Rio Grande do Sul Prosecutor's Office to look at state's partnership with US company Alvarez & Marsal

The US company sold services to Louisiana after hurricane Katrina, causing gentrification and privatization

Translated by: Ana Paula Rocha

Brasil de Fato | São Paulo |
One of the streets downtown Porto Alegre, the capital city of Rio Grande do Sul - Foto: Rafa Dotti

State deputy Laura Sito (Workers’ Party) has called on the Rio Grande do Sul Public Prosecutor's Office (MP-RS, in Portuguese) to investigate the cooperation between the state government and the US company Alvarez & Marsal

The government of Eduardo Leite (Brazilian Social Democracy Party), following the initiative taken shortly before by the mayor of Porto Alegre, Sebastião Melo (Brazilian Democratic Movement), announced a partnership for the consultancy company to work on the reconstruction of the state, devastated by heavy rains.  

According to Pedro Capeluppi, the extraordinary state secretary for reconstruction support, Alvarez & Marsal will help map out the houses, schools, hospitals and infrastructure that will need to be rebuilt. The announcement says the company will work for the next 30 days “free of charge”.  

One of Alvarez & Marsal’s clients includes the administration of the American state of Louisiana, in the United States, after Hurricane Katrina.  

The gentrification of New Orleans’ downtown area and the privatization of its public education, with the firing of 7,000 public school teachers, is one of the legacies of this process of rebuilding Louisiana’s capital city.

In a document filed on Sunday (19), Sito claims that the partnership between public and private entities in Rio Grande do Sul does not appear on the state’s official registry.  

The congresswoman, who chairs the Citizenship and Human Rights Commission of the Legislative Assembly of Rio Grande do Sul, questions why – since the company is providing a public service, albeit free of charge – it should not be subject to external control by the public administration.

“Law 14.133/2021, in its article 72, lists the documents required for direct contracting by the administration in cases of unenforceability and waiver of bidding. We were unable to locate this documentation on the part of the company, which would already be operating in Rio Grande do Sul,” says the document submitted to the Public Prosecutor's Office. 

She also argues that the only exception for direct contracts not being listed on the National Public Contracting Portal within 10 days is when they are urgent. “However, as we don't know the content of the contract and the city hall said it was for ‘reconstruction’, there is no assumption of urgency, given that the flood waters haven't even receded,” says Laura Sito in the document.

“We know that it's at delicate times like the one we're experiencing that many companies and institutions take advantage of the opportunity to make a profit. Billions are being announced, so we need to be vigilant. We want transparency,” said Sito. 

Brasil de Fato asked Alvarez & Marsal and the government of the state of Rio Grande do Sul for a statement and had not received a response by the time this article was published. This news story will be updated once the company responds.  

Edited by: Matheus Alves de Almeida