June 07, 2016

RIO DE JANEIRO (AP) Brazil's federal police searched the offices of a construction consortium behind one of Rio de Janeiro's main Olympic sites on Tuesday as part of a probe into potential fraud, the police said in a statement.

Officials are looking at possible fraud in the transport and disposal of debris from construction at the massive Olympic site in Rio's Deodoro neighborhood, where the equestrian, field hockey, canoeing and other events are to be held during the Aug. 5-21 games. The alleged scheme may have included the falsification of documents and price inflation, the statement said, without providing further details.

A report on G1, the internet portal of Brazilian broadcaster Globo, said a contract for the disposal of debris was initially estimated to cost 80 million Brazilian reais ($23 million), but ballooned to 147 million reais ($42 million). G1 also said it had obtained documents suggesting that more than a dozen drivers whose names appear in contracts denied ever having worked on the project.

As a result of the probe, a court has blocked 128 million Brazilian reais ($37 million) that were earmarked to pay the Deodoro Complex Consortium, the police statement said.

Giant Brazilian builders Queiroz Galvao and OAS are part of the consortium. Both companies have been implicated in the sprawling graft scheme at Brazil's state-run oil giant, Petrobras, which has ensnared some of Brazil's richest businessmen and top politicians. Prosecutor estimate that under the scheme, Brazil's biggest construction and engineering firms paid at least $2 billion in bribes in exchange for inflated Petrobras contracts.

Despite the fact that many of the same construction firms caught up in the Petrobras scandal are behind the Olympic construction, Rio officials have long insisted the Olympic projects are clean and transparent.

The consortium issued a statement that it was cooperating with authorities and said the additional disposal charges were due to a larger-than-expected amount of debris, ''which was not initially planned for in the basic project.

''That alteration did not impact the total value of the work stipulated in the contract,'' the statement said.

The spokesman of the Rio Games' organizing committee played down Tuesday's searches, saying, ''We have nothing to hide about the construction in Deodoro or in anywhere else around Rio.''

''We recommend the highest standards to all the companies that work for us, and city hall does exactly the same,'' said Rio 2016 spokesman Mario Andrada, adding that contractors had been told ''if they did anything wrong they would have to respond to law.''

Andrada spoke at a briefing for the foreign press aimed at soothing fears over Brazil's outbreak of Zika, the mosquito-borne virus that's has been linked to a surge in the birth defect known as microcephaly.

The local organizing committee's chief medical officer, as well as the state and municipal health secretaries, insisted that the incidence of Zika's vector, the Aedes aegypti mosquito, tends to plummet during the southern hemisphere winter months, meaning that the chances of athletes or visitors catching Zika during the Rio games were small.

''We're leaving nothing to chance in protecting our guests,'' Andrada said. ''It has not affected (sales) in any way.''

Zika is just one more in a series of challenges facing the Rio Games, including continued fears over the safety of the city's human sewage-polluted waterways, the most severe recession in decades and a political crisis that saw President Dilma Rousseff suspended last month. Rousseff's vice president, Michel Temer, who is replacing her as interim president pending the conclusion of impeachment proceedings held a meeting Tuesday in the capital, Brasilia, to underscore his support for the games.

''It's good to reiterate the today that the Olympics mean a lot for the country, especially at a moment where there's a certain lack of belief in the country, it's important that we have very smooth Olympics, with all sectors very well organized,'' Temer told journalists after the meeting. ''We have to inject a dose of motivation, more than a dose of motivation, a dose of institutional security.''

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