World Cup costs soar as political donations from constructors eyed

The cost of building Brasilia's World Cup stadium has nearly tripled to $900 million in public funds, largely due to allegedly fraudulent billing, government auditors have said.

After the dramatic increase in costs, the arena is now the world's second-most expensive soccer arena, even though the city has no major professional team.

It comes amid suspicion over the cozy link between construction firms and politicians in Brazil. Analysis of data from the World Cup host country's top electoral court by the AP news agency shows skyrocketing campaign contributions by companies that have won the most World Cup projects. 

The lead builder of Brasilia's stadium increased its political donations 500-fold in the most recent election. The links have raised questions about how politicians who benefit from the firms’ largesse can be effective watchdogs over billion-dollar World Cup contracts.

"These donations are making corruption in this country even worse and making it increasingly difficult to fight,” said Renato Rainha, an arbiter at Brasilia’s Audit Court, which is investigating the Brasilia stadium spending.

“These politicians are working for those who financed campaigns.”

With only three-fourths of the $900 million stadium project examined by auditors, $275 million has already been found to allegedly reflect costs at a much higher level than would normally be considered reasonable.

Federal prosecutors said that no individuals or companies face corruption charges as of yet related to World Cup works. There are at least a dozen separate federal investigations into spending related to the tournament.

Claudio Monteiro, the head of the government’s World Cup committee in Brasilia responsible for oversight, said the audit court’s allegations are simply wrong and that all the spending would be justified.

“This report comes out just 100 days before the Cup? That’s why I say they’re trying to spoil the party,” Monteiro said from his office outside the stadium. “We’re going to show how this report is off base.”

Every cent of funding for Brasilia’s stadium comes from taxpayers as it relies solely on financing from the federal district’s coffers. The auditor’s report found instances of what appears to be flagrant overpricing.

For example, the transportation of pre-fabricated grandstands was supposed to cost just $4,700, but the construction consortium billed the government $1.5 million.

The consortium is made up of Andrade Guiterrez, a construction conglomerate, and Via Engenharia, an engineering firm. Andrade Guiterrez did not respond to an AP request for comment on the accusations of cost overruns. It noted its political donations were legal.

Andrade Guiterrez, which was awarded stakes in contracts totaling nearly one-fourth of the World Cup’s total price tag, contributed $73,180 in 2008 municipal elections.

Four years later, after it was known which cities were hosting tournament matches, and thus which political parties controlled the local governments that awarded and are overseeing cup projects, the company’s political contributions totaled $37.1 million.

While those campaign contributions were legal, they are likely to soon be banned by Brazil’s Supreme Court. Suspicions abound in Brazil, where in a poll last year three-fourths of respondents said the World Cup construction has been infused with corruption.

That helped fuel widespread, often violent, anti-government protests last June that send more than a million Brazilians into the streets. Many demonstrators rallied against the billions that were being spent to host the tournament.

The overall price of the 12 stadiums, four of which critics say will become white elephants after the tournament because they are in cities that cannot support them, has jumped to $4.2 billion in nominal terms, nearly four times the estimate in a 2007 FIFA document published just days before Brazil was awarded the tournament.

At the time, leaders also promised the stadiums would be privately funded.

The Associated Press