In a rare police action here, Brazilian authorities late last month arrested two top environmental officials in southern Rio Grande do Sul state, along with 16 businessmen and their associates, for allegedly forming a criminal ring involved in the sale and purchase of environmental licenses and mining rights.

Over 150 members of the Federal Police, Brazil’s version of the Federal Bureau of Investigation in the United States, took part in the bust, the result of a 10-month investigation that was called Operação Concutere (Operation Concussion) and was launched in July 2012. Among those arrested were Carlos Fernando Niedersberg, the Rio Grande do Sul state Environmental Secretary, the state’s highest ranking environmental official; and Luiz Fernando Záchia, the Municipal Environmental Secretary of Porto Alegre, the state capital. Both are alleged to have belonged to the ring.

Removed from posts

The arrests of Niedersberg and Záchia were confirmed by spokesmen for Gov. Tarso Genro and Porto Alegre Mayor José Fortunati. The spokesmen said the governor and mayor removed the two officials from their respective posts on April 29, the day that police took them into custody.

The state Justice Department asked the Federal Police not to release the names of the 18 suspects arrested because information contained in their court-issued arrest warrants is confidential. But those arrested included top state and local environmental authorities, says Renato Madsen Arruda, with the Environmental Crimes Division of the Federal Police in Brasília, and a member of the team investigating the alleged payoffs. Among them, Arruda reports, were officials at the state environmental secretariat and Fepam, its licensing and enforcement arm; officials at the DNPM, the federal body that issues mining rights; and businessmen and their intermediaries.

The entrepreneurs and their go-betweens allegedly bribed local and state environmental officials, among them Fepam authorities, to issue environmental licenses for civil construction projects, most of them apartment complexes, and environmental licenses for mining projects. And they allegedly bribed DNPM officials for the rights to mine for sand and clay used to build highways, Arruda says.

Environmental licenses and mining rights are awarded, not sold, by Fepam and the DNPM respectively. If a company discovers a mineral deposit, has the technical and financial capacity to tap it and agrees to perform environmental restoration of the area, the DNPM usually awards it mining rights.

Bribes have been offered to the DNPM by companies that seek mining rights, but either don’t have the technical and financial capacity to carry out the project or are held up by regulators, says Arruda. Such delays can occur, for instance, when Fepam deems a company’s environmental-impact assessment inadequate, or when the licensing process becomes protracted for other reasons.

Arruda says that the Federal Police have wiretapped conversations in which bribes were offered and accepted and in which specific outdoor locations were chosen for making payoffs. Federal policemen also videotaped businessmen’s intermediaries giving envelopes, ostensibly containing cash, to environmental officials at the payoff spots. In addition, they examined bank account records of those in the ring and have evidence that the ring was involved in fraud, including the falsification of documents, and money laundering, Arruda adds.

“We have a strong case, one that involves top state and local environmental officials and well-known business leaders, suspects we believe will be tried and convicted, based on the evidence we collected,” Arruda asserts. “The investigation and bust, as well as the possible convictions, should inhibit similar types of corrupt activities from occurring.”

Suspects released

All 18 suspects were released within five days, but face possible criminal charges. The federal prosecutor’s office in Rio Grande do Sul state is waiting for the Federal Police to conclude the investigation before deciding whether to file criminal charges.

The investigation is scheduled to end by early June. Arruda estimates Federal Police will indict about 50 people, among them the 18 already arrested and released, as suspects in Operação Concutere. He says the Federal Police won’t make further arrests.

If tried and found guilty of corruption, those charged face up to 12 years in prison, and possibly up to another five years for fraud and up to 10 years for money laundering.

Francisco Milanez, president of Agapan, a Rio Grande do Sul state nonprofit that is Brazil’s first and oldest environmental group, forecasts the case will have a beneficial effect.

“This operation is the first time the Federal Police have arrested suspected members of a ring committing environmental crimes in this state,” the group said in a prepared statement. “And we believe that the arrests made will make the state’s environmental licensing process less corruptible and more rigorous.”