Why was São Paulo’s transport secretary placed under arrest?

Federal police officers arrested São Paulo State Transport Secretary Alexandre Baldy on Thursday morning, under suspicion that he defrauded public health contracts. Another two people were detained, among them a researcher from the Oswaldo Cruz Foundation (Fiocruz) research institute.

The arrests were part of the haughtily named Operation Dardanários — meaning ‘forestaller,’ or someone who buys up goods before they are sold on the open market — and concerns the misapplication of funds in the area of health in Rio de Janeiro and São Paulo, involving federal agencies. The Federal Police states that it found “collusion between businessmen and public agents,” who allegedly rigged public procurement processes.

Among the contracts under investigation involve social organizations and the Dr. Albanir Faleiros Machado Urgent Care hospital (Hurso) in Goiás, the Goiás Commerce Registry, and the National Health Foundation (Funasa/Fiocruz).

The contracts date back to the administration of former Rio de Janeiro Governor Sergio Cabral, who is currently serving a mammoth 280-year prison sentence for a string of corruption charges. Mr. Baldy, and the others involved in the operation, will answer for the...