With the Rio Olympics drawing near, it is time for Brazil to shine and show off their event management prowess to the rest of the world. However, with several issues related corruption popping up every now and then, the event has come under some heavy scrutiny, with the world wanting to know what is really going on in the country. Thankfully, a Reddit thread related to topic led a knowledgeable civilian to give us an insider perspective. Here it is:

Since most of what is being said is regarding crime and violence, which is somewhat hard to predict and even harder to analyse, I’ll try to write a little about a more political perspective on the Olympic Games and what is going on in Brazil these days.

The Olympics were part of a Brazilian project aiming to establish the country as a world power. This was done in many fronts, mainly through active diplomacy and increased participation in world affairs (such as heading the UN peacekeeping mission in Haiti). The fact that it is taking place during a period of great political uncertanity and economic decline is really undermining what was a failed project from the start.

The most compeling narrative – for those interested in understanding the reasons behind the problems with the Rio Olympics – is the tale of corruption that is behind it all and that is being mostly ignored by the Brazilian and International media.

Take the Olympic Villa for example. It was a 3 billion BRL project (something around 1 billion USD), privately executed by a company called Odebrecht and fully financed by Brazilian state owned bank Caixa, which loans money at generous interest rates way below the market average. The president as well as a significant part of the Board of Directors of this company is currently in jail for corruption, money laundering, offering kick-backs and fraud in legal tenders. The Brazilian tax-payers have, therefore, subsidized a 3 billion reais project that is currently embarassing the country in the international media. This company was also one of the major campaign donors in the last elections and its president was very close to most of the Brazilian political elite, including all our former Presidents and most of the Governors from the richer states.

Although the existence of a nefarious connection between public figures and private companies is not a Brazilian invention and is something that can be observed in most countries of the world, the level it has reached in Brazil is simply absurd. Take the case of Odebrecht alone, the construction company I mentioned above. They became a global player by using their connections with the Brazilian government. They have built the Miami Airport, have many large scale projects in Africa (notably in Angola) and were the largest construction company in the country. And it was all built on corruption. They bribed politicians and bank-rolled their campaigns only to get lucrative public contracts. Is it similar to what companies do with lobbying in the US? Similar, but far from being the same. The issue here is that these Brazilian companies have low to none accountability for what they do and they were never held responsible for their actions. Until last year that is, when political discontent with the elected government of PT gave public support to investigations on the party’s ilegal activities that led to the arrest of Marcelo Odebrecht and other construction moguls, as well as politicians and assorted bureaucrats.

What we are seeing unfold right now is the crumbling of a system that has been in place since at least the 1960s. This system was based on full cooperation between corrupt politicians and crooked businessmen in the construction sector to rob the country blind. All public tenders for construction in Brazil are frauded. All construction companies (besides the really small ones that feed on crumbs) are corrupt. Why? Because that’s the way this system works. It depends on this ilegal exchange of money and favors and it benefits a handful of billionaires and a bunch of crooked politicians. This is the system that is under fire due to the Lava-Jato (Car-Wash) operation.

What we are seeing unfold in Rio, the poor infrastructure, the lack of funds to pay the police, the fear that it will be a poorly organized event that will cause Nazi Germany to lose their status as worst Olympics host ever, is all a consequence of this system that I briefly described above. This is why the project of making Brazil a world power was a failed one from the start. The money we made during our ‘Economic Miracle 2: Subsidized Bugaloo’ was not invested. It was spent, mainly to make a handfull of businessmen richer and to keep a caste of politicians in power. A system like this cannot work efficiently to organize a nice event, because its purpose was never to be efficient, but to generate generous kick-backs. Which, rest assured, it did.