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Report: Price-Gouging Rampant in Brazil's WC Contracts

In a 140-page report about the building of the Mane Garrincha Stadium in Brasilia, auditors found an astounding $275 million in alleged price-gouging from the construction company that won the contract -- and they have only examined three-quarters of the project. Meanwhile, the cost of building the Brazilian capital’s World Cup stadium has nearly tripled since the South American country was awarded the tournament in 2007 to $900 million in public funds, making it the world’s second-most expensive soccer arena, after England’s Wembley Stadium.

Mane Garrincha isn’t the only example of overspending by politicians at the 2014 World Cup, but it is certainly the most egregious one. The Associated Press reports that the price tag for building and renovating 12 stadiums in Brazil has nearly quadrupled to $4.2 billion since the country was awarded the tournament, and most of that is due to price gouging from construction firms like Andrade Gutierrez, which was awarded the Brasilia Stadium as one of its contracts. The AP report alleges that politicians are in the back pocket of such firms, with Andrade Gutierrez having upped its municipal campaign spending 500-fold between the time when Brazil was unveiled as the 2014 tournament host, and the cities, venues and controlling political parties were announced.

As the report says, the widespread distrust of the Brazilian public isn’t surprising in a nation where 40 percent of federal congressmen have criminal cases pending against them before the country’s highest court. Mane Garrincha security guard Paolo Rodrigues seemed to sum up the nation’s frustrations: "I'm not against the Cup, but I'm frustrated with the spending and the corruption we all know it involves. When politicians build a road, even if there are kickbacks, at least at the end we have a road. With this stadium, we have nothing."

Read the whole story at Associated Press »

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