Ms. Rousseff ousts the heads of the Ministry for Transport

This Saturday, President Dilma Rousseff decided to sack the representatives of the Ministry for Transport involved in a tip-off shown in Veja magazine this week. This news report sheds light on a system for payment of bribes for bigwigs of the Republic Party (Partido da República – PR) in exchange for work contracts.

Ms. Rousseff has spoken to the Minister for Transport, Alfredo Nascimento, this Saturday, and has also agreed on the sacking of all those involved, namely: Mauro Barbosa da Silva, the Minister’s Head of Cabinet; Luís Tito Bonvini, the Minister’s Cabinet Assistant; Luís Antônio Pagot, the General Director of the National Transport Infrastructure Department (Departamento Nacional de Infraestrutura de Transportes – DNIT); and José Francisco das Neves, the CEO of Valec. The sacking of these people will be made official by the Chief of Staff, as from this coming Monday.

To make sure of the progress of the investigations and also the proof of the facts as ascribed to the heads of the institution, the people mentioned in the report will be stripped of their posts on a preventive basis until the investigations are completed, says the Minister for Transport, in a statement.

In the meantime, Mr. Nascimento will keep his position. The Minister has said that he will conduct an internal investigation to quickly and strictly investigate the involvement of big executives of this Ministry and also of associated institutions, in the facts mentioned by the magazine.

Apart from rallying round the judicial advisory organizations and internal control bodies of the Ministry for Transport, the Minister has also decided to seek the participation of the Federal Controller’s Office (Controladoria-Geral da União – CGU). The administrative measures for the start of the investigation procedures will be made formal as from next Monday, says the note.
The Minister has dismissed any illation or report that he has authorized, endorsed or agreed to the practice of any political or party act involving actions and projects of the Ministry for Transport.

Opposition – Representatives from the opposition have threatened to collect signatures to open a Public Inquiry (Comissão Parlamentar de Inquérito – CPI) to investigate the allegations involving the Ministry for Transport. They also intend to call upon the Minister himself, Alfredo Nascimento, to present his case at the National Congress.

At the beginning of the week, the Brazilian Social Democracy Party (PSDB) will make an investigation request to the Federal Prosecution Office (Ministério Público Federal – MPF) and also to the Federal Police (Polícia Federal – PF) requesting the opening of new investigations into the case, as also a special request for auditing to the Federal Audit Court (Tribunal de Contas da União – TCU) and a request to call upon the Minister of the General Controlling Office (Controladoria Geral da União – CGU), Jorge Hage, in the Brazilian Parliament.

“The facts are very serious. The sacking was correct, but there is a need for further investigations”, said the leader of the PSDB in the Brazilian Parliament, Duarte Nogueira from the State of São Paulo. Opposition Senators interviewed by Veja this Saturday have also asked for a tougher stand by the Brazilian President Dilma Rousseff.

Case – The issue of Veja shows that, on the 24th, President Dilma Rousseff had a meeting with members of the top management of the Ministry for Transport in the Presidential Palace to complain about irregularities in the Ministry. Together with the Chief of Staff, Gleisi Hoffmann, and the Minister for Planning, Míriam Belchior, she complained about the Constant increases in the costs of work on roads and railroads, also criticized the lack of control over the addenda to contracts signed with building firms, and has also asked for the suspension of the start of new projects. Ms. Rousseff said that the Ministry for Transport is out of control, that the work projects have inflated prices, and has announced an intervention in this Ministry which is controlled by the PR – which charges a 4% kickback from the companies that provide the services considered.

The President has also asked for an explanation about the explosion in the prices of the developments associated with the Growth Acceleration Program (Programa de Aceleração do Crescimento – PAC). In his statement, Minister Alfredo Nascimento said that since January he has been doing what he can to bring down the costs of the work.

This concern meets not only the need for full control on the expenses of the Ministry but also the decision to monitor the budget guidelines of the Government as a whole. A characteristic of his participation in the Federal Government in previous administrations and also in line with his position as a public figure, Alfredo Nascimento has been in constant alignment with the advice given by the President.

Meeting – With spreadsheets and documents on the table, Ms. Rousseff stepped up the tone in the meeting with representatives from the Ministry: The Ministry for Transport is out of control”. The President dubbed “abusive”, for example, the hike in the budget for railroad work, which soared from US$ 7.59 billion in March 2010 to US$ 10.46 billion this month, which is an increase of 38% in just over a year. President Dilma got particularly angry with Valec, the state company that takes care of the railroad network, and also with the National Transport Infrastructure Department (Departamento Nacional de Infraestrutura de Transportes – DNIT), responsible for the roads.

The Executive Secretary of the Ministry, Paulo Sérgio Passos, the CEO of DNIT, Luiz Antonio Pagot, and the Engineering Director at Valec, Luiz Carlos Machado de Oliveira, were also at the meeting, at which Ms. Rousseff spoke more than listened.

“You are inflating the value of the work. There is no budget that can resist the increases as proposed by the Ministry for Transport. I would have to double the tax burden in the country to be able to meet these costs”, said Ms. Rousseff, when the meeting was nearing the end. She gave the final diagnosis: “The three of you need a nanny. And you will have three nannies as from now: Míriam, Gleisi and myself”.

Over the last few weeks, VEJA spoke to Congresspeople, Presidential advisors, police officers and businesspeople, consultants and subcontractors. From them, there was confirmation that the PR charges kickbacks from their suppliers in exchange for success in tenders, and also guarantees overpricing and pretends they do not see the addenda, these being the target of the President’s wrath at the meeting on the 24th.

The scheme was apparently headed by Congressman Valdemar Costa Neto, who in 2005 had to resign his seat in the Brazilian Parliament in the wake of the mensalão corruption scandal, and also by minister Alfredo Nascimento, who, indeed, did not appear at the meeting with Ms. Rousseff, “for personal reasons”.

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