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Brazil’s PCC Gets Involved in City Contracts Game

A series of arrests targeting politicians with ties to gangs in the Brazilian state of São Paulo demonstrates the ongoing development of the country’s largest criminal network. In a series of […]

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A series of arrests targeting politicians with ties to gangs in the Brazilian state of São Paulo shows how the country’s largest criminal network continues to develop.

During a set of raids on April 16, Brazilian authorities captured arrested three city councilors – Ricardo Queixão of Cubatão, Flávio Batista de Souza of Vasconcelos, and Luiz Carlos Alves Dias of Santa Isabel – along with 10 others, suspecting them of manipulating bids for city contracts to benefit the First Capital Command (Primeiro Comando da Capital – PCC), Brazil’s largest gang.

Two more suspects are still on the run. Brazilian newspaper Folha de São Paulo reported reported that the detainees included officials in the state governor’s office.

The operation, led by the Special Action Group for Combating Organized Crime (Grupo de Atuação Especial de Combate ao Crime Organizado – GAECO), a special unit of the São Paulo State Public Prosecutor’s Office (Ministério Público – MP-SP), aimed to capture suspects and evidence related to alleged bid-rigging in favor of companies linked to the PCC.

Despite Rumors of a Split, PCC Remains United

The bids related to contracts for companies offering cleaning services, inspection, and control posts, according to a statement reported by the MP-SP. The investigators relied on wiretaps, which eventually linked the criminal network to city councilors and other public officials “who directed bids through the control of companies,” GAECO Colonel Emerson Massera said in a press conference.

According to government prosecutors, the bidders were either front companies or legitimate businesses controlled by the same individuals. They allegedly secured as much as 200 million reais ($38 million) in government business over the past five years.

During the raids, authorities also confiscated weapons, ammunition, cell phones, 3.5 million reais ($660,000) in checks, and some smaller amounts of cash.

“Our primary goal right now is to stifle their finances to weaken crime,” GAECO’s Flavia Flores said at the press conference.

InSight Crime Analysis

The PCC’s expansion into the realm of city contracts indicates the group’s ongoing development. The gang – which originated over 30 years ago following a violent prison riot – has consistently broadened its economic activities from collecting “dues” from prisoners and their families to profiting from facilitating international drug trafficking.

The PCC still operates primarily in the country’s prisons. However, with its economic influence expanding, it appeared inevitable that the group would begin collaborating with local politicians and officials – a common trend for criminal gangs in the Americas.

Yet the PCC’s entry into municipal services and state contracts goes against the group’s fundamental ideology and tradition. The PCC has a saying: 'crime fortifies crime' – crime strengthens crime. This phrase alludes to how Brazil’s prison-based groups have established a sort of parallel society in which the country’s greatly unequal classes seldom intersect and do business.

This division stood for a while. There were corrupt politicians involved in high-level schemes – exemplified by the Lava Jato scandal – and the low-level prison-based criminal organizations like the PCC and their counterparts in Rio de Janeiro, the infamous Red Command (Comando Vermelho – CV).

However, as their economic power grew, there was a greater need to hide illegally obtained money. This led to criminal groups, known as “factions” in Brazil, having to work with the wealthy and powerful.

During a press conference, GAECO’s Flores stated, “The factions need this structure to expand their operations and strengthen their illegal activities.”

In Brazil, Old Police Tactics Lead to Same Results 

While the CV remains at the bottom levels of crime, the PCC has moved up, as explained by Benjamin Lessing, a professor at the University of Chicago and an expert in Brazil’s prison gangs.

“The CV is too wild and violent, porra louca [totally crazy] to get involved in these things,” he said in an email exchange. “But maybe the PCC is having better luck. In part because of its different structure and business model.”

Lessing mentioned that the PCC takes a more advanced approach, including setting up front companies. He also suggested that it might be easier to get into corrupt activities in São Paulo than in Rio de Janeiro.

Bruno Paes Manso, an expert on the PCC, told InSight Crime that the group initially invested in local bus companies. These investments continue, as seen in mid-April, when the MP-SP brought money-laundering charges against the founders of two bus companies that had been serving up to 700,000 riders daily, costing the government millions of reais. These companies, according to the MP-SP claims, were established by the PCC to launder money from their bank robberies and drug trafficking activities, among others.

However, Paes Manso stated that the group also created public service companies related to landfills, waste management, and even some that provide health and education services.

“The PCC operates like the mafia,” he said, “and has a great ability to infiltrate public institutions.”

*Featured image: Police arrested 13 individuals connected to the PCC in a raid in São Paulo. Credit: Divulgação/MPSP

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