Brazilian Feds target Rio’s Trump Hotel project

. Jan 29, 2019
trump hotel rio Rio's defunct Trump Hotel project (now LSH Lifestyle)

Brazil’s Federal Police launched an operation this morning to target a bribery scheme involving former and current directors of BRB — a bank controlled by the state administration of Brasília. In exchange, these directors would push for investments into the now-defunct Trump Hotel project in Rio de Janeiro (currently named LSH Lifestyle). At least five arrest warrants have been issued by a federal court in Brasília.

The list of investigated individuals is rather odd — including not only bank directors, but also the son and daughter of a 1980s soap opera star, and the grandson of the last president of Brazil’s military dictatorship. Paulo Renato Figueiredo, grandson of the late General João Baptista Figueiredo, has an arrest order against him. He currently lives abroad.

</span></p> <p><span style="font-weight: 400;">In 2013, Mr. Figueiredo became an associate to U.S. President Donald Trump to develop a luxury hotel in Rio&#8217;s flashy Barra da Tijuca neighborhood. He held a license to use the Trump Organization brand until 2016, when it pulled out from the deal two months after Mr. Figueiredo was placed under investigation. </span></p> <p><span style="font-weight: 400;">At the time, the Trump Organization avoided mentioning the criminal investigation, blaming construction delays for pulling their brand from the project. Spokesperson Jennifer Rodstrom said at the time that &#8220;the developers of the Rio de Janeiro hotel are significantly behind on the completion of the property, and their vision for the hotel no longer aligns with the Trump Hotels brand.&#8221;</span></p> <p><span style="font-weight: 400;">According to the investigation, kickbacks amounted to at least BRL 16.5 million, as reported by newspaper </span><i><span style="font-weight: 400;">Folha de S.Paulo</span></i><span style="font-weight: 400;">. In return, BRB directors authorized investments without any risk analysis from the bank&#8217;s auditors. Many projects that were benefited ended up costing BRB huge losses — among which figures the Trump Hotel project. </span></p> <h2>How the corruption scheme worked</h2> <p><span style="font-weight: 400;">Federal marshals claim the scheme began operating in 2012, and that BRB directors received large sums of money in cash. The money was transported on chartered jets to avoid raising suspicions from authorities. Often, the companies involved would use fraudulent invoices to mask their operations. But kickbacks also came in other forms — including tickets for a VIP lounge at the 2015 Rock in Rio Festival and paying for the catering service of the wedding of a BRB director&#8217;s daughter.</span></p> <p><span style="font-weight: 400;">The operation was based upon statements made by former executives of the Odebrecht construction company and a money launderer who worked for the Brazilian Democratic Movement (MDB) party, who have been collaborating with multiple investigations.</span></p> <p><span style="font-weight: 400;">The case is part of a <a href="">larger graft probe</a> involving publicly-administrated pension funds.</span></p> <h2>Rio&#8217;s defunct Trump Hotel</h2> <p><span style="font-weight: 400;">The hotel is situated on the corner of Avenida Lúcio Costa and Rua Professor Coutinho Fróis, facing the beach and right in the heart of Barra da Tijuca. During the 2016 Olympic Games, all of its rooms were reserved by members of the International Olympic Committee (COI). After a tower built in Panama in 2011, it was Trump Hotels second real-estate venture in Latin America, with 170 rooms on 13 floors, with suites of 34 and 450 square meters, a heated swimming pool and a view of the Atlantic Ocean. At the top of the building, Mr. Trump&#8217;s name was emblazoned in gold letters.</span></p> <div id="attachment_13625" style="width: 570px" class="wp-caption aligncenter"><img aria-describedby="caption-attachment-13625" loading="lazy" class="size-full wp-image-13625" src="" alt="paulo figueiredo donald trump" width="560" height="376" srcset=" 560w, 300w" sizes="(max-width: 560px) 100vw, 560px" /><p id="caption-attachment-13625" class="wp-caption-text">Paulo Figueiredo and Donald Trump</p></div> <p><span style="font-weight: 400;">Paulo Renato Figueiredo was responsible for the arrival of the Trump Hotel in Rio. As well as being a partner of hotel management firm LSH Barra Empreendimentos Imobiliários S.A., he was also the CEO of the Polaris Projetos e Empreendimentos group, which carried out the consultancy of the business, built in an area of 16,000 square meters and purchased for BRL 12.5 million in 2012. Before incorporating the Trump Hotel, LSH Barra also launched a development of luxury homes in the same neighborhood, with 22 mansions priced between BRL 2.5 and 5 million.  </span></p> <p><i><span style="font-weight: 400;">El País Brasil</span></i><span style="font-weight: 400;"><a href=""> spoke</a> with Mr. Figueiredo back in 2015, and the general&#8217;s grandson spoke of having met Mr. Trump in 2012 on a Florida golf course, during a business lunch with the American president&#8217;s daughter, Ivanka. &#8220;He greeted me and said he was leaving, before Ivanka told him my grandfather was the Brazilian president. Then he got a chair and sat down,&#8221; he said.</span></p> <p><span style="font-weight: 400;">Mr. Figueiredo declares himself a &#8220;conservative liberal,&#8221; and in an article for the website of the Instituto Liberal, he stated he felt like an &#8220;intruder&#8221; in Rio. &#8220;My model of the Rio de Janeiro people lives like the American middle class in Miami, not that of Havana. Maybe that&#8217;s why I feel less and less like there is a place for me here. I feel like an intruder in my own city.&#8221; Mr. Figueiredo was the director of Market Relations at the institute. Focused on &#8220;the research, production, and dissemination of ideas&#8221; based on a &#8220;liberal order,&#8221; the Instituto Liberal is presided over by Mr. Figueiredo&#8217;s friend, economist and writer Rodrigo Constantino, who is also a founding member of Brazil&#8217;s leading right-wing </span><a href=""><span style="font-weight: 400;">think tank</span></a><span style="font-weight: 400;">, Instituto Millenium (IMIL).

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