magazine.

If spinning was an Olympic event, Mario Andrada would hold multiple gold medals, in apologetic press conference, impassioned defence, charming deflection and handy stat. The director of communications for Rio 2016 was a popular figure at the Games, tasked, among other things, with explaining why the diving pool had turned green.

Andrada says there are “three pillars” of an Olympic legacy: a generation of inspired young athletes and the facilities they need to succeed, a city with better transport and twice as many hotel rooms, and a lasting feeling of “self-confidence and empowerment”. Brazil is in the throes of a crisis “…and yet, Brazilians felt so good during the Games. They hosted the world with such pride. This has value. As soon as they remember the Games they feel happy about it.”

Leitão’s assessment is scathing: “The sporting legacy is zero. Rio de Janeiro has just hosted the Olympics and doesn’t have a running track.” In December, the final of the state basketball championship was postponed because there wasn’t an arena capable of housing both sets of supporters safely.

As there were no bidders at the auction to manage the Olympic facilities, the Ministry of Sport and City Council have been obliged to take over. The velodrome, a R$143 million white elephant in a country with few competitive cyclists, is home to a federal task force, the Government Agency for the Olympic Legacy. The air conditioning runs constantly to prevent the Siberian Cedar track from warping, but there has not been a race since the Paralympics.

The aquatic centre in April 2017, eight months after the Games.

The aquatic centre in April 2017, eight months after the Games.

Children were invited to play table-tennis and badminton at Arena Three earlier this month, but the original plan, to turn it into a public school, has stalled. Likewise the Arena of the Future, which hosted handball games. The R$178 million contract awarded to Dimensional Engenharia was to build, dismantle and transform the structure into four schools, but in December 2015, the Paes administration agreed to pay the company R$140 million and released it from phase two and three of its obligations. “Now nobody is responsible,” says Leitão. “So nobody has done anything.”

The canoe course at Parque Deodoro was supposed to become a public swimming pool, but was built with no bathrooms, and closed all summer. Viral images of the Maracanã show broken windows, piles of ripped out seats and a threadbare pitch barely fit for Sunday League games. Andrada pleads for patience: “By August, we’re going to have the Olympic Park in Barra and Deodoro fully operational, on time.”

Speeding through a tunnel under Latin America’s biggest favela, Rocinha, Andrada’s second claim, of a city transformed, briefly seems credible. The extension to Rio’s metro system is as slick as one might expect for R$10.4 billion. On the Tuesday morning I visited Olympic Park, it was also empty. The advertising slogan plastered in stations – ‘If You Try It, You’ll Like It’ – hints at its biggest problem. Far too few people are using the new line – around a third of the 300,000 daily riders predicted by feasibility studies.

The five new stations serve the city’s richest neighbourhoods. Longer journeys from the west zone require a Rapid Transit Bus, and although these too are clean, safe and efficient, the networks are poorly integrated, with separate fare cards. The combined cost is more than most cariocas – residents of Rio – can afford.

“Meanwhile, you have people who live in the outskirts of Rio de Janeiro who spend four or five hours stuck in traffic on buses every day,” says Hugo Costa, an urban planning expert from the poor north zone. “They built it in the wrong place, and that’s true of all the infrastructure. The government could have used that money to resolve so many of the city’s problems.”

In his neighbourhood, Ramos, few people use the new Rapid Transit Buses, preferring the train or the Governor’s Island ferry. The light rail network, the Veículo Leve sobre Trilhos, is known dismissively as the Veículo Lento para Turistas – the slow train for tourists. Costa claims that along Avenue Rio Branco, it is faster to walk.

In neighbouring Alemão, the chief legacy of the pre-Olympic boom is a R$253 million cable car, also the subject of a fraud investigation. It has been out of service for eight months and may never restart, because the state cannot afford the R$2.7 million monthly operating costs.

The Alemão cable car is closed, possibly for good.

The Alemão cable car is closed, possibly for good.

The main station is being used as a police base. “Every other day we’re hearing about innocent kids getting shot by police, and this is in a sense a legacy because of the amount of money that was invested in arming the police in the lead up to the Olympics,” says Theresa Williamson, of pressure group Rio On Watch. Rio’s police killed at least 182 people in the first two months of this year.

Faced with record numbers of assaults and robberies, a stalled economy and seemingly intractable urban dysfunction, few cariocas currently share Andrada’s feelings of pride in their city, but several of the people I talked to did say attitudes have shifted as a result of the Olympics. “The positive legacies aren’t any of the ones that were stated or intended… but civil society is more networked, more aware. People in favelas are angry,” says Williamson.

“I think the poor started to change the way they view themselves,” says Julia Michaels, an American journalist who has lived in Rio for thirty-five years. “They were empowered by this boom that included the Olympics. They are not as easily pushed off the side as they were before, and it’s going to be interesting to see how that plays out: how much frustration there is because of the bigger gap than ever between expectations and what can really be.”

The sight of men as powerful as Cabral and Batista being led away in handcuffs is almost unprecedented in a country where the rich, and politicians in particular, enjoy extraordinary impunity. “What I’m surprised about is that the investigations are happening freely. This is fantastic,” says Williamson. “The corruption itself, it’s just like ‘finally.’ We knew it was there.”

An item on current affairs show Fantástico showing the luxurious lifestyles Odebrecht executives enjoy under house arrest was a reminder of how deeply privilege is entrenched. Supporters of the Workers Party worry that the main aim of Operation Car Wash is to jail former president Lula da Silva, who is also accused of taking Odebrecht’s money, to prevent him standing for re-election next year, and that once this is achieved, the investigation will fizzle out.

A huge demonstration against Michel Temer's government in Brasilia, May 24.

A huge demonstration against Michel Temer’s government in Brasilia, May 24.

Temer has refused to resign and is fighting for survival. His approval rating, already low since pushing through an unpopular austerity measure freezing public spending, is now in single digits. An ongoing attempt to reform the pension system by raising the retirement age for public workers has been met with a wave of demonstrations, including a one day national strike.

On Wednesday, tens of thousands of people took to the streets in Brasilia to demand Temer’s ouster. Government buildings were invaded and vandalised, and troops were deployed to restore order following pitched battles between protesters and military police. Brazil is on the brink – of what, no-one quite knows.

“We’ve just hosted the Olympics and the government doesn’t have money for our retirement? There’s something wrong with this picture,” says Costa. “You can’t play the politics of bread and circuses, and take away the circus, then say ‘well, there’s no bread.’ Because this is what happened with the Olympics.”