Politicians arrested in troubled Brazil World Cup host city

Reuters News
Posted: May 21, 2014 9:00 AM

SAO PAULO (Reuters) - Several leading politicians have been arrested as part of a large corruption and money laundering probe in Cuiaba, a World Cup host city in Brazil that has had some of the worst delays and other problems as the soccer tournament approaches.

Federal police late on Tuesday raided the offices of the mayor, a government auditing agency, the district attorney and the legislature of Mato Grosso state, of which Cuiaba is the capital, in search of documents and other evidence, local media reported on Wednesday.

The state's former finance minister and an ex-head of the state legislature were arrested and taken to jail in Brasilia, O Globo reported. A spokeswoman for the Mato Grosso federal prosecutors' office would not tell Reuters what they were charged with, saying the court case was confidential.

Federal police also raided the home of Mato Grosso Governor Silval Barbosa in search of documents and arrested him after they found a handgun with an expired license. Barbosa paid bail and was released, his lawyer, Ulisses Rabaneda, told O Globo.

Barbosa said in a statement after his release that he was "calm and ... providing information to the authorities."

Prosecutors in Mato Grosso are investigating whether local politicians used government-controlled banks and companies to secure money for themselves and allies. A senior official at the state prosecutors' office told Reuters that the probe involves hundreds of millions of dollars in missing government funds.

The official, who spoke on condition of anonymity because the probe is ongoing, said there was no direct connection between the scandal and delays in World Cup projects, but said it was part of a "pattern of missing money in Cuiaba."

With less than a month before the Cup starts, Cuiaba's new soccer stadium is still not fully finished. A light rail system that was supposed to be ready for the tournament will not be finished until at least 2015, local officials say.

Road expansions, new bridges and other improvements are unfinished, and the city of about 1 million people in Brazil's soy belt resembles a giant construction site. A new airport terminal is also not expected to be ready in time for the World Cup.

Cuiaba is one of 12 cities that will host World Cup games.

Reuters reported in February that an October fire at the Cuiaba stadium caused much worse damage than Mato Grosso state officials had previously disclosed. State and federal prosecutors later said the damage had been repaired to their satisfaction and that the facility seemed safe.

(Reporting by Brian Winter; Editing by Todd Benson and Lisa Von Ahn)