Understanding Brazil’s “Sistema S”

On Tuesday morning, Robson Andrade, president of the Brazilian Confederation of Industries (CNI), was arrested as part of a Federal Police investigation into corruption allegations connected to the “Sistema S” — a group of non-profit organizations run by the private sector, which promote educational and cultural activities across the country.

Mr. Andrade, along with other business owners, is accused of having overpriced contracts for the “Dolls of the World” cultural festival, organized by the Industry Social Service (SESI) in the northeastern city of Recife.

SESI is run by industry employers’ unions (such as the CNI) and promotes cultural and...

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